Meet market

On a Wednesday morning ;in March, 80 lawyers representing the 11 ;firms ;on Sainsbury’s newly appointed panel gather in an auditorium in the supermarket chain’s ‘store support centre’ at 33 Holborn. The brief? To learn more about their shared client so that they might become better service providers.

The lawyers are brought up to speed through talks given by Sainsbury’s executives, then offered the chance to have their queries addressed in a Q&A at the end of the day. The session also offers the chance to mingle with representatives of the legal department’s five sub-divisions – civil disputes, commercial, employment, property and trading – over a coffee or a bottle of branded Caledonian water.

Firms are invited to bring along up to seven advisers each on the day. But the distance involved in travelling to London for Northern Ireland’s L’Estrange & Brett and Scotland’s Shepherd and Wedderburn mean they bring a few less. This leaves extra places for other panel members. Addleshaw Goddard, led by partner Derek Tolley, has an army of eight. “They’re quite keen,” says Sainsbury’s head of legal services Nick Grant. Packing the panel into the same room for five hours sounds like a recipe for a tortuous day. These people have just spent the previous seven months of a gruelling tender process identifying how they are able to offer advice more precisely and more cheaply than each other and now they must break bread, or in this case Jammie Dodgers, together. Unsurprisingly, the unease pervading the auditorium as it all kicks off is palpable.

The conference begins with an address by Grant. “If anyone mentions the word potato, they’re off the panel!” he quips as he strides before the audience, in an allusion to the story that had broken just days earlier of the Sainsbury’s potato buyer who had been mired in a £3m kickback scandal. But the joke only elicits the faintest titters from the assembled lawyers, who seem to be uncertain as to whether it’s okay to laugh.

The tense atmosphere persists for the duration of Grant’s talk and is in great contrast to his confident, almost flippant, style. He responds to a slide entitled “The tender process, how was it for you?” with the comment: “I know the answer: bloody awful! The phrase ‘long and drawn out’ was first coined here.”

But an explanation for the climate of nervous anticipation among the attendees is provided when Grant asks the delegates how many of them have attended similar events. Two or three hesitate, then cautiously lift up their arms like school pupils being grilled in assembly by the head- master, wondering if they will be called on to elaborate further.

The panel conference format is a relatively novel approach. To date BT, Northgate Information Solutions and Shell are among the few organisations to have attempted to bring firms together for information-sharing exercises.

“These things aren’t often done,” confirms Linklaters corporate lead partner Mark Stamp, who is in attendance at the conference. “It’s a bit startling at the beginning.”

Bond Pearce head of retail, partner Gavin Matthews, who is leading a team of six delegates, agrees. “Lawyers are not used to attending such an event,” he says. “Sitting in a room with law firms that are your direct competitors is not an easy ask.”

So why has Sainsbury’s decided to do this? Does Grant want to present one final hurdle for appointees to clear in a test of their commitment and professionalism? Were the meetings, phone calls and reviews that characterised the tender process not enough to gauge their staying power?Although Grant has brought many sweeping changes to the Sainsbury’s in-house legal department, this was not his initiative. Nor was it out of a desire to follow BT’s example. The idea, in fact, came from the law firms themselves, Grant says. They told him during the tender process that they were “hungry for information about Sainsbury’s”. They said that they “would be better service providers, would provide more efficient, insightful, deeper answers if they had that,” he clarifies. “[The conference is] me delivering on my promise to bring [the law firms] more inside the fold.”

Over refreshments in the lobby area, the lawyers confirm that this is the case. “It’s a privileged opportunity to gain insight into the entire business,” says Addleshaw Goddard competition partner Adam Aldred.

For his part, Matthews says his key objective for the day is to find out what Sainsbury’s strategy is as a mid-market chain and how his firm can provide more targeted advice.

Again, it is a member of the Sainsbury’s legal team, head of trading Jill Hardwick, who injects a more irreverent style into proceedings, jokingly illustrating the supermarket’s place in the pecking order of the major players by quoting humorist Alan Coren’s quip that Sainsbury’s exists to keep the riff-raff out of Waitrose.

Matthews says that having this information is key. “If you know where they’re heading, where they may be gaining market share or losing customers, you know how you can help them.”

Stamp argues that this type of intelligence can be much better gleaned by an in-house meeting of this nature than just from reading some glossy promotional material. “You get a flavour from seeing Sainsbury’s in its own base and through the people you meet,” he adds.

As the day unfolds, the tensions lift somewhat and Matthews cites a talk on trends and future market activity in food retail by Sainsbury’s customer and market insights manager Alan Lowthorpe as assisting in answering his queries about the chain’s market strategy. “It helped us to know where the pressure points are and what the likely legal issues are [surrounding] advertising and pricing issues,” he says.

But there is another objective to the day beyond just increasing law firm know-how. Grant says he wants to “test the limits of what we call a panel”, adding: “For me a panel is me here waiting and a group of people there waiting. When something happens I go to them. The idea is to see if we can found a community of trusted legal advisers with bonds and linkages within itself rather than a panel consulted every so often.”

It sounds nice, but how willing are law firms to become part of this “community of trusted legal advisers”, when they might be giving the game away to a rival?”We’re not trying to give anything away, we’re just expressing the manner in which we want to work,” argues Stamp. Linklaters is the only firm to have a corporate remit, so the opportunity to cooperate on information-sharing is less likely to arise. But the majority of the other firms on board work on property and a panel conference in theory should allow them to pick up techniques on best practice and problem-solving.

But Bird & Bird telecoms specialist, partner Dominic Cook, who has had experience of the panel conference format in his role advising BT, is more sceptical about how much firms really learn from each other. “Occasionally another firm is doing something interesting, but personally I haven’t had a eureka moment,” he says.

Nevertheless, Cook thinks such events are valuable. “Keeping panel firms up to speed is in everyone’s interest. If you get on with them then both of you get a better deal.”

As the conference draws to a close, the question on everybody’s lips is how it will be taken forward. Grant describes the conference as “a first novel step” and plans regular follow-ups. The time and resources involved in bringing seven or so lawyers together from each firm with the entire in-house legal team mean that the legal conference format is not something that can occur frequently. So how can Grant ensure that his vision of developing “a community of trusted legal advisers” is put into action?Sainsbury’s might learn a thing or two from other organisations that have attempted to do similar things, despite Grant’s assertion that he is plotting his own path. BT, for example, has taken a two-tier approach to panel liaison and engagement.

BT kicked off the appointment of its two most recent panels in 2003 and 2006 by inviting lawyers to events focusing on business and priority matters, according to BT Retail general counsel Gordon Moir. And it has followed this up by having the participating firms host workshops on key issues such as diversity with a broader audience, including the firms’ HR and marketing directors. Linklaters corporate partner Roger Barron, who has been involved in these events as a BT adviser, says they are “about engendering the spirit of working together”.

But other approaches have been less successful. One partner cited a failed experience floated by another client to establish an extranet service. The intention was that law firms would be able to post advice to be viewed by both the client and the other members of the panel. “It didn’t proceed – I think law firms were being too competitive,” he says.

Of course, Sainsbury’s is to establish a steering group of sole representatives within the firms and senior in-house lawyers within the next couple of months. Grant says its tentative priorities will be: training and development; IT/process simplification; corporate responsibility; knowlege management; and business opportunities. Sainsbury’s will stop picking up the phone to individual lawyers, nor stop organising one-on-ones on specific issues, and some advisers have already been called upon in this capacity.

And there is always the possibility that Sainsbury’s will go back to the traditional approach of firms operating discretely, with little contact with each other. “Maybe we will come to the conclusion that the old model is the right one,” says Grant. n

#panel firms

Addleshaw Goddard: Property and commercial

Bond Pearce: Regulatory

Charles Russell: Regulatory

CMS Cameron McKenna: Property

Croner Consulting: Property

Denton Wilde Sapte: Commercial and property

Lawrence Graham: Property

Linklaters: Competition and corporate

L’Estrange & Brett: Northern Ireland

Shepherd and Wedderburn: Scotland

Winckworth Sherwood: Licensing