Greer McMullen is responsible for overseeing Coty’s legal affairs worldwide. He talks to Jodi Bartle about building an appropriate legal function for the third largest beauty company in the world.
Breaking the beauty mould
In October 2016, French heritage brand Coty merged with Procter & Gamble’s stable of fragrance, cosmetics and hair colouring offerings, doubling its size and re-emerging as the third largest beauty company in the world. Three weeks after the shift, Greer McMullen stepped into the role of general counsel, and has spent the last two years rebuilding the legal function to support the new Coty - a challenger brand, purpose-built to break the beauty industry mould.
Radically different approach
“The idea wasn't to be one (Coty) or the other (P&G) but to create a new beauty company where there are no ‘sacred cows’ to speak of. We feel that some of our competitors have an idealised view of what beauty is but we don't think that beauty should be narrowly defined; instead, we offer our customers tools to help them explore what they think is beautiful to them. It is a radically different approach where we want to enable and applaud people for setting their own beauty standards, whatever makes sense to them. This strikes me as being both a right and winning strategy.”
A self-confessed beauty brand neophyte, Greer says he was drawn to Coty and the beauty sector in equal measures, after various high profile roles including being a general counsel within one of the General Electric businesses. Although initially determined not to become a lawyer, he reluctantly found the fusion of creative business thinking and the intellectual rigour of legal practice was a good fit, settling upon a career in law with the goal to go in-house. “I found the middle space interesting, so I went into M&A and corporate securities as opposed to being a litigator, because as a litigator you are arguing over split milk and someone has to lose for someone to win - but in business, there are always multiple winners - a good business deal is a win-win for all parties.”
And so to the helm of Coty’s international legal function. Greer says one attractive aspect was that the beauty sector itself “seemed to me to be very sustainable and relatively recession-proof, with good growth and innovation. It also has the ability to empower; allowing people to feel more in control of their lives, boosting self-esteem. And if you look worldwide, beauty isn't the same thing everywhere, so it’s a complicated, interesting sector to be working in.”
Compliance and the business perspective
Coty has a broad portfolio of established brands, from every day products to high-profile luxury licenses such as Gucci and Burberry, which adds to the legal complexities. “The luxury business is where most of the licences are - at Coty, we have added higher end ones and their standards are very high, but we know how to do it well. We are good with compliance and the business perspective and to have a good relationship with a licensor you need to be good at both - and we are well set up for that.”
Other priorities include compliance (“increasingly important and something that needs to be viewed by our lawyers as a way of life - I’ll never be at peace about being good enough at compliance”), GDPR, issues regarding retail outlets, the different applicable laws throughout Coty’s global reach on employment and privacy, and international sanctions. “Generally businesses don't like change, but we have to execute the change and have it all accepted. I only provide about 3% of actual legal advice to the company - the real challenge for a GC is to empower your team of lawyers to do a great job. It’s really about finding folks and giving them the opportunities and support to be successful.” As for e-commerce and the advances in tech in the beauty space, he admits that it is a big challenge for a legal team and that legal has to learn to follow the business and its clients on it. Greer says he is still unsure as to how much fundamental digital expertise a lawyer needs to have gearing up towards the near future. “I suspect we will need to know more than I know now, and that it will require serious retraining; but I just don't know yet.”
Legal function redesign
The 2016 merger required a redesign of the legal function, increasing by about 40% as the size of the company doubled. “I have had to reconfigure, to look for new skill-sets and to consider geography and specialisation. My direct reports have expanded from five to ten, and we have had to fill in the gaps that Coty didn't have; in employment, compliance, and in our privacy capacity. The new Coty has a different business model - it’s also a US public company with a predominately non-US cultural DNA, which can present some complexities and challenges. We have to bridge those differences, to figure out how best to meet US requirements but keeping it user-friendly to the rest of the company.”
The female factor
The beauty industry typically appeals more to women than men, and Greer notes that 90% of his direct reports and about 85% of the entire legal function are women. “We’ve had terrifically wonderful candidates, the best lawyers who just happen to be women. For me, the ability to attract and hire the best legal talent who also have a head for the business solution and the courage of their convictions has been one of the great pleasures of being here over the last two years.”
Coty’s legal budget is “substantial, reasonable and likely adequate”. He is close to finalising a preferred counsel panel, and lists the benefits of one as being less about cost and more about efficiency, freeing up time so his team don't have to constantly train outside lawyers. He cites a strict checklist when asked about what he looks for in outside counsel - demanding diverse representation (“important both personally and to the company”), an acknowledgement that in-house lawyers have higher stakes and more to lose than private practice lawyers, geographic coverage, efficient staffing plans, honesty about capabilities, billing guidelines and an insistence that a firm make a relationship commitment to Coty.
Centres of gravity
Once the Coty legal re-build is complete, the total size of the company’s function will number about 55, with about 40 of those being internationally distributed lawyers. Coty’s centres of gravity for the legal function are in New York, Paris, Geneva, London and Germany, followed by Brazil, China, Russia “and we have someone in LA - it is decent coverage, although the volume of work is very high, so I put a premium on prioritisation and risk management.” The multi-cultural, multi-lingual, multi-experienced and multi-located distribution of his lawyers requires careful management to keep his team aligned and bonded. Greer’s communication channels are layered; meeting with each lawyer twice a year one-on-one, with direct reports three times a month by telepresence and in the fourth week in the month he meets with his team globally, either through WebEx or dial-in. The whole function is enrolled in a programme of professional development which sees the legal team meet for two days a year off-site, a crucially important scheme which connects and builds relationships leading to overall trust and business efficiency. It also allows Greer insight into what is working well, and what needs to be done differently.
The role of lawyers
Greer’s vision for his legal function is that his lawyers will serve as business partners to the company as a whole. “If you have business people coming to the lawyer for business advice, it allows for great, early lawyering. But, it is a big ask, so there has to be huge value-add perceived by the business person to do it in the first place. Our lawyers must understand the business in order to gain trust and confidence, and they also need to be a great lawyer. Bringing a lawyer in early for thought processes means that they can become a business solution for the division, which ultimately makes the business better as well as addressing legal issues. You can’t always make the business better but eight out of ten times you can, and we aim for that.”