Can you give us an overview of the legal function at Fonterra, how it supports the work of the business and how you would describe your operating model?
We have 26 people in our global legal team with 13 lawyers and 2 legal executive roles here in NZ and a further 10 lawyers in some of our key markets (including China, the United States, Chile, and Australia). Across the team, there is an average of over 15 years of legal experience. We have 16 women and 10 men in the team and 8 different nationalities.
We have a centralised team sitting in Auckland which is made up of portfolio sub-teams supporting key business units: our Global Operations and Global Ingredients business unit (which includes our global manufacturing business and our global dairy ingredients business), our Global Consumer and Foodservice business (which includes our various consumer brands businesses around the world and our sales into the foodservice channels (including quick service restaurants, hotels, restaurants and bakeries), our Group Functions and Farm Source business units (including our Trading Among Farmers/Fonterra Shareholders’ Fund, treasury, procurement, health and safety, food safety and regulatory functions) and our Farm Source business (which is the key farmer relationship and engagement part of our business and obviously very critical for us).
The lawyers in our offshore markets sit in a particular portfolio sub-team depending on the nature of the business they support. Our Chinese legal team (of three lawyers) sit outside of these portfolio teams given the significance of that market and the lead lawyer in that market reports directly to me. We have a separate Governance, Risk and Assurance function with whom we work closely. This function includes the Company Secretarial function, support for the Fonterra Shareholders Council (our shareholder representative body), and our privacy, internal audit, risk and compliance functions.
Fonterra has a Legal policy and Standard on what needs to come to the Legal Team. We are a relatively small team given the scale and geographic spread of our company and so we try our best to provide the business with self-service options where that makes sense or make sure that customised training is provided to (hopefully) minimise the amount of issues and things we have to deal with. It is all about demand management.
As for external support, we do have a loose panel of trusted external advisors in New Zealand and regular external legal counsel in our key markets. We are all really general practitioners in the team so we do go external for specialist advice or to access up to date market knowledge and experience. We often lean on our external law firms offshore for market intelligence and making contacts and opening doors for us. We look to use our external lawyers with different levels of internal oversight. In some cases, we are comfortable with our external lawyers dealing directly with our people with very limited oversight and reporting on the understanding that they will engage with one of our team for major risk calls.
Some of our lawyers sit on lead teams of various business units and markets which enables them to get in early in strategy discussions and are not just left to execute. Our lawyers are well connected and networked in the business and like a lot of in-house legal teams have a unique advantage in that we span the entire business and have great visibility over what is going on.
Given the scale and complexity of our business, the importance of Fonterra to our farmer shareholders and New Zealand (and the media attention therefore given to just about everything we do), and the sheer number of markets and channels we play in, I think it is fair to say that members of the Fonterra legal team have some of the most challenging and exciting in-house legal roles in New Zealand.
As the General Counsel of Fonterra, I have a broad remit and management responsibilities but given the current capacity of our team I am actually “on the tools” a fair bit doing similar work to the rest of the team whether it is managing litigation, leading a M&A transaction, or providing a complex bit of advice.
How do you co-ordinate across a globally distributed legal function to ensure consistency of approach and advice?
We talk to each other! We also use the Legal lead team (myself and the 3 GCs) to monitor work flows and core engagements across the entire global legal team to ensure consistency and no forum shopping by the business. The GCs and myself (with the China team) keep tight with the lawyers in our respective portfolio teams. We also leverage the reporting across the team to see what’s going on and check in with senior management about what we are working on.
We have (and continue to build) an expansive precedent database which is accessible on an online Legal Team site and have started using a new practice management system which we hope will enable us to make sure that previous advice is visible and accessible.
We also have a Legal portal/intranet site on our Co-operative’s intranet called the “Legal Shed” which provides access to forms of contracts, lots of quick guides (from how to deal with and instruct the Legal Team to how to deal with competitors), training modules, Q&A and whole lot of other cool stuff that is aimed at encouraging self-help where that makes sense. That provides “one source of the truth” on various legal matters.
What key challenges are your team facing and how do you plan to address these?
Like everyone else, we have the inevitable cost pressures and these are heightened at the moment as the business is going through a major strategic review and full review of its portfolio of investments. There is a high demand for legal resource which is stretching the team. We need to be firmer and more focused on the work we should be doing and more importantly not be doing, look to be smarter about how we use external resources, and continue to provide opportunities for legal “self-service” across the wider business.
As a truly global business, our legal team is dispersed across multiple time zones and it is a challenge to have everyone in the team connect for a team meeting. We need to continue to find ways that all members of the team can engage with each other and leverage the skills and experience sitting across the global team. We have been relatively successful in building a close connection within the portfolio teams.
Are you rolling out or planning to roll out any new technologies or systems to support the work of the legal team?
We have recently signed up to the LawVu practice management system and are looking to fully transition on to that system. It is early days and it takes a fair bit of effort to change old habits but we are seeing the value. Our key driver in moving to a practice management system was really around knowledge management. We need to be able to find stuff and understand what was going on in case someone leaves the team (not a regular occurrence by the way!).
We are also working on the next “upgrade” of our Legal Shed portal that I talked about earlier. We need to continue to keep this portal relevant, comprehensive and user friendly. Among other things, we may explore potential uses of some basic AI in that context.
How do you see the role of the modern in-house lawyer evolving?
As we all know, technology will continue to make BAU legal more self-service allowing in-house lawyers to step high above BAU and focus on more strategically important work. As in-house lawyers show their value beyond “black letter” law, we will see more in-house lawyers given responsibilities beyond the pure legal function e.g. project management, risk, corporate/stakeholder affairs, investor relations, compliance, risk, privacy etc. Clearly, for many sole in-house counsel and small in-house teams, this is already the reality.
I think cost pressures on businesses will see them continue to grow in-house legal capability in order to save costs on external legal counsel. New law firms providing flexible and highly experienced staffing options will become more and more attractive.
What are you doing around diversity and inclusion?
Fonterra has adopted the NZLS Gender Equity Charter and was an early adopter of the Law Society’s Gender Equitable Engagement and Instruction Policy. The principles in the Charter and Policy closely align with Fonterra’s broader focus and approach to diversity and inclusion, and are consistent with Fonterra’s thinking around sustainability in a broader sense, and reflects our core corporate value of Do What’s Right. We actively putting the gender equitable briefing commitments into action not only for litigation but also for non-litigious commercial work and not just in New Zealand but also in the context of offshore instructions.
In meeting some of the Charter commitments (such as unconscious bias training), the Fonterra legal team will look to take advantage of other internal corporate programmes and resources in this space. The legal team have also shared the actions they have taken in furthering gender diversity the principles of the Charter and Policy with the wider business unit the legal team sits within (including the adoption of the principles of the Charter and Policy and engagement with their external law firms on these issues). The team also applies the principles of the Charter and Policy in a wider sense – for example, ensuring diversity of gender in external speaking panels in which we participate. We have made a good start in this space but we can certainly do more.