Bread and butter of the law

David Wigan reports on a company that prefers building strong relationships with firms to holding beauty parades.

When is a lawyer not a lawyer? When he or she is employed by Asda. At least according to Denise Jagger, the supermarket chain’s senior in-house lawyer. She says the company’s Leeds headquarters is the corporate equivalent of Coleridge’s stately pleasure dome, and at the forefront of enlightened management practice.

“We work in an open plan and open-minded environment,” she says. “Although we are primarily legal advisers, we are encouraged to join in all aspects of the business. We are encouraged to be much more than just lawyers.”

Just three of Asda’s 100,000 employees are dedicated lawyers. Jagger, head of legal, is assisted by Eleanor Doohan, formerly of Hammond Suddards, and employment specialist Gary McHale.

Such a tiny proportion of lawyers to staff seems daunting, but Jagger – formerly a partner at Booth & Co – says the seamless relationship between the legal team and the rest of the business boosts efficiency.

“With such a small group of lawyers you need to be full of energy, but more importantly you need to understand how your business works. Asda is a master at creating the right kind of environment for fostering communication between departments.”

The Asda legal team has had a busy year. The company championed price cuts through highly-publicised court cases, embraced e-commerce, won the UK Supermarket of the Year title for the third year running and, last June, was taken over by US-based Wal-Mart, the world’s biggest retailer (The Lawyer, 5 July 1999).

Sales for the period stood at £13bn, representing 14 per cent of the market share, while the company says it gained one million customers following the Wal-Mart tie-up.

“You do need to be passionate about Asda,” says Jagger. “The company has a reputation for challenging the status quo in food retailing and we are constantly campaigning on issues that affect our customers.”

Last May, Asda was feted for its success in the so-call Parma ham litigation when it fought off an attempt by Italian ham producers to prevent it using the Parma name after packaging of the product was moved to the UK. The case will go back to the House of Lords on appeal this year.

Asda uses a regular selection of law firms, to which it is intensely loyal.

“It is difficult for firms to get a foot in the door, but once we have formed a relationship it tends to be strong and enduring,” Jagger says.

On the corporate side, the main beneficiary of Asda’s fidelity is Slaughter and May. The relationship goes back several years and was strengthened during the Wal-Mart takeover, on which Slaughters acted.

Jagger picks out Slaughters’ head of corporate Nigel Boardman as “an excellent strategist and always business oriented”.

She also praises corporate partner Nilufer Von Bismarck, who has worked with Asda since qualifying. “She has a brilliant mind,” says Jagger. Slaughters also acted for Asda at the Competition Commission inquiry into supermarket practices.

Eversheds in Leeds is the company’s first choice for non-corporate work. Jagger singles out head of intellectual property Rex Parry as “very technically competent, and with a wicked sense of humour.”

Richard Kampner at Addleshaw Booth & Co cemented his reputation as a top-class litigator while acting for Asda in the Penguin/Puffin litigation – in which Penguin manufacturer United Biscuits brought a passing off and trademark infringement action. Asda kept the biscuits but lost the right to use black and white seabirds on the packaging.

On the property side, Park Nelson in London is often consulted, with Eugene O’Keefe recommended. Virginia Clegg at the Frith Partnership in Leeds and Glasgow firm Maclay Murray & Spens are other favourites.

“We do not believe in law panels or beauty parades,” says Jagger. “They are too formal. We usually meet people on the other side of deals and develop the relationship from there.”

External advisers are susceptible to the Asda brand of corporate bonhomie. “Several Leeds-based advisers were invited last year to join in our adopt a store programme,” Jagger says. “They came along and helped pack bread and work on the tills for a day.”

But the majority of work is handled by the in-house team. “We handle pretty much anything that comes our way,” Jagger says. “Between us we cover contract and employment issues, intellectual property and trademark decisions, in-house training and European law.

“As in-house lawyers, we are often asked to design training programmes for in-house teams.” McHale is working on several at the moment, adds Jagger.

One of the biggest projects in the last few months has been the setting up of Asda’s e-commerce unit.

Doohan handled the legal aspects and drafted forms. “It was an interesting project because most of the UK legislation is not yet in place, so there was a fair amount of second guessing,” she says. “It’s wonderful for a legally trained person to get the chance to cross over to product development.”

Doohan is also involved in Asda’s latest campaign – to abolish manufacturer’s specified retail prices for some over-the-counter medicines.

She says the company is a willing and aggressive litigant when it comes to pursuing free market precedents.

“It is outrageous that it is lawful for pharmaceutical companies to specify resale prices for some over-the-counter drugs,” she says. “We were threatened with injunctions by Severn Seas, Roche, Whitehall Laboratories and Pharmacia & Upjohn and were forced to give undertakings not to undercut, but we see it as nothing less than a health tax on the public.”

Doohan adds that the Office of Fair Trading is investigating and the case will be heard by the Restrictive Trade Practices Court in October.

Despite the Asda in-house legal team’s sense of community, Jagger admits that new blood will be required in the near future.

“We have increasing contact with the Wal-Mart team in Arkansas, especially in the area of best practice.

“The workload is getting heavier and we will probably take on two more lawyers in the coming months.”

Annual highlights

Takeover US retailer Wal-Mart paid £6.75bn to take over Asda in June. The move rocks the food retail industry as Asda – already said to be 5 per cent cheaper than its rivals – promises even lower prices.

E-commerce The company launches online shopping, with customers provided with

CD-Roms listing the company’s products. Asda opens the first dedicated warehousing in the UK for food retailing on the world wide web. Value Mad – which searches the web for the cheapest products – soon follows.

Parma ham case Asda wins in the High Court after the Confederation of Parma Ham Manufacturers tries to stop it using the word Parma on its packaging after Asda moves its meat packing business to the UK.

Cheaper medicines campaign The retailer campaigns to stop drug manufacturers specifying minimum retail prices for some over-the-counter products. The case is due to go before the Office of Fair Trading in October.

Departure Senior Asda lawyer Nick Cooper leaves to become group company secretary at Sage in January 2000. He is replaced by his former deputy Jagger.