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An Olympic effort

Cover Story
|Written By Derek Hill
An Olympic effort

With the 2010 Winter Olympic Games coming to Vancouver, legal work is already well underway to ensure all goes smoothly for organizers, sponsors, and most importantly, athletes.

There may be no bright flame flickering and smoking in the breeze high overhead BC Place, no camera bulbs flash-popping in a thousand bursts of light, and no nervous, excited athletes proudly holding their rippling national flags for all to see, but the Vancouver 2010 Olympic Games are already underway.

For the lawyers, that is.

Even though the Olympic flame won’t actually be lit in Vancouver until Feb. 12, 2010, legal work related to the Games began in earnest in 2003, immediately after the announcement by the International Olympic Committee that Vancouver had been chosen to be the host city over Salzburg, Austria, and PyeongChang, South Korea. The amount of Games-related legal work going on in British Columbia has grown steadily since then; and depending on the field of law in question, it may peak at any time up to, during, or even after the Olympic flame is finally extinguished at the closing ceremonies of the 2010 Olympic and Paralympic Games.

AN IN-HOUSE BIAS
The main source of Games-related work for Canadian law firms is the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games, also known as VANOC. The committee was established on Sept. 30, 2003 with a mandate of supporting and promoting the development of sport in Canada by planning, organizing, financing, and staging the Games. Its operating budget is a whopping $1.63 billion (74 per cent of which is slated to come from private funding and the remainder from the public purse), and one of its primary tasks is to use $580 million of that budget to secure the necessary venues for the Games, either through new construction projects or by renovating and/or leasing existing facilities. Among various ongoing projects are the construction of two athletes’ villages (one in Vancouver and one in Whistler/Blackcomb), an Olympic speed-skating oval in Richmond, B.C., and the Whistler Sliding Centre, which will house the bobsled, luge, and skeleton competitions.

“The preparation for the Games is a massive task of getting goods and services lined up so they’re there to ensure that the Games come off properly,” says Kenneth Bagshaw, VANOC’s chief legal officer. “You can count the contracts in the tens of thousands.”

Bagshaw, formerly the regional managing partner for Borden Ladner Gervais LLP’s Vancouver office, says he was intending to happily slip into a semi-retired state and indulge some of his hobbies when he was encouraged to bid for the job as general counsel for 2010. After doing so as “a fun adventure to try” he had the “surprising” outcome of winning it over 200-plus other applicants. “So there I was, confronted with a job that was starting out to be larger than the job I used to have,” he says, chuckling. “I wound up my practice at the firm at the end of November 2004 — that was a Friday — and I started the following Monday here. And I have been going pretty much flat out ever since.”

He describes his legal team of seven in-house lawyers as being composed of three “grey hairs” and four “younger ones.” The former group includes himself, vice president and corporate secretary Dorothy Byrne (who was general counsel of the preceding bid corporation and who “thankfully” elected to remain with VANOC), and James Conrad, an intellectual property lawyer on secondment from Orca Bay Sports & Entertainment (the owner of the Vancouver Canucks). Three of the four “younger ones” — Charles Hotel, Chris Gear, and Chris Beardsmore — are from Vancouver law firms and the last is a non-practising American attorney who had experience with the Salt Lake City Games in 2002, and who provides contractual legal support as director of transactional affairs. Bagshaw also intends to add another lawyer to the team in 2008.

“My general direction has been a bias toward in-house work,” he says, noting that although the job involves a wide range of matters, its core is contract work, which led to his decision to hire mostly “generalists in commercial law.”

Meanwhile, VANOC itself is a relatively large legal client, outsourcing legal work via RFPs to a number of Vancouver-based firms and offices in discrete areas where the in-house team needs more specialized expertise. Certain intellectual property work was farmed out to Borden Ladner Gervais LLP; privacy law to Fasken Martineau DuMoulin LLP; early-stage sponsorship work to Blake Cassels & Graydon LLP; and higher-level corporate advice, land law, and construction law to several firms, including Fraser Milner Casgrain LLP and Farris Vaughan Wills & Murphy LLP. “Like any smart client, they spread their work out,” says Bradley Freedman, Vancouver IP practice leader for BLG, who has advised VANOC on protecting the Olympic brand.

And Bagshaw is looking at spreading it out even more. “I don’t have a firm engaged specifically for litigation generally, and so I’m looking at putting out an RFP to solicit probably two firms to be on standby for litigation,” says Bagshaw. “I don’t want to find a writ landing on my desk and then go out looking for a law firm, so I want to have that arrangement in place, and I’ve been, essentially, very fortunate that I’ve not had to confront that issue in any way so far.”

REALITY CHECK
In the Fall of 2005, Bagshaw sent an invitation to roughly 28 regional managing partners to join him for lunch at a downtown business club, to come and talk about the impending Olympic-related legal business. “There was an expectation in the legal community that there was going to be a lot of legal work,” says Bagshaw, “and I was concerned about that expectation, and I tried to address it.”

When 25 or 26 of the invitees showed up for the free lunch, he told them about the magnitude of the project, where VANOC was in the selection of firms, and so on. He described to them his philosophy of building his in-house legal team’s strength, and that he would seek outside counsel using an RFP process only for specialized issues: “Essentially, saying that what was likely to come forward in the future was relatively modest.” And because he knew “that wouldn’t be what they all hoped to hear,” he invited a speaker from the 2010 Commerce Centre (a B.C. government agency established to inform, educate, and connect B.C. businesses to Olympic Games-related business opportunities) to talk to the firms about where they might find opportunities in serving other parties, such as other government partners, sponsors, licensees, suppliers, etc.

“It seems to me that that was a bit of a reality check for everybody; it seemed to be understood and accepted.”

Meanwhile, some enterprising firms, such as McCarthy Tétrault LLP, had already been making a special effort to bring in what Games-related work was out there. “Shortly after the Games were awarded, we set up a committee here, just to monitor what possibilities there might be arising out of the 2010 Olympics, and whether we should be going after the work. . . .” says Daniel Steiner, partner with the firm’s corporate finance and acquisitions group, and chairman of the firm’s 2010 Olympic committee.

“As part of that whole process, we started doing things like taking a look at who the sponsors were for past Olympics, and trying to figure out if they were going to be involved in the 2010 Olympics, and actively going out and trying to pitch them for some work.”

Steiner says the committee members also went around within their own firms, asking lawyers if they had any connections with the former sponsors and whether the firm ought to approach them. Committee members also spoke with lawyers involved with previous Games in Salt Lake City, Utah, and Sydney, Australia, to glean some advice.

Looking back, Bagshaw’s comments about the modest nature of the work available appear to have been spot on — the committee’s efforts to generate new clients seem to have met with limited success, given that McCarthys is not working directly for VANOC or for any of the major sponsors. However, Steiner is quick to note that the firm is involved on several Games-related projects, including some real property work, some IP/licensing work for a licensee, Trimark Sportswear Group, and some aboriginal work. The firm is also starting to see some interest in investors seeking to invest in companies holding 2010 licenses. Steiner adds that his team believes immigration and tax work will increase as the Games approach.

“In 2003, there was a lot of talk about . . . sort of speculating that surely this was going to create a lot of business, without a lot of return initially, because we probably over-estimated how quickly the work was going to come and when it was going to be needed to be done,” says McCarthys partner Russell Benson, who’s involved in work on some of the Whistler/Blackcomb facilities.

“There’s only going to be . . . a couple of firms acting for VANOC, or their in-house people,” he says, “and everybody else in town will be acting for all the other people on the other side of VANOC. And we’re getting a good share of that.”

Ross MacDonald, managing partner with Stikeman Elliott LLP in Vancouver, says, “More than just direct involvement with VANOC . . . on all sorts of commercial transactions generally involving either the host city or other venue municipalities and cities, indirectly a lot of what you are doing for those cities has some material involvement with VANOC and the Olympic Games.”

For example, MacDonald acted for the City of Vancouver on a “fairly comprehensive” street furniture agreement with JCDecaux and Viacom Inc., four years ago, which he says would normally have been a straight commercial P3 deal; instead, one of the central issues of the negotiation was the ambush marketing policy that the IOC would impose to try and preserve the sponsorship value. “So, four years ago, Olympics was a big deal, and we spent a lot of time trying to understand the ambush marketing policy, and then resolving commercially where the parties needed to end up so as not to run afoul of the IOC’s requirements.”

And it appears that Games-related work will continue for some time. “I think that there will be, on a going-forward basis, spikes in activity coinciding with increased public interest in the Olympic movement,” says BLG’s Bradley Freedman, who has done some IP work for VANOC. “So when the Beijing Games happen [in 2008], there will be more legitimate advertising and promotion of relationships with the Olympic movement. That’s, I guess, when we can expect more ambush marketing and other infringement. So, what will happen then, we’ll have to see.”

George Macintosh, head of the litigation group at Farris Vaughan Wills & Murphy LLP, says, “I can’t imagine that the work is going to end until sometime after the Olympics end, because it’s such a work in progress, right?” His firm was retained by VANOC to handle what Macintosh describes as “one-offs,” such as a campaign against Imperial Oil for alleged ambush marketing, which was settled, and a “heated dispute” with the owners of the principal venue, GM Place, about the terms under which VANOC would be able to occupy the hockey rink for the term of the Olympic and Paralympic Games.

“I mean, there are so many construction sites, and there are so many thousands of contracts that have to be settled. And out of those, inevitably there are going to be some disputes. And the Olympics presents the fullest imaginable spectrum of potential litigation events, if something went sideways — and so not to be sort of ghoulish about it, but litigation could crop up at any stage. And you know how it is, half of you hopes it doesn’t, and half of you hopes it does,” he says.

At the same time, Macintosh notes there has been very little Olympic-related litigation so far, and speculatively offered an alternative hypothesis. “It may be that it’s one of those events, relatively speaking, that there’s so much goodwill in the air, that maybe there’s less litigation than there otherwise would be. You know, Company A and the Olympics, they may make quick-and-dirty settlements in the interest of getting on with life in an Olympic-sort-of moment, more so than people generally would. I know that in the Esso example, you know, I was pretty impressed by Esso where it sort of just stood up to the plate and said, ‘You know, we’re not going to fight this, we’re just going to back off.’ And part of that, I think, would be Esso saying, ‘Who needs publicity and negative comment in the middle of an Olympics?’”

A WORD FROM THE SPONSORS
Not to be overlooked in a discussion of legal work related to the Games is the role played by corporate counsel for the major sponsors of the Games, who are primarily called upon to negotiate the sponsorship agreements with VANOC.

“It’s a kind of combination of a services agreement and a sponsorship/branding agreement,” says Peter Miscevich, assistant general counsel with Bell Canada Inc., the top national sponsor for the Games. “It’s a $200-million commitment from Bell, and part of that is a payment of a rights fee to be able to use the rings, etc. — but the other part of that is providing the technology solutions for VANOC and for the Games.”

During the negotiations of the sponsorship agreement, Miscevich says there were several parties on either side of the table, including several internal stakeholders, such as Bell’s insurance, risk management, and tax departments, while on VANOC’s side, the IOC had to approve the contract at the end of the day. “When you combine the two contracts into one, it became quite a complex agreement to piece together.”

At any one point, up to seven in-house lawyers have been involved with Bell’s Olympic-related work, and the in-house team sought outside help in areas such as sports law, technology and marketing, and telecom-specific issues from two lawyers with Macleod Dixon LLP in Calgary. Miscevich says there were a whole host of ancillary agreements that subsequently had to be finalized to ensure Bell could provide the services it had contracted to perform, including agreements with other suppliers, and other Games-related service arrangements (Bell later entered into a partnership with the Vancouver Convention Centre, the broadcasting hub for the Games). “We’ve had to build a fibre-optic network from Whistler to Vancouver,” says Miscevich, “and in terms of building any networks, there’s no end of legal issues that come out of right of ways, and negotiating contracts with the builders of the network and suppliers, and that’s been a whole other industry of its own.”

Cindy Roberts, senior counsel for Petro-Canada Inc., another national sponsor, says, from time to time, four to five in-house counsel have been involved in her company’s Olympic-related work, in addition to two outside counsel with Miller Thomson LLP who are consulted on special issues. Again, the main agreement was the sponsorship deal with VANOC, which established not only Petro-Canada’s financial commitment, but sunk costs such as those involved in fuelling Olympic-related vehicles. Roberts is also still working periodically on various related subordinate agreements, including one with the Canadian Olympic Committee with respect to revamping the Olympic Torch Relay Fund, which began in 1988 with the Calgary Olympics.

“I think it’s just one more corporate community investment kind of project,” she says. “It’s a big one, for sure, but we’re involved in a number of community investment programs, and this is a bigger scale, but we have a group that handles all kinds of sponsorships. So I would assume, like most sponsors, this will be a job that’s primarily handled in-house.

“I think there is a perception here that Petro-Canada in fact got a great deal of value out of its involvement as a sponsor previously [in 1988]. Certainly for us, the torch relay was seen as a huge program that really elevated a company that didn’t necessarily have the greatest public image in Canada, and it really was a very, very positive development for us.”

LESSONS LEARNED
Since 1994, the Olympics have alternated every two years between summer and winter Games, meaning it’s a virtual certainty that there will always be a lawyer performing Olympics-related work somewhere in the world. And the Olympic legal community appears to be working together to ensure that lawyers acting for successive Games can put the lessons learned from past failures — such as the bid scandals in Salt Lake City in 2002, or the capacity issues which delayed production of venues and drove up costs in Athens in 2004 — behind them.

In fact, Bagshaw says his primary informational resource has been the lawyers involved in the Salt Lake City Games, and that one of his principal ongoing responsibilities as chief legal officer for VANOC includes recording his team’s efforts and accumulated wisdom for the benefit of others. He expects to soon be asked to lend his wisdom to the team behind the 2014 Winter Games in Sochi, Russia.

When asked what makes performing Olympic-related legal work special, the lawyers interviewed for this article gave many different responses: the high-profile involved; adding value to one’s resume; the fact that VANOC as a public body is not your “typical” commercial entity; one skier enjoyed working on ski-run related work; the tremendous value of one of the most powerful brands in the world; the pressure to perform, coupled with the high reward of seeing years of work culminate over a 17-day period; that it’s a once-in-a-lifetime opportunity; and the quality of the people involved.

“Being involved with the Olympics itself is special, it’s a great honour,” says Bagshaw. “I think all of us feel this way, to be part of this team. And if I talk to my peers in the legal profession, they say ‘Damn it Bagshaw, you got the dream job. You got the job we’d all love to have.’ And they’re right, they’re absolutely right. We’re doing this with the goal of providing to the athletes the best possible opportunity to excel — and that’s what we’re doing. We want it so there’s nothing in the way of their performing to their ultimate best when they come to these Games.

“It’s sometimes almost heart-stopping,” he says, reflecting. “It can certainly raise the hairs on the back of your neck if you hear some of the stories of the kinds of sacrifices and the depth of commitment that these people have to pursue Olympic medals. It’s really quite extraordinary and inspiring.”


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