KRISTIN CAMPBELL: Hilton Worldwide’s general counsel manages a 140-member legal team for the 157,000-employee hospitality company. ()
The legal team at Hilton Worldwide Holdings Inc. makes sure the doors can stay open at the company’s more than 4,300 properties and that management, shareholders and regulators have a smooth experience with the legal department.
Hilton’s 58-attorney legal department recently shrunk its outside-counsel list, revamped how its reviews those firms and enhanced Hilton’s compliance ­programs.
General counsel Kristin Campbell’s team juggled those projects with the groundbreaking $1.95 billion sale of the Waldorf Astoria New York this year and ongoing pro bono commitments. Diversity is also important for the legal team, where women make up 43 percent of the attorneys and 70 percent of the overall staff in the department.
Campbell manages 140 people in the legal department, which includes the compliance, labor-relations and government-relations functions. The team serves a global hospitality company that has about 157,000 employees.
“The more knowledge, talent and expertise I have on the in-house side the more beneficial it’s going to be for the company,” Campbell said.
Hilton posted revenue of $10.5 billion in 2014 and $2.6 billion for this year’s first quarter.
The legal team played a central role in the February sale of Waldorf Astoria New York to Anbang Insurance Group Co. Ltd., including a 100-year management agreement that calls for Hilton to run the property.
“It was a very unprecedented way for us to unlock value for our shareholders,” Campbell said.
Hilton made other transactions with the proceeds to tap into Internal Revenue Code Section 1031, which allows tax postponement for gains invested in similar property. Those deals included buying five U.S. hotels for $1.76 billion.
The internal team worked on a range of deal issues, including compliance, real estate, the management agreement, labor, employment and intellectual ­property.
Dentons and Simpson Thacher & Bartlett of New York advised Hilton on the sale of the hotel. With help from Perkins Coie of Seattle, Dentons was the company’s principal counsel on the Section 1031 exchange.
Dentons and Hilton lawyers worked on an integrated deal team, said Meghan Cocci, Phoenix office managing partner and vice chairwoman of Dentons’ global hotels and leisure practice. Cocci was lead outside counsel on the management agreement and on the Section 1031 hotel acquisitions.
“They’re a working in-house legal group. They have a lot of expertise,” Cocci said.
Campbell described the law department as an “integrated” component within the rest of the company. The department works directly on a wide swath of Hilton’s legal matters. The team relies on outside help for litigation and large transactions.
“I’ve always worked really under the theory that I’d rather make my legal team and services rather than buy them,” Campbell said.
Campbell joined a department with more than 350 outside firms in 2011. After a request-for-proposal process, the department tapped 40 outside firms and two specialty compliance firms and started tracking them in early 2014.
Hilton tracks spending with a system that’s integrated into proprietary software that lets users select an outside firm by matter type, region and ratings. Hilton lawyers enter rating information into the system during engagements.
A couple of years ago, the department started using alternative fees, including flat fees and fixed fees with a success bonus.
“We are very comfortable now having an eyes wide open conversation about how much and what value we’re getting for their services,” Campbell said.
Campbell said Hilton’s outside-counsel spending dropped about 10 percent last year, but she declined to disclose specific numbers.
The department has also launched major compliance programs since Hilton went public in December 2013. That included overhauling the online training program and holding in-person training for more than 5,000 people. The department also revised and reissued major policies, including those for antitrust and competition, and anti-corruption.
To ensure that compliance makes it to the property-operations level, the department is also crafting a compliance ambassador program that will involve employees outside the legal department.
The changes haven’t derailed the department’s commitment to community service. The department spent close to 800 hours on several programs in 2014, Campbell said. About half were with Street Law Inc., which runs classroom and community programs about the law.
“It really speaks right to the core values of the company, and consequently the legal team,” Campbell said.
Name of company: Hilton Worldwide Holdings Inc.
Headquarters: McLean, Virginia
Number of lawyers in the D.C. area: 36
Number of U.S. lawyers outside D.C.: 4
Number of lawyers outside the U.S.: 18
Name of general counsel: Kristin Campbell
KEYS TO SUCCESS
►Listen. Listen to your team, listen to your business partners, and then listen to what is happening in the world. The best thought leadership and decision -making occurs when you listen first.
►You need to really understand the business. It is critical for any general counsel to truly understand the way the business works and what the key levers are for long-term business success. — Kristin Campbell, General Counsel