Full steam ahead for finance
30 May 1995
Irish solicitors are reporting a growth in business as the economy shows signs of a significant upturn. Increasing numbers of European companies have set up operations in Ireland in the past year, particularly in Dublin's International Financial Services Centre, where the EU extended the deadline for the licensing of new companies from last December to the year 2000.
A recent issue of the US Business Week magazine referred to the Irish "Celtic Tiger" and quoted Morgan Stanley economist Kevin Gardiner describing it as one of the fastest-growing economies in Europe, skirting recession and boasting average growth of five per cent. Gardiner predicted this year the pace could be even faster. And while law firms are more circumspect about the past year, there is evidence of increased activity throughout.
"It's picking up very nicely indeed across the board," says William Earley, managing partner of McCann Fitzgerald, a view supported by Mason Hayes Curran partner Declan Moylan who says his firm has had a "flying start" to the current financial year, which is "not somethingF we could have said last year," he adds.
Beauchamps partner Robert Ryan says his firm has had quite a good year but explains that transactions have tended to be more medium-sized deals as opposed to larger ones.
"The old style corporate finance work is not as active as it used to be," agrees Earley adding that this view is backed up by investment bankers.
One major transaction was the flotation of the Irish Permanent Building Society, the largest building society in Ireland. It was represented by A&L Goodbody with William Fry acting for the underwriters.
"It was the first Irish building society to go public," says O'Riordan managing partner at A&L Goodbody, adding it was also the fourth largest institution in Ireland. "It has done very well. The share price has performed tremendously and it showed confidence in the marketplace."
O'Riordan says that there has been a significant number of rights issues as well as a number of management buyouts. A&L Goodbody was involved in the well-publicised Dakota management buy-out while Matheson Ormsby Prentice represented Murray Johnson and the Bank of Scotland.
The past year has also seen a number of restructurings and refinancings, including the Goodman refinancing. The arrival of a number of UK venture capital companies in Ireland has also generated more work for law firms. "There has been quite an expansion over the past year as they look for good opportunities to invest their funds," comments Ryan.
Most firms have noted an upturn in property work, with a number of UK retailers opening up in Dublin's city centre. Other major transactions included UK quoted company Jermyn Investment Company in its 50-50 split joint venture involving Century Holdings which subsequently purchased a substantial property portfolio from Irish Life worth £50 million. Jermyn Investment Co. was represented by Mathsons.
The International Financial Services Centre (IFSC) has also generated more work and is now competing heavily with Luxembourg. Although it has not generated as much in employment terms as originally anticipated, it is a considerable success in terms of revenue and generates around 200 million Irish pounds per annum in tax despite its low tax rate. And the recent arrival of Merrill Lynch which is setting up its capital markets bank in Dublin is a boost for the centre. "The nice thing about IFSC work is that it is now growing secondaries," says William Earley, whose firm is based in the centre.
Most of the top firms are getting work from the centre. Mathesons London partner Stanley Watson says his firm has seen a significant growth in IFSC work in the past year and has acted for a significant number of financial institutions setting up business despite the fact the firm was a "slow starter" in getting into the area. "In the last few years, we've become a lead player in connection with UK work," he says.
Other areas which are growing include intellectual property, with a number of the top firms ensuring that they have IP specialists on board. Mason Hayes Curran is currently involved in one of Ireland's biggest IP cases - the litigation between cereal manufacturers Kelloggs and Irish supermarket chain Dunnes Stores over alleged similarities in brands. Masons is representing Kelloggs and Ophren Franks is acting for Dunnes. "In Ireland you don't often seen a decent trademark action," says Moylan, adding this is the "biggest trademark action in years".
Firms are also picking up work from the government's decision to partially privatise the Irish telecoms market. Beauchamps, for example, are acting for an international consortium which are tendering for a GSM licence.
Some firms have reported a slowdown in film finance work, a major new area in the Irish market. But for others, the area is still buoyant. Mason Hayes Curran reports it is involved in the financing of the new Marlon Brando film which will be made in Ireland and was recently involved in the financing of 'Frankie Starlight'.
On the structural front, there were few changes among law firms. Two firms experienced breakaways, the most recent being Hugh O'Donnell from Rory O'Donnell to set up his own firm. A group of three lawyers left JG O'Connor to join Whitney Moore & Keller. The group was headed by Philip O'Connor, one of the two O'Connor brothers. A source at the time denied the disagreement had anything to do with personalities. "They were just not happy with the direction of the firm."