Ed Ryan, general counsel of Marriott International Inc. ()
Amid a corporate growth surge and the pressing demands of worldwide antibribery and labor laws, Marriott International Inc.’s global general counsel Ed Ryan employs the kind of personal touch you’d see in any good hotelier.
Maintaining strong relationships with the 72 attorneys on Marriott’s legal team means that in-person contact often takes priority over email correspondence. An old-fashioned device helps, too, he said — “We don’t have any exotic transporter. I use the telephone a lot.”
Last year, a retreat in Washington gave far-flung in-house attorneys a chance to get to know each other and Marriott business professionals. Ryan also makes a point to travel to each overseas region at least once a year. “You have got to work at it,” he said of team building.
The $12.8 billion company has some 330,000 workers, including about 150,000 direct employees. Marriott’s franchised and managed properties account for the rest.
Although the company owns and develops some real estate, it’s primarily in the management and franchise business, Ryan said.
Compliance, particularly with the Foreign Corrupt Practices Act, is a constant focus for Ryan’s team. The department recently rolled out the second iteration of an electronic learning tool designed with a consultant’s help to home in on hospitality industry risks.
But Ryan believes the most effective training happens when a relatively small group gathers in the same room.
“If you get a group of about 15 where you really capture their attention and get great dialog, that dialogue is really useful in terms of enshrining the training,” Ryan said.
Such meetings also help top brass get a better handle on the challenges that field managers face, he said. The training helps Marriott meet other compliance mandates, including the USA Patriot Act, Office of Foreign Assets Control programs and various wage-and-hour laws.
“Their legal and ethical compliance program focuses on setting the right ‘tone from the top,’ ” said Tim Erblich, chief executive of the Ethisphere Institute, a corporate ethics research and consulting firm in Scottsdale, Ariz. Ethi­sphere named Marriott a World’s Most Ethical Company for the seventh year in a row in 2014.
“It’s clear that Marriott’s leadership and commitment to governance, ethics and compliance policies and practices don’t just aim to meet legal minimums and industry standards, but really look to exceed them,” Erblich said.
The legal team handles most hotel management and franchise agreements in-house. Management agreements, for example, are lengthy, hotly negotiated contracts that cover 20- to 50-year periods, Ryan said.
“There are hundreds of variables that have to get sorted out in order to enter that deal,” he said.
Marriott manages litigation in-house but has outside counsel handle the day-to-day details. It relies on outside firms for significant mergers and acquisitions, financing and securities work.
Spending about 75 percent of the outside budget with six or seven firms helps Ryan’s team stay familiar with key outside lawyers. “We see the same lawyers who get to know us and the business,” Ryan said.
Go-to firms include Crowell & Moring for litigation and regulatory work; Gibson, Dunn & Crutcher for corporate and deal work; DLA Piper and Jenner & Block for litigation; Holland & Knight for transactional work; and Venable for a wide range of matters, including transactional work.
“They work as well with outside law firms as anybody I’ve ever seen because of the open style. They have no hidden agenda,” Gibson Dunn partner John Olson said.
As for diversity, 57 percent of the company’s lawyers are women and minority-group members, and the team seeks diversity in the outside lawyers it hires.
The in-house team is helping the company handle a major growth period. Marriott signed more than one hotel project per day in 2013, for a record 387 hotels and 67,000 rooms. This year, the company finalized an $815 million deal to sell three luxury so-called Edition hotels in London, Miami and New York. As they open, Marriott will operate them under long-term management agreements. Earlier this month, the company finished its $200 million purchase of the 116-hotel South Africa-based Protea Hospitality Group. That deal involved due diligence and keeping one’s eyes “open to the compliance aspects of what you’re acquiring,” Ryan said.
As the company grows, Ryan expects his department to evolve and expand, especially overseas.
“We’re trying to stay ahead of the company. The law department acts as navigators as well as protecting the flag,” he said.
Name of company: Marriott International Inc.
Headquarters: Bethesda, Md.
No. of lawyers in the D.C. area: 43
No. of U.S. lawyers outside D.C. area: 7
No. of lawyers outside U.S.: 22
General counsel: Ed Ryan
KEYS TO SUCCESS
♦ Listen to your team. Rarely do you have all the answers or any of the answers. The answers you get are from listening to ­people.
♦ Stay engaged with the business. [Foster] familiarity so that everybody feels really comfortable calling, asking and discussing.
♦ Really pay attention to the people in the department. Make sure that people are really engaged.
— Ed Ryan