For Stephen Lerner, general counsel at mobile phone giant 3, one phrase sums up his legal team: “The challengers”.
The five-year-old mobile company is at the forefront of a drive to make the UK mobile telecoms market more competitive and the legal team is at the heart of that challenge.”3 was a young entry into an established market that doesn’t like change,” says Lerner. “It means that we’re having to fight for our position by being innovative and challenging the market – be that on the legal front or otherwise.”
One cause that the 3 legal team has put on the radar of communications watchdog Ofcom is the current system of changing networks while keeping the same mobile number. According to Lerner, the number porting scheme does not lend itself to a competitive market.
“To change networks in the UK you need permission from your current network provider and then it will take several days to port the number, while in Ireland moving a number takes a couple of hours,” he explains. “This situation makes UK customers feel locked in with their current network and therefore it is anticompetitive.”
Testing the regulatory waters of the telecoms world is a key focus area for 3, which is why Lerner has brought on board Clyde & Co ace Mark Warrington, who was the driving force in a consumer class action against JJB Sports, the UK’s first such action (The Lawyer, 10 March). Warrington was brought in house because with the legal team challenging the status quo on a regular basis, 3 needed a dedicated competition lawyer.
Before Warrington’s appointment the operator relied on secondments from the likes of Baker & McKenzie to fill its competition needs. The hire of Warrington, however, does not mean that Bakers will be left out in the cold.
“Competition is key to us, which is why we need someone dedicated in-house,” says Lerner. “But the volume of work is growing, which is why we need solid, expert firms such as Baker & McKenzie to work alongside us.”
Bakers has been one of 3’s firms of choice since the company’s inception in 2000. Along with Barlow Lyde & Gilbert (BLG), Bakers assisted in the mobile company’s launch, which has since seen 3 attracting 10 million customers across eight countries.
BLG, however, is no longer one of 3’s preferred law firms – although Lerner stresses that this has nothing to do with the firm’s abilities.
“For a start we don’t have a panel, just close relationships with certain firms such as Baker & McKenzie, Lester Aldridge and Freshfields Bruckhaus Deringer,” explains Lerner. “When it came to BLG, it wasn’t a question that the relationship had changed, it was simply that as our in-house team grew, the level of work BLG was doing for us could be brought in-house.”
Lerner took over the general counsel role from Paul Vickers, who left 3 at the end of 2006 as part of a reorganisation that resulted in 130 job losses. It was Vickers’ vision to develop an in-house team that would rely far less on outside counsel.
“Paul left me with a strong team of exceptional lawyers, so I saw no need to make changes to a good team,” says Lerner. “My aim is to build on the rock-solid foundations that were handed over to me.”
Lerner’s team, in addition to Warrington, includes one regulatory lawyer, one person dedicated to the Republic of Ireland, three commercial solicitors, four in procurement and outsourcing and four property and retail lawyers.
The property and procurement teams are the largest for 3, as the operator ;is ;expanding ;at ;an exponential rate, rolling out 120 new retail stores last year alone.
“From the work the team has been able to pull off with tight time-frames, it’s clear to me that we have a great set of lawyers,” enthuses Lerner. “But we are still looking to expand our in-house capabilities as we continue to challenge the market. We are, however, waiting for the right talent.”n
Name: Stephen Lerner
Organisation: Hutchison 3G UK (trading as 3)
Title: General counsel
Reporting to: Chief financial officer David Dyson
Number of employees: 8,100
Legal spend: £3m-£5m
Legal capability: 15
Main law firms: Baker & McKenzie, Cobbetts, Freshfields Bruckhaus Deringer, Lester Aldridge, Lewis Silkin, Matheson Ormsby Prentice
Stephen Lerner’s CV
Education: 1984-88: BA, University of Manitoba
1989-92: LLB, University of Western Ontario
1993-94: Law finals, admitted as barrister and solicitor in Canada
1995-96: LLM, McGill University
1997-98: Law Society of England & Wales finals
Work history: 1994-95: Junior lawyer, Macleod Dixon, Canada
1996-98: Lawyer, Taylor McCaffrey, Canada
1998-99: Senior lawyer, CMS Cameron McKenna, UK
1999-2003: Senior lawyer, Clifford Chance, UK
2003-05: Legal counsel, 3
2005-06: Senior legal counsel, 3
2006-present: General counsel, 3