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James Williams is general counsel and corporate secretary of Liquidity Services Inc., the Washington, D.C.-based online auction firm that offers manufacturers, retailers, and government agencies a way to buy and sell wholesale, surplus, and salvage goods — everything from cars seized by the D.C. police to Italian espresso machines returned to stores.
Can you tell us a little about the company and what it does? Liquidity Services provides online auction marketplaces for wholesale and surplus goods, as well as a wholesale industry search and advertising portal. Our two online auction marketplaces in the United States are Liquidation.com and Govliquidation.com. We also have a site in the U.K. called UKsurplus.com, through a contract we have with the U.K. Ministry of Defence. Government surplus is a big part of the business. We also have a large contract with the U.S. Department of Defense, which currently accounts for the majority of goods we sell. One of the real industry drivers for our business on the commercial side is the growth of supply and excess property from business. For example, “big box” retailers have fairly flexible return policies, and as those get returned, there is a natural market for those products. Other industry drivers include supply-chain inefficiencies and new-product innovation. Continuous innovation in technology products, such as computer and office equipment and consumer electronics, results in a continuous flow of surplus assets. As part of our online services, we also provide value-added services, so that in the case of the government or a large corporation, they can outsource the process to us. For example, we can provide warehousing, come pick up your items, and implement campaigns to market the items. The typical scenario can start with a phone call where someone says, “We have a lot of surplus goods.” We can store those goods while we’re developing a marketing strategy. We will log items, take photos of them, then create the auction, which we put online along with a description. Our wholesale industry vertical search and advertising portal provides a single online destination to connect buyers and sellers of wholesale merchandise. Instead of doing a broad Google search, now buyers can find products, vendors, and advertisers and know they’re going to get the wholesale market. It’s called goWholesale.com. But aren’t some stores getting more strict about returns? Is that cutting into the business? If we take a step back, we see that one of the drivers of the industry is liberal return policies. Another driver is product obsolescence. For example, people have to have the latest electronics. And for many industries, the historic ways they were selling excess material had mixed results. Some examples include negotiated direct sales and live on-site auctions. We believe these methods were highly fragmented and limited sellers from achieving ideal results or even tracking those results. Companies needed a way to measure their results in selling excess goods. Our value-added services solve these problems by providing sales and marketing, logistics, and customer support. We also provide transparent tracking and reporting, so the client has access to information throughout the entire process. Last November, Liquidity Services filed for an initial public offering. What’s the news on that? I’m sorry, but I can’t comment on the IPO. We have filed, but SEC rules and regulations say that we aren’t allowed to talk about it. What kinds of legal issues do you cover? As general counsel, I report directly to CEO Bill Angrick, who is also one of the founders of the company. I’m not only the company’s first general counsel, but I’m also their first lawyer. I’ve been with the company for two months. The company has grown fast, so our legal needs are changing. We have more of a need for a cohesive legal strategy, and that’s why I was hired. I have a corporate and securities background, and I have also spent time on the proposed IPO. What is your background? Before Liquidity Services, I was the general counsel at Acterna, a telecommunications-equipment manufacturer in Germantown, Maryland. They were acquired by JDS Uniphase. I joined the organization as senior corporate counsel. And before that I was assistant general counsel at PathNet Telecommunications. I’ve also been in private practice, with one firm in D.C., Kirkland & Ellis, and one in Palo Alto, [Calif.], Wilson Sonsini Goodrich & Rosati. In between those two firms I worked with a private company, Hamilton Securities Capital Markets. That was a purely business role. My responsibilities involved government contracts, where I was helping two agencies auction off their nonperforming loans. They also were looking to invest in high-tech companies in the area, so I helped the company find good investments. One of the things I had noticed in Silicon Valley was that I had enjoyed being involved in the business elements of the companies I was working for. I enjoyed the business side of any company, understanding what they do. Once you’re bitten by that bug, it’s hard to get it out of your system. Small companies don’t have in-house lawyers, so as an outside lawyer, you go to their board meetings and the CEOs will turn to you to talk about their business plan. So I was naturally drawn into that. I started thinking about whether I would like to be working side by side with the CFO and the CEO, and got naturally energized by talking about their strategies. What would you say are the biggest legal challenges on the job? The biggest challenge is really that I’m their first general counsel and their first lawyer, so I’m working hard to educate folks about ways I can be helpful to them. I’m now able to be there early on and work more proactively with folks, with issues concerning transactions or contracts, as opposed to having to fix problems after something has gone wrong. I’m saying, “I’m available here; let’s have a dialogue about the legal issues early on.” What’s the best part of the job? We have great people here, and I mean that sincerely. People are receptive to the role of general counsel and have a basic understanding of that. I’m already seeing people coming to me and seeing what role I can play. It’s also a young company, and with a bright, high-energy team. We provide a great service that’s cutting edge, so it’s an exciting dynamic to be around. What outside firms do you use? Hogan & Hartson is our principal outside counsel. Where would we find you outside the office? I’m a huge tennis fan; I love to play. I’ve also started taking golf lessons, so you might find me out on the driving range. Read any good books lately? I just finished Jack Welch’s book Winning. It’s good on how to succeed in business. It’s a nice read and offers a lot of no-nonsense advice. You can also apply his ideas to legal functions.

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