The dotcom don
3 November 2003
Below a sign for a company called G Hacking lies one of London's leading new media boutiques. Liam McNeive, founder of McNeive Solicitors, probably did not choose the offices because of this, but it is a nice touch. The kind of joke he likes. The former Masons partner, still best known in the market as AOL's quasi-in-house lawyer, is confident, however, that his recent move to South London is not a reflection that the market he serves has also gone permanently down the river.
"I don't want to extrapolate too much from the deals that I'm seeing happen at the moment, but I do know that I'm at least as busy as I've ever been," he says.
Fewer of those deals involve AOL these days, though. The client that was the key driver behind McNeive's decision to leave big firm culture behind forever now has 11 in-house lawyers of its own in its Hammersmith offices. The work has not dried up entirely, but McNeives is now just one of a panel of firms that includes Olswang, Nicholson Graham & Jones and Masons, the latter through the return of senior associate Natasha Doman from McNeives to her former firm in March this year.
Luckily, there are other clients on the books. There are a couple of "fairly substantial" SMS aggregator clients; mBlox, which just raised $10m (£6m) in the US; and TynTec. There is also mobile marketing company Flytxt and, bizarrely, the National Trust Photographic Library, which McNeive advises on copyright, publishing and technology.
The client McNeive is most closely associated with today, though, is the meet-your-old-mates service FriendsReunited. Although not yet of AOL proportions, the growth and success of FriendsReunited has been little short of sensational. It is the second-largest membership organisation in the country after the AA, with some 8.5 million registered members. McNeive has been acting for the website for around two years. "As far as I'm aware, I'm the only one on content issues," he says. "They don't use me for corporate, but anything to do with the business, yes. The fantastic thing is it's such a span. I get everything, from all content issues like data protection, contempt of court, copyright and trademark, then collateral branding deals like those for FriendsReunited CDs and a book we're doing with Virgin Books."
McNeive has most recently advised the dotcom on a groundbreaking deal with Sky Interactive, signed last Wednesday (29 October), which will offer a version of the site through your TV. "It was quite a negotiation," he reveals. "First, negotiating with Sky is always tough, though the in-house lawyer Andrew Steed was reasonable and fair. Plus, it's unusual, I think, for Sky to find itself doing a deal with a small entrepreneurial company like Friends-Reunited; like any business in their position, they're pretty risk-averse. And FriendsReunited has the odd legal issue arise now and again."
Well, yes, there is the odd dodgy posting on the website from time to time. That is when McNeive dusts off his defamation textbooks, although as he points out, he is no litigator. "When I talk about the defamation work, I mean letters before action - advisory work. The really interesting part of this is weighing up the commercial advantage of FriendsReunited having message boards, where people can place sometimes scurrilous things, versus the legal downside, the potential for being sued given the uncertainties in the law. It's very easy for lawyers just to say it's really dangerous, you've got to take it all down. But the imperative is to be commercially realistic."
You get a sense with McNeive that a fairly large part of him misses the days that he longingly describes as "a lot of fun, even leaving aside the fees".
More than most lawyers, McNeive was at the centre of what he almost inevitably refers to as the "dotcomedy". At least he can truthfully say that he was there and, unlike the 1960s, he can still remember it in impressive detail. "It was 7pm on an October evening in 1995 when I was sitting in my office at Nabarros and the phone rang, and it was Tom Dabney [then head of international legal at AOL] calling me from a call box on the Fulham Broadway. He said, 'Can I come and see you about some work?' I said, 'When are you free?' He said, 'Now'. So I said, 'Okay'. He came over and, about 20 minutes in, he stopped me dead and said, 'I think it's going to work'. Got some contracts faxed over for me to review and that was it. That was how it started."
The AOL strategy back then was to have a lawyer who Dabney could trust in each major jurisdiction, which meant the UK, France and Germany. "Remember," says McNeive, "in the early days, no one really understood the internet anyway, and you had to reinvent the wheel every time you instructed a lawyer. He told me it was to do with self-interest, so I stopped being grateful then."
McNeive's entry into the top echelons of the rapidly growing dotcom world generated more than the usual number of war stories from that period. There was the Clickmango experience, the notorious dotcom with the inflatable boardroom that featured Tiny Rowland's son Toby as a co-founder and Joanna Lumley as a backer and company face. When it went belly-up, McNeive was the recipient of what he believes was its last ever cheque, a photocopy of which is still on his office wall.
There was also the time McNeive flipped over to the other side of the table and co-founded a dotcom himself in the form of music download service iCrunch. "I call it Crunch now - I feel rather embarrassed calling it iCrunch," he admits. Sitting in a Borough pub, playing with his favourite toy (an Apple iPod), McNeive explains in typical detail how far the industry has moved on since iCrunch launched at the start of 1999. "When we started iCrunch there was one make of MP3 player available, the Rio Diamond. It had 32 megabytes of memory. You could store about seven or eight tracks on that. What I've got has 30 gigabytes of memory, with 1,660 tracks on it so far, and that's already obsolete by the way. The new machine has 40 gigabytes. I'm encoding at 320 kilobits per second..." McNeive clearly likes his music, although sadly for iCrunch the world was not quite ready for it in 2000. Having raised £4.2m, with backing from (among others) Nomura and New Media Spark, what McNeive says may have been "the first legitimate downloadable music business in Europe" was sold to Music Choice Europe in April 2001.
McNeive's passion for music, though, remains. A major attraction of the move south to Borough was the fact that he shares his offices with music lawyers Andrew Lewis and Paul Jones. The synergies ("synergies: it's such a shit word," says McNeive) between the two firms are obvious, although currently there is only a referral relationship in place.
McNeive's track record in both online content and the music business suggests that the two firms will at the very least enjoy working literally in the same space, so to speak. Meanwhile, the dotcoms may not be back, but there are at least some signs of life. Clickmango's Toby Rowland is back on the scene in the shape of McNeive client Midas Player, an online gaming business. "In the last two to three weeks, they've raised some serious first round VC [venture capital] money. And this from people who haven't put money into a dotcom for three or four years." Perhaps McNeive can still prove to be ahead of his time.