Unilever
General counsel: Ritva Sotamaa
Team size: 500
Major law firms used: Linklaters, Baker McKenzie, Clifford Chance, DLA Piper
No year is uneventful at global consumer goods giant Unilever, but 2017 in particular was memorable, thanks to the unsuccessful blockbuster merger with Kraft Heinz.
It would have been the second-largest M&A deal in history, but on 17 February 2017 Unilever and Kraft Heinz issued a joint statement announcing that the deal would not take place. Klaas Evelein, Unilever’s global legal operations director, says that the aborted merger had a prolonged effect on the company, noting: ‘We’re still in the process of deciding where we want to be.’ General counsel (GC) for corporate and transactions Robert Leek, and group secretary Tonia Lovell, were the key players for Unilever on the Kraft Heinz bid.
As a result of the deal falling through, Unilever sought to boost returns by selling off its household-name spreads business to US private equity house Kohlberg Kravis Roberts. The €6.8bn buyout was finalised in December, with Unilever chief executive Paul Polman describing the sale as a ‘further step in reshaping and sharpening our portfolio for long-term growth’. Well-regarded transactional lawyer Leek oversaw the sale.
One of the more pioneering aspects of Unilever’s in-house legal team is its enthusiastic adoption of a legal operations function. Evelein is Unilever’s second legal operations director and says his role mirrors the progression of the modern GC: ‘In the past, the life of a GC was a bit simpler, but with all the challenges at the moment they realise life is more complicated! You need someone focusing on the operations. The role is looking at the strategic view as well as our IT projects and communications.’
Evelein has a legal background, having worked for six years at Dutch firms Boekel de Nerée and later SOLV. He argues this can be advantageous: ‘It’s very important to understand the needs of the legal counsel. When you’re dealing with local law, it’s a plus because you really know what’s going on.’
Associated British Foods
General counsel: Paul Lister
Team size: 55
Major law firms used: Allen & Overy, Addleshaw Goddard, Herbert Smith Freehills, Macfarlanes
Ask Associated British Foods (ABF) director of legal services and company secretary Paul Lister why he thinks his in-house legal team is well regarded, and he points to how visible the broader £15bn-plus food, ingredients and retail multinational has been in recent years. ‘We buy and sell a lot of firms,’ he says. ‘Commercial is extremely important for us.’
This mantra has kept the 55-strong in-house team active as ABF, which owns household names such as Primark and Twinings, went shopping in the 18 months from early 2016. Deals include the late-2017 purchase of balsamic vinegar brand Acetum, a €100m-turnover business in Italy, which followed the acquisition of two sports nutrition businesses earlier that year. In 2016, the FTSE 100 company also bought the half of African company Illovo Sugar it did not already own for £262m. On the other side of the ledger, the company sold its North American herbs and spices business, as well as five cane sugar factories in China for £297m.
‘We’ve got great lawyers who make an effort to get into the businesses.’
The transaction-heavy business means the in-house legal team is mostly split into general commercial and other specialised areas, such as antitrust law. ABF operates in more than 50 countries, meaning some lawyers are ‘cuckoos in the nest’ in places like Thailand, Mexico and Australia. But otherwise, Lister says, it is a central legal team with no formal panel. ‘The team grows based on the amount of work we’ve got and, frankly, on whether it is better to in-source it than outsource it. We get the work done and get it done cost effectively.’
He believes it is vital for his team to be involved directly with the business – otherwise he may as well outsource all work. ‘We’ve got great lawyers who know the businesses very well, who make an effort to get into the businesses, who are good counsellors to the business guys, as opposed to theoretical lawyers.’
Technology plays a big role in compliance functions, particularly in training, which it can make more interesting for people who do not usually concentrate on it. However, Lister has resisted unnecessary change in the team’s structure: ‘If you hire the right people, I question whether you need a big HR and COO strategy function around it. I don’t think we’re big enough for that yet anyway. If I had a bit of resource, I’d probably hire another lawyer.’
Coca-Cola European Partners
General counsel: Clare Wardle
Team size: 100
Major law firms used: Ashurst, Lewis Silkin, RPC, Shoosmiths
In mid-2016, Coca-Cola European Partners was established following the combination of Coca-Cola Enterprises, Coca-Cola Iberian Partners, and Coca-Cola Erfrischungsgetränke. The merger created the world’s largest independent Coca-Cola bottler based on net sales, worth €11.1bn and serving more than 300 million people in Europe.
The merger also brought in Clare Wardle as GC and company secretary from British retailer Kingfisher. One of her first tasks was to bring the three different entities, departments and approaches to risk and compliance into one unit – ‘a huge amount of work’. She adds: ‘It was very exciting to look at a challenge like this with a great brand and a great business, and one that is on the agenda for growth but at the same time driving a massive transformation programme.’
Wardle believes it has been a success. The in-house legal team has about 100 people covering legal, risk, compliance and security. She has eight direct reports – six are effectively general managers for legal in countries, along with operations head, ‘right-hand man’ and chief compliance officer Frank Govaerts, and vice president of corporate and deputy company secretary Paul van Reesch. She says one of the team’s assets is diversity, with 63% of the total legal workforce women, as well as a female majority in the leadership team, which has seven different nationalities represented. ‘One of our real strengths is having good people, but they’re not all the same kind of good people – we have a real diversity of skillsets.’
‘One of our strengths is having good people, but not all the same kind of people.’
Otherwise, the biggest project legal has been involved with is setting up the new entity’s structures from scratch, in which the corporate team played a big role. It established a new common framework for risk and compliance, using risk reporting to look at how the business can improve its planning. There is also increasing regulation around plastic and sugar across Europe, as well as consolidating wholesalers and retailers to deal with.
Technology has played a crucial role. One internal project is looking at improving the use of technology so legal can focus on bigger issues rather than small contracts, which has resulted in standard contracts being made available to the sales team to get signed on iPads. These also allow for amendments in real time, whereas previously it was all done using the traditional, time-consuming paper format. Furthermore, data and case-management systems are being overhauled, while Wardle also sees value in technology for compliance training. ‘These days, if you’re going to have a paper policy, then it’s not worth the paper it’s written on because nobody’s going to read it. Ours is all available electronically in a form that people are going to access and read.’
Diageo
General counsel: Siobhan Moriarty
Team size: 300
Major law firms used: Slaughter and May, Pinsent Masons, Addleshaw Goddard
The in-house legal team at drinks multinational Diageo has a sprawling global mandate: the company’s 140 lawyers cover the 180 countries it does business in, all from 40 countries where it has lawyers based. Add to that a team that has become smaller over the years in a drive for efficiency, and a busy acquisition trail, and its little wonder the in-house team draws praise from its peers, with one GC noting: ‘Diageo has continued to do a fantastic job in working out how that team operates and making sure they are doing interesting things.’
Diageo GC Siobhan Moriarty puts the team’s strength down to its close alignment with the business and strategic agenda, ‘providing creative and pragmatic support through high-level legal risk management and execution’. There have been marquee transactions, too, such as the billion-dollar acquisition of the Casamigos tequila brand in 2017, made famous by celebrity founder George Clooney. There were also some legacy issues around its 2013/14 £1.8bn investment in listed Indian company United Spirits, resulting in a lawsuit against that company’s founder. A legal team of about 30 is currently in India. Moriarty notes: ‘That’s been a very interesting and sometimes challenging journey.’ The Indian subsidiary’s GC, Mamta Sundara, draws praise for the progress she has made during this time. Another to gain a mention is North America GC Tara Hunt, who heads the legal team for the business unit which is responsible for 35% of the company’s £12bn-plus net sales.
‘Our aim is to blend world-class risk management with brilliant execution.’
Pinsent Masons partner Craig Connal QC says Diageo’s team is marked out by its ‘ability to cope across a rapidly changing legal and practical environment, covering a bewildering range of issues’. He adds: ‘It’s not an organisation you see falling on its nose every ten minutes; you’ve got to have some good lawyers in the background.’ He cites Randall Ingber, GC for global functions, litigation and Africa, as being particularly strong.
Moriarty says the role of her department has changed from focusing on technical legal skills to developing leaders who can support the business. There is also a balance to be found between assessing risk and carrying on with business, working out where there is zero risk and what to do when issues present as more of a grey area. ‘Our aim is to blend world-class legal risk management with brilliant in-market execution. Being great business partners is the biggest growth areas for lawyers; it’s good to be able to spot the issues, but you’ve also got to bring viable solutions as well.’
Thomas Cook
General counsel: Alice Marsden
Team size: 52
Major law firms used: Latham & Watkins, Allen & Overy, Fieldfisher
It was a year of significant development for Thomas Cook, with GC Alice Marsden expanding the size of her legal team from 45 to 52 during 2017.
Her group legal team in London is split across practice areas, a system Marsden describes as ‘like a law firm’. Elsewhere, the legal team is split by geography and business function. Thomas Cook’s heads of legal sit beneath Marsden and cover continental Europe, the Nordics and the UK, and the areas of corporate finance, group airlines, Thomas Cook Money, and hotels and resorts.
Recently-promoted head of legal for group airlines, Silke Schober, oversaw a major transaction in 2017, as the company sold Thomas Cook Airlines Belgium to two companies: Brussels Airlines and VLM Airlines. The deal saw 160 pilots and cabin crew, flight slots and two aircraft transfer to Brussels Airlines, with the remaining three aircraft being used elsewhere within the Thomas Cook business.
Marsden also highlights group head of compliance James Kelly, who worked on the strategic alliance Thomas Cook announced with fellow travel company Expedia in September. The agreement saw Expedia become Thomas Cook’s preferred provider of hotels for complementary, city and domestic holidays. For customers, it means an additional 60,000 hotels on offer. The partnership also allows Thomas Cook to advertise its core package holidays via Expedia’s website, expanding its distribution.
Despite the significance of these two mandates, arguably Thomas Cook’s standout performer in 2017 was newly-appointed UK head of legal Stuart MacGregor, who added around 20 people to his team and dealt with a wave of bogus holiday-sickness claims. This came to a head last October, with MacGregor involved in a case that saw two Britons sent to prison for making false insurance claims against Thomas Cook. Marsden says: ‘He’s been so inundated with them that he said to me “I feel like I haven’t achieved anything you wanted me to in my first year”. When it was really hitting its peak it was unbelievable. We used to receive a small number of claims a month, but at that time we were receiving claims in the thousands.’
A new document management system and contract automation software are on Marsden’s wish list. She declares: ‘This year we are going to focus on tech.’
Dyson
General counsel: Martin Bowen
Team size: 168 (125 lawyers)
Major law firms used: Baker McKenzie, Gowling WLG, Osborne Clarke, Kirkland & Ellis, Kim & Chang
In late 2017, Sir James Dyson announced his company would invest around £2.5bn to bring an electric car to market by 2020. Big numbers, but then Dyson spends several million pounds each week on its R&D strategy.
With 400 engineers currently working on the project and a new purpose-built facility being constructed just down the road from Dyson’s headquarters in Wiltshire, the Dyson car is far from a pipe dream. For the legal team, says GC Martin Bowen, finding ways to make it a Dyson car is essential.
‘Our designers and engineers excel at producing market-leading products, we have the task of blending that into a much more strictly-regulated regime of law and standards. This sounds like the boring side of it, but we actually find it very exciting. The culture of innovation that surrounds us means we are willing as a legal team to take on issues others may see as a stretch too far. Our lawyers have to understand that when they engage any client base, especially an engineering client base, their role is to help produce a product that is both different and better. Having lawyers who can contribute to that mission is part of our success.’
But it was the legal team’s work on one of Dyson’s more established product lines that caught the eye. When the EU proposed legislation on testing and labelling vacuum cleaners’ energy performance, Dyson’s lawyers – led by GC of Europe, the Middle East and Africa Gwen Mahé – spotted a problem in their proposed methodology. Lobbying from other manufacturers had led the regulators to test models when empty. As a result, Dyson’s technology – designed to maintain energy performance as the vacuum cleaner collects dirt – would not receive a fair rating.
‘People don’t tend to challenge the EU Commission on regulation very often,’ comments Bowen, ‘but we felt very strongly about pursuing a seemingly abstruse technical argument. Fortunately, Sir James was very much behind us and we had his full support. We are lucky that Dyson as an organisation likes to challenge and is not afraid of losing.’
Having lost the case in the first stage before the European General Court, which ruled that the Commission’s work was within the ambit of the original directive, Dyson appealed to the European Court of Justice, which subsequently ruled in its favour, giving it an opportunity to put the case for revised regulations at a hearing in March this year.
Paul Rawlinson, global chair of Baker McKenzie, comments: ‘Bowen expects his legal team to embrace the pioneering, innovation-driven Dyson approach to legal issues and this was clear when representing Dyson in the EU Court of Justice litigation.’
‘Blending different skills together – not always purely legal skills – is essential for rapidly growing or innovative businesses like Dyson,’ concludes Bowen. ‘We need to make sure all departments, from marketing to engineering, are talking the same language. Lawyers are there to make sure nothing gets lost in translation and to do that they have to be embedded in the business. When we look to recruit, we look for good legal skills and risk awareness, but we also want people who are desperate to get out there and sit with the business to help make it work.’
Marks and Spencer
General counsel: Verity Chase
Team size: 20
Major law firms used: Slaughter and May, Osborne Clarke, DWF
Eminent retail brand Marks and Spencer (M&S) received multiple nominations this year after rising above some challenging scenarios, not least relating to the largest-ever legal collapse in the UK market.
M&S had been a long-established client of the European business of King & Wood Mallesons (KWM) before its collapse in January 2017. In the months leading up to the downfall, M&S had placed a lot of property work with KWM, meaning there was a scramble to spread the work around when the firm went under.
That task fell to M&S veteran head of property legal Carolyn Lock, who ensured the work was accounted for as ex-KWM partners sought refuge at rival firms Addleshaw Goddard and Osborne Clarke (OC).
OC partner Dolf Darnton, who has worked with M&S in the past, says: ‘It was a huge hassle, but they did pretty damn well to come up with a solution.’ Darnton specifically highlighted Lock’s ability to manage the situation effectively as an indication of her strong performance.
GC Verity Chase is a popular figure in in-house circles. Darnton says she has ‘stepped up’ to her role after taking over from longstanding legal chief Robert Ivens, who retired in August 2016. Ivens first joined M&S in 1985, before becoming head of legal in 1989.
Last year also saw M&S engage in a thorough overhaul of its real estate portfolio, in response to market conditions. In April 2017, it announced 36 new stores. But in January 2018, a further plan was announced to close six stores by the end of April, with M&S choosing to shift its focus to online sales.
Property lawyers Amy Sanders, Helen Wright and Nick Tassoni were picked out for their continued work on managing the portfolio. Outside of real estate, M&S’s in-house team has been busy with regulatory and compliance, commercial litigation and employment work over the year. Patricia Howell, the head of employment law, is well regarded externally.
Darnton concludes: ‘They are a very cohesive group of very able people who balance well the needs of the business and organise their external law firms very efficiently.’
Canon Europe
General counsel: David Bateson
Team size: 30
Major law firms used: Freshfields Bruckhaus Deringer, Bristows
The Europe, Middle East and Africa headquarters of global imaging technologies and services business Canon covers operations in over 100 countries across the region. Led from the UK by senior vice president for legal, intellectual property and sustainability, David Bateson, a team of 30 lawyers located in a number of regional offices supports a broad range of markets. Over the last year, it has been instrumental in helping the organisation expand further by setting up new operations in Qatar and South Africa.
The team covers a similarly broad range of product lines, ranging from outsourcing and consulting services business Océ to a medical systems division, acquired from Toshiba in 2016. These businesses, which involve the collection of large amounts of personal data, mean preparing for the new GDPR regime has taken on an added importance. Leading the business through this work is Rob Green, formerly legal director for emerging markets. As of this year, Green has taken on a new role as legal director and data privacy director.
Jennifer Rickard, who recently retired from her position as head of property litigation at Nabarro, says Green is a standout figure within the Canon Europe team who ‘displays that good balance between understanding the nuances of the issues and not micro-managing his team. He has the necessary detachment and a good understanding of business to help drive projects forward’.
‘Rob Green has the necessary detachment and a good understanding of business to help drive projects forward.’
Although run as a direct subsidiary, Canon Europe has a considerable degree of freedom in setting its own policies and processes. As a result, legal has been able to develop and introduce a new engagement model across the company. ‘The foundation of this model is using technology to allow the routine parts of our work to be completed by end users,’ comments Green. ‘We wanted to go beyond a passive self-service model that relies on a template located in the Cloud, but the cost of the technology on the market seemed prohibitive.’
Green’s response was to create his own self-service portal, drawing on the team’s experiences to create a list of Q&A material that would allow a wide range of users to locate information quickly.
The team has also developed its own company-wide training programme to help lawyers work more closely with various business units. Modules cover a variety of non-legal topics, from learning to identify opportunities to thinking about things from a client’s perspective. The programme also asks lawyers to take control of a virtual business over a two-day period so they can better see how different aspects of a company’s operations are interrelated. ‘The whole programme is designed to get support functions thinking about the commercial units they are supporting,’ comments Green. The programme has since been taken on by the business and extended across other support functions, from HR to finance.
Green, who trained in-house, says the programme has been particularly useful to those moving across from private practice. ‘There are a lot of things you don’t know when you move in-house. Often, when someone is deemed to be failing in a role, it is because they are not aware of the tacit expectations about what that role entails.’
Reckitt Benckiser
General counsel: Rupert Bondy
Team size: 225
Major law firms used: Davis Polk & Wardwell, Linklaters
Rupert Bondy surprised many when he left BP for Reckitt Benckiser (RB) at the end of 2016. A veteran of 26 years at the oil major, and one of the most high-profile GCs in Europe, he had guided it through some particularly challenging times, including settling the Deepwater Horizon government claim following the catastrophic 2010 oil spill in the Gulf of Mexico.
As GC of consumer goods multinational RB, Bondy is overseeing some major mandates that reinforce the company’s position in the FTSE 100.
Bondy contends that the in-house team at RB is passionate about the diverse range of brands that comprise the company, from Finish detergent to Durex. He says: ‘One of the distinctive things about RB is that it prides itself on being extremely lean and the legal team punches above its weight in terms of its size. There’s tremendous energy, commitment and passion about the company and its brands.’
Considering the $17.9bn transaction RB undertook in February 2017, it is clear the team is capable of handling marquee transactions. The deal, which was the company’s biggest-ever acquisition, saw RB purchase baby formula manufacturer Mead Johnson to secure its position in the consumer health bracket. According to Bondy, the deal represented a ‘very significant effort’ by the legal team, as it resulted in RB reorganising its whole business into two new divisions: health and hygiene, and home.
He says: ‘Infant formula is a particularly sensitive category. We are dealing with very young babies who are completely dependent in some cases on us for 100% of their nutrition.’ North American GC for health, Geoffroy Ribadeau Dumas, had a strong involvement in both the Mead Johnson acquisition and the subsequent integration.
Richard Walker, now RB’s head of legal for hygiene and home, oversaw a substantial disposal of the company’s food business in July 2017. To raise funds for the Mead Johnson buyout, RB sold off its food division to Baltimore-based spice company McCormick for $4.2bn.
Unlike some of the other teams highlighted in this year’s GC Powerlist, RB chooses not to operate with a director of legal operations. Bondy states: ‘We don’t have the capacity to justify having one, despite people arguing that it justifies itself with the benefits it brings. We are very lean and mean.’
Royal Mail Group
General counsel: Maaike de Bie
Team size: 50
Major law firms used: Addleshaw Goddard, Herbert Smith Freehills, Dentons
Few in-house legal teams received as many nominations as the Royal Mail Group this year, with GC Maaike de Bie regularly cited by both private practice firms and other in-house teams.
De Bie’s reputation partly comes from her effective guidance of the legal team following Royal Mail’s 2015 initial public offering. ‘We all had to learn a lot about the business. Instead of telling the business what to do, it was empowering it to make decisions by itself. We were spending a lot of money managing our external firms. Now we’re taking a proactive approach to tackling fraud and debt. We have a finite amount of resources and we look for the best bang for our buck.’
Royal Mail is also well known in the in-house community for its pioneering use of a legal operations director. Until December 2017, Sarah Barrett-Vane was in the role, but she has since left to become a consultant. Her overhaul of the company’s billing system has proved transformational.
De Bie says: ‘I used to go to the financial officer of the company to ask how things are going. The person might say “I am sure you are doing great work”. After e-billing, we were able to say “we did 800 transactions for you”. I had all the data to demonstrate all the legal work we had done. It really helps you transform those conversations.’
As part of de Bie’s broad transformation of the business, she has instigated a review of Royal Mail’s culture. De Bie concedes that people ‘like being told what to do’, but says it’s ‘definitely not my leadership style’.
Greg Bott, director of Addleshaw Goddard’s consultancy arm, describes de Bie as ‘an excellent leader with a big impact’. He also singled out the work of Barrett-Vane, labelling her a ‘legal ops pro who has done a lot of good work in a number of areas and who recognises the importance of meaningful data to help in-house teams make properly considered, evidence based decisions’.
Uber Europe, Middle East and Africa associate GC Matthew Wilson adds: ‘The way in which [de Bie’s] taken a very traditional institution, transformed the legal function and played a significant role in transforming the business in the face of much more agile, unencumbered competitors has been hugely impressive.’