Disney Revamps In-House Law Team to Meet Complex Legal Needs (1)

The Walt Disney Co. has made key hires and other strategic moves to reorient its law department as the media and entertainment environment evolves.

New jobs have been created and titles clarified under a streamlined structure, according to two sources with direct knowledge of Disney’s roughly 1,400-strong legal group. Disney has gone through several rounds of layoff within the last year, so the conglomerate has sought to tighten its belt, including by investing in legal operations to get the most of its legal services providers.

Litigation risks stemming from the rise of new technologies like generative artificial intelligence, as well as the increasingly complex kaleidoscope of global and regional regulations, are behind some of the changes.

“We are continuing to evolve our legal and global affairs organization to best support the size, scale, and complexity of our company and its global businesses,” chief legal and compliance officer Horacio Gutierrez said in a statement. He succeeded long-time legal chief Alan Braverman in 2022.

Horacio Gutierrez

Photo courtesy of The Walt Disney Co.

Disney’s legal team has gone though many changes since Braverman retired. Some lawyers were laid off or left via other means, including some who took new jobs—such as theme park chief counsel A. Louise Pentland and litigation head Jill Ratner.

The Burbank, California-based company elevated veteran in-house litigator Janene “Jana” Bassett to inherit Ratner’s litigation portfolio. The exit of Pentland—a legal and business executive at PayPal Holdings Inc. before Disney hired her last year—necessitated a rethinking of how best to find and retain “enterprise function leaders,” or lawyers for business units within its “family of companies,” such as Disney Cruise Line and sports network ESPN that are large enough to be their own standalone entities, said two sources familiar with the matter.

Disney declined to comment on the changes in detail but acknowledged some recent additions and a desire to revamp a legal function that serves a diverse slate of industries—entertainment, hospitality, and technology.

Between resolving a legal battle with Florida Gov. Ron DeSantis (R), defeating an activist campaign by billionaire investor Nelson Peltz, and navigating a CEO switch, Gutierrez has faced significant challenges.

“These are significant balls in the air that he’s had to juggle, but he’s an experienced legal chief,” said Robert Föehl, a business law and ethics professor at Ohio University. “In a short period of time, he’s handled it with aplomb.”

New Recruits

Disney has tapped two lawyers with deep experience at Microsoft for key legal roles—perhaps not a surprise, as Gutierrez was himself once Microsoft’s general counsel prior to becoming the top lawyer at Spotify Technology SA.

One of them, Matthew Penarczyk, a global head of legal, business solutions, and corporate compliance at TikTok Inc., will join Disney on Dec. 16 as general counsel for Disney Experiences, per an internal memo obtained by Bloomberg Law. That company division includes theme parks—such as Disneyland and Walt Disney World—as well as resorts, cruises, gaming, and consumer products.

Prior to TikTok, Penarczyk spent nearly two decades at Microsoft, where he was a deputy general counsel and led the company’s compliance and legal ethics program. Penarczyk and Howard are now among a half-dozen other general counsel reporting directly to Gutierrez.

The other, David Howard, spent a dozen years at Microsoft. He joined Disney on Nov. 25 as general counsel for corporate legal, a new role that oversees core functions such as antitrust, compliance, employment, legal operations, litigation, transactions, and mergers and acquisitions. At Microsoft, Howard held a variety of positions including head of litigation, competition, and compliance. He spent the past two years as a partner in Seattle at Morgan, Lewis & Bockius.

“We have some of the best legal and public policy minds in the world at Disney, and David and Matt bring a wealth of experience to our outstanding team,” said Gutierrez, who helped Microsoft and Spotify tackle major legal issues.

Gutierrez’s promotion last year to legal and compliance leader freed up the “general counsel” title for others at the company. His other direct reports are now ESPN general counsel Eleanor “Nell” DeVane, Disney Entertainment Studios general counsel Paige Olson, Disney Entertainment Television general counsel Steve Chung, and Disney International general counsel Dorothy Attwood, whose duties also include global public policy and privacy.

Jolene Negre, a deputy general counsel for securities regulation and governance who is Disney’s corporate secretary, also reports directly to Gutierrez, as does head of US government relations Susan Fox. All are longtime Disney employees.

“Change is often hard to inspire and effectuate in a corporate legal department,” said Michele DeStefano, a legal innovation expert and law professor at the University of Miami, who has worked with Gutierrez over the years. “Given the challenges Disney faces, the hurdles are even higher.”

Cutting Costs

Disney is using more alternative and fixed-fee arrangements and “competitive” requests for proposal on certain matters to reduce its legal spend, said a source. The company wants high-quality legal services, but is determined to bring spending within budget.

Howard, a litigation leader in private practice before he moved to Microsoft in 2010, is now tasked with that effort. It’s one for which he’s experienced, having led a push at Microsoft to phase out the billable hour as the primary metric by which law firms handled work for the company.

Disney is now searching for a legal operations chief to oversee its legal services transformation and technology initiatives. In February, it bolstered its spend management expertise by hiring Vishal Anand as a director of legal business operations. Anand, an attorney who specializes in legal process outsourcing, leads the company’s work related to managing law firms.

While the senior legal leadership roles underneath Gutierrez are all filled, a source said Disney has kept many “chief counsel” positions further down the hierarchy that report into each divisional general counsel. For example, Stephen Zager, a former Netflix Inc. lawyer who joined Disney this year as chief counsel for its Disneyland Resort and corporate real estate, now reports to Penarczyk.