They say the early bird catches the worm. One might say that Dan Lee, general counsel of Caribou Coffee, proves the early bird also catches the top legal job.
During a seventh grade civics class in his small Minnesota farm community, Lee declared his aspiration to become a corporate lawyer. Fast forward 10 years, and Lee was at Hamline University and Minnesota State, pursuing dual degrees in law and business.
“It was one of those things that was meant to be,” he says. “I like business. I like the law. It just fit my personality and obviously did so from a very early age.”
After working on the legal teams at GE, Carlson Cos. and MoneyGram, Lee arrived as Caribou’s first GC at the same time the company went public in 2005. With a full plate from the start, Lee transitioned the company through its initial public offering phase while helping it retain the values vital to Caribou’s character.
“I wasn’t the traditional ‘keeper of no’ that some lawyers can become,” he says. “It really was a socialization process to become part of the organization’s fabric, so when I started to actually make changes to drive risk out, people understood I was coming from a place of respect for what they’d done before.”
Q: You knew early on you wanted to be a corporate lawyer, but did you always want to work in-house?
A: I planned my education around maximizing the opportunity to be in-house. At the time I went to business and law school, I was fifty-fifty about whether I was going to use the MBA or go into in-house practice. When I graduated, I made the strategic decision that if I didn’t practice in-house law right away, the legal skills would erode so quickly that I probably never would. So I thought I’d work in-house for a few years, and if a business opportunity opened up, I’d jump into that side of the world. The reality is I’ve figured out that in-house is perfect for my personality because I like the balance of law and business.
Q: What’s your typical day like?
A: There have been only two or three days since I started here where the day went exactly as I planned. Usually there’s some new issue that I never would have anticipated on my drive into work. That’s part of the fun because you don’t get stale doing this, by any means. I now know more than I ever thought I would about everything from health inspection laws to local regulations on waste control in the District of Columbia.
Q: What are some of the unique legal challenges you face at a food and beverage company?
A: The single biggest thing that keeps me up at night is the patchwork of food regulations that’s developing across the country. Because the federal government hasn’t come up with an overall food regulatory program, many states developed their own versions. Our struggle is keeping up with all of these different regulations that all have slightly different requirements.
We just learned about a regulation in the District of Columbia that requires us to charge our customers for every bag we put a product in. If it’s a paper bag, then the bag needs to be a certain size, has to be a certain material so it’s recyclable and has to have certain labels so the customer knows it’s recyclable. When you look at how many jurisdictions we work in that could come up with different regulations, that kind of detailed regulation can eventually become a huge burden.
Q: What kinds of regulatory changes would you like to see in the food industry?
A: I would really like to see common standards that level the playing field for everybody and are clearly communicated and understandable not only to the industry itself but also to consumers. There are cities, for example, that now require nutritional information beyond menu boards. When these kinds of disclosure require too much material, people ignore it or don’t understand it and therefore aren’t making the best decisions about their purchases. There has to be a balance, and we haven’t found that balance yet.
Q: Have you experienced any major litigation at Caribou?
A: We’ve had a couple of wage-and-hour class action litigations. One was a store manager misclassification case where store managers–who were the most highly compensated individuals in the store–claimed they should have been hourly employees and paid for every hour they worked more than 40 hours on a one-and-a-half time basis, under the overtime regulations. It’s exactly the same kind of litigation that Starbucks has had.
Q: What are the biggest challenges of your job?
A: Everybody looks at the coffee shop and they see this beautiful, good tasting, warm, inviting cup of coffee in the warm environment we create. They relax there. What they don’t see as easily–and by design because we don’t necessarily want them to see it–are all the myriad details behind the scenes that go into executing that wonderful, warm inviting environment.
Behind the scenes, the class action litigation is a large challenge because large litigation is extremely costly to defend, whether you did anything wrong or not. But we also have the regulatory challenges and the fact we’re in the food industry and required to be compliant with labeling and packaging laws, and the fact that we’re importing agricultural products from other countries.
Q: As leader of a small legal team, what strategies do you use to get the work done?
A: Everybody that works on the team works hard. They put in a lot of hours, and they’re working smart. I have a few law firms we’ve developed relationships with over the years. Because they’ve gotten used to us, they handle matters for us fairly efficiently. One firm does our trademark and intellectual property maintenance work on a fixed-fee basis. We use that firm exclusively because they know us. Recurring themes come up, so having the same lawyer help us on a consistent basis instead of reinventing the wheel each time drives the cost down.
Q: What is your favorite Caribou product?
A: It’s called a Depth Charge. It’s a shot of espresso you add to your coffee. If you’re drinking a mocha java coffee, you’re already getting a very nice, smooth dark roast, and then you add this shot of espresso, and it takes on an even deeper, more chocolatey character that I just find very wonderful. I drink that every day.