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Like many college graduates, Deval Patrick says that when he got out of school in 1978, he wanted to keep his options open. That’s why he carried a law school application in his backpack while working for the United Nations in Sudan. One night in the desert outside Khartoum, Patrick, then 22, put a flashlight on the ground, swatted away a few flies, and filled out the forms by hand. He asked a friend who was traveling to London to take the envelope and mail it from there because Sudan’s postal service was not as reliable. A few months later, Patrick received a letter telling him he’d been accepted at Harvard Law School. The next 25 years were replete with options for Patrick � many of which would be career pinnacles for other lawyers. He worked at the NAACP Legal Defense and Education Fund, headed the U.S. Department of Justice’s civil rights division for three years during the Clinton administration, and held partnerships at two Boston law firms. In 1997 Patrick became head of a task force created to resolve serious racial discrimination problems at energy giant Texaco Inc. By 1999 he was vice president and general counsel. Two years later he signed a five-year contract and joined The Coca-Cola Company as executive vice president and general counsel. The company paid Patrick, who grew up in Chicago housing projects, $10.36 million in cash and restricted stock his first year, and $1.91 million his second year. Information about his 2003 compensation was not publicly available. But now Patrick, 47, is sifting through his options once again. On April 12 The Wall Street Journal reported that he had resigned “amid criticism from some company directors over his handling of government investigations into the company’s accounting, according to people familiar with the matter.” The news broke a day after Coke chairman and CEO Douglas Daft, motivated by inquiries from the Journal, sent an Easter Sunday e-mail to employees announcing Patrick’s departure. The e-mail praised Patrick for his “significant contributions,” and said the lawyer would assist Coke through the end of the year. But Daft added that chief deputy general counsel Geoffrey Kelly would serve as “interim general counsel.” Patrick says he got hundreds of e-mails from employees asking him to stay, as well as puzzled inquiries from fellow lawyers and even one federal judge overseeing a Coke matter. On April 14 Daft issued another statement, clarifying that Patrick would stay through December and saying that Patrick “has my and the board’s confidence and support in the professional and effective manner in which he and his legal team have conducted our legal affairs.” “It was badly handled,” Patrick says of how his resignation was announced. In between meetings in Washington, D.C., Patrick recently discussed his three-year tenure at Coke � including the awkward announcement of his resignation. He arrived not long after the company had hired a new CEO, Daft, and settled a major race discrimination suit. Even now, Coke still is in transition. Neville Isdell is set to become CEO when Daft steps down at year-end. And the company is waiting to see what comes of federal investigations into Coke’s accounting. Coke says it is cooperating with the government’s investigation. Belying the pressures he’s faced, Patrick is friendly, polite, calm, soft-spoken � and assertive. Explaining the global challenges heading Coke’s law department, he sometimes sounds more like a graduate of Harvard Business School than Harvard Law. He’s at ease talking about profit centers, a “targeted selection” hiring process, and the “intricate ballet” that occurs between Coke’s production of its secret formula concentrate and a customer popping open a can of cola. He’s unapologetic about reorganizing Coke’s legal department, even though the result was the reassignment or retirement of a number of experienced lawyers. Likewise, Patrick describes his consolidation of Coke’s outside counsel relationships � one that gave 80 percent of the business to seven firms � first in terms of dollars and cents: “We had relationships with hundreds of firms � and no discount relationship with any of them.” As for his resignation and its unceremonious announcement, Patrick says the decision to leave was his. He first discussed the matter with Daft in October 2003, and says he gave notice in March, a month after Daft announced his own resignation. Patrick says he wanted to resign before Daft’s replacement was named so his departure wouldn’t look like an ouster by the new CEO or an objection to the board’s choice for that post. He also says he did not want to conduct his next job search in secret. Patrick is quick to explain that his resignation also was motivated by a shifting balance between enjoying the challenges at Coke and wanting to spend more time with his wife, Diane Patrick, a partner at Boston’s Ropes & Gray, and his two daughters. A person familiar with Patrick’s thinking suggests that Coke’s general counsel also may have been growing tired of executive politics at the company. But Patrick insists he’d never heard a board member express dissatisfaction with his work on the federal investigations, saying he was “astonished” when he read the Journal report. Board member Ueberroth, who heads Coke’s audit committee, the one most directly related to the accounting issues under investigation, echoes that point: “I’ve never heard an even slightly negative discussion by any board member about Deval’s handling of those matters,” he says. Of course, the palace intrigue that marked Patrick’s resignation announcement was far off the horizon when, still Texaco’s general counsel, he flew to London to meet Daft in the summer of 2000. The visit was arranged by a mutual friend so that the two could discuss Patrick’s thoughts on effective relationships between general counsel and their CEOs. Coke was then, as now, in a time of management transition. Just a year prior, Daft had taken charge of the company from M. Douglas Ivester. Ivester had spent less than three years at the helm, taking over after chairman and CEO Roberto Goizueta died in 1997. The meeting was not a job interview, Patrick says, but Daft liked Patrick’s idea of using Coke’s company lawyer as a counselor and not just a legal technician who gauges whether business strategy will pass muster with the courts. “If all we do is say no, the company needs only one lawyer,” Patrick says he likes to tell his 120-attorney staff. Daft later asked Patrick to join Coke, and in February 2001, Patrick signed a contract with the company ["Coke Isn't It," June]. Even though Patrick was well-known for his civil rights work at the NAACP, the Justice Department, and Texaco, he says he made it clear to Daft he did not want to take the job just to oversee Coke’s $192.5 million settlement from its own employee race discrimination suit. Instead, he appears to have immersed himself in Daft’s efforts to shift the company from seeing itself solely as the perennial leader in the soft drink industry to one that goes far beyond colas to fruit drinks, juices, energy drinks, rehydration drinks, and others. But the legal department under Patrick would reflect the kind of evolution that was affecting Coke as a whole. Patrick flattened out the department’s reporting structure. This created management opportunities for some in-house lawyers but led to the departure of many others who had enjoyed management positions under Joseph Gladden Jr., Patrick’s predecessor. The changes he initiated did not always endear him to the old guard from Coke’s legal department. About six months after arriving, Patrick asked all of his managers essentially to reapply for their positions. “Not everybody liked that,” Patrick says in understatement, although he argues that many inside the department had, in fact, suggested such a reorganization was necessary. “Clearly people who had been in their positions for a long time felt very uncomfortable,” says W. Thomas Haynes, who was general counsel to Coke’s North America division when Patrick arrived. Patrick’s reorganization of the legal department eventually eliminated Haynes’s job; Haynes is now executive director of The Coca-Cola Bottlers’ Association. Haynes can name about a dozen lawyers he says were in management positions when Patrick arrived and are either no longer with Coke or not in management anymore. To be sure, some left to accept more appealing offers with other companies or law firms, but others retired when the reorganization relieved them of their management roles. “My assignment wasn’t to protect them,” Patrick responds, adding that his goal wasn’t to rid the department of experienced lawyers. He says Haynes’s position “changed” and was not officially eliminated. “They were all hard,” he says of the reorganization decisions. Patrick also made changes to the company’s relationship with its hundreds of outside law firms, including Atlanta’s King & Spalding, which has been doing Coke legal work for decades. The firm retained a healthy chunk of Coke business � doing nearly $14 million in 2003 � but Patrick says the company no longer has a “default firm.” One former Coke lawyer, who asks not to be named, recalls Patrick’s reassessment of the company’s outside counsel relationships. “He made it clear it was a new day,” the lawyer says, one in which “old relationships don’t necessarily hold, and everything is up for grabs.” Again, Patrick is unapologetic, saying he arrived to find the company using hundreds of outside firms, none of which was offering discounted work. He eventually established a core group of seven firms, reevaluated annually for performance, diversity assignments, billing rates, and other factors, that get about 80 percent of Coke’s business. King & Spalding remained on the list, but things changed, Patrick says. He moved intellectual property work back in-house, though Coke’s vast litigation kept King & Spalding busy, according to the company’s annual proxy statements. Coke disclosed how much it paid the firm because company director Sam Nunn, the former U.S. senator, was a King & Spalding partner. Nunn resigned from the firm in 2003 to remove any conflict-of-interest issues, and the company no longer needs to disclose its payments. The proxy statements show that King & Spalding did about $7.56 million of Coke work in 2001, $8.8 million in 2002, and $13.8 million in 2003. L. Joseph Loveland, the King & Spalding partner responsible for the firm’s relationship with Coke, won’t discuss much about the firm’s work for its client or how it has changed. But he says the firm has a similar relationship with Coke as it does with other clients � that of a core counsel. The other six firms that share in the 80 percent of Coke’s business are, according to Patrick: Morrison & Foerster; Thomas, Kennedy, Sampson & Patterson; Holland & Knight; Skadden, Arps, Slate, Meagher & Flom; Howrey Simon Arnold & White; and Cleary, Gottlieb, Steen & Hamilton in Europe. According to Patrick, the company’s biggest challenge is the “intricate ballet” between manufacturing the secret formula and the consumer’s popping open a can. Coke controls the beginning production and the marketing at the end, but nothing in between, Patrick says. Independent bottlers and other business partners, with which Coke has faced off in court over the years, control the middle. But the rest of the world sees little difference between The Coca-Cola Company and anyone else who does the work in between those two steps, Patrick says. One example of this problem came from Colombia, where a worker trying to form a union at a Coke bottling plant was murdered. A federal suit brought against Coke by an international labor rights fund failed because, according to an April story in The Washington Post, the judge ruled that Coke did not have enough control over the bottler to be held liable. Nonetheless, groups pressed Coke to hold an independent investigation into the murder, and at an awards dinner last year, Patrick said he would conduct one. But after initially backing the idea, Daft refused to allow the investigation to go forward. The Post story quoted an unnamed source as citing Daft’s reversal as the kind of “internal politics” from which Patrick was growing impatient. Patrick, when asked about the Colombia case, reminds a reporter that the company was cleared of any liability. He adds that he “respects the CEO’s authority” to decide against the independent investigation. Asked to name one of his successes during his three years at Coke, Patrick says, “After 20 years of trying, we have a unitary legal function.” The goal, he says, is to have the company’s lawyers as close as possible to the business units they cover. For example, Patrick is now in the process of spreading the company’s trademark lawyers around the world so that Coke’s local units have quick access on fast-moving problems. After local triage, litigation also is controlled in Atlanta, according to Patrick, because he wants to make sure the company’s arguments in cases are consistent. Patrick says he has tried to keep Coke’s lawyers from falling victim to the typical litigator’s reaction of wanting to crush anyone challenging a client. Human resources, in particular, has taken on a more conciliatory approach with a new program that he says goes beyond the requirements of the race discrimination settlement. The program allows Coke employees to bring disputes to an arbitrator. If the arbitrator decides in favor of the employee, Coke must abide by the decision; if the employee loses before the arbitrator, however, the employee retains all rights to take his complaint to court. The goal, Patrick says, is to “plan for a relationship at the end of the dispute.” Patrick says this approach to litigation has resulted in more settlements and fewer trials, thereby saving the company money. Joshua Thorpe, a partner at Atlanta’s Bondurant, Mixson & Elmore, a law firm that represented the race discrimination plaintiffs, says the new program is “innovative and creative,” with the potential to resolve disputes before litigation is needed. Curiously, Patrick says his department actually has made more money than it has spent thanks to cases in which Coke has been the plaintiff. He estimates the recoveries to have been in the tens of millions of dollars each year since he arrived. In a case about alleged price-fixing of corn syrup sweetener, Coke’s lawyers are actually working with their arch rivals from PepsiCo, Inc. One of the more serious legal challenges Patrick faced, in addition to implementing the race discrimination settlement hammered out by his predecessor, involved the case of Matthew Whitley, who sued Coke for wrongful termination. The suit settled last year for $540,000, which Patrick points out was $100,000 for Whitley, $140,000 in severance benefits, and the rest for costs and attorneys’ fees. But the accusations � including revelations that Coke executives tried to fake the results of a test for customer Burger King Corporation � have led to two investigations by the Department of Justice and the Securities and Exchange Commission. Coke is cooperating with the investigations, which were reportedly the subject of some board members’ criticism of Patrick � the criticism Patrick says he never heard before reading it in the Wall Street Journal article that reported his resignation. “I think his tenure as general counsel has been very good,” says Ueberroth. “It’s been a tough time for The Coca-Cola Company.” He adds, offhandedly, that he wishes Patrick would reconsider leaving. If he won’t, Ueberroth says, he hopes the company gets “somebody very much like him.” That decision will be up to Isdell, the new Coke chairman and CEO announced by the board in May. Until then, Patrick says he is fielding “some intriguing overtures” from law schools, law firms, and companies. Once again, Patrick is keeping his options open.
Jonathan Ringel is a staff reporter with Corporate Counsel sibling publication The Fulton County Daily Report.

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