It’s a given that many attorneys end up getting to help people in their daily work. But even with that commonality, Neil Grealy never dreamed that he would be helping to clothe and feed about five hundred million people every year. And yet, that’s exactly what he does as head of legal for the Americas for Louis Dreyfus Company (LDC). With operations in more than one hundred countries, the company distributes roughly eighty-one million tons of products annually, including oilseeds, grains, sugar, rice, juice, coffee, cotton, and dairy, among others.
Grealy joined LDC in 1991. He had previously been a litigation associate at Skadden, Arps, Slate, Meagher & Flom. Tom Scheuer, then general counsel for the group in North America, hired Grealy, believing that a litigation background was helpful for in-house counsel, due to the variety of issues and areas of law that the department addresses on a daily basis. At the time Grealy was hired, in addition to agricultural-based businesses, LDC included an energy company that over time traded refined products, electricity, natural gas, natural gas liquids, and operated related assets. These were newly created areas of business because electricity, for example, had just been deregulated. As a result, the applicable laws were evolving along with the markets themselves.
“Working in an area where there was no template for how policies and practices had been handled before made the work challenging and provided tremendous learning experiences,” Grealy says.
In 2006, the North American energy business spun off in a joint venture with Highbridge Energy. LDC operations refocused on processing agricultural products as well as importing and exporting those products and processed goods. These changes raised the company’s industrial profile. This included building corn-based ethanol plants; a facility for producing soybean oil, meal, and biodiesel; and a Canadian canola processing plant. LDC also acquired Imperial Sugar Co. in 2012.
These developments required the legal department to quickly gain experience and expertise on matters such as permitting, environmental concerns, construction details, and equipment procurement.
“Because of the range of our businesses, the legal department is always learning something new,” Grealy explains. “At each stage, there are issues that present themselves in which we don’t have extensive experience, so we work with experts in the business and outside counsel that do. And quite honestly, ignorance can be a benefit. You end up asking questions that help clarify issues and teach you about the businesses on a much deeper level.”
Although LDC in North America had a long history as a supplier to manufacturers of consumer products, the acquisition of Imperial Sugar (and its Imperial and Dixie Crystals brands) put the company in the position of selling directly to consumers for the first time in its history.
For the legal department, this opened the door to advising clients on areas related to advertising, customer relations, and quality assurance. It has also brought the company’s supply chain to the forefront in new ways. Consumer concerns about issues such as genetically modified organisms (GMOs), food processing techniques, and the types of labor involved in production all require the supply chain to be thoroughly examined, monitored, and controlled.
To put it in perspective, Grealy explains the difference between a commodity-based and a consumer-oriented supply chain: “The entire nature of the business changes when questions of the source and the type of commodity come into play. You no longer have just a vessel full of No. 2 yellow corn,” he says. “You also have to categorize it as organic, non-GMO, along with determining the approvals it has at various destinations and identifying whether it is a fair trade product.”
This presents inherent challenges. In some cases, LDC products are purchased on commodity futures markets, where their origin may not be completely clear. That’s when the legal team’s expertise in risk management, negotiating guarantees, and indemnities are essential. Grealy characterizes it as an area that requires careful consideration because it comes at “the intersection of US regulations and questions of legal exposure.”
“Supply chain and processing issues are the reasons you don’t see some companies using the words natural or all natural anymore,” Grealy says. “The amount of litigation those sorts of claims have produced require that you put a great deal of investigation and caution into the processes and the descriptions you use.”
“At each stage, there are issues that present themselves in which we don’t have extensive experience, so we work with experts in the business and outside counsel that do. And quite honestly, ignorance can be a benefit. You end up asking questions that help clarify issues and teach you more about the businesses on a much deeper level.”
LDC is organized by regions, but its worldwide businesses require that information, and insights can be shared and accessed across regional boundaries. To accomplish this, departments work through transversals or structured clusters for coordinating cross-regional issues. For example, in addition to regional finance groups, a lawyer based in Europe oversees meetings of the finance transversal. Here, the best practices are reviewed to ensure consistent operations and processes, and details such as restrictions for different types of financing in different jurisdictions are examined.
For the legal department, transversals function as forums for attorneys to share resources, information, and experiences such as templates showing the types of contractual clauses the company prefers regarding a wide variety of issues. With this in mind, the legal team developed a model for RFPs for construction contractors and equipment suppliers that clearly specify the terms that are to be bid on and the type of contract LDC expects them to enter into.
Outside of the legal department, Grealy has a close working relationship with his internal business clients. In fact, due to the range of issues and the relatively small size of the legal team, the department relies on its business counterparts to access important developments and information.
“Since our businesses are each actively involved in numerous industry and trade associations, they are resources for us when it comes to keeping up with developing trends, pending regulations, and other important priorities,” Grealy says. “When it comes to the flow of information, it’s not just one-way from the legal department.”
This exchange of information is further supported by the recent implementation of the HiQ platform. While it has not yet been used extensively at LDC, it has been used successfully to share documents and other resources with outside parties for several transactions related to the sale of one LDC business in 2016.
Because market and regulatory shifts can affect LDC’s domestic and import/export businesses quite differently—what’s negative for one can be positive for the other—Grealy is hesitant to make predictions about the challenges the legal department will face in the near future. However, with more than twenty-five years of experience with the company, he is certain that, regardless of changing markets and consumer demand, his team will always be evolving to help LDC continue its vital role in nourishing and clothing people around the world.
Did you know?
Gérard Louis-Dreyfus was chairman of Louis Dreyfus Energy Services, a subsidiary of the group involved in crude-oil trading, gas investments, and infrastructure. He is also the father of American actress Julia Louis-Dreyfus, the Emmy-winning star of Seinfeld.
Eversheds Sutherland (US) LLP:
“Neil models how lawyers deliver value to clients. Intellect, work ethic, dedication, and efficiency are mere foundational blocks. Coupled with a granular understanding of the business and its diverse personalities, Neil exemplifies the trusted adviser.”
—David McIndoe, Partner