Harry Potter magic casts spell on lawyers

Victoria MacCallum meets the Warner Brothers' in-house legal team behind the blockbuster

For most people, the name Harry Potter conjures up no more than good holiday reading, over-excited children, and shelves of film-related merchandise.

However, for Steven Mertz, Warner Brothers' senior vice-president for legal and business affairs and European general counsel, JK Rowling's tales of muggles and magic have taken up a hefty chunk of his department's working life for the past year.

Warner Bros is, of course, the studio which was lucky enough to secure the rights to film the Harry Potter novels, the first of which - 'Harry Potter and the Philosopher's Stone' - came out last year to the sound of box-office records being broken.

The second is scheduled to be released later this year, and plans are afoot to film all seven novels in the series.

'Harry Potter has taken up a huge amount of our time,' admits Mr Mertz.

'We all had a day job until we were fortunate enough to have Harry Potter come along, but now sometimes it seems like we do Harry Potter in the day and our other jobs by night.'

Mr Mertz and his 20-strong team of lawyers based in central London are responsible for an impressively wide range of work tied up with the films, from the finance aspect to copyright and intellectual property (IP) issues.

'IP is a large part of what we do, and with Harry Potter a lot of people unjustifiably wanted to generate their own business off the back of the incredible goodwill associated with the property,' says Mr Mertz.

'With a film like this, you have IP issues popping up all along the line - from the acquisition of rights to film production, to related merchanding.'

One such issue which hit the headlines last year was that of a young female Harry Potter fan who had set up her own Web site about the film, using both the Harry Potter and Warner Bros trademarks (see [2001] Gazette, 1 March, 6).

Although the dispute was settled 'amicably', Mr Mertz maintains that 'from a legal perspective, you have to police your trademarks', while admitting that 'it was an unfortunate situation, as she was a genuine fan' .

IP disputes aside, the team also takes a broader view of the Potter project, keeping several fingers in various legal pies.

'We, together with our colleagues in California, are taking an overview of the whole situation and managing the legalities of the project throughout its progression from pre-production, to theatrical release, to video exploitation, and so on,' says Mr Mertz.

'For example, there was a huge amount of excitement over the project, with a lot of people wanting to get involved - and we helped to manage that.'

Apart from negotiating contracts for Harry Potter merchandise, there is also the day-to-day film production work for the lawyers to deal with.

Solicitor Greg Gibson - previously in-house at a television company prior to joining the legal and business affairs team at Warners - takes on much of the work, currently spending one day a week on the film set of the second Potter movie ('Harry Potter and The Chamber of Secrets'), working with the production team on the nitty-gritty legal work.

'A lot of mundane legal issues crop up with the everyday filming process,' he says.

'We have to negotiate contracts with a large range of people and companies involved with the film, be they actors, film crews, or caterers, and ensure that everyone gets paid at the right time and everyone's interests are represented properly.'

Although he admits that working on the Harry Potter films is 'something that people are interested to hear about', he stresses that 'much of what I do is simply commercial law which happens to be in an entertainment environment'.

Mr Mertz is also keen to downplay the glamour of the job.

'Yes, the industry that we work in is an exciting one, but we are lawyers and we work on tough legal and business issues,' he says.

To illustrate his point, he says that regular screenings of forthcoming Warner Bros films take place in their building in Holborn, but he and his team 'very rarely' attend, as they usually are still hard at work.

The London legal and business affairs office covers all of Warner Bros' European operations, and the legal team is split into several practice groups such as employment, film production, general commercial, new media, competition, and so forth.

Each team reports to Mr Mertz, who in turn reports to Warner Bros' head studio in California.

Lawyers work for the operating divisions, such as Warner Home Video, Warner Bros Consumer Products (the company's merchandising arm), Warner Bros International Television, and Warner Bros Theatres (which operates a film exhibition joint venture with the Village Roadshow company in the UK).

If for no other reason, from a logistical point of view the time difference involved with liasing with the Californian headquarters means that early nights are out of the question.

'We deal with such a broad range of business matters and we cover such a wide number of jurisdictions that the volume of work can sometimes be quite challenging,' says Mr Mertz.

'For this office at least, it's a myth that working in-house is a less stressful, nine-to-five job; here we constantly multi-task on a multi-jurisdictional level, and on a good day it is fascinating, but on a bad day you can feel slightly schizophrenic.'

Previously in the film financing department of City firm Denton Hall (now Denton Wilde Sapte), Mr Mertz moved in-house 12 years ago and says that working in private practice is a good training for in-house work.

'You become more specialised in firms, because that's the most efficient way of working, whereas in-house you have to develop a broader range of skills as you cover a broader range of issues.'

The size of the London team and the range of specialisms contained therein means that other companies in the AOL Time Warner stable occasionally use them as a resource.

For example, HBO, a US-based television channel which makes 'Sex and the City' among other programmes, financed the 'Band of Brothers' television series in Europe two years ago, and the London team was drafted in to give a wide range of advice on production, financing, and employment issues.

'Because we're relatively well staffed here with a broad depth of knowledge, we try to keep as much work as possible in-house, both for efficiency reasons and to increase motivation among the staff,' explains Mr Mertz.

External firms, chosen from a centralised list, are used for specialist advice - such as competition enquiries - and for some European issues.

'All the lawyers in the London team have a strong grasp of European legal practice, but if we have a complicated issue in Europe then we will often use external lawyers to advise us.'

Employment issues in particular tend to crop up across Europe, as Warner Bros has thousands of employees across the continent, from the Leicester Square cinema in London to its Home Video operations in Israel.

'We always have to maintain our European outlook,' says Melanie Jones, an assistant in charge of the employment team formerly at City firm Stephens Innocent (now Finers Stephens Innocent).

'One of my most recent tasks was developing a data protection compliance procedure for all our European employees, and at the moment we are involved with interesting issues over the labour laws being introduced across Europe.'

However, not all her work is so far-flung: 'In the UK alone we have around 2,000 employees, and the employment team deals with every dispute that arises - from selling popcorn in theatres to high-level film production problems.'

So, it appears to be the variety of work that stands out in this team: whether it's calculating the cost of quidditch sticks or negotiating catering contracts for the cast of 'Band of Brothers', life is never dull for the Warner lawyers.

But then, this is the movies.