Deval L. Patrick with Coke bottle art. Alison Church/Daily Report. 05-19-04.

The news that former Massachusetts Gov. Deval Patrick is jumping into the race for the Democratic presidential nomination may remind readers of Patrick's days as a rather important lawyer in Atlanta—general counsel to The Coca-Cola Co. Here is what we wrote in our affiliate publication, GC South, under the headline, "Coke Isn't It; The inside story of GC Deval Patrick's brief, tumultuous time at Coca-Cola." It ran June 1, 2004.

By Jonathan Ringel

Like other recent college graduates, Deval L. Patrick says, in 1978 he wanted to keep his options open. That's why he carried a law school application in his backpack while working for the United Nations in Sudan. One night in the desert outside Khartoum, Patrick, then 22, put a flashlight on the ground, swatted away a few flies and filled out the forms by hand. A friend who was traveling to London mailed the envelope from there, where the postal service was more reliable.

A few months later, Patrick received an acceptance letter from Harvard Law School.

The next 25 years were replete with options—many of which would be career pinnacles for other lawyers. Patrick worked at the NAACP Legal Defense and Education Fund, headed the U.S. Justice Department's civil rights division for three years during the Clinton administration, and held partnerships at two Boston law firms.

In 1997, he headed a task force created to resolve serious racial discrimination problems at energy giant Texaco Inc. By 1999, he was vice president and general counsel.

Two years later, he joined The Coca-Cola Co. as executive vice president and general counsel. Coke paid Patrick, who grew up in Chicago housing projects, $10.35 million in cash and restricted stock during his first year.

Now Patrick, 47, is sifting through his options once again.

On April 12, The Wall Street Journal broke the news that Patrick had resigned "amid criticism from some company directors over his handling of government investigations into the company's accounting, according to people familiar with the matter."

The news broke a day after Coke Chairman and CEO Douglas N. Daft, motivated by inquiries from the Journal, sent an Easter Sunday e-mail to employees, announcing Patrick's departure from the Atlanta-based company.

The e-mail praised Patrick for his "significant contributions" and said he would be "making himself available" to assist Coke through the end of the year. But Daft added that Deputy General Counsel Geoffrey J. Kelly would serve as "interim general counsel."

Activist Jesse Jackson would later seize on the Easter Sunday announcement that Coke's top-ranking African- American officer was leaving and call it another "crucifixion," according to news reports.

Patrick says he got hundreds of e-mails from employees asking him to stay, as well as puzzled inquiries from fellow lawyers and even one federal judge overseeing a Coke matter.

To some, the abrupt announcement looked as if Patrick had been relieved of his duties.

On April 14, Daft issued another statement, this one clarifying that Patrick would stay through December. The e- mail continued: "I want to personally affirm that Deval has my and the board's confidence and support in the professional and effective manner in which he and his legal team have conducted our legal affairs."

"It was badly handled," Patrick says of how his resignation was announced.

Patrick opens up

Though Patrick's resignation made national headlines, there's more to the tenure of this man who appears uncomfortable with media scrutiny.

Between meetings in Washington, Patrick recently discussed his three years at Coke—including the awkward announcement of his resignation—in a series of telephone conversations with GC South.

Interviews with more than a dozen other people connected to Coca-Cola, including board member Peter V. Ueberroth and several legal department alumni, make Patrick's tenure seem one of hard-fought changes through a troubled business and legal period.

Indeed, Patrick arrived not long after the company hired a new CEO, Daft, and settled a major race discrimination suit. Even now, Coke is in transition. Neville Isdell is set to become CEO now that Daft has announced his own resignation; what will become of federal investigations into the company's accounting remains to be seen.

Belying the pressures he's faced, Patrick is friendly, polite, calm, soft-spoken-and assertive. Explaining the global challenges of The Coca-Cola Co., he sometimes sounds more like a graduate of Harvard Business School than of Harvard Law.

He's at ease talking about profit centers, a "targeted selection" hiring process, and the "intricate ballet" that occurs after the production of Coke's secret-formula concentrate and before a customer pops open a can of cola.

He's unapologetic about reorganizing Coke's legal department, even though it meant the reassignment or retirement of a number of experienced lawyers.

Likewise, Patrick describes his consolidation of Coke's outside counsel relationships—one that divided 80 percent of Coke's business among seven lucky firms-first in terms of dollars and cents: "We had relationships with hundreds of firms—and no discount relationship with any of them."

As for his resignation and its unceremonious announcement, Patrick says the decision to leave was his. He first discussed the matter with Daft in October 2003 and says he gave notice in March, a month after Daft announced his own resignation. Patrick says he wanted to resign before Daft's replacement was named so his departure wouldn't look like an ouster by the new CEO or an objection to the board's choice for that post. He also says he did not want to conduct his next job search in secret.

Patrick is quick to explain that his resignation also was motivated by a shifting balance between enjoying the challenges at Coke and wanting to spend more time with his wife, Diane B. Patrick, a partner at Boston's Ropes & Gray, and his two daughters.

A person familiar with Patrick's thinking suggests that Coke's general counsel also may have grown tired of executive politics at the company. Though it's difficult to offer specifics on this concept—especially when many who could talk about it still depend on Coke for their careers—Patrick's feelings on that subject may have tipped the scales in favor of seeking a new job closer to home.

But Patrick insists he'd never heard a board member express dissatisfaction with his work on the federal investigations, saying he was "astonished" when he read the Journal report.

Board member Ueberroth, who heads Coke's audit committee, the one most directly related to the accounting issues under investigation, echoes that point. "I've never heard an even slightly negative discussion by any board member about Deval's handling of those matters," he says.

Coke's new legal environment

Of course, the palace intrigue that marked Patrick's resignation announcement was not yet in view when, still Texaco's general counsel, he flew to London to meet Daft in the summer of 2000. The visit was arranged by a mutual friend so that the two could discuss Patrick's thoughts on effective relationships between general counsel and their CEOs.

Coke was then, as now, in a time of management transition. Just a year prior, Daft had taken charge of the company from M. Douglas Ivester, who had spent less than three years at the helm, taking over after Chairman and CEO Roberto Goizueta died in 1997.

The meeting was not a job interview, Patrick says, but Daft liked Patrick's idea of using Coke's company lawyer as a counselor and not just a legal technician who gauges whether company plans will pass muster with the courts.

"If all we do is say 'No,' the company needs only one lawyer," Patrick says he likes to tell his 120-attorney staff.

Daft later asked Patrick to join Coke, and in February 2001 Patrick signed a five-year contract with the company.

Though Patrick was well-known for his civil rights work at the NAACP, the Justice Department and Texaco, he says he made it clear to Daft he did not want to take the job just to oversee Coke's $192.5 million settlement from its own employee race discrimination suit.

Instead, Patrick appears to have immersed himself in Daft's efforts to change the company's self-image. Daft wanted Coke, which had seen itself simply as the perennial leader in the soft drink industry, to view itself as a company whose business transcends colas to include juices, fruit drinks and energy and rehydration products.

But the legal department under Patrick would reflect the kind of evolution that was affecting Coke as a whole. Patrick flattened the department's reporting structure. That created management opportunities for some in-house lawyers but led to the departure of many others who had enjoyed management positions under Joseph R. Gladden Jr., Patrick's predecessor.

The changes he initiated did not always endear him to the old guard from Coke's legal department.

About six months after arriving, Patrick asked all of the managers in his department essentially to reapply for their positions.

"Not everybody liked that," Patrick says in understatement, although he argues that many inside the department had in fact suggested that such a reorganization was necessary.

"Clearly people who had been in their positions for a long time felt very uncomfortable," says W. Thomas Haynes, who was general counsel to Coke's North America division when Patrick arrived. Patrick's reorganization of the legal department eventually eliminated Haynes' job; Haynes is now executive director of the Coca-Cola Bottlers' Association.

Haynes can name about a dozen lawyers he says were in management positions when Patrick arrived and are either no longer with Coke or are not in management any more.

To be sure, some left to accept more appealing offers with other companies or law firms, but others retired when the reorganization relieved them of their management roles.

"My assignment wasn't to protect them," Patrick responds, nor was his goal to rid the department of experienced lawyers. He says Haynes' position "changed," and was not officially eliminated.

"They were all hard," he says of the reorganization decisions.

Patrick also made changes to the company's relationship with its hundreds of outside law firms, including Atlanta's King & Spalding, which has been doing Coke legal work for decades. The firm retained a healthy chunk of Coke business—nearly $14 million in 2003-but Patrick says Coke no longer has a "default firm."

One former Coke lawyer, who asked not to be named, recalls Patrick's reassessment of the company's outside counsel relationships.

"He made it clear it was a new day," the lawyer says, one in which "old relationships don't necessarily hold, and everything is up for grabs."

Again, Patrick is unapologetic, saying he arrived to find the company using far too many outside firms, none of which was offering discounted work. He eventually established a core of seven firms—re-evaluated annually for performance, diversity assignments, billing rates and other factors-that gets about 80 percent of Coke's business.

King & Spalding, Coke's perennial outside firm, remained on the list, but things changed, Patrick says. He moved intellectual property work back in house, though Coke's vast litigation kept King & Spalding busy, according to Coke's annual proxy statements.

Coke disclosed how much it paid the firm because company director Sam Nunn, a former U.S. senator from Georgia, was a King & Spalding partner. Nunn resigned from the firm in 2003 to remove any issues over conflict of interest, and Coke no longer needs to disclose its payments to the firm.

Proxy statements show that King & Spalding did about $7.56 million worth of Coke work in 2001, $8.8 million in 2002 and a whopping $13.8 million in 2003.

L. Joseph Loveland, the King & Spalding partner who oversees the firm's relationship with Coke, won't discuss much about the firm's work for its client or how that relationship has changed. But he says King & Spalding has similar relationships with other clients-that of a core counsel.

The other six firms that share 80 percent of Coke's business are, according to Patrick: Morrison & Foerster; Thomas, Kennedy, Sampson & Patterson; Holland & Knight; Skadden Arps; Howrey Simon Arnold & White; and Cleary Gottlieb in Europe.

The ballet and its performers

According to Patrick, the company's biggest challenge is that "intricate ballet" between manufacturing the secret formula and the consumer's popping open a can.

Coke controls the beginning production and the marketing at the end, but nothing in between, Patrick says. Independent bottlers and other business partners, with which The Coca-Cola Co. has faced off in court over the years, control the middle.

But the rest of the world sees little difference between The Coca-Cola Co. and any of the middlemen, Patrick says.

One example of this problem came from Colombia, where a worker trying to form a union at a Coke bottling plant was murdered in 1995. A related federal suit brought in 2001 against Coke by an international labor rights fund failed because, according to an April story in The Washington Post, the judge ruled that Coke did not have enough control over the bottler to be held liable.

Nonetheless, groups pressed Coke to hold an independent investigation into the murder, and at an awards dinner last year, Patrick said he would conduct one.

But after initially backing the idea, Daft refused to allow the investigation to go forward. The Post story quoted an unnamed source as citing Daft's reversal as the kind of "internal politics" of which Patrick was growing tired.

Patrick, when asked about the Colombia case, says that the company was cleared of any liability. He adds that he "respects the CEO's authority" to decide against the independent investigation.

Asked to name one success during his tenure, Patrick says, "After 20 years of trying, we have a unitary legal function."

The goal, he says, is to have the company's lawyers as close as possible to the business units they cover. For example, he is in the process of spreading Coke's trademark lawyers around the world so that the company's local units have quick access to legal help.

There are exceptions. Supply chain legal issues are handled in Atlanta, he says, because that's where the company's supply chain business is based.

After local triage, litigation also is controlled in Atlanta, according to Patrick, because he wants to make sure Coke's arguments in cases are consistent.

Patrick says he has tried to keep Coke's lawyers from falling victim to the typical litigator's reaction of wanting to crush anyone challenging a client. Human resources, in particular, has taken on a more conciliatory approach to employment issues with a new program that he says goes beyond the requirements of the race discrimination settlement. The program allows Coke employees to bring disputes to an arbitrator. If the arbitrator decides in favor of the employee, Coke must abide by the decision; if the employee loses, however, the employee retains all rights to take his complaint to court.

The goal, Patrick says, is to "plan for a relationship at the end of the dispute."

Patrick says this approach has resulted in more settlements and fewer trials, thereby saving the company money.

Joshua F. Thorpe, a partner at Atlanta's Bondurant, Mixson & Elmore, one of the law firms that represented the race discrimination plaintiffs, says the new program is "innovative and creative," with the potential to resolve disputes before litigation is needed.

Curiously, Patrick says his department actually has made more money than it has spent, thanks to cases in which Coke has been the plaintiff. He estimates the recoveries to have been in the tens of millions of dollars each year since he arrived.

In a case about alleged price-fixing of corn-syrup sweetener, Coke's lawyers are actually working with their archrivals from PepsiCo Inc. Patrick was in Washington for mediation on that case when he spoke to GC South magazine.

End of a bumpy road

One of the more serious legal challenges Patrick faced, in addition to implementing the race discrimination settlement, involved the case of Matthew Whitley. Whitley filed a whistleblower suit against Coke in 2003, claiming he was fired after he reported that metal particles were contaminating drinks. The suit settled last year for $540,000, which Patrick notes was $100,000 for Whitley, $140,000 in severance benefits, and the rest for costs and attorney's fees.

But the accusations-and Coke's own admission that its executives tried to fake the results of a marketing test for customer Burger King-have led to investigations by the Justice Department and the Securities and Exchange Commission.

Coke is cooperating with the investigations, which were reportedly the subject of some board members' criticism of Patrick-the criticism Patrick says he never heard before reading of it in the Wall Street Journal article reporting his resignation.

"I think his tenure as general counsel has been very good," says Ueberroth. "It's been a tough time for The Coca- Cola Co."

He adds that he wishes Patrick would reconsider leaving. Ueberroth says he hopes the company gets "somebody very much like him" if Patrick won't stay.

That decision will be up to Isdell, the new Coke chairman and CEO the board announced in May.

Until then, Patrick says he is fielding "some intriguing overtures" from law schools, law firms and companies.

Once again, Patrick is keeping his options open.