Cadbury's legal chief Hank Udow talks to Leigh Jackson about shaking up his team, keeping advisers on their toes and finding new challenges

If longevity is anything to go by, working as the top lawyer at confectionery giant Cadbury seems to be one of the, ahem, sweeter in-house roles going.

After all, the company – one of the world's largest confectionery businesses – has a knack of being able to retain its staff. Chief legal officer and group secretary Hank Udow has been at the company for more than 20 years and is still fascinated by his work.

He says: "It still amazes me how many interesting and complex transactions I have had the opportunity to do at Cadbury. It is never dull. The scope of activities from a legal perspective is enormous."

Udow, a US-born lawyer who joined the company from Shearman & Sterling, is not alone in devoting most of his working life to Cadbury. Current chief executive Todd Stitzer has been with the company for 25 years and chief human resources officer Bob Stack joined back in 1990.

Udow (pictured) says the ethos at Cadbury enables its lawyers to play a defining role in the company – an aspect which has proved crucial in keeping lawyers involved.

"In this business, lawyers are not simply people you go to for legal advice. We have a different model," he comments. "The company wants lawyers involved with the business generally."

Udow says Cadbury looks for two main traits when hiring lawyers: technical excellence and business acumen.

"Recruiting is the toughest part of any job," Udow says. "The first thing we look for is good legal skills – sometimes people come out of big law firms because we are looking for lawyers with that level of experience, but we do not look at large firms exclusively."

Udow adds: "The second thing we look for is people who are business-oriented. Sometimes you can have great lawyers but, in a business context, they can turn out to be a disaster. Being a good lawyer does not necessarily mean one has the skills to help people come to sound business decisions."

In spite of the task of building a formidable in-house team, Cadbury has around 130 legal staff worldwide, including 85 lawyers and, following a restructure earlier this year, is led by seven distinct regional legal heads.

As a consequence of the restructuring, which was part of a company-wide move to cut 250 middle managers and a further 330 jobs in Australia and New Zealand, Asia-Pacific legal head Rod McNeil left the company.

The creation of new legal heads is aimed at bolstering internal communication and accountability.

Udow comments: "It was important to speed up decision-making within the company. The consensus was that it had become slow. The lines of communication have now been shortened."

Udow also puts this premium on communication in his relationship with external counsel, commenting: "You can call a firm for some advice and they will come back to you with a 10-page well-resourced opinion, which you can do nothing with," he says.

"At other firms a partner will give you an instinctive response that can be used as actionable advice. There is a distinct difference in styles. A good lawyer is comfortable making judgement calls."

While the company does not operate a formal legal panel, it instructs a number of firms on an ongoing basis, including Slaughter and May, Freshfields Bruckhaus Deringer, Shearman and Morgan Lewis & Bockius. Cadbury also has relationships with other firms, including Wragge & Co, on a more prescriptive basis.

Udow comments: "We do not have a panel structure, although in a sense I suppose we operate an informal panel. The issue with formal panels is that they are somewhat fictitious. You go through the process of creating a panel and then you find you need to go off panel on multiple occasions."

Aside from the need for flexibility, Udow says the lack of a formal panel ensures that Cadbury spreads its supplier base and gains better deals through constant competition.

Udow says: "As a business policy, we would never be purchasing from just one supplier for raw material – and we feel the same about law firms for two reasons. Firstly, it is helpful to see different styles and approaches and secondly, it keeps them on their toes. We constantly need to forestall the development of institutional entitlement. If we use a range of advisers our firms pay more attention."

He adds: "Law firms have not been as competitive as they could be and they make assumptions about the relationship and are not as responsible as they could be about billing."

With this in mind, Cadbury deliberately uses its in-house team to conduct the majority of its legal work, with around 70% of its workload handled internally. When the company decides to use outside counsel the process is watched closely in-house.

"We do a lot of our work in-house," Udow says. "We do not have litigators in-house, but we oversee and are actively involved in the management of all our litigation."

He adds: "Our in-house lawyers always work closely with outside counsel on matters in which we have retained outside counsel. We play a significant role. For example, we always lead the negotiations of transactions with outside counsel providing us with support. We are fortunate to have significant transactional experience in-house."

While trying to ensure that outside support is maintained effectively, Udow plays a key role advising the Cadbury board on legal issues. However, while he is not a member of the board, Udow does not believe sitting with the board necessarily represents an inherent conflict.

Udow says: "As company secretary I am not a member of the board, but attend and participate in all of its meetings, as well as the committee meetings.

"I do not think it is a conflict for a general counsel to be a member of the board. Promoting the best interests of the business and discharging fiduciary duties are not in conflict with abiding by legal obligations or ethical principles."

He adds: "There is a growing trend in the UK and the US to only have one executive director on the board. From a corporate governance perspective, this is probably positive."

With Udow soon to enter his 21st year with the company, the veteran lawyer argues that a strong company culture is essential to maintaining job satisfaction – that and a bit of variety.

Udow says: "What I love about this business is that it has a great culture, great people and great brands. That combination makes the hard work enjoyable."

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