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The 'off-centered' GC
The National Law Journal
Sam Calagione founded Dogfish Head Craft Brewery Inc. in June 1995 in Rehoboth Beach, Del., as a brew pub called Dogfish Head Brewing & Eats. More than a decade later, the pub remains open, but the company has added a distillery that produces gin, rum and vodka, and a 100,000-square-foot brewery in nearby Milton, Del., that provides 27 states with Dogfish Head beer.
The company is privately held and does not release its revenues. However, according to general counsel Shauna Barnes, the company has grown by 20 percent in recent years in terms of sales. Dogfish has more than 250 employees and, according to Barnes, is "always hiring."
Barnes became Dogfish Head's general counsel in August. Her formal job title is "off-centered general counsel"a concession to a determinedly informal workplace. There had been concern within the company, she said, that bringing a lawyer in-house would mean the death of fun for the other workers; her title had to convey the requisite gravity when she negotiated deals, yet not offend a company culture that emphasized "off-centered ale for off-centered people." Job titles that didn't make the cut included "fun police" and "Dr. Know."
Barnes is the only lawyer within the office of general counsel. She reports to chief operating officer Nick Benz.
Barnes' forte is contracts and alcohol regulation; for other legal matters, she turns to outside counsel, including a team from McDermott Will & Emery's Washington officeMarc Sorini to help iron out distribution agreements with wholesalers and alcohol regulatory issues; Richard Kim to oversee the trademark portfolio; and John Dabney for trademark litigation. She also has developed relationships with a number of lawyers in Wilmington, Del.: Margaret DiBianca of Young Conaway Stargatt & Taylor counsels on employment law. Dan McCollom of McCollom Thomas helps with general corporate work. Richard Kirk of Bayard counsels on regulatory work specific to Delaware.
"When we hire outside counsel, it's important that they're great at what they do, but it's also important for us that their personality matches with Dogfish," Barnes said.
Barnes spends most of her day working on alcohol regulatory work. At the close of each workday, she prepares a "to do" list to tackle first thing the next morning. She's lucky, she said, if she gets to No. 1she's often greeted at her desk by co-workers waiting to ask a licensing question or about a contract.
As for a typical day, "it's a lot of what pops up that day, while moving forward with some more of my long-term projects."
One long-standing project was a negotiation with lawyers representing the Grateful Dead for a collaboration brew called "American Beauty." The project is part of a series inspired by particular musicians and their music. Never mind the Dead's hippie vibe and bootleg-friendly ethos"That was a negotiation," Barnes said. "They've got some great lawyers on their side."
The rest of her work involves applying her legal skills and educating herself. "There is still a lot to learn, and I still lean on outside counsel," she said. "I am not so full of myself that I don't know my limitations. I certainly know my limitations, and will call out for help."
When Prohibition was repealed, the federal government mandated a three-tier system of alcohol regulation: supply, wholesaler and retail. Typically, when a supplier enters into an agreement with a wholesaler, the latter grants exclusivity within its territory for the brand. If the supplier decides it wants to work with someone new, the regulatory framework makes terminating the old relationship difficult. It also makes for legal work.
In Illinois, for example, a supplier may terminate an agreement only if it pays reasonable compensation. Dogfish Head is in federal court there now, arguing about what constitutes reasonable compensation.
In Virginia, meanwhile, Dogfish has been interceded in a territorial dispute between two wholesalers. The company decided to involve itself because "we felt strongly that one wholesaler had the right to our brand and the other did not," Barnes said.
Working for a brewery makes for some interesting challenges, Barnes has discovered. Many involve alcohol regulations. State regulators "try their hardest to address every situation, but the cool stuff that our brewmaster and Sam [Calagione] come up with that they want to do is usually not addressed at all," Barnes said.
Take the time Dogfish created a beer/wine hybrid. The problem was that beer and wine are taxed differently. The solution, she said, boiled down to this: If you have more of the ingredients that make beer as opposed to wine, the beverage is taxed as a beer.
"It's really fun, and it's really outside-the-box thinking. It's a cool job."
Route to the top
Barnes graduated from Wake Forest University School of Law in May 2010. Brandon Barnes, still her fiancé at the time, was working at McDermott as an associate when Barnes graduated (they met in law school after Barnes had her offer to work at McDermott as a summer associate). Unfortunately, that was at the height of the financial crisis, and the firm deferred her start date.
She worked as a Constitutional Law Fellow at the Institute for Justice until she became an associate in McDermott's antitrust and competition practice, where she defended health care mergers, assisted in counseling clients, and worked on civil and criminal antitrust cases.
She had found that she loved to draft contracts and work on deals, she said, but saw little of this work in her new position. She sought out Sorini, leader of McDermott's alcohol regulatory and distribution group, who had recently lost an associate and gave Barnes some work for his brewery clients. "You name a small craft brewery, they're his clients," Barnes said.
She researched trade-practice issues for him, negotiating and drafting distribution agreements for breweries. Dogfish was a client, and when she found out the company was in the market for a young general counsel to grow with the brewery, she saw her opportunity.
"I know that one of the reasons they hired me was that I've done a lot of the regulatory work with Marc," Barnes said.
Barnes was born in Pittsburgh. She and Brandon haven't had any kids, she said, but she considers her dogs her children. Her hobbies include landscape photography and travel.
[State regulators] try their hardest to address every situation, but the cool stuff that our brewmaster and Sam [Calagione] come up with that they want to do is usually not addressed at all.
Don Tartaglione writes for The National Law Journal, a Daily Report affiliate.