Yorkshire: No quarter asked

Although it is headquartered in Birmingham, 2 Sisters Food Group’s central functions, including legal, can be found in Wakefield as a legacy of the company’s 2011 merger with Northern Foods. The company has expansion in its DNA, with Northern Foods being itself ‘a company that grew out of acquisition’, says group legal counsel David Morgan.

In 2013, hot on the heels of that merger, the group acquired VION Food Group’s poultry and red meat businesses, a transaction with a roughly six-week turnaround, exemplifying the company’s ‘entrepreneurial’ style of operating. ‘Part of our pitch when we buy businesses is: we’ll do the transaction; it will happen very quickly; there’s little governance to go through, no institutional shareholders to deal with – we’re privately-owned,’ says Morgan.

On the back of that deal, the three-person team was subsequently involved in competition issues. ‘We then had to go to the Office of Fair Trading (OFT) for a merger investigation because the acquisition meant we’d have a relatively sizeable market share in chicken,’ Morgan says. ‘It would have been a disaster if we had to hold the VION business separate from our own business under OFT rules while the business went through a Competition Commission investigation and then have remedies imposed – that would have cost the business millions.’

Business-critical matters such as these inevitably influence the law firms he chooses because, for example, ‘the cost of dealing with an OFT clearance if they succeeded was minuscule compared to the cost of having, potentially, a firm that can’t get you a clearance’. For matters such as these, 2 Sisters Food Group procures on a bespoke basis, taking into account factors such as ‘quality of the advice, the experience that they have, their reputation and the confidence that the board has in them’.

For day-to-day business matters, being local is often not a factor in selecting law firms, but that’s not to say it never is. For example, for pensions advice, a local perspective is vital, according to Morgan. ‘Locality matters, because the chairman of the Northern Foods trustees, the finance team and pensions team who are providing data are all based in Yorkshire. What I then say to myself is: “Well, we have a lot of the personalities that are regional, so having a law firm in London that has a great pensions reputation but doesn’t know any of the people, doesn’t know how they might interact in negotiations and doesn’t have a Yorkshire link makes no sense.” You still need expertise, but regional knowledge and relationships do have an impact on decision making.’

Mark Amsden notes a ‘seismic shift in the supermarket sector’ of late and, as group general counsel of Wm Morrison Supermarkets, he would know. Morrisons has faced all the major changes seen in the retail sector, such as online shopping, the growth of convenience stores and the arrival of foreign discounters.

The company itself has witnessed a significant amount of change in the last decade. It moved from being ‘a family-owned company based out of Yorkshire’ with around a hundred stores based reasonably locally to buying Safeway in 2004 which, with around 300 stores nationally, ‘was like swallowing an elephant’.

The legal team was born during this time of transformation. Until five and a half years ago, Morrisons had no in-house capacity. When Amsden arrived just over a year ago, he grew the group to ten staff, each with responsibility for different parts of the business. Nevertheless, a team of ten lawyers can only go so far in servicing the needs of some 120,000 employees and Amsden likes to think long term. ‘One of the metaphors we use is the importance of teaching people to fish – if you teach them to fish, you feed them for life,’ he says. This translates to upskilling staff – ‘helping people to help themselves’, he says. ‘So better precedents, better training. We all recognise that we would service the business better if each of us were quite rigorous on one day a week, just training other people in the business.’

Last year the team conducted an extensive panel review and when it comes to assessing external legal advice, what Amsden values most is firms ‘not surprising us, in every sense’. This means ‘being consistent in your advice, being consistent on pricing and getting off the fence – tell us honestly what you think’. The stakes are high because as a supermarket the company’s biggest issues are food safety and health and safety issues, and when these things are neglected, newsworthy crises can happen, such as the horse meat scandal that Morrisons came out of well because it is able to control its own supply chain.

This doesn’t happen by accident. ‘There’s a lot of work that goes on within the business, both within the legal team and within the different technical services parts of the business, to ensure that we do the right things,’ says Amsden. ‘The pleasant thing about working within Morrisons is that the starting point with any decision is: what is the right thing to do?’

‘Iconic structures’ are the game for Severfield, which fabricates structural steel for use in construction projects such as the Shard and the Olympic Stadium. Locations in North Yorkshire (where it is headquartered), as well as Lancashire and Northern Ireland, serve the company well, because, as group legal director and company secretary Mark Sanderson puts it: ‘You obviously benefit from having the slightly lower overhead of being based in the North and in Northern Ireland.’

The key focus of legal work is contractual and dispute management, much of which is handled by a team of quantity surveyors. Sanderson’s role is to ‘make sure that we’ve got the right systems and processes, so we’re enforcing the minimum standards we aspire to in terms of contracting, and that we’ve got the key components of risk mitigation contained in most of our contracts’.

Another crucial area of involvement for Sanderson is in risk management, where he works closely with the company’s health and safety director. ‘Health and safety is our number one risk,’ he says. ‘You’re handling big lumps of steel, both in factory and then on-site. You’re working at height, you’re working in windy conditions, you’re working with welding gear… all of which are potential dangers.’

Other key areas include general commercial agreements, corporate governance and regulatory compliance, although as Sanderson says: ‘There isn’t a massive demand in a business our size for legal advice.’ As such, it’s a one-man legal team and his role goes beyond law to encompass leading the company’s ISO 27001 compliance programme and business continuity planning. Severfield doesn’t often go out to external firms but has occasion to for matters such as property, construction, share schemes, compliance, banking and bespoke areas, such as its recent rights issue.

‘Lots of people beat a path to the door to offer you their services and I’m always very clear with them and say: “I’m happy to have a coffee with you, but I’m not going to make promises because we don’t actually use lawyers very much.’” When he does use them, Sanderson is clear about his preference when it comes to construction, property or share scheme advice. ‘A lot of the lawyers in the Northern marketplace are more commercial and a bit more savvy at that kind of work. For half the price you’ll get a commercially astute, experienced lawyer giving advice as opposed to a very junior theoretician from a big City firm.’

Mike O’Connell’s to-do list is getting longer. As head of legal services for Mid Yorkshire Hospitals NHS Trust, he reports a rise in the volume of litigation claims made against the trust, consistent with a national trend towards a growth in litigation against the NHS. The reasons for this are complex but clinical negligence claims comprise the bulk of the litigation brought and these can be influenced by socio-economic factors, particularly at a local level. ‘Within the catchment area of our trust, there are several areas that have particular issues of deprivation and social problems, and that has knock-on effects on patient access to healthcare, their understanding of healthcare, and how they go about resolving concerns and issues that they might have.’

But, he adds, alongside this trend is a drive for efficiency, resulting in quicker turnaround times. ‘The NHS Litigation Authority (NHSLA) has streamlined things. There are electronic means of reporting and communicating between the NHSLA and the NHS trusts and also with panel lawyers. There is a speeding up of all the processes.’

All clinical negligence claims are handled by the NHSLA, which instructs firms from the recently reviewed Yorkshire and Humber legal panel. As a key component of the work for O’Connell’s team is pastoral support for staff – often in relation to coroners’ inquests – the importance of sensitivity means that access to a local law firm can be paramount. ‘That kind of devoted face-to-face quality time is the efficient way to do it, but moreover is the right way to do it. A regional firm will have experience of good working relationships with those local firms who act for claimants and equally they will be used to working with the local coroners.’

There are times when this local touch can be of particular benefit: ‘There is still some variation in how individual coroners work in their local areas, so knowledge and experience of those particular quirks or nuances will be critically useful,’ O’Connell says.

But the backdrop of national change to the NHS is ever-present for the trust and this is evident in the strategic aims for the organisation going forward. It is planning to become an NHS Foundation Trust – which entails addressing historic financial debts – as well as to achieve a significant clinical services reconfiguration over the next five years. This involves examining resourcing and building requirements across three main hospital sites. As ever, its focus is to deliver all that ‘in a safe and effective way’, says O’Connell.

catherine.rodgers@gcmagazine.com