Joia Johnson, chief legal officer of Hanesbrands Inc. ()
A legal team with just 10 lawyers at underwear manufacturer Hanesbrands Inc. might seem skimpy, but the small group of specialists and generalists deftly handles a wide range of legal matters around the globe.
Lawyers at the $4.63 billion undergarment and casual apparel company manage outside firms while juggling a myriad of compliance priorities and acquisitions. Their international focus stems from supporting the company’s global workforce of 49,700 people, including just 8,300 U.S. employees.
Hanesbrands’ in-house lawyers team up with outside lawyers on projects instead of merely handing off work, chief legal officer Joia Johnson said. But that requires a special dynamic.
“It’s not sufficient, it’s not practical and it’s not effective to simply hire an outside lawyer and unleash them on the business to do whatever the business leaders think is appropriate,” Johnson said.
Recently, for example, the legal department helped negotiate purchase agreements and financing documents for two acquisitions, Johnson said. In October, Hanesbrands paid about $583 million for Maidenform Brands Inc., including several undergarment brands and licenses. In June, the company announced a pending deal to acquire European intimate apparel maker DBApparel of France for about $550 million. It partnered with Atlanta’s King & Spalding, which led the negotiations, for the Maidenform deal.
Hanesbrands’ primary outside firm for the DBApparel deal is Cleary Gottlieb Steen & Hamilton of New York, but it’s also managing 14 additional law firms because the target company operates in various European countries.
Company lawyers outside the United States are generalists who do triage and manage outside firms, while stateside lawyers apply expertise in areas like mergers and acquisitions and employment litigation, she said.
Hanesbrands relies on outside lawyers for specific niches where the department lacks specific expertise, such as tax and environmental law, she said.
“All of the specialists here use outside counsel in various ways either to supplement their own knowledge about particular areas or to help them with … getting all the work done,” Johnson said.
Johnson and her team have a deep understanding of Hanesbrands’ business and strategies and take care to communicate that to outside lawyers, said Bill Baxley, a corporate partner at King & Spalding.
“They’re very effective in communicating what they’re looking for from us. It makes the relationship so much better and makes us more effective,” Baxley said.
Lower billing rates are high on Hanesbrands’ wish list and the department embraces alternative billing. King & Spalding did the Maidenform deal work for a capped fee. The firm paid a flat fee for its securities and ­governance work following a request-for-proposal process last year. That move cut ­annual spending in that area by half, and Hanesbrands is working on a request-for-proposals for intellectual property work, Johnson said.
Other alternative-fee arrangements include fee caps for litigation with bonuses for a successful result, and flat fees for outside lawyers who fill in when a Hanesbrands lawyer goes on maternity leave, for example, she said.
The company’s other key outside firms include Atlanta-based Kilpatrick Townsend & Stockton for intellectual property, manufacturing contracts, litigation and other work, and Southern regional firm Womble Carlyle Sandridge & Rice.
While managing billing and the 30-person legal department, Johnson oversees another 15 employees in the corporate social responsibility department and one governmental and trade relations employee.
The legal team was integrally involved with the corporate social responsibility department’s overhaul of the company’s global code of conduct a couple of years ago. That department, with legal and Deloitte LLP, started crafting an enhanced Foreign Corrupt Practices Act and anticorruption compliance program. The project started with the collection of data from the company’s 20,000 or so contractors and suppliers and culminated in a global rollout this year, she said.
“It’s hard to sort of tease out what’s [corporate social responsibility] and what’s legal,” Johnson said.
Hanesbrands must also adhere to a host of international laws, rules and regulations. It approaches that task with a highly diverse crew of attorneys. Seventy percent of the lawyers are female, 40 percent are Asian or African-American and 10 percent are from Central Amer­ican countries.
Johnson said she leans toward outside teams that reflect Hanesbrands’ diversity, but doesn’t use a programmatic approach.
“There’s diversity all around. If you’re a global company you’re diverse by definition,” Johnson said.
Name of company: Hanesbrands Inc.
Number of lawyers in the Carolinas: 7
Number of U.S. lawyers outside Carolinas: 0
Number of lawyers outside U.S.: 3
Chief legal officer: Joia Johnson
KEYS TO SUCCESS
• You have to figure out how to create a structure or how to communicate ideas in such a way that business people are freed up to be able to run the business.
• Create an environment where the lawyers feel free to be able to consult with their peers.
• Create an environment where the lawyers can always continue to learn new things.
— Joia Johnson