Alex Aldridge talks with AOL's international general counsel Tony Wales about life at the sharp edge of media law

With his thick-rimmed designer glasses and close-cropped hair, AOL international general counsel Tony Wales does not look like a lawyer. And, as he talks animatedly with a slight Midlands accent about 'brand value' and 'social networking verticals', neither does he sound like one.

But Wales has spent 15 years in the media – initially as general counsel at The Economist Group, before moving on to AOL in 2001. Not that life has been all skinny lattes in that time.

"Fascinating, but hard," is Wales' summary of 18 months of untangling five-and-a-half million AOL consumer contracts after the company's 2006 decision to drop its subscription-based internet service provision and reinvent itself as a 'free' multi-site web portal funded by advertising.

The approach saw the European in-house legal team slashed from 23 to 10 – leaving six lawyers in London, two in Paris and two in Hamburg. And with AOL announcing last month that it would be cutting 10% of its workforce (which equates to around 700 jobs) in response to falls in online advertising revenue, there are fears that more of its lawyers could be set for the chop.

Oxford-educated Wales moved into media in 1994 after spending 10 years at Turner Kenneth Brown (TKB) where he worked his way up from trainee to partner. Behind the switch lay various motivating factors: Wales' enjoyment of the pieces of acquisition work he had done for the Financial Times, his increasing sense of disillusionment with the "self-importance" of many private practice lawyers and, perhaps most importantly, the near collapse of the heavily real estate-focused TKB.

As the firm desperately cast around for potential merger candidates – the majority of which were national-focused firms – Wales, who spent large chunks of his career with TKB in Hong Kong and Prague, began wondering if he would fit in at the new outfit. At which point the Economist job came up.

"A major part of the draw was that The Economist has an international perspective," he reflects. "At the time, it was embarking on this programme of purchasing businesses around the world to make it a multi-portfolio brand, which sounded terrifically exciting."

Alongside coordinating these transactions, Wales was charged with handling the legal aspects of The Economist's shift from old to new media – an element of the job that he found fascinating.

"I love the dynamic, fast-changing nature of electronic media. From a legal perspective that means trying to fit these often quite outdated concepts to something that is constantly developing, while keeping in mind the commercial objectives. Plus there is the added bonus that what you are dealing with is relevant to people's everyday lives."

Once bitten by the new media bug, Wales was smitten and when AOL came calling in 2001, the opportunity to work for an online media company was too good to refuse. Eight years in and Wales finds himself facing the most serious economic downturn of his career – the challenges ahead made especially daunting by the notoriously cyclical nature of the media sector. What is his strategy for dealing with reduced budgets and staffing pressures?

"The objective is to be as long-term as possible," he explains. "So while there may be opportunities to screw our law firms down on fees, I am very conscious of the fact that such behaviour may not be beneficial to the company going forward."

He adds that he is currently talking to some of AOL's loose panel of firms – which include Clifford Chance, Herbert Smith, K&L Gates, Pinsent Masons and Baker & McKenzie – about the possibility of taking on some of their junior lawyers as maternity cover to prevent them being laid off. "When they sort themselves out they are likely to do us favours in the future," he predicts.

Post-recession, Wales envisages the role of in-house counsel gaining in profile as companies become more proactive on issues such as compliance and risk management.

He says: "General counsel have a unique position at the heart of the business, with a really good handle on the nitty gritty. We understand the tax side, the accounting side, marketing, general operational matters – and this makes us ideally situated to advise on company-wide risk management policy."

Wales adds that as general counsel input on strategy takes on unprecedentedly high premiums, he expects the old debate about whether they should sit on the executive board to become redundant.

"We are entering a new, much more cautious environment, which will inevitably sweep away some long-held conventional wisdom," he suggests.

As for what the future holds for him, Wales is open-minded: "There is no such thing as job security anymore. You have to always be thinking about what motivates you and there is a danger of staying in any job too long."

While chatting in the lift on the way out of Legal Week's Soho offices, Wales adds that he wouldn't rule out doing something "off the wall" one day, citing his wife, a Slaughter and May litigator turned full-time garden designer, as an example.

"In my case, I really enjoy writing – I actually wrote The Economist's pocket book on law while I was there – so I'd love to do something along those lines."

What about a return to private practice at some stage?

"Only if they offered me a huge amount of money," he replies with a smile, before merging seamlessly into the fashionably-dressed West End throng.

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