As the winner of the ‘Competition Team of the Year’ at the 2016 Global Counsel Awards, we asked Rainer Koll-Möllenhoff of REWE Group his opinion on what it takes to be a successful in-house lawyer, the best way to advise senior leadership and what winning the award meant to him and the team.
Describe your current role (responsibilities, size of team, structure).
My employer, the REWE Group, is one of the leading trade and tourism groups in Germany and Europe. Altogether 330,000 colleagues work in 12 European countries. In 2015 we generated a turnover of more than €52 billion.
Currently I head one of five teams that form the REWE’s central legal department in Cologne under the overall responsibility of Volker Dürschlag.
My team comprises six lawyers – including Vanessa Farmand and Marcus Steinberg, who joined the award ceremonies in London and New York. Half of the team is responsible for M&A transactions, while the other three handle antitrust, competition and procurement matters, which are particularly important for REWE as a food retailer.
The other four teams of REWE central legal department deal with operations and information technology, corporate, intellectual property and risk management. Further legal issues such as employment, tax, real estate and tourism are covered by separate legal in-house units, which are integrated into the relevant operational entities in different cities throughout Germany. Our foreign branches – operating mainly under the supermarket brands Billa and Penny in Austria, Bulgaria, the Czech Republic, Croatia, Hungary, Italy, Romania, Russia, Slovakia and Ukraine – have their own national legal departments in the relevant countries.
What led you to a career in-house?
Before studying law I worked in a bank, so I was aware that an in-house career would be an interesting option. My career as a corporate/M&A lawyer started with Linklaters LLP in Cologne and Frankfurt. The work was characterised by close cooperation with highly specialised colleagues from law firms but also – at least in M&A transactions – with our clients’ finance and tax experts, who provided practical input and new perspectives. This variety was sufficiently intriguing for me to accept in 2006 an offer from the German finance institute Commerzbank, where I joined one of the subsidiaries (Commerz Real AG), which issued closed ended funds and managed open real estate funds. Until 2009 I dealt with the acquisition and disposal of ships, planes and real estate properties before joining REWE Group in 2009 – while I enjoyed my work at Commerz Real AG, I was keen to work with an even larger variety of M&A transactions.
In your current role, what is the most challenging situation that you have faced? What are the most significant challenges that in-house lawyers are likely to face over the next few years?
Due to the size of REWE Group, most M&A projects are challenging with regard to how much they are worth, the legal implications, the number of legal and natural persons involved, the short timeframes, the amount of documents and the need for creativity, flexibility and mobility. There is no one-size-fits-all answer – every case needs a tailormade solution. A constant challenge in any transaction is the combination of a lack of time and a lack of information or transparency on the one hand and the need for decisions on the other.
Regarding the general challenges for in-house lawyers, one of the most significant recent developments is the growing number of new rules and regulations. More and more areas are heavily regulated and you need dedicated specialists to handle these. In my personal opinion, our legal framework should reflect the common sense of justice and at the same time be easy to understand and handle. The more complex and complicated our rules become, the greater the risk that society cannot live up to its own rules and expectations.
What kind of matters do you tend to handle in-house?
We try to handle as many cases and questions as possible in-house using our own manpower and expertise. Our sector – especially food retail in Germany – operates in a highly competitive market with minimal margins and, like all other departments of REWE Group, the central legal department is very sensitive with regard to avoidable costs and expenses. However, M&A transactions and merger control proceedings often exceed the limits of our own manpower over a period of several weeks, especially during the due diligence phase. Further, in a merger control proceeding, the involvement of external lawyers is necessary to avoid an illicit exchange of information with competitors. In very sensitive cases, a second opinion from a specialised law firm is indispensable in order to minimise commercial and legal risks.
What do you consider to be the essential qualities for a successful in-house lawyer?
You need to be more than a lawyer with legal expertise; the ability to manage a complex project demands further skills. As an in-house lawyer, you are the first point of contact for your client and you work with a variety of different departments and persons – from HR to public relations. You have to ensure that external lawyers receive necessary and precise information at the right time and put them in touch with the relevant people within your own company. Not only legal decisions need to be taken but also necessary commercial decisions from the operational sides of the company need to be either prepared or transferred into the legal framework to ensure the continuation of the project. For this, a thorough understanding of the core business and its operative needs is indispensable. In addition you need to be able to handle the interests of different departments which might be conflicting, meaning that besides management skills, you sometimes also need to be a diplomat.
What’s important for in-house counsel to consider when advising senior leadership?
In my view, the role of the in-house counsel is to provide reliable and independent legal advice. This can sometimes be challenging when it comes to the reduced possibilities of drawing the complete picture behind unpopular messages. You have to avoid being considered a road block which you can achieve by presenting a realistic alternative solution and explaining the advantages that come with your suggestion.
How does the legal department contribute to your company’s growth?
Reliable contracts are a precondition for a company’s commercial success. Every single contract that generates income and financial profit lays the grounds for growth. While drafting contracts we make sure that these goals are properly reflected. In addition, every contract deals with the allocation of risks and we make sure that our commercial colleagues know which risks they are taking – or that a risk they are not willing to take is shifted onto the contractual partner as far as possible.
As the majority of issues in our legal department have financial implications, every successful deal, project and litigation contributes to our company’s growth. Mergers and acquisitions play an important role in any company’s growth strategy. We have managed to negotiate good contracts regarding value determination, return of invest and risk allocation in the past and are highly ambitious about repeating this in the future.
With regard to your industry, are there any significant developments worth highlighting?
The big and yet unanswered question for the food retail industry is the development of online sales and the relevant consumer demand. It is not a secret that Amazon wants to enter this market. The big European food retailers have started to prepare themselves for this battle.
If not a lawyer, what would you be?
Originally I wanted to be a journalist. However, legal texts have a longer life expectancy.
What did winning a Global Counsel Award mean to you?
We were delighted to have won this prize – it is a fantastic reward for all the work my colleagues have done. The settings of the ceremonies were amazing and we enjoyed several interesting conversations with the other nominees and representatives during the evenings.
A very positive effect of the award was that it highlighted the good job that REWE’s legal department is doing, not only to our senior management but also more widely among our colleagues.
The purpose of the Global Counsel Awards is to identify those in-house counsel, both teams and individuals that excel in their specific roles. The primary aim is to reward lawyers for demonstrable achievements across the full spectrum of in-house responsibility, not simply those who have acted on high-profile transactions. To make a nomination for the 2017 awards please click here.
For further information on the awards, please visit www.globalcounselawards.com.