In-house lawyers? Better to hire from within

Archer-Daniels-Midland Company (ADM) is one of the world’s largest food companies. It grows, processes, and sells grains and other products through a huge network of ships, railroad cars, and ports, and sells or operates in nearly every country in the world. You would think that this vast empire would have a large legal department, especially with some $90 billion in revenue that places the Chicago-based ADM as number 41 in the Fortune 500. But it doesn’t. Some 80 lawyers in 15 countries constitute ADM’s legal department, which places the headcount way below such corporate giants as General Electric Co. and even Italian companies such an ENI. Leading ADM’s legal department is senior vice-president and general counsel Cameron Findlay, who has had a number of big firm and in-house counsel jobs, as well as serving as a clerk to now-deceased U.S. Supreme Court Justice Antonin Scalia. We talked with Findlay about the department, how it manages outside law firms, and the legal challenges that face an international food producer.

You were at Medtronics (a medical devices producer) the last time we talked. Why did you switch jobs?
I’m in Chicago in real life. I loved Medtronics, loved the legal department, loved my peers, my boss, everything about it. I just didn’t want to spend the rest of my career in Minnesota. When the headhunters would call, I’d say I’d be interested if something comes up in Chicago. And then ADM moved to Chicago so I took them up on it. It’s an interesting place, a completely different industry, not quite the same quality of legal issues, but still a nice place to be.

How is your department structured? Are people in practice groups, is it geographical, or a little of both?
Yes to all. We have a classic matric structure. Here in Chicago, we have functional centers of excellence for litigation, employment law, corporate M&A securities, intellectual property. Then we have business unit dedicated counsel. Each unit has two lawyers We have a regional structure except for North America. Our international headquarters is in Rolle, Switzerland, in Asia, Shanghai. We have a bunch of lawyers in South America, based in Sao Paolo.

How is the in-house bar in South America? Is it still a work in progress?
That’s a good way of putting it. The job’s been transformed here in the US in the past 30 years. It’s a relatively prestigious, sought-after thing to do. And in Europe, the same. In South America, it’s a little behind that. Sao Paolo seems to be the center for in-house departments. Some companies put their South American in-house departments in Miami, but we’re in Brazil. Brazil is very important to us.

Do most of your legal team come from private practice or other companies?
We look to people who have in-house experience. I’ve found that in-house and outside lawyers think differently, especially in a lean department, which we are. Think about it: for a $90 billion company to have 80 lawyers is still lean. We can’t afford to train someone in how to be an in-house lawyer. There are exceptions to that, but most hires are from other big multinationals.

They are different skill sets.
Yeah, if you’re GE or Pfizer, it’s easier to bring in a bigtime Cravath partner as a litigator. We need people who know how to manage firms, bring in alternative fee arrangements, know which deposition to go to, or which ones to leave to the firms.

Do you have a panel of outside law firms?
We do have a panel, and we’ve been trying very hard to bring business to our preferred firm network. We call it the ADM Law Firm Alliance, or “Alfa” for short. You have to have a snappy acronym these days. When I got here, the company didn’t know which firms it was using. A lot of the businesses can hire law firms on their own, lawyers could, too. They’d just send the bills for payment. And we wanted to get in a smaller number of firms to assist us.
We set up this small network of 18 firms. Some we use for lots of things, like Sidley Austin and Skadden and Baker McKenzie. There are some for specialty areas. We have a lot of maritime stuff, so we use Jones Walker in New Orleans. We have a lot of international arbitration matters before the Grain and Feed Trade Association, GAFTA. A lot of that happens in London, so we have a couple of firms there.

Do you do a formal evaluation of your outside firms? Or team building?
Both. When we put together our panel, we invited the firms—each could send two representatives. We wanted them to work together, to think as a team rather than rivals. And then we do an in-depth annual evaluation. We do a firm report card that shows all the metrics that we use, from spend to average hour cost, to the partner/associate mix, to diversity in the teams on our matters. And we sit down with the firm for about two hours, sometime between January and March, and walk them through it.

After the 2008 crisis, it seemed that a lot of power shifted from law firms to inside counsel. Firms were trying to accommodate the clients. The paradigm shifted, people said. What’s your opinion?
I think the pendulum has swung back toward law firms. I thought at the time that it would be the breaking point for law firms. That they’d send you the bill and expect you to pay. But the great law firms have reasserted their power. They say, we have lots of work, we’ll just work for someone else. But the mid-tier firms can’t do that. They’re more willing to do alternative fee arrangements and big discounts. In the last 3-4 years, the big firms have said they aren’t so interested in that.

Do you have a separate compliance department?
We do. When I got here, there was a major FCPA matter and as a result, we built a substantial compliance department. We brought in a compliance guy from Coca-Cola, and he reports to me. He’s got 20 people worldwide.

Since you’re in the grain business, have GMOs caused you any grief, or opportunity?
Sustainability is now a requirement in our sector. Governments and NGOs want us to have it, but more important, customers want us to have sustainable processes. I was watching a Hellman’s mayonnaise ad; it’s owned by Unilever. They pledge that oils are sustainable, eggs are cage-free. I saw soybeans being loaded into a crusher, and I thought, that’s exactly what Unilever demands of us. They want us to certify that we’re not contributing to deforestation, or that we aren’t buying from companies that do that.

What are the nightmare issues for you?
The nightmare scenario would be a food-safety problem, whether intentional or through negligence. So we do a lot of crisis planning. I’ve been involved a lot in enhancing our food security and regulatory and food safety and quality programs. Another scenario—we operate in nearly every country in the world, so FCPA concerns are up there. All those reputational problems are so important. ADM knows more than most—we were the subject of a movie, The Informant. You don’t want to have a problem so big they make a movie with Matt Damon about it.

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