Caught in the net
15 October 2001
26 February 2014
3 July 2014
1 August 2014
25 June 2014
25 February 2014
Life at Bird & Bird must be tough at the moment - its chief executive officer (CEO) David Kerr looks absolutely knackered.
With his hair sticking out at random angles, Kerr has the appearance of a man who has just been woken and pointed in the right direction by a kindly secretary. Even holding his head upright seems a bit of a strain, so Kerr spends a lot of the time talking to the table, occasionally summoning up enough energy to make eye contact.
"Busy times," he mutters as he shows me into the room. It only seems polite to ask him why but he looks slightly startled, and he begins to tell me about the role of a CEO, which was not exactly what I was after.
He then proceeds to take the clingfilm off a plate of biscuits and the plastic wrapping is then transformed into a plaything to amuse him throughout the interview. First he moulds it into a small tower on a flat base, then it is transformed into a lozenge with two spindles that allows him to spin it between his thumb and finger as if wrapping and unwrapping a boiled sweet.
If Kerr is tired, then it is probably because he is doing two jobs; as well as handling all the strategic stuff entailed in being a CEO, he also spends around 50 per cent of his time on client-related matters.
"I do enjoy the strategic side of things and I think there's always a tension in any law firm between the role of managing partner or CEO and losing sight of your own practice," he explains. "You have to have a feeling for the changes that are occurring in the market, and you're more in touch with the demands of a client [if you continue to fee-earn]."
Of course, being in touch with client demands has become imperative for Bird & Bird over the course of the last few months, which has seen its core market in technology-related work go through a drastic downturn. Businesses that merely had to cough to get money out of the venture capitalists now find they are about as popular with the money men as broccoli is with six-year-olds.
"It feels like the pendulum has swung the other way or the bubble has imploded too much," admits Kerr. "But we've benefited greatly from having a strong international base and the nature of the work has changed. In place of IPOs [initial public offerings] and the venture capitalist side, there's a lot of restructuring and merger activity. Instead of acting for dotcoms which are now dotbombs, our clients
are now established companies."
One of the anomalies of the dotcom phenomenon, explains Kerr, is that as the sector suddenly dropped out of favour with the markets, consumers actually started buying from the internet and it has now become an accepted way of getting all sorts of goods (possibly because it allows you to go shopping while appearing to be working very hard at your desk).
"I think the industry's coming of age," says Kerr. "There are many historical analogies with a whole lot of industries that used a new technology which spawns a whole lot of new companies, and then there's a period of consolidation. What's really happening is that people are going back to the bottom line and asking, 'Can you make money through this business?' I think we're likely to see - if we're not already there - an attitude that the internet is not particularly special, it's a necessary way of selling goods to the market."
One of the benefactors of the boom within the firm was Graham Defries, the firm's head of e-commerce, who has now signed up with Weil Gotshal & Manges. Kerr shrugs off his departure, saying that he understands Defries wanted to move into a more mainstream M&A role. "I don't blame him for wanting to do that," says Kerr. "The real demand here is for partners who can look after substantial clients on the commercial project work, so I don't think [his departure] is a complete surprise. The firm has to move in the direction in which the market moves."
Unfortunately for Bird & Bird, that movement seems to have been mostly down for the last year. Kerr admits that he and the firm are a lot more optimistic about the future than back in January, when all was doom and gloom. Since then, he says that the market has proved itself to be quite resilient and the firm's fears have not been realised.
And, as he has said, the firm has the support of a European network, which includes Swedish merger partner Gedda & Ekdahl, plus offices in Paris and Brussels. The firm is currently in discussions to find link-ups in Germany, Italy, Spain and the Netherlands and "maybe one or two other countries in Europe".
There are no plans to follow Osborne Clarke's example and open in Silicon Valley; Kerr says that the partnership is still openminded about whether it wants to do anything with a US firm following the failure two years ago of merger discussions with Orrick Herrington & Sutcliffe.
"We have no current plans to do something with a US firm," states Kerr. "We're still in a period where we're re-establishing friendly networks with law firms that we know well. We're very happy and comfortable with that."
After the collapse of the Orrick talks, Kerr says that a
postmortem was held - a "US army-style debrief" - to see what the firm could learn. It has been decided that the firm is currently aiming for a best friends-type arrangement, building on existing relationships with firms across the Atlantic. But in Europe Kerr wants something more permanent - indeed, he is in ongoing talks with Wessing, which have been credited with speeding up the disintegration of the firm as the more internationally-minded partners head for pastures new.
Despite this, Kerr insists that Bird & Bird is still interested in the firm as a whole rather than cherry-picking particular teams.
"It's a difficult period for [Wessing]," says Kerr. "I have a huge amount of respect for some of their lawyers on a purely personal basis. In common with a lot of German firms, they're facing a lot of issues. We're looking at other options, but we're happy to have a dialogue with Wessing as a firm. My own personal preference is not to go with market rumour and I prefer to look people in the eye and make up my own mind about them."
Presumably, with merger talks, Kerr ensures that he gets enough rest to be able to look people in the eye. By this point in the interview, incidentally, he has moved on from his clingfilm worry-egg and has progressed to doodling on a pad. First of all, he works on an angular design of triangles and boxes, then progresses to designing his own crown of thorns. If anyone wants to offer a cod-psychology explanation, answers on a postcard please.
Anyway, back to the subject.
Kerr believes that the slump in the technology market could be about to slowly turn. "If you look at the Valley," he says, "things will pick up there and come out here several months to a year later. I think there are signs that is beginning to happen in the Valley currently. There are investments being made - a lot of sizeable investments in the Valley - and it looks like that's going to quite established companies, which is perfectly sensible."
The difference this time round, believes Kerr, is that e-commerce is no longer something special and will just become part of 'commerce' as a whole. Surely, I venture, it will go against Bird & Bird's strategy if the area becomes mainstream. But Kerr believes that most firms are still unwilling to get sucked into an area where technical knowledge is a prerequisite.
Perhaps surprisingly, Kerr does not have a technical background, having done languages and law at university. This, he argues, is a positive advantage as long as a lawyer has a general knowledge of the industry and is willing to read huge amounts to keep up with market changes.
This does not seem to be a problem for Kerr, who says that he finds nothing more stimulating than meeting a new client and getting his head around what they are trying to do.
At the moment, he claims, the firm has clients working on technology which could, if it succeeds, have a massive impact on the way we live and work. As someone who is still unable to work out how pay-per-view finds the right TVs, this thought fills me with horror, so I ask for hints on what the technology is so as to mentally prepare myself. Kerr smiles and says that even that much is confidential.
Perhaps one of the innovations is a new development in food wrapping and Kerr's fiddling was merely research for a client.
Chief Executive Officer (CEO)
Bird & Bird