Tuesday, 4 September 2012
Talking to Parabis CEO Tim Oliver just after the grant of his firm's ABS licence, I praised him for his diplomacy. This is the first ABS licence to be granted for a structure specifically designed to enable private equity investment and it has famously taken an age to be approved by the SRA - almost eight months - despite the application being made in the very first days ABSs were allowed, 3rd January this year.
It was the following public statement that I thought particularly deft: "While at times we have felt frustrated at the time it has taken to secure our licence, we are very pleased with the robustness of the application process." I caught up with him this week to ask about the story behind this artful phrase.
"I have no criticism of the depth or thoroughness of the process the SRA take you through to satisfy themselves that the structure you are creating has a genuine business purpose and is not some dodgy money laundering device. Of course it's important to have such a fine filter in place. What I had a problem with though, is that I simply didn't believe the SRA had the right resource - nor depth of resource - to deal with our application in reasonable time. First it created an inordinate amount of business uncertainty. it stymies you; you can't motor forward with any strategy while you are waiting on such a fundamental decision about your future structure. Second, the SRA failed to appreciate the sheer number of stakeholders involved, all waiting for conclusion on investment - our 2,300 staff, our bankers, and of course the investors themselves. There's no doubt we risked losing some good people from the firm as a result of the delay, and the uncertainty and drain on morale it caused. And we had a real challenge keeping the funding in place. The high street banks we used just couldn't understand what was going on. The FSA had given approval within 28 days. The bank told us they had never had a transaction that had taken beyond three months for a regulator to approve, so the deal they gave us had a three month time limit. We had to go back no less than four times to negotiate a month's extension each time.
"What I find particularly depressing is the fact that what we are trying to do with this private equity backing from Duke Street is bang in the centre of what the Legal Services Act, and a deregulated legal market, is supposed to be all about. Yet you got the impression that the administrators on the ground seemed to be very nervous of what we were proposing and I think struggled at times to know how to assess it. Indeed it took six months for them to get their heads around it. In short, they lacked the specialist background to understand this was actually a very straightforward private equity deal. A template case and exactly the kind of development the LSA was intended to facilitate.
"There is no doubt there are some excellent people at the helm of the SRA who have real vision and who embrace and encourage legal business innovation. But the operational end needs to keep pace with that culture."
At this point Tim starts to echo the sentiments of my friend Andrew Hopper QC who talked about just this issue in this blogspot only a couple of weeks ago - the critical disconnect between the sophisticated vision / rhetoric at the senior end of the regulator and what happens on the ground.
"I do think the SRA has learned some lessons over the last few months, have listened to feedback from firms and others going through the process, also from the Legal Service Board, and are taking steps to put this right. They are staffing up with exactly the right skill sets and are involving some former City firm lawyers in the ABS approval process."
Tim is philosophical about the journey the firm has been through. "Being a frontier person you have to expect things to be harder for you than for those following on behind. Hopefully we have chopped a few trees down for those coming in after us."
Kysen's @Sophie_Bowkett was at the Commercial Court for the Abramovich judgment this week and tweeted some pics. We love these big high profile cases at Kysen of course. The kind of legal story you can really get your teeth into - and which appeals to a much more generalist audience than is often the case with the more specialist-audience legal topics we are often dealing with. So yummy opportunities for some excellent broadcast coverage.
We still find it hard to believe that statistic, that more than 60 percent - yes you heard me right, 60 percent!! - of the Commercial Court's workload involves a former-Soviet Oligarch or super-wealthy Easter European businessman. No wonder the UK legal authorities saw fit to invest so much money in the new Rolls Building to encourage this trend for litigation from overseas. But do we think this is a wise investment? Is attracting so much overseas litigation into our courts a good thing for the UK legal system and surrounding economy? Or do we think it diverts money from other parts of the legal system that desperately need it? We're canvassing opinion amongst our legal friends, so do please tell us what you think...
So are the Paralympics "transforming perceptions"? The news is good so far: tickets selling out as never before; the Opening Ceremony attracting Channel 4's highest ever ratings (astonishingly, even more tuned in than for the concluding episode of Friends); and a first day of stunning record-breaking performances for Team GB. Anti-discrimination law friends at RJW Slater & Gordon say numerous disability charities are planning campaigns and events to capitalise on the moment, expecting a sea-change in public attitudes. I certainly loved the idea of shifting the emphasis to what people can do and I think the idea of the Superhumans is inspired. Looking at this picture of "blade runner" Oscar Pistorius, who competes in both Olympic and Paralympic events, the moniker certainly fits.
I have to say my fave moment was seeing Royal Marine amputee Joe Townsend coming down the zipwire from the ArcelorMittal Orbit Tower with the Olympic torch and seeing Boris Johnson's tweet: "And thanks to Royal Marine Joe Townsend's stunning zipwire display. That's how to do it! #OpeningCeremony." For anyone who's forgotten Boris' own botched zipwire display, you can view it again here.