Delivery man: Neill Abrams, Ocado
11 July 2011 | By Caroline Butcher
Neill Abrams, general counsel at online grocer Ocado, has been with the company since its earliest days.
Ocado might be one of the most recognisable online grocers today, but general counsel Neill Abrams remembers when it felt more like “a few guys doing a school project”.
The South African lawyer, who previously worked at Goldman Sachs as a financial analyst and then as executive director and counsel of the legal department, entered the fledgling retail company in 2000 when he was approached by three of his former colleagues from Goldman Sachs: Tim Steiner, Jason Gissing and Jonathan Faiman.
Abrams also had a short spell at the bar at One Essex Court before joining Ocado, and is the first to admit his career has followed an unusual trajectory.
“I couldn’t sensibly advise anyone to adopt the path I’ve followed because it’s been entirely serendipitous,” he says. “When I first got involved in Ocado it was literally three guys with an idea, and I started working with them two or three days a week and built it up from scratch. There was a tremendous feeling of satisfaction to go from that situation to having 5,000 people. The rate of change at Ocado has been breathtaking.”
Starting as sole counsel for the retailer, Abrams was involved in negotiating key branding and sourcing relationships with John Lewis and Waitrose, as well as a wide array of start-up work.
“I was involved in creating from scratch all the things established companies take for granted,” he recalls. “I provided advice on equity funding, debt negotiations, the IPO, the building of an automated warehouse and the whole real estate and construction side of the business.
“I also oversaw the employment law set-up. At first it was just a few of us guys who knew each other so we didn’t need to have that sort of HR infrastructure, but to put it in place has been interesting.”
IP matters concerning Ocado’s development of its own software were also high on Abrams’ legal agenda in the first few years of operation.
“We built our own IT department and then realised there was no commercial product that did what we wanted,” he says. “So we wrote our own program and we now have about 200 developers who work for us. We looked at the question of how you pack a million items of groceries a day and still have 99.9 per cent accuracy. The IT we use has gone through a sea change.”
Abrams has built up his legal team to include nine lawyers who focus on areas including employment, corporate, commercial, IP, real estate and construction.
“Nine lawyers may sound a lot, but relative to the rate of change and growth of Ocado it’s not that much and it keeps our external spend under control,” he explains. “I like to have the department plugged into as many business areas as possible. We have lawyers integrated into various areas and they go to meetings for things such as marketing and engineering.
“They have a transactional role but it’s also about risk management. We act as a facilitator, not a blockage, but we need to ensure transactions are carried out in a way that doesn’t result in litigation or other problems.”
Abrams has never appointed a formal legal panel for Ocado, preferring to take a ’horses for courses’ approach. Key advisers include Slaughter and May for corporate, IPO and IP work, Scottish firm Shepherd & Wedderburn and Herbert Smith for real estate work, and Lancashire transport firm Backhouse Jones for specialist transport advice.
He also instructed a broad range of firms to advise on Ocado’s IPO work last year, when the retailer changed from a private to a publicly listed company. Advising firms included Allen & Overy, Baker & McKenzie, Bond Pearce and SJ Berwin.
Abrams lists Ocado’s objectives as growth and expansion into other jurisdictions, as well as expansion of the product range.
“The grocery market in the UK is absolutely enormous: it’s somewhere around £150bn in value,” he says. “We have a turnover of about £550m and despite the number of column inches we generate we’re tiny, so our first objective is to grow. We’ve been growing at 25 per cent per year and would like to continue that.
“We’d also like to expand from a core groceries range to offering other homeware, kitchenware and mother and baby products. There are more retailers going online but we’re not afraid of it. The retail market’s absolutely enormous and as it grows we’ll grow with it.”