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Corporate Counsel Q&A - Aviation 2012

Who's Who Legal interviews Julian Homerstone, general manager of legal affairs at Virgin Atlantic Airways, Britain's second largest carrier. He discusses the requirements of his role and the relationship between private and in-house aviation legal practice.

Julian Homerstone

Name: Julian Homerstone

Position: General Manager – Legal Affairs

Company: Virgin Atlantic Airways Limited

Sector: Air Transport

Number of employees: 8,500

Virgin Atlantic has carried around 58m passengers since it began operations in 1984 and retains its position as a world-leading long-haul airline. Virgin Atlantic has become Britain’s second-largest carrier serving the world’s major cities and has enjoyed huge popularity, winning top business, consumer and trade awards from around the world. The airline has pioneered a range of innovations setting new standards of service, which its competitors have subsequently sought to follow. Despite Virgin Atlantic’s growth, its service still remains customer-driven with an emphasis on value for money, quality, fun and innovation.

Tell us about your role

I’ve had the privilege of leading the legal function at Virgin Atlantic, one of the UK’s most exciting and dynamic companies, since 2006. As a legal department we deal with all aspects of legal management, advice and strategy which touch and concern the Virgin Atlantic Group globally.

How big is the legal department?

Virgin Atlantic has seven qualified UK lawyers, one legal executive, one trainee (borrowed on a rolling basis from one of the Virgin Group legal panel firms) and a departmental PA.

What do you consider to be your most important role as in-house counsel? And how is life as an in-house counsel different from that of a private practitioner?

My most important role (and that of my team) is to empower our colleagues across the business, to ensure that the company’s legal risk exposure is kept within manageable limits and the company is best placed to exploit commercial opportunities when they arise.

There are certain key differences between an in-house counsel and a private practitioner. A private practitioner acts as an adviser who dispenses legal advice to their client within their set specialism. They do not typically assume commercial responsibility when directing their client; rather they focus on providing accurate and focused advice in order for their client to make an informed decision. An in-house counsel’s role, whilst similar, is not the same. The in-house counsel’s role is to provide accessible advice to the business (whether generated internally or through external advisers) across a broad spectrum of legal areas. Once such advice is given, the in-house counsel is typically expected to assume commercial responsibility and accountability for the chosen legal course of action.

Tell us about recent special projects keeping your team busy

Many of Virgin Atlantic’s recent special projects have been widely covered in the press. Our work is always diverse and we commonly deal with issues which range from minimising disruption from volcanoes to snow, new aircraft acquisitions and exciting new product, service and marketing campaigns. There is never a dull moment.

One of our biggest (and probably our most widely covered project in the press at the moment) concerns our opposition to the proposed merger between British Airways and bmi. Helping to maintain a rich competitive landscape for the benefit of the travelling public remains a key objective of Virgin Atlantic as much now as it did in 1984, when we started our operations.

What law firms did you hire? What were the main challenges?

On our opposition to British Airways’ merger proposal with bmi, Herbert Smith LLP are acting as our primary advisers and have acted for us in many competition-related matters over the years. Our key challenge currently, is to ensure we continue our positive engagement with the relevant competition authorities to ensure proper regulatory scrutiny of what’s being proposed.

What skills do you require in external counsel to address these challenges?

Clearly on this particular matter a proven track record in dealing with the European Commission and the UK’s OFT is imperative. Together with an expert knowledge of our business and proven technical and commercial expertise, these remain key factors in our decision-making as to which firm is retained for what.

Do you always tend to work with the same firms?

As a Virgin Group company we use the appointed firms in the Virgin Group Legal Panel. This brings together a select, small group of international, national and regional firms to provide the Group with legal support and advice.

The panel includes the likes of Allen & Overy, Bird & Bird, Bond Pearce, Burges Salmon, Harbottle & Lewis, Herbert Smith, SNR Denton and Macfarlanes. All of which I regard as being part of the extended Virgin Atlantic legal team.

When dealing outside your home jurisdiction, how do you find counsel?

Given that we’ve been operating internationally since 1984, we have maintained many long-term relationships with numerous legal experts abroad. Where we don’t (or we open exciting new routes) our first port of call would typically be an approach to our larger panel firms, many of which have good, integrated networks of overseas offices or associated firms.

Do you see yourself hiring the firm primarily, or the individual?

The individual always remains key. We look for highly qualified, motivated, “can-do” advisers who really understand our business. That, coupled with a proven track record of formulating and offering creative solutions to commercial problems, has shown itself time and again to be a winning solution.

What measures do you use to control or monitor fees?

All the panel members have committed to Virgin Panel fee rates. This in combination with fixed and capped fees, helps us to manage legal spend. Typically our long-standing relationships with our various external legal advisers allow us to ensure that we are billed according to the value provided to Virgin Atlantic, as opposed to billing based on time incurred.

Is the role of the in-house lawyer changing?

Not at Virgin Atlantic. Any organisation’s success (and that of an in-house legal team) is largely driven by an ability to out think the opposition, follow a common strategy, anticipate likely outcomes and deliver savvy commercial results. Such deliverables are achieved through teamwork across the business and with our external advisers. In-house counsel who can empower and connect with their colleagues and their chosen externals are typically well on the way to ensuring the lasting commercial success of their organisation.

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