Nestlé panel faces rejig after four-year reprieve

Nestlé has launched a massive review of its European legal panel with a repeat of its ‘Running Shoes’ strategy, which cut 25 per cent of its legal spend last time round.

The contracts are worth up to SWf5m (£2.07m) a year for the panel firms, which are Freshfields Bruckhaus Deringer, Mayer Brown Rowe & Maw and Norton Rose. White & Case also picks up some corporate work.

Nestlé general counsel for Europe Trevor Brown said: “It’s been four years now… It’s purely part of internal discipline and standard practice.”

The last tender was in 2003 following the company’s Running Shoes initiative, which capped legal spend at 0.13 per cent of total sales revenue.
Since then Nestlé’s global legal spend has fallen from SWf145m (£60.16m) to SWf107.5m (£44.6m) and the number of lawyers in the group has dropped from 213 to 179. Nestlé’s revenue has increased to almost SWf100bn (£41.49bn) in that time.

Brown said this year’s process will follow the same format. He said Nestlé had not needed to put the work out to tender for four years because the relationship between the company and its firms is so close.

The main law firms are used for corporate, finance and regulatory work in Europe.

For its first tender in 2003, Nestlé sent out invitations for submissions to around 30 firms in the UK and Europe, calling 12 for an interview. Six of those firms were asked back for a second interview.

The review was due to take place earlier this year but was delayed by Nestlé’s $5.5bn (£2.74bn) acquisition of baby food maker Gerber in the US last month.

Brown and the European team worked with the company’s US legal group on the deal and did not have time to conduct the review.