A pretty picture

With its acquisitive streak finally slowing down, Getty Images’ legal department has its sights set on image rights. Steve Hoare reports.

The brainchild of an investment banker and the grandson of a multimillionaire: it may come as little surprise that after being founded in 1995, Getty Images went on an acquisition frenzy. The fact that this frenzy saw Getty Images buy 40 companies in its first eight years may be somewhat more remarkable.

Following this spending spree, Simon Quirk was recruited in January 2002 to launch a legal department for Europe, the Middle East and Africa (EMEA) and sort out the daunting task of integrating all these companies.

Built up from nothing, Getty Images now claims to be the world’s leading provider of imagery. Pick up your newspaper and have a look at the photos. The likelihood is that they will come from Reuters, Associated Press, Agence France-Presse (AFP) or Getty Images. This, however, is only 15 per cent of the company’s business. The other 85 per cent is ‘creative’ work, which means work that is arranged, such as fashion shoots.

Of the company’s revenues, 40 per cent comes from Europe and Quirk’s first job was to sort out the tangled mess of companies throughout the EMEA region. Previously, the head office in Seattle provided all legal services, with Weil Gotshal & Manges and Willoughby & Partners providing local advice out of London.

One of the first things that Quirk did was fly out to all of the company’s European offices and conduct a series of beauty parades. “The company needed to reduce costs and this was a good way of doing it,” says Quirk.

The main change to Getty’s informal panel has been the appointment of several firms throughout Europe. Salans is instructed in Paris and Eversheds handles the French employment work. Cuatracasas advises the team in Spain. Rodl & Partner advises Getty in Germany, with Baker & McKenzie handling employment issues there.

After the flurry of acquisitions, the company had superfluous offices in many countries. The consolidation entailed reducing the numbers of offices and staff in Europe by about 55 per cent, which is why it was so necessary to appoint local law firms for employment advice. “We had a lot of duplication because of all the acquisitions over the past five years. We had to liquidate companies to refine our vision,” says Quirk.

“There is a culture of understanding that local issues need to be dealt with by local people in local ways,” he says. While Quirk reports to senior vice president for legal and human resources Jeff Beyle in Seattle, London is the group’s biggest office and although the legal department is thought of as one team, the team runs on a decentralised model. Quirk’s team is fairly autonomous.

Harmonising processes and practices throughout Europe was a tricky task. Quirk’s team also managed the EMEA aspects of a global project to rationalise its agent network. The company now has just 88 contracts to be terminated or revised from an original 420. “We’ve had to return tens of millions of images to photographers, which is a legal minefield,” says Quirk.

Now that the consolidation process has been completed, Getty Images can get on with doing business. Jonathan Lockwood was recently recruited from KirchSport to deal with intellectual property (IP) issues and it is IP that is at the core of the business. “All we do is license intellectual property with a few add-on services. The vast majority of our revenue comes from licensing images,” says Quirk. This makes the legal department especially important to the business. For a company of its size the legal department is fairly large.

Quirk says: “Because IP runs throughout the whole organisation, there’s an incredible appetite for legal services.” At some stage every employee will need to contact the legal team. Getty has an army of sales people who are selling stacks of licences every hour and they get a stream of requests from clients to use an image for a certain purpose which may need verifying. The creative department may need to know if a photo can be scanned into the collection when there may be trademarks in the backgroun which need deleting.

Recently, a paralegal was employed solely to develop Getty’s unauthorised-use activities. If people are using images without a licence, or the licence has expired, or an image has been copied, then Getty will chase you down. In the past, this has been done on a piecemeal basis, but now it will be a coordinated attack. “This will be a real driver of revenue,” states Quirk. He is hoping that Europe alone will raise $1m (£600,000) through this method.

One of the hottest topics for Quirk is image rights. “People are becoming more and more aware of their image rights,” says Quirk, noting the recent Sara Cox judgment. He expects more landmark decisions in this area. While the company does not tolerate the more intrusive style of paparazzi photography, it has been involved in some litigation, mostly involving licensing, which, in the UK, is outsourced to Willoughby & Partners.

There have also been more dramatic reasons for going to court. In the middle of the Afghanistan war, the company sued the President of the US and the Secretary of Defense because they would not let the company’s photographers in to shoot images of the detainees being held in Guantanamo Bay in Cuba. They gained access despite the general post-11 September mood of press repression in the US.

The company has tamed its acquisitive nature, but the deals continue to flow and where previously the legal work was outsourced, primarily to Weil Gotshal, now 95 per cent is handled in-house. The company recently entered a strategic alliance with AFP. Getty will have exclusive rights for the marketing of AFP images in North America and the UK. AFP will market Getty’s photography of North America to its daily newspaper subscribers in the rest of the world. Weil Gotshal just advised on the competition issues.

In November last year, the company transferred its listing from the Nasdaq exchange to the New York Stock Exchange. The company has bedded in its acquisitions and is now looking ahead, with the legal department at the heart of the business. “It really is a coming of age for the company. It was always a great concept and everyone liked the idea. Now it has been proven to be right,” states Quirk, with the relish of someone who believes themselves to be in exactly the right place at exactly the right time.
Simon Quirk
Vice-president, corporate counsel
Getty Images

Statistics
Organisation Getty Images
Sector Imagery provider
2002 Revenues $463m(£278m)
Employees 1,700-1,800
Legal capability 7
Vice President, Corporate Counsel Simon Quirk
Reporting to Senior vice president for legal and humnan resources Jeff Beyle
Principle Law Firms Boodle Hatfield (commercial licensing), Eversheds (HR), Weil Gotshal & Manges (corporate and commercial), Willoughby & Partners (intellectual property and litigation)