Building your assets

People are the most valuable asset at broker ICAP, and it is no different for the legal team, which is on the lookout for its own new stars. Gemma Westacott reports

ICAP is on a recruitment drive. But unlike the usual headline-grabbing tales within the wholesale brokerage market of companies trying to steal key broking staff from their rivals, the drama this time centres on plans to bolster ICAP’s in-house legal team. General counsel outside of the US Mark Schreiber reveals he is on the lookout for a new senior lawyer with a minimum of five year’s experience in Hong Kong. The successful applicant will head the company’s first legal capability outside the UK and US. The lucky lawyer, who will be based in Hong Kong and report to Schreiber, will assist ICAP’s Asia Pacific and Middle East (APME) offices.

Schreiber says this may result in the launch of a full-capability legal team if the initial response from ICAP’s offices in Australia, China, India, Japan and New Zealand proves positive.

However, Schreiber warns the new APME lawyer is likely to be extremely busy. Asia is about to be inundated with work following the company’s entry into the Korean market, and similar growth is anticipated in China. Last year, in conjunction with joint-venture partner Korea Inter Dealer Broker (KIDB), ICAP became the first international broker to receive a wholesale broking licence in Korea. The group is now also on the verge of receiving the first wholesale broking licence in China.

Schreiber says that so far these developments, along with the launch of a range of property-based derivatives in May which enable investors to take a position on the future of the property market without investing in actual bricks and mortar, have not created any headaches for the legal team. But the developments in China and Korea are likely to mean that ICAP must begin developing greater relationships with local law firms.

Currently, Schreiber outsources matters on an ad hoc basis based on referrals and past experience, although the group does have strong ties with Deacons in Hong Kong and Minter Ellison in Australia. Other firms with longstanding relationships with ICAP include Macfarlanes and Ashurst, which were legacy advisers of ICAP – Macfarlanes from before Schreiber joined the group in 1993 and Ashurst following the group’s merger with Exco, a longstanding client of the firm’s, in 1998.

Schreiber, however, hints that he is looking to bolster the company’s list of niche financial services advisers and is therefore developing an informal panel for this area. “We have no formal legal panel, but I’ve started to build up an informal panel for certain areas, such as in financial services, because I want to have a number of people I can call. I’m looking for different expertise in specialist areas and markets.”

Most of the group’s UK and European legal needs are handled in-house, although Schreiber is in almost constant contact with the company’s external advisers. Schreiber says he uses these as “sounding boards” as well as for litigation and major corporate and competition matters.

Since Schreiber joined ICAP from Japan-based Sanwa Bank in 1993, the company has matured greatly from its former position of utilising legal advice only when things looked likely to become contentious. And, as the in-house team grew to its present size of 10 UK-based lawyers, the company has developed a culture of asking for legal advice on most matters.

Employment law takes up a lot of the team’s time, so Schreiber has two staff assigned to managing employee relationships and employment contracts full-time. He emphasises that this is because “the nature of our business is that the assets walk out the door every night”.

ICAP is more than aware of the dangers this presents. In recent years the company has been caught up in high-profile disputes with both Cantor Fitzgerald and Collins Stewart over staff moves both to and from ICAP. The majority of such contentious work is farmed out to external counsel, while the in-house employment specialists focus on management issues.

One of the biggest issues the team has overcome in recent years is the problem thrown up by the advent of electronic trading. “In the voice broking world you can say who said what when and you can listen to a tape to confirm this. In the electronic world you need to define when is a trade done, when is a bid a bid, and when is an offer an offer to avoid suddenly being saddled with a huge liability.”

To combat this the legal team has drafted and implemented a generic set of electronic broking terms and conditions. Schreiber says that about three years ago it came to light that a number of sections of the business were offering clients different terms and conditions for the company’s electronic platforms, causing a time-consuming nightmare for the legal department. So he began the ambitious project of developing an all-encompassing umbrella of master electronic trading agreements that would enable the company’s clients to sign one document once and access all of the group’s different broking platforms under the same general underlying terms and conditions.

“As with any in-house lawyer only half of what you do is legal, the rest – like the terms and conditions – are about being part of the management and solution process,” says Schreiber.

Mark Schreiber
General counsel outside of the US
ICAP

Statistics
Organisation ICAP
Sector Wholesale broking
Turnover £794m
Employees 2,900
Legal capability 10
General counsel outside of the US Mark Schreiber
Reporting to Chief operating officer Mark Yallop
Main law firms Ashurst and Macfarlanes (corporate, M&A); Carter Ledyard & Millburn (US matters)