Matthew Ayers, Senior Vice President & General Counsel, Bolthouse Farms, Christine Kennedy, Managing Director, Transform Advisory Services, Major, Lindsey & Africa, Bodie McNaught, Managing Director, Interim Legal Talent, Major, Lindsey & Africa |
When the sale of Bolthouse Farms was announced, what were the initial considerations the legal department?
Matt: Because we had a very public announcement of a sale process, we began the exercise of coming up with what a standalone, totally independent legal department might look like. We looked at the most extreme end of a spectrum of possibilities and made the assumption of that if the buyer was a private equity company, generally speaking, you don’t have another legal team that you’re going to fold into; you’re on your own.
So, we looked at the biggest gap scenario, going from shared resources to absolutely no resources. And we began that exercise before the bidding process for the auction and came up with a list of the functional things that the three of us could take care of. We then took a look at the broader areas of the sort of legal issues an independent food company would encounter. What are our gaps? What can we do now? What do we rely on Campbell for day to day? There were a lot of things that we could do and we were happy about that, but there were a few areas in which we were almost entirely dependent on cross-functional folks in Campbell.
With that gap analysis, we then broke down each area and discussed if we were going to hire to fill that gap, use outside counsel or try something that we hadn’t thought of yet. We got to a place where we had mapped out the legal work into large buckets.
As the sale process continued, it became apparent that all of the serious buyers were private equity companies, so doing that work in advance was really helpful. Two weeks after the sale was announced, I sat down with the guy who was going to be the new CFO of Bolthouse from the private equity group. I was able to say to him that I had a very well- thought-out plan that spoke to what the gaps were, not only in terms of headcount and capability, but also systems.
And you have to think about processes and systems because if you’re not thinking about legal operations, processes and systems, you’re missing the big picture. If you just focus on people, you’re going to miss how you’re going to get the work done. We did a very intense analysis of every single systems and processes that we use. How do we communicate with one another? How do we store things? What about contract management? What about matter management and billing? What about discovery tools? What about legal research tools? We just started thinking about everything that we do and took for granted.
We realized how much of what we were talking about normally falls under the broader bucket of legal operations and—we not only needed all of those systems, but we also needed someone to handle legal operations.
The three of us in the legal team had some heart-to-heart conversations about what the new world was going to look like. It was going to be hard on the team because they were going to do a lot more and, potentially, we weren’t going to get all of the roles and processes completed on day one.
Bodie and Christine, when did you enter the conversation with Matt about turning his plan into reality?
Bodie: Matt and I had worked together for a long time during his time at Campbell. When he started transitioning into this new role, we chatted about what was going on and how we could help them through that process. We used our Make-Buy tool and had a lot of conversations around what his team looked like and what that next hire should be.
Once the spinoff was more formalized and he knew they needed to build a standalone department with two employees, we went a little bit deeper. We started to talk about processes, systems and what those next steps could look like. That’s when we brought in the MLA Transform team.
Christine: I still remember our first conversation. Matt understood that in order to improve, he needed to have a little reflection pointed his way and to really think about where this law department was going. Matt had done an incredible amount of legwork. When Mark and I came in, we started brainstorming and talking through the possibilities at a high level, looking at where Bolthouse Farms’ legal department wanted to be on day one and then on day 365. We walked through the different systems they were going to lose and helped pinpoint those critical systems they would need to get in the door.
How did you develop a baseline for what your department would need to even begin operating?
Matt: I cannot overstate the importance of getting that benchmark and having that external viewpoint, especially when you are working with a team of folks who have been together for a long time. I had been at Campbell for 10 years and I knew Campbell’s systems. Getting that external perspective and having those hard conversations about where we are on a maturity model was invaluable.
Christine: When we first engaged Matt regarding Transform Advisory Services, we discussed differentiating his immediate needs as a building-from-new law department today from what the department will need in one year or even five years. Appreciating that many of the corporate systems and personnel they traditionally relied on would be lost, it was necessary to holistically assess where Bolthouse Farms was today to determine how mature the legal department was before identifying a system or personnel headcount arbitrarily. Our Maturity Assessment dives into hundreds of data points, canvasing business alignment and coverage, resourcing strategy and management, and budget and financial management, to name a few. This deep-dive assessment built a framework for next steps in architecting the newly forming law department from scratch. This was customized to Matt and his team, not a pre-built solution they would have to fit into. From there, we were able to help him move forward with a strategy.
How did you decide to staff your department? What roles did you feel like you needed to get off the ground?
We had to think about the core substantive areas of the law, and I knew we had gaps on labor and employment, litigation, marketing and IP. I was the only attorney to start. I was a transactional lawyer by trade but didn’t know a lot about litigation or labor and employment. I needed to fill that role quickly. I was able to find a local attorney who didn’t have the deep labor and employment background but had the hunger to learn and was a litigator by training. Also, we knew we were lacking on food law and marketing. Although that took longer to fill, we did manage to fill that role with a contract attorney. And then, obviously, legal operations—that to me was a real core gap.
Also, Bolthouse did not have a standalone corporate compliance program. While we’re a privately held company and don’t have the same reporting and compliance issues as a public company, we want to be a public company someday, perhaps. And that doesn’t happen overnight, and you certainly can’t operate like a mom and pop startup company and then flip to issuing an IPO. You have to have a compliance program in place for quite some time, so that was the other area that we needed to fill the gap.
Bodie: Early on, when Matt took on his new role, we had a lot of discussions around when it would be the right time to hire his first attorney (or more) as well as discussing the best profile for him based on his business needs. I shared MLA’s Make-Buy tool with Matt and walked through how it could assist him. Using specific data points provided by Matt, MLA’s Make-Buy Tool helped us analyze, calculate and understand the costs to hire a new lawyer for his legal department versus using outside counsel. He quickly realized that making an internal hire would be the least expensive option when it came to meeting his legal needs. Matt found this tool very helpful with his decision-making and moved forward with making his first attorney hire.
What is the biggest challenge you are currently facing?
Matt: The challenge is, as 2020 moves on and continues to throw us new surprises here and there, as an essential industry, having to develop a whole new route to deal with our ongoing operations to protect business continuity and, most importantly, the health and safety of our employees. We actually have a whole new role; the seventh and newest member of our legal team is a crisis management specialist. Right now, she is dedicated to mostly COVID-related issues. Once that ends, there are other crisis management and business continuity areas that we need to think about, particularly as we keep growing.
However, if something is not an emergency, the timing slips and priorities change. So, I have to manage expectations with my team and we have to be flexible. You realize, at some point, you can’t do everything.
The beginning of COVID was nuts; we had to set expectations for our own health and wellness and that meant readjusting expectations on timing. On some things, we could get the work done, but it might not be in the original time frame—and being able to mentally let go of that is important.
Where are you in your timeline right now?
Matt: We had a model timeline of what we would put into place by when, but we have to be flexible. Flexibility is the key. When we talked about where we wanted to be in on day 365, no one expected that we would be in the middle of a global pandemic. It really puts in to practice that phrase “expect the unexpected.”
But when I think about it, we’re up to seven people in the legal department right now in a little over a year. I don’t think we could have made an argument for that if it weren’t for the framework exercises that we put into place. If we didn’t have that outside perspective from MLA and the outside data, there’s no way I would have justified the growth to seven people.
You have to have the data and the backup to show the value that you’re going to bring to the company in terms of recapturing revenue or making processes faster or protecting the company, and you need the road map to get there.
The work that we’re doing will continue for as long as we’re continuing to grow as a company. We still have work to do to make improvements on our systems. There’s some work that we will continue to do on people, which will eventually overlay with the organization’s plans for organic growth as well as through strategic development and M&A activity. It’s not as if we decided we have a timeline and here are all the systems and we’re done and now we’re going to have a static department for the next five years.
About Bolthouse Farms
For more than a century, Bolthouse Farms has been known as the innovation leader in growing and distributing carrots and high-quality, innovative branded products. Employing more than 2,200 people and headquartered in Bakersfield in California’s fertile San Joaquin Valley, Bolthouse Farms is one of the largest carrot growers and distributors in the U.S. Guided by its vision—Plants Powering People—the company produces and sells super-premium juices, smoothies, café beverages, protein shakes, functional beverages and premium refrigerated dressings, all under the Bolthouse Farms® brand name. Visit Bolthouse Farms or follow us on Instagram, Facebook and Twitter.
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