R&R makes some of the best-known ice cream brands around and it’s growing fast, with GC Francesca Yardley keeping a cool eye on progress
What is the best thing about working in-house? Better hours? More variety? Control?
How about four litres of free ice cream per week written into your contract, the first taste of every new lolly to hit the shelves and the chance to drive around the office in a mini ice cream van?
It’s certainly not your average job description, but it is the enviable reality for Francesca Yardley, general counsel at R&R, Europe’s largest private-label ice cream maker.
“I sit next door to the new product development kitchen,” she says, “so whenever they make something new they come in and say ‘try this’!”
“Nothing’s ever that nasty in ice cream,” she admits – although the Irn Bru batch could be a bit of an acquired taste.
The chances are if you’ve picked up a Tesco, Aldi or Sainsbury’s branded ice cream it’s been made by R&R (and tasted by Yardley). The North Yorkshire company makes Nestlé and Cadbury products in the UK, and produces the long-time favourite Fab lollies as well as Thorntons and Aero ice creams.
Yardley’s relationship with the company started during her time at Linklaters, where she worked under high-profile private equity stars Richard Youle and Ian Bagshaw.
The firm snared a relationship with R&R after former associate Tom Jaggers moved over to then-owner Oaktree Capital Management. In 2012 that paid off for Yardley, who was taken on to help prepare the company for a sale.
“Oaktree was looking to exit so R&R felt it lacked legal capability and was looking to take on a legal function in-house,” she recalls.
“In the ice cream business you’re making something that’s tangible that people want,” she says, plus it is “a bit like the Charlie and the Chocolate Factory, but with ice cream”.
As the only lawyer in the company, joining was unnerving.
“It’s intimidating when you come out of private practice and are given a job with no specification – it was basically just ‘set up a legal department from scratch’,” says Yardley.
The company is halfway between a quirky dairy and a corporate beast. Its Willy Wonka is Sir James Lambert, who founded R&R in 1985 with a group of farmers. The business has been acquiring its way to global success ever since, merging with lolly company Treats in 1998 and acquiring ABF’s ice cream businesses and Nestlé’s UK operation in 2001.
Yardley was thrown into in-house M&A work with a private equity bidding war between 10 companies, won by Paris private equity firm PAI last April, valuing the business at €850m (£700m).
“I was brought in mainly to do M&A stuff and a lot of the rest of the time I spend looking at commercial contracts,” she says. These include Nestlé, Cadbury and Kraft, “and we also have a licence to make Disney character ice creams”.
But in December 2013 paracetamol tablets were found in two of the company’s ice creams, forcing it to recall its chocolate and nut cones from Tesco stores.
Yardley admits, “In light of the horsemeat scandal, product liability and recall has become a big focus.”
Unfortunately, it wasn’t the first time.
“We once had a product recall to do with the sticks we were using,” she says. “The product we were making for Tesco had quite large nuts and chocolate bits that were bending and breaking the sticks,” she says. “Everyone knows when they buy a lolly it’s going to have a stick but they don’t expect it to be splintered.
“In those cases my role is to protect the business in terms of documents that could be used against us, so I keep an eye on emails.”
But for the most part, Yardley’s concerns consist of balancing the workload in-house and keeping the legal budget down.
Yardley does not operate a formal panel but uses Linklaters private equity partner Alex Woodward for M&A work, Latham & Watkins for financing and has recently used Addleshaw Goddard senior technology partner Michael Lowry for a distribution agreement across Europe.
Without a formal legal budget, fees are a constant battle.
“Our legal budget will change depending on whether we make an acquisition,” she says. “I’d prefer to have a budget in some ways because it would make my conversations with our advisers easier – you wouldn’t have to sit there and have ‘the haggle’. I try to get all my fees fixed where I can because it gives us certainty. I know, having been in private practice, how difficult it can be internally to manage fees and it focuses our advisers on giving us the right level of service.”
Yardley’s biggest issue is justifying legal bills the chief financial officer has not budgeted for.
“You don’t know about that when you’re on the other side of the table,” she says. ”My view is, if I know what the fixed fee is and I tell him upfront, I don’t have to have another argument about it later.”
She is considering a panel but her advisers are as keen on retainers as her CFO is on unexpected bills.
“I had a conversation about an annual fixed fee with one firm and they just said no,” she says. “But firms have offered some interesting options. Linklaters has offered the first few hours free and the management board uses Travers Smith, which has offered a fixed quota of hours free. We’re also talking about going for one firm to be full-service and bringing banking, M&A and everything else in-house, but I don’t think there’s a firm that could do that for us.”
This will be a busy year for Yardley, who expects PAI to look for an exit, but she has a good way of taking her mind off things.
“We launched mini Fab lollies recently and now we have a mini Fab van we can drive around the office.”
Position: General counsel
Reporting to: Bob Bigley, corporate development director
Legal spend: Depends on transactional activity
In-house practice areas: Commercial, competition, corporate M&A, employment, IP, litigation, real estate, regulation
Main external law firms: Addleshaw Goddard, Latham & Watkins, Linklaters
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Simon Rose, head of corporate legal affairs, United Biscuits
I joined United Biscuits (UB) as head of corporate legal affairs in 2003 and have played a role in a period of great transition for the group since it moved from the FTSE 100 to private equity ownership in 2000.
Having trained at Freshfields Bruckhaus Deringer before accepting partnership at Burges Salmon, the move in-house to head up the commercial legal team was a chance to get involved at the sharp end of a household name business reinventing itself in a competitive market.
With only three qualified lawyers in its ranks, the legal team of six has had to show considerable versatility, covering the range of legal specialisms as well as managing the group’s vast trademark portfolio including such iconic names as McVitie’s, Jacob’s and family favourites like Jaffa Cakes, Penguin and ‘the original’ Digestive biscuit.
Building and maintaining a legally aware culture is a constant challenge with a global business, but by demonstrating a solutions-oriented approach the team has become respected as a trusted business partner.
Although well-established as the leading biscuit manufacturer in the UK, and with group brands prominent in many countries in Europe, much of UB’s growth is in developing markets, with a fast-growing African business and recent acquisitions in India and Saudi Arabia.
With ambitious private equity owners (Blackstone and PAI) and a new CEO in Martin Glenn, UB is becoming a global powerhouse.