Owens & Minor Inc. distributes medical and surgical supplies to the acute-care market and helps customers manage their supply chains. Those customers include 4,500 hospitals, alternate care units and the federal government. Its products include disposable gloves, dressings, endoscopic equipment, syringes, surgical products and gowns, and sutures.
The company was founded in Richmond, Va., in 1882. Today it has approximately 5,100 employees, with an additional 1,800 soon to come aboard from its recent acquisition of Movianto Group, the health care logistics division of Celesio A.G. in Germany. Last year’s revenues reached $9 billion, worth a No. 298 ranking on the Fortune 500. Board chairman G. Gilmer Minor III is the great-grandson of founding partner George Gilmer Minor Jr., whose own ancestor was Thomas Jefferson’s doctor.
LEGAL TEAM AND OUTSIDE COUNSEL
General Counsel Grace den Hartog’s department comprises seven lawyers, an adjunct tax attorney, two paralegals and a legal coordinator. All have different specializations, including labor and employment, regulatory and compliance, corporate and securities. Since arriving at Owens & Minor, den Hartog’s approach has been to integrate members of the group into the business team, the goal being to “eliminate the silos that had been built around Legal and Business,” she said. She reports to president, chief executive officer and director Craig Smith.
Three-quarters of the legal work is performed within the department. Contract preparation and acquisitions are done in-house, as are labor matters, unless they reach litigation. Despite the in-house emphasis, den Hartog calls on outside counsel “quite a bit,” she said, citing five firms: Hunton & Williams of Richmond; Atlanta-based Troutman Sanders, most recently for an Asian joint venture; Morgan, Lewis & Bockius, for labor and employment; Richmond’s McGuireWoods, for regulatory issues; and Atlanta’s King & Spalding, also for regulatory work. There are “a host of others, depending on the matter,” including London’s Ashurst, she said. Den Hartog believes in hourly billing.
There is just one predictable aspect of den Hartog’s workday — “I’m here most every day,” she said. “As a GC, I am a generalist and never know what will come up.” She works with the top executives on business matters independent of legal management. Den Hartog’s lawyers manage customer contracts and work on customer-related agreements, sometimes several each day. Some of these complex, long-term arrangements can take weeks to negotiate and finalize, she said. The Department of Defense is one of Owens & Minor’s top customers.
As a public company, Owens & Minor is overseen by the U.S. Securities and Exchange Commission. It is also subject to state pharmaceutical, licensing and regulatory boards, particularly in connection with distribution, medical devices and medications. There has been an uptick in Food and Drug Administration involvement regarding Owens & Minor’s new clinical-products and private-label lines. The legal department handles occasional patent work with products the company registers.
The attention den Hartog pays to the Sarbanes-Oxley Act has dwindled since its inception around the time of her arrival at Owens & Minor. The company already had a “strong governance philosophy, approach and policy procedures,” she said. As for the Dodd-Frank Act, “We have not been put in an unfavorable position by the requirements. We were compliant all along.”
HEALTH CARE REFORM
The legal department has its hand in “low-level” lobbying, den Hartog said, and Owens & Minor is a member of the Health Industry Distributors Association, a trade group with its own lobbyists. The company closely monitored the Patient Protection and Affordable Care Act’s progress through Congress.
Den Hartog’s job has not changed much lately, she said, but the business itself has — beginning with changes triggered by the health care reform legislation, a component of which was to squeeze excess spending by monitoring care more closely. The industry responded in part by investing in updated medical records technology. Consolidation in the industry has meant a burst of mergers and acquisitions and the continued growth of large hospital systems, she said. Owens & Minor has responded by expanding its technology and consulting services.
The company supports pro bono activities and other forms of community involvement, hosting company-wide fund-raising initiatives and allowing employees to take time off during the work week for charitable endeavors. Owens & Minor has donated supplies for Haitian disaster relief, committing money to the American Red Cross and supplying military units deployed in Haiti, including the USNS Comfort hospital ship. It has also contributed manpower and money to legal aid efforts.
Den Hartog has traveled extensively within the United States this year. She anticipates additional foreign travel in the future, particularly with Owens & Minor’s joint venture with a Shanghai-based sourcing company. She expects to face more foreign legal issues as a result.
ROUTE TO THE TOP
Den Hartog joined Owens & Minor in February 2003 as senior vice president and general counsel following a 19-year stint at McGuireWoods. She graduated in 1974 with a B.A. from Westhampton College, a women’s school within the University of Richmond. She earned her J.D. in 1980 from the University of Virginia School of Law.
Den Hartog enumerated three career highlights: serving as national products liability trial counsel for Ford Motor Co. during her time in private practice; being Owens & Minor’s legal leader; and her recognition by The National Law Journal as one of the country’s Top 50 Women Litigators in 2001.
Den Hartog is a Richmond native. She and her husband, William H. King Jr., a lawyer with McGuireWoods, have two children: Jonathan, 31, and Mattie, 26. She loves gardening and has been working on an arboretum for 12 years. She is a novice golfer and loves traveling.
Den Hartog’s recipe for success for anyone aspiring to become a general counsel: “Stay close to the business issues and maintain a flexible/creative approach. Lawyers are educated and trained to approach issues in an analytical framework. While analytical reasoning is, of course, important, a trusted and valuable GC will also look beyond the analytics to provide advice that is grounded in diversity of thought informed by good judgment and high integrity.”
She also believes in staying connected, up to date and as knowledgeable as possible.
LAST BOOK AND MOVIE
The Expats, by Chris Pavone; and The Best Exotic Marigold Hotel.