Michael Ellis, group GC, Abercrombie & Kent
14 July 2014 | By Jonathan Ames
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He has a dream job at a luxury travel brand but prefers to work from his London desk – meet Michael Ellis, group general counsel at Abercrombie & Kent
It looks like a lawyer’s fantasy job – being part of the senior team at a luxury travel business. It holds the prospect of glamorous first-class jetting around the globe and a professional life of five-star comfort in exotic venues.
But Michael Ellis does as little travelling as possible. The group general counsel for London-based upmarket holiday and adventure company Abercrombie & Kent (A&K) is a keen advocate of new technology communications and, being a one-man-band of a legal department, time is precious.
“I have to do a certain amount of travel but I try to keep it to a minimum because you lose a lot of time,” confirms the South African, who was shortlisted for the In-house Lawyer of the Year prize at this year’s The Lawyer Awards.
“And it is very tiring,” he continues. “We have lots of technology such as Skype and video conferencing so I try to work as much as possible from London and travel only when I absolutely have to sit across a table from somebody. Sometimes, you have to be on the ground for the communication to be right.”
Sitting at his desk at A&K’s headquarters just down the road from Trafalgar Square is exhausting enough. Ellis joined the business only a year ago; he was A&K’s first in-house lawyer and the past 12 months have been spent on a hamster wheel of assessing the business and its legal needs.
But one of his first tasks had nothing to do with legal advice.
“When I told friends about my move – or even now when I attend conferences – I had to explain that the company is in the luxury travel business, not selling jeans and t-shirts to teenagers,” says Ellis.
Confusion with US fashion brand Abercrombie & Fitch is frequent. Indeed, several years before Ellis arrived the two businesses had a minor joust over IP.
“We [A&K] sold safari clothing,” Ellis explains. “That is, until Abercrombie & Fitch said they didn’t like the idea.”
The travel company backed down, sensibly deciding that a legal battle over a product not core to its business was not worth the expense.
IP issues – for which the company routinely instructs US firm Holland & Knight – still form a significant part of Ellis’s workload. But only a part. Ellis says the one surprise he had, after joining A&K from the offices of hedge fund administrator GlobeOp Financial Services, was the variety of work involved.
Assets all over the world
At the heart of the company’s business model are some 50 destination management companies around the world – the people on the ground who meet passengers on
arrival at airports, act as guides in remote locations and generally aim to ensure that A&K’s luxury brand is not tarnished.
“We’re unusual in that we own those destination management companies,” reveals Ellis, “so if you travel on one of our boats on the Nile, it’s owned by A&K.”
In travel business jargon, such assets are referred to as ‘end-user products’. A&K has a fleet of boats – in addition to the Nile, it owns craft on the Yangtze and in the Galapagos. It also runs a private jet and a collection of Safari lodges.
“All these destination management companies have legal issues,” says Ellis. “Often, they can deal with these themselves. Where I add value is when they are too busy or the issue is complicated. And, importantly, I am the liaison with local counsel.”
Ellis also works on financing and share options deals, as well as a variety of employment issues. And there is an element of corporate work. For example, A&K recently opened sales offices in Abu Dhabi and Monaco. In addition, the business runs a property arm for the sale of second homes and a villa rental business.
Instructing local counsel is key to Ellis’s role. With the business operating in exotic and at times difficult jurisdictions, having trusted advisers on the ground is crucial. With matters arising daily in jurisdictions as far-flung as Myanmar, Vietnam, Ecuador and Africa, Ellis needs an initial staging post for advice. That is normally provided by his contacts at London Berwin Leighton Pasiner.
“They have a great referral system,” says Ellis. “They will give me a list of, say, three firms in a jurisdiction and then I’ll fly out to meet them and see which I like.”
Ellis also instructs Leeds-based niche practice Travlaw for industry-related issues, for example around the EU’s Package Travel Directive, as well as occasionally turning to the legal department at the Association of British Travel Agents (Abta).
“That’s a wonderful legal resource,” Ellis says of Abta, giving credit to the association’s quarterly legal affairs meetings for general counsel in the sector.
“Something I’ve learnt in the past year,” comments Ellis, “is that international law firms – even those with offices in a foreign jurisdiction – often don’t have the connections you need to get licences and authorisations. Lawyers at the local firms have grown up there, they speak the language and know exactly how to get things done.
“Sometimes I struggle with the language barrier, so things can take a bit longer, but their fees are around an eighth of those of a global firm. And we can get the job done.”
For the most part, Ellis insists on getting the job done on fixed rates, a requirement that most local firms have little difficulty embracing.
“If you’re the firm for us because you’re an expert in a particular type of matter, you must have done it before,” says Ellis, “and if you’ve done it before, you must have a reasonable idea of how much it will cost.”
Ellis says he readily accepts that unforeseen circumstances can drive fee quotes beyond scope.
“I take quite a bit of time providing as much information in advance as possible,” he says. “A lot of complaints from in-house counsel concern the fact that their law firms are not sufficiently commercial, but a lot of in-house counsel don’t take enough time helping outside counsel understand their business.
“Lawyers sometimes forget that we are ensconced in the business and we know how it all works. Therefore it’s our responsibility to ensure that when we first instruct law firms we help them understand how our business works. Bring them into the office and let them ask questions that help them become more commercial and put fees in the correct bracket.”
Sensitive local issues include corporate ownership rules – many of the jurisdictions in which A&K operates have strict constraints on foreign businesses in the tourist sector, requiring them to strike joint venture deals.
“Working around those challenges means you’ll often need a local counsel to advise on the best way of doing it,” explains Ellis.
There are also compliance issues back home in the UK and the business’s biggest market, the US. Legal issues around the Bribery Act in the former and a string of legislation in the latter – including the Foreign Corrupt Practices Act, the Patriot Act and the Dodds-Frank Wall Street Reform and Consumer Protection Act – loom large for A&K.
The problem with perfection
For any business holding itself out at the luxury end of the market there will always be consumer issues. Ellis points out that A&K’s main client demographic is 50-year-old American millionaires. It is a client base for which the word ‘demanding’ summarises only a fraction of the attitude.
“Of the tens of thousands of customers we have every year, there are always going to be a few who aren’t happy with something,” acknowledges Ellis. “But it is amazingly few. That’s something I was a little surprised about. But, then, we spend the money to make sure everything is perfect.”
Michael Ellis, Abercrombie & Kent
Title: Group general counsel
Industry: Luxury travel
Reports to: Chief executive
Annual legal spend: £250,000
Number of employees: 2,500
Size of legal team: One
Law firms instructed: Berwin Leighton Paisner, Holland & Knight, Travlaw
2013: Joined Abercrombie & Kent
2010-12: General counsel for law firm Appleby in the British Virgin Islands
2005-10: First European general counsel for London-based hedge fund administration company GlobeOp Financial Services
2002: Trained and qualified as a solicitor at the London office of legacy Dewey Ballantine
2001: LPC, College of Law, Store Street
1999: Diploma in the common professional exam, Guildhall University
1996: Degree in law and industrial psychology from University of Natal, Durban, South Africa