It was the dotcom company that seemed to have it all: glamorous, photogenic young founders selling products that appealed to everyone and in the process gaining acres of press coverage. But with its share price riding high on a wave of dotcom enthusiasm, the following slump of lastminute.com was, perhaps, inevitable.
But lastminute.com is one company that did not get washed out with the tide when the wave crashed in mid-2000. Many who witnessed the demise of those other famous e-tailers – boo.com and clickmango.com – predicted the same fate for lastminute.com, but we are now starting to hear analysts whispering that the company will last.
As lead global legal counsel David Hickson puts it: “Lastminute.com will survive because we have a good business strategy and something to sell.” This is the essential essence that eluded many dotcom entrepreneurs back in the late 1990s.
Lastminute.com’s business strategy is to sell travel and tour packages over the internet two to three weeks in advance, often at discounted rates. It also offers gifts, hotel and restaurant reservations, events tickets and auction services. For reasons of spontaneity or procrastination, 4.2 million people are now subscribing to the company’s site, making it the most visited pan-European travel enterprise.
That is not to say that lastminute.com is turning a profit, but a recently-published annual report shows that it is likely to in its core areas of UK and France by 2003. This is a major achievement. Amazon.com, the online book retailer that is often fêted as the greatest dotcom success story, has only just turned its first profit after six years in operation.
Lastminute.com floated on the stock market in March 2000, when its recommended share price was 500p. Shares are now trading at around 32p, and the company recently unveiled losses of £53.7m against a total transaction value of £124.2m. However, strong backers such as Morgan Stanley are predicting that the company will do better, and at the time of writing the share recommendation was ‘buy’.
At the moment, though, lastminute.com is not the ideal environment for a ‘fat cat’ lawyer. Hickson freely admits that he earns less than a newly qualified assistant at the average top 10 City firm. This is a lot less than most legal directors are paid, but Hickson can cope with this as he is only 29 and one and a half-years qualified.
Hickson joined lastminute.com upon qualification as one of two in-house lawyers. He gained his grand title of ‘global legal counsel’ after his boss in the legal department left the company for a competitor.
And being barely out of nappies themselves, the company’s co-founders, Martha Lane Fox (now 28) and Brent Hoberman (now 33), decided that there was nothing wrong with a 29-year-old global legal counsel.
Their choice reflected the young entrepreneurial spirit of the company. “I sit opposite Martha and Brent, who are the co-founders, in an open-plan office. We’re a young company with a flat, meritocratic management structure,” says Hickson. “But there are some adults here, too,” he hastily adds. He is in part referring to Allen Leighton, the former chief executive officer of Asda and a huge name in the City, who has just become chairman of the company.
When he ‘grows up’, Hickson himself would prefer to be an entrepreneur than a lawyer. He trained at specialist music firm Harbottle & Lewis, and although he liked the area, he found his work less than entertaining. “I think I’d go out of law rather than into private practice. I liked Harbottle & Lewis, but I didn’t enjoy the job. I photocopied Robbie Williams’ file once,” he says.
Hickson’s role at lastminute.com is more varied. His work takes in several arms of the law that are hived off to specialists in private practice. “The company is a plc operating in nine countries, which obviously raises a lot of corporate and tax issues, as well as issues relating to shareholders,” he says. “I also need to know ecommerce law, such as the Data Protection Act and the Electronic Communications Bill. The company also gets a disproportionate amount of media interest when you consider its size, so I have to deal with media-related issues arising from this.”
Recently, Hickson has also completed some major corporate deals in-house. In November 2001, the company signed a £700,000 deal to integrate its travel booking engine into internet service provider AOL’s service. In the same month, the company signed a global marketing partnership with airline Lufthansa.
Hickson does outsource significant deals to external firms, but at the moment he is between corporate advisers. Lastminute.com famously used Linklaters on its initial public offering (IPO) in March 2000 and on the integration of lastminute.com France and the website of French travel brand Degriftour in September 2000. But because the nature of lastminute.com’s deals have changed since the heady days of its IPO, Hickson and Linklaters have drifted apart.
“We now have commercial deals that are big enough to outsource about twice a year, and I do about three a week in-house. We’re in the market for a mid-sized corporate firm, but we need one that can do class one deals without charging top six prices,” Hickson explains.
Hickson knows that lastminute.com does not belong with the corporate behemoths that bed down within the magic circle pen. He needs top-class corporate lawyers that understand the needs of his business and can cope with his less than extravagant legal spend of around £15,000-£20,000 a year.
“We’re a young business,” he emphasises. “When you’re doing ecommerce deals there are certain things that external lawyers who’ve been in private practice for a long time don’t understand in relation to our business. An example of this is the importance of cost benefits and cost control to dotcoms.”
There is one firm, though, that Hickson is still very happy to work with as his main intellectual property (IP) and employment adviser – niche technology firm Bird & Bird.
“There are areas of expertise I always use external lawyers for, such as global IP and branding issues,” says Hickson. “If I need something in this area, I’ll call the IP department at Bird & Bird.”
Hickson, though, does not commit to the idea of transferring his corporate work to Bird & Bird. One reason for this may be the firm’s European focus, as previously it was Linklaters’ US group in London that undertook lastminute.com’s US work.
But Hickson says that he is in no hurry to choose a new corporate firm. “We did work with Linklaters, and we recently used Freshfields for the first time. We’re now looking for new corporate firm, but we’re not in any hurry to decide soon,” he says.
Like those holiday makers who choose their travel destination two weeks in advance, this man truly embodies the ethos of lastminute.com.
Lead global counsel
|Global legal counsel||David Howell|
|Main location for lawyers||London|
|Main Law Firm||Bird & Bird|