In-house news, updates and analysis | Page 59 of 94

• General counsel: Edward Smith.
• Team headcount: 33 lawyers.

There are few GCs like Edward Smith, who push their team members outside the remit of the traditional in-house counsel role. But the former Freshfields Bruckhaus Deringer lawyer encourages his team to think about gaining experience across the Telefónica UK business and less about behaving as lawyers.

Indeed, Simmons & Simmons partner James Cotter observes: ‘Ed Smith has a strategy of having versatile lawyers and moving them around different areas because he thinks it’s good to have cross-disciplinary people across the business. They’re very cohesive and are an excellent team.’ To remain attuned to the wider business, the legal team has adopted a model whereby each legal team head was appointed a ‘dancing partner’ on Telefónica’s board to embed themselves with leadership teams to attain greater knowledge of the business. Counsel also attend weekly leadership team meetings and core work includes negotiating key devices contracts with telecoms and technology giants, including Apple.

In the last two years the team has further managed a substantial feat in reducing its external legal spend. Led by Smith, savings for the 2014 financial year were £1.4m (47%), totalling £2.9m (66%) over two years.

Having taken over the role in 2011 following a reorganisation of the Spanish giant’s UK and European operations, Smith tends to recruit bright junior lawyers, eschewing the hire of bigger names in favour of putting in place a career structure and stretching his pennies further. Of those, cited names to watch include Julia Boyle, who began as an intellectual property lawyer and was recently made head of market and consumers, and also works on women in leadership initiatives. Another is Sophie Service, an ex-Ashurst disputes lawyer who has climbed the ranks to deal with complex regulatory-infused claims.

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• General counsel: Andrew Garard.
• Team headcount: 87 lawyers, including 65 in the UK.

Over the past five years, ITV’s profitability has increased 300%, but costs in its tightly-managed legal and business affairs team have fallen 30%.

The legal team has made a concerted effort to bring work other than M&A and litigation in-house, and has standardised a menu of repeat contracts to give the commercial business a higher degree of autonomy.

The television broadcaster last year acquired a controlling interest in Leftfield Entertainment for an initial cash payment of $360m, with the remaining share value calculated by a profit multiple, an opportunity brought directly to GC Andrew Garard as a result of a contact made in the US. This is one of a number of recent acquisitions in the US and Garard says: ‘The legal team has been front and centre of each deal.’

Major disputes involving the team include a challenge to the pension regulator’s retrospective determination that ITV should make a financial contribution under the Pensions Act 2004 after Boxclever – a joint venture between Granada (now part of ITV) and Thorn – became insolvent in 2003, leaving a pension scheme deficit of around £62m by the end of 2009. Garard says: ‘We will be fighting it tooth and nail.’

The broadcaster is leading the field with its corporate social responsibility activities, driven by Garard and director of legal affairs and third-party sales Barry Matthews (named Rising Star In-House Counsel of the Year at the 2014 Legal Business Awards), which will this year see 100 underprivileged children take part in a week-long development programme – a programme that has quadrupled in size from last year.

ITV’s panel review this year will also see external law firms required to provide diversity statistics and explain what measures they have in place to improve those figures.

Garard banned the billable hour in 2008 and external work is conducted largely on a fixed-fee basis. He comments: ‘If fee-earners have a target of 2,000 billable hours a year, we are working with law firms to ensure that lawyers working on our rates are adequately rewarded.’

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• General counsel: Simon Dowson-Collins.
• Team headcount: 12 in legal and contracts, including four lawyers.

The UK legal arm at publishing house HarperCollins is considered the ‘lifeblood of the organisation’, according to its chief Simon Dowson-Collins. In dealing with over 600 contracts a year for the acquisition of rights to publish books, the 12-strong team negotiates lucrative agreements with high-profile authors including George RR Martin, Veronica Roth, David Walliams and Nigel Slater.

Key to negotiations is ensuring royalties and rights are secured in those contracts, which allows the company to exploit its rights over the 70-year lifetime of copyright. ‘It is core to the business because it’s what we trade on – it’s essential we are at the front-end of the business,’ says Dowson-Collins.

Major mandates for Dowson-Collins, whose experience of in-house includes serving as a media defamation litigator at the BBC, include handling matters regarding an investigation into the so-called agency model – under which publishers rather than retailers set the price of e-books – by the European Commission. The company settled in 2012 after concerns were raised by the Commission that HarperCollins, alongside Simon & Schuster, Hachette, Holtzbrinck Publishing Group and Apple, had restricted the price of cheap e-books in breach of EU antitrust legislation.

Innovative structures put in place include the formation of a global piracy centre for the entire business, while forging external relations with the Police Intellectual Property Crime Unit, and notably establishing provisions for anti-bribery regulations and implementing a worldwide compliance programme.

Critical to the smooth operation is the department behaving collaboratively and collegiately, according to Dowson-Collins, and he says: ‘We live or die as a team and the ability to trust one another is crucial. You want people that care about what they do – that makes them trustworthy. Weak teams are internally competitive teams and contain people who are there for their own personal aggrandisement and ambition, before the good of others and the work they’re trying to do.’

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• General counsel: James Conyers.
• Team headcount: 120 lawyers.

A ccording to BSkyB’s GC James Conyers, the hallmark of a great in-house team is its ability to ‘successfully identify the key needs of the business it is serving and the most efficient way to meet those needs, ensuring they will continue to be met sustainably in the future’.

The company secretary and five directors of legal report to Conyers. Each director of legal heads up a team or teams, which are focused on a particular part of Sky’s business (eg content acquisition) or a particular legal discipline (eg regulatory and competition law).

Stephen Wilkinson, global head of M&A at Herbert Smith Freehills, says: ‘What distinguishes Sky is that, whereas some companies in media and telecoms have come and gone, Sky has continued to lead change in a fast-moving industry, and the legal team’s skillset and approach has had to keep pace with that change. That change has taken place across the business – in technology, delivery platforms, expanding businesses from analogue to digital, satellite broadcasting to telecoms and broadband, and beyond. On top of all that it has taken on and integrated major acquisitions and won significant regulatory judgments and commercial litigation. They are individually and collectively leaders in their industry. There can only be a few law firm partners who know as much about broadcast media regulation as James Conyers.’

Last year the legal group, spearheaded by deputy GC Andrew Middleton and principal legal adviser Sianne Walsh, instructed longstanding adviser HSF on its high-profile £7.4bn buyout of European sister companies Sky Deutschland and Sky Italia from 21st Century Fox. The deal, which was cleared by EU antitrust authorities in September last year, created a pan-European business with 20 million customers and combined revenues of over £11bn.

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• Group general counsel: Alexandre Menais.
• Team headcount: 160 lawyers.

In 2014 the total value of deals handled by Atos’ 160-strong, burgeoning legal team reached €3bn, including acquiring part of Xerox for €1.1bn, as the French IT services company also spun off Worldline in a €2bn initial public offering (IPO).

Led by GC Alexandre Menais, the Xerox transaction saw the in-house legal team handle a large chunk of the corporate work, assisted by Weil, Gotshal & Manges.

While large corporate deals are typically immune to strict fee arrangements, the Worldline IPO saw Cleary Gottlieb Steen & Hamilton advise Atos on a fixed-fee basis and Menais has banned all use of the billable hour outright.

The legal team has grown from around 150 in 2012 – the year after Menais joined from Accenture – to 210, which includes a contract management division of around 50 staff.

Menais has also introduced an in-house certification programme under which contract managers and other members of staff are able to achieve legal training and qualifications in modules such as compliance and company secretarial work.

Other initiatives rolled out by Menais and his team – where standout individuals include senior vice president, deputy group GC legal operations and contract management Maria Isabel Pernas Martinez, and head of contract management Beatriz Antona Rodriguez – have been adopted by Atos as a whole, including a buddy system to help new joiners integrate within the company. Menais has also brought in an external consultant to measure the success of Atos’ diversity programme.

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