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Corporate Counsel Title corpcounsel.com Date 2016 Best Legal Departments 2017 clorox

By Sue Reisinger

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Clorox’s Legal Team partners with The Business Side for a Sparkling 2016

The Clorox Co. offers products that it says make everyday life team’s biggest success, she says, is being a proactive, trusted partner to ­better, every day. And Laura Stein, executive vice president and general the business units. counsel of Oakland, -based Clorox, challenges her legal team “Our hallmark is partnering with business,” she says. “The global to do the same by learning new facets of the business and finding bet- legal implications of doing business today gives us a seat at the table” ter ways to work every day. She calls it the “continuous improvement when major business decisions are made. initiative.” For example, she says members of the legal team co-lead Clorox Stein includes herself in that mandate. programs on global privacy, cybersecurity, enterprise management and The GC, who speaks six languages, made herself learn about a more. The lawyers are also “committed to trying to drive change in new business and its accompanying federal regulations when Clorox our profession to make it better, including pro bono work and efforts acquired a probiotics company in the spring of 2016. to increase diversity in the profession.” It was a unusual move for a company best known for its iconic bleach Stein herself chairs the national Leadership Council on Legal and cleaning products, Glad plastic bags, Fresh Step cat litter, Kings- Diversity, a group of more than 265 corporate legal officers and law ford charcoal, K.C. Masterpiece barbecue sauce, Hidden Valley salad firm managing partners dedicated to creating a diverse legal profession. dressings and other well-known household brands; and a challenging The Clorox legal team also walks the walk and is 75 percent diverse lesson for the general counsel, who has spent 20 years at Clorox, but under American Bar Association standards that include ethnicity, gen- not continuously. She worked eight years as a Clorox in-house counsel der, sexual orientation and people with disabilities. and assistant GC, then five years at H.J. Heinz Co., which hired her to In addition. Stein serves on the Clorox executive committee, be general counsel, and the last 12 years as GC at Clorox. chairs the Clorox women’s employee resource group, and co- Stein says she loves being a general counsel and spends her days sponsors the company’s social responsibility and enterprise risk “trying to stay five steps ahead” of the latest legal problem. Her legal management programs, among other responsibilities. She says she photography by Jason Doiy/ALM

From left: Mark Danis, Laura Stein, Gillian Thackray and Angela Hilt

also works closely with Clorox’s board of directors on governance Mark Danis matters. Danis is vice president and associate general counsel who joined Clo- Stein also has responsibility for areas tied to the reputation of the rox less than two years ago after 25 years as a litigator at Morrison & company, including communications, corporate responsibility, risk, Foerster. Danis brought the perfect mix of business and legal expertise audit, government and community affairs. And her legal team, as in to Clorox. At the law firm, he opened the San Diego office and served other years, met with stockholders to hear their issues as “part of how as managing partner over business operations across 17 offices. we work with the board,” Stein says. Danis says he has enjoyed the transition into in-house work. In pri- In an effort to improve the legal profession, Clorox attorneys in 2016 vate practice, he explains, “my work for clients was more surgical” and provided pro bono services to the Family Violence Appellate Project by focused on fixing problems. serving as moot court judges to assist attorneys in preparing for appel- “Now I am able to work on business issues proactively, before they late hearings. The legal department has provided pro bono services become problems. It’s been invigorating for me,” says Danis. to the nearby Community Law Center, helping to expunge Danis says he has “zero regrets” about leaving the law firm. criminal records, and to California Lawyers for the Arts by providing “For me, this is similar to when I opened MoFo’s San Diego office. copyright, trademark and other services. The in-house attorneys also I am doing something new and challenging myself professionally, partner with law firms to help fund Equal Justice Works fellowships to stretching into the business.” address juvenile legal issues in the community. Danis directly supervises seven lawyers and oversees four key legal All these qualities have helped earn Clorox a spot as one of Corporate areas—litigation, regulatory, advertising and privacy/cybersecurity. He Counsel’s Best Legal Departments of 2017. Besides Stein, the depart- also sits as both a lawyer and business adviser on the “specialty leader- ment is guided by three veteran associate general counsel who bring ship team,” which oversees five of the company’s household and food their own strengths to the job: brands. Best Legal Departments 2017 clorox

One recent litigation victory included a case that could have affected of our work. We have to think about how to ensure our brands stay many producers of consumer goods as well as Clorox’s business model. strong.” In the case, a Midwest grocery store chain brought antitrust claims Thackray says several patent attorneys work hand in hand with against Clorox for refusing to sell large package sizes that it reserves research and development to identify and protect innovations. for wholesale stores such as Sam’s Club and Costco. The U.S. Court “They have the freedom to guide the business to make sure we’re of Appeals for the Seventh Circuit ruled last August in Clorox’s favor, not infringing on anyone else, while protecting our own brands,” says overturning the trial court and saying the large sizes were not a “pro- Thackray. motional service” that had to be offered to all competing customers. A group of trademark lawyers do similar work in their field. One of her team’s biggest accomplishments came through working with a business unit on critical patent protection for a key ingredient in We Like: Clorox bleach that makes it more stable with a longer shelf life, she says. Its strong efforts in diversity and pro bono services. The original patent was going to expire, so her legal team worked with the unit to come up with a new compound that could extend the Could do better: They can be a tad controlling in their interaction original patent while adding other benefits to the product. with the media. “We built out a patent portfolio around that molecule to keep our new ingredient from being copied in the marketplace,” she says. Clorox recently notched another victory by successfully resolving a The issue was important enough that the court granted an interlocu- trademark dispute through what Thackray calls “adopting an innova- tory appeal, and the filed a friend of the tive strategy.” Clorox brought the case before the U.S. International court brief supporting Clorox. Trade Commission, an independent, bipartisan, quasi-judicial, federal Although the case is still pending on a lesser claim in federal district agency that handles unfair trade practices. Such cases often involve court in Wisconsin, Danis says the appeals court ruling “was the heart patents but seldom trademark cases. of the case” and a significant victory for the entire industry as well as “It was one of the first significant trademark cases to be filed with Clorox. the ITC,” she says. The strategy led to significantly lower costs than Asked how his team’s “continuous improvement,” Danis cites the court litigation “and almost immediately brought the other company to creation of “affirmative recovery programs” to iden- the negotiation table for the first time—ultimately tify where the company is owed money and better resulting in a great win for Clorox,” Thackray says. outside counsel management. Overall, Thackray says she is most proud “of “We are always looking for ways to more closely our low level of patent and trademark litigation. partner with outside counsel, with an increase in It shows we are doing a good job of guiding the fixed fee/contingency fee/and risk sharing arrange- company through the risks. We do a lot of proactive General counsel: ments to keep the legal spend down significantly,” Laura Stein work to make sure people respect our IP that we he says. are not spending on unnecessary disputes.” 2016 revenue: $5.76 billion Danis also has a long-term commitment to pro net sales for fiscal year But when litigation is necessary, she says Clorox bono and community service activities, including ending June 30, 2016 primarily relies on outside counsel to go to trial. with the Marin County Youth Court program and 2016 income: $648 million “We will get involved with negotiating with net earnings for fiscal year as a board member of the Family Violence Law opposing counsel, or in pre-litigation talks. But ending June 30, 2016 Center. for the actual litigation we work alongside outside Number of U.S. lawyers: 29 counsel,” Thackray says. Gillian Thackray Number of in-house “Internally we are crafting the litigation strat- Vice president, associate general counsel and global lawyers outside egy by looking at what the business goals are,” chief counsel for intellectual property, Thackray is the U.S.: 6 she adds. “Then we vet that strategy with outside another legal team leader. Main law firms: Kilpatrick counsel, improve it and implement it.” Townsend & Stockton; “Our brands are one of our most valuable assets,” Gibson, Dunn & Crutcher; Her team’s “continuous improvement” efforts Thackray says. “Registering trademarks is the least Morgan, Lewis & Bockius included analyzing the process between the time Best Legal Departments 2017 clorox

lie in four key areas that include corporate governance and board adviser; traditional corporate law matters such as mergers and acqui- sitions or real estate; international legal matters of all types including litigation outside the U.S.; and head of the legal operations program. Hilt also has seven lawyers on her legal team whose biggest accom- plishment in the past year involved broadening Clorox’s reach into the health care industry through the acquisition of RenewLife, a probiotics and digestive health company. This was the acquisition that prompted Stein to learn the new business. Hilt says “the key was how effectively we collaborated with the busi- ness side to move forward into a relatively new area. We put together

“Our hallmark is partnering with business.” —Laura Stein

a swat team of internal legal advisers from different disciplines from purely legal to more strategic and were able to get the transaction com- pleted on an aggressive time frame.” She says two things help the Clorox legal team stand out. First is hiring attorneys for their subject matter expertise, with a goal of broadening into other areas over time. And second, she says, “is a very strong partnership with business. All of our senior attorneys have a seat at the table on [each business’s] leadership team. They function as a mini-general counsel for that business. It is a terrific development experience.” “It is both fun and exciting to wear so many hats,” Hilt says of her business role. “It helps us all be better business advisers by seeing so the research and development department announces a new technique many different areas.” or compound, until the IP legal team determines to take action to pro- Hilt also found ways to continuously improve on legal ops pro- tect it. cesses last year. They included mapping out a more efficient contract “We wanted to make sure at every step of way the process was pro- management process, and finding a way for the legal ops team to better viding the right work at the right time, in a minimum number of steps,” “onboard” new attorneys. Legal ops also developed a way to facilitate she says. transitions among all the attorneys. The result: The team shaved a month and a half off the timeline by Clorox, she explains, gives all attorneys chances to broaden their removing roadblocks and realizing that certain work streams that were experiences by moving into new areas. “The legal ops team helped us going on one after the other could actually be done at the same time. clarify and improve our processes for doing these subject matter transi- Angela Hilt tions so we don’t miss a beat,” she says. Angela Hilt, vice president, corporate secretary and associate general As Hilt sums up the legal team, “adding value to the company counsel rounds out the leadership of the legal department. Hilt’s duties through continuous improvement is just in our DNA.”

Reprinted with permission from the June 2017 edition of Corporate Counsel © 2017 ALM Media Properties, LLC. This article appears online only. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382 or [email protected]. # 016-06-17-04