When Prohibition was repealed, the federal government mandated a three-tier system of alcohol regulation: supply, wholesaler and retail. Typically, when a supplier enters into an agreement with a wholesaler, the latter grants exclusivity within its territory for the brand. If the supplier decides it wants to work with someone new, the regulatory framework makes terminating the old relationship difficult. It also makes for legal work.
In Illinois, for example, a supplier may terminate an agreement only if it pays reasonable compensation. Dogfish Head is in federal court there now, arguing about what constitutes reasonable compensation.
In Virginia, meanwhile, Dogfish has been interceded in a territorial dispute between two wholesalers. The company decided to involve itself because "we felt strongly that one wholesaler had the right to our brand and the other did not," Barnes said.
Working for a brewery makes for some interesting challenges, Barnes has discovered. Many involve alcohol regulations. State regulators "try their hardest to address every situation, but the cool stuff that our brewmaster and Sam [Calagione] come up with that they want to do is usually not addressed at all," Barnes said.
Take the time Dogfish created a beer/wine hybrid. The problem was that beer and wine are taxed differently. The solution, she said, boiled down to this: If you have more of the ingredients that make beer as opposed to wine, the beverage is taxed as a beer.
"It's really fun, and it's really outside-the-box thinking. It's a cool job."
Route to the top
Barnes graduated from Wake Forest University School of Law in May 2010. Brandon Barnes, still her fiancé at the time, was working at McDermott as an associate when Barnes graduated (they met in law school after Barnes had her offer to work at McDermott as a summer associate). Unfortunately, that was at the height of the financial crisis, and the firm deferred her start date.
She worked as a Constitutional Law Fellow at the Institute for Justice until she became an associate in McDermott's antitrust and competition practice, where she defended health care mergers, assisted in counseling clients, and worked on civil and criminal antitrust cases.
She had found that she loved to draft contracts and work on deals, she said, but saw little of this work in her new position. She sought out Sorini, leader of McDermott's alcohol regulatory and distribution group, who had recently lost an associate and gave Barnes some work for his brewery clients. "You name a small craft brewery, they're his clients," Barnes said.
She researched trade-practice issues for him, negotiating and drafting distribution agreements for breweries. Dogfish was a client, and when she found out the company was in the market for a young general counsel to grow with the brewery, she saw her opportunity.