Conversation with David Morley Senior Partner Allen amp Overy

Allen & Overy Senior Partners were recently in India on their annual visit to meet their clients and best friend Trilegal. Trilegal Partners had series of discussions with Allen & Overy Partners to assess their relationship so as to provide better services to clients and also to integrate more effectively. Trilegal and Allen & Overy Partners also hosted a joint client reception on September 29, 2011 at Hotel Taj Mahal in New Delhi where our Associate Editor, Pallavi Sawhney, got an opportunity to speak to Allen & Overy’s Senior Partner David Morley.

Allen & Overy Senior Partners were recently in India on their annual visit to meet their clients and best friend Trilegal. Trilegal Partners had series of discussions with Allen & Overy Partners to assess their relationship so as to provide better services to clients and also to integrate more effectively.

Trilegal and Allen & Overy Partners also hosted a joint client reception on September 29, 2011 at Hotel Taj Mahal in New Delhi where our Associate Editor, Pallavi Sawhney, got an opportunity to speak to Allen & Overy’s Senior Partner David Morley. Below is the conversation Pallavi Sawhney had with David Morley on varied issues ranging from Allen & Overy’s experience in assisting India related cross border transactions, structure of Allen & Overy’s India team, views of foreign clients on investing in India, his thoughts on Legal Process Outsourcing and his views on liberalization and entry of foreign law firms.

Bar & Bench team had also recently spoken to Trilegal Co-Founding Partner Anand Prasad on various issues including Trilegal relationship with Allen & Overy.

David Morley is worldwide Senior Partner of Allen & Overy. He joined Allen & Overy as a trainee in 1980, qualifying as a solicitor in 1982 in the Banking department. He became a partner in 1988. In 1998, he also became the global head of the Banking practice. In May 2003, he was elected to the position of worldwide Managing Partner. David is a banking lawyer with wide transactional experience advising banks and financial institutions, as well as borrowers, on all types of debt and structured finance transactions.

Pallavi Sawhney: Talk us through A&O’s experience in assisting India related cross border transactions.

David Morley: We have been involved in almost every one of the major cross border deals in India. Some examples would include advising Vedanta on their acquisition of Cairn, advising Reliance on the joint venture with BP, advising KBC on the sale to Hinduja Group, advising banks on financing of Bharti’s acquisition of Zain Africa, advising Lanco on their acquisition of Griffin and advising GVK on the financing of the acquisition of Hancock.

One of the things which is very striking about Indian corporates is the ambition and confidence that they have and also their ability to make decisions quickly is quite compelling. When any opportunity arises, Indian corporates seem to be nimble to take that opportunity quickly.

We see a global trend that often Indian corporates and clients in Asia generally have a different perception of risk and market practice to traditional business investors located in the west. This is a very interesting trend because over the last few years business investment decisions were typically being dictated from the west and what we see now is a rebalancing, more and more decisions are being taken in India and Asia and that is a dramatic change.

Pallavi Sawhney: How big is the A&O India legal team? Can you help us understand how is the India team structured within A&O and where does your relationship with Trilegal fit into that framework?

David Morley: We have a core India team which is drawn from London, Dubai, Hong Kong, Singapore, Australia and New York and sometime from other offices as well. The core team who spend most of their time on India related work is about 10 partners and 50 associates.

In terms of those lawyers who have fairly regularly worked on Indian transactions, the number is probably double. It is quite a large number and a significant part of the firm’s work, which is what you expect as Indian economy is growing and generating lot of work.

We have an India group which is chaired by Senior Partner Jonathan Brayne. His responsibility is to coordinate the various jurisdictions in which we are working and various practice groups and then also to act as a key point of liaison with Trilegal.

Pallavi Sawhney: Your experiences working alongside Indian law firms – How do you rate Indian law firms competitiveness and quality?

David Morley: We have worked alongside most of the leading Indian law firms. We would say that these firms have extremely high quality lawyers. In fact, we are very impressed by the quality of lawyers we come across, very well educated, great negotiators, very good at navigating through government regulations and so on, excellent at managing their client relationships.

Pallavi Sawhney: What are your clients’ thoughts on investing in India? Do you see bullishness or are investors still cautious after the corruption scandals in India?

David Morley: We did a survey in July-August this year. We hired an independent research company and published a report called ‘50 Degrees East’. The researchers took feedback from over 1,000 senior business leaders in more than 19 countries. These business leaders are all directors of large companies with more than 500 employees with international experience. They were asked series of questions about their business prospects, most important growth market in the world and so on. India was number two after China as the most important growth market.

Businesses are looking for growth and obviously India is a growth story. I think businesses see the long term fundamentals of the economy which are likely to go in one direction in terms of continued growth. They accept that there are ups and downs, obviously there are concerns about complex regulatory regime, getting government consents to do business and acquiring land. Corruption is obviously also a concern but they also understand there is long term growth story here and so they have to work their way through these things.

Pallavi Sawhney: What is your take on the Legal Process Outsourcing as an evolving area of business? How do you think have the law firms modified their businesses in the view of the changing dynamics?

David Morley: This is interesting. What we hear from our biggest clients, they are all under pressure themselves to manage their costs and to make themselves more efficient and in effect deliver more for less. This is driving law firms to think very hard about how they can deliver their services.

One of the trends that we are seeing from large sophisticated western clients is the desire to disaggregate the work. So in other words, if there is an M&A transaction the client will pay premium price for high level strategic structural work but will separate out perhaps the more routine aspects of the work and pay lower price for that, so the total package is cheaper.

We as a firm do in fact use legal process outsourcing. For example, we use Integreon for some litigation discovery work. We spent the last year looking very carefully on the issue of alternative resourcing models to make sure we are delivering the best value for our clients. We wanted to set up our own center, 100 percent controlled by A&O to handle support services and also to handle some of the more routine aspects of the legal work.

We looked all around the world and had also considered India because India is quite high on our list but then we decided to open in Belfast in Northern Ireland. We have now created 300 jobs in Belfast and we moved those jobs out of London. At the moment they are mainly support jobs but we are now beginning to recruit some lawyers to do some of the more routine legal work.

I think legal process outsourcing is one tool in a tool box that every law firm now has to have in terms of how they manage their business and how they work with their clients, because different clients want different things.

Pallavi Sawhney: Indian legal market – How do you view it? Your views on liberalization and entry of foreign law firms.

David Morley: We would of course welcome liberalisation. We have 39 offices in 27 countries in the world. We actually regularly do business in about 100 countries. Our business is completely global. More than 70 percent of our work involves two or more offices at any one time and that is simply a reflection of how the world has become global and how our clients are operating at a global level.

India is a very important market, we have lots of highly valued clients here, clients who are looking to invest in India and Indian companies looking to invest in the rest of the world and so on. I think liberalisation is only going to happen when the key stake holders who are involved in the debate believe that it is for greater good.

I have been with A&O for 31 years and I have seen this process in lots of different countries like Germany, France, USA, Japan and Singapore. Korea is a recent example. All these countries liberalised their regime and the sky did not fall. In fact in every case the profession has got stronger in those countries which is an important point.

There are may be two voices that perhaps have not been allowed enough voice in the debate so far. The first voice is of the clients and we hear from clients that they want more choice and that is not surprising. Everybody knows that more choice creates more competition and everything improves. Second one I think is may be younger lawyers as well. There is no doubt India has enormous reserve of incredibly talented people and a lot of those lawyers feel that they have to go abroad to gain experience and training. In the long term that would not be necessary and they can contribute to growing Indian economy. So those are the two voices that should be heard.

Pallavi Sawhney: How has the best friend relationship developed with Trilegal over the years? Also, how has it been beneficial for Allen & Overy?

David Morley: First of all I should say we have great personal relationships with the Trilegal Partners. They are very smart, ambitious and meritocratic firm. Right from the very first day we met them, we kind of felt that we are on the same wave length in terms of how we thought about the development of businesses and how to serve clients. Our main focus in terms of our relationship with Trilegal is to create the same client experience so that when the client comes to A&O or they come to Trilegal they feel like that they are getting the same experience in terms of level of quality of service and expertise. We do lots of things to integrate with them for example, we are working together to create standard form documentation at Trilegal which makes a big difference in terms of efficiency and cost to the clients. We have secondments – in the last couple of years we have had over seven secondments from Trilegal to A&O offices around the world. Trilegal lawyers participate in our training and come for our off-sites. Trilegal has a partner on our partnership selection committee and we have one on theirs and obviously we reach out to clients jointly and so on. But we have been very clear since the start that whatever we do must be strictly in compliance with the relevant regulations.

We visit India at least once a year to discuss with Trilegal Partners what we need to improve, how we can provide better services to clients and how we can integrate more effectively and so on.

I am very impressed by the younger partners in the firm. The founding partners have done a great job of mentoring them, training them and bringing them up. They have got very ambitious, intelligent group of young partners who can drive the business in the future.

Pallavi Sawhney: The delegation from UK visited India to further strengthen Indo-UK cooperation. What do you perceive from this recent meeting that Minister of Justice Kenneth Clarke had with Indian counterparts?

David Morley: The President of the Law Society John Wotten was till last year an A&O Partner. It appears from the meeting that there is a bit of a shift in perhaps the way people are thinking about liberalization today and I would expect that this is not another false hope. I think in the end India has to do what it thinks is best for India. We understand that and accept that.