I'm still standing
24 June 2002
Well, the last few months haven't been much fun, says Williams, whose recollections are punctuated by the odd bark of mirthless laughter. Still, for a man whose world has crumbled beneath him, Williams is in pretty good shape. He certainly looks okay for a man who has not averaged much more than three hours of sleep a night recently. "You're used to dealing with pressure when you're acting for a client," he says. "But this was different." It is a monumental understatement.
On 8 January, Williams was in Houston presenting to the worldwide management his strategic review for Andersen Legal. After the spin-off of Accenture and the departure of Jim Wadia, the global management had changed and Williams was back to square one, having to take his bosses right up the learning curve again. His presentation, he thought, would be the start of a new phase. The paper was full of the usual stuff - focusing growth in a small number of countries, sorting out a US link-up - but the main thing was that Williams felt that he had managed to succeed in getting the development of the legal arm back on the worldwide management's agenda.
"Then I flew back home and opened the newspaper," he says. That day, 10 January, Andersen admitted shredding Enron documents - and from then on everything changed. "It was an 'oh shit' moment, I think you could say," groans Williams.
And then all sorts of stuff hit the fan. Andersen Legal partners reacted in all sorts of ways - one is said to have got religion, while there were daily tears in the corridors. Williams confides that, at the height of the crisis, walking the floor in Garretts' Strand offices was one of the most difficult things he had to do, with people coming up to him wanting to be reassured. The problem was, he could make no promises at all.
From 10 January onwards, Williams had to try to save Garretts while the Andersen collapse was played out daily in the press. After a nightmarish few months, cannoning from KPMG to Ernst & Young to Deloitte & Touche, Andersen opted for Deloittes on 9 April in a deal that left Garretts out in the cold. With a firmwide deal now impossible, Williams was faced with the prospect of having to scramble to find homes for his entire staff. "I had the unenviable task of standing up in front of the Garretts partners, saying that Andersen was doing a deal with Deloittes and that we weren't included in it; and at the moment, we haven't got a plan B," he says.
So exactly how bitter is he? (Come on, Tony, admit it. Give us the Oprah moment.) Williams pauses. "I think we were very cross at the time," he confesses. "What genuinely surprised us was there was not even the intention of, 'well, we'll keep the legal practice going for a year'. It was almost a feeling of, 'well, we've vaguely heard of Garretts'." Another pause. "But they were under extreme pressure at the time. The business was in danger of rapidly walking out of the door. They had to stabilise."
Williams will not be drawn on this, but former colleagues claim that Andersen senior partner John Ormerod and head of tax and legal Richard Buck proved less than supportive. "Returning calls would have helped," says a former partner.
Another former insider says: "Throughout the process, Garretts was treated appallingly by Andersen [UK]. The Garretts partners had taken a conscious decision to go in there and build something. When Andersen signed the deal with Deloittes they should have made a commitment to keep Garretts financed."
Another former Garretts partner rails at the fact that the relationship with Andersen had disintegrated to the extent that, by the end, Garretts reached a separation agreement only hours before it was due to dissolve. "It was about structuring arrangements, so Garretts wasn't stuck with unreasonable liabilities - settling various balances owed between [them]. It was fraught," the source says.
One thing Williams will talk about are the various heroes of the hour: most of his partners at Garretts; John Cooper at Lovells, who advised the firm on its separation from Andersen; plus, in the absence of funding from Andersen after the Deloittes deal, Alan Taylor at Barclays. "He was absolutely superb," says Williams. "Throughout all of this he kept all the facilities in place and was tremendously supportive. In fact, in the end we were in the position of not using the overdraft facility.
"I'm not one of these wailing victims. It was unfortunate the way we were dealt with and unfortunate the way the dice fell with the Deloittes deal. Actually, in April we wondered whether the dice were ever going to roll our way."
The next few weeks were a queasy rush to get as many teams into new homes as possible. "Two years ago you would have been able to dispose of a whole firm in a bull market," he says. "But most firms have surplus capacity at the moment." The problem, Williams acknowledges, was that 20 per cent of Garretts' work was Andersen-related. It meant that, for many law firms looking at entire offices, there was a risk that the turnover would simply not live to up to projections. It was certainly a factor, for example, in the Reading office, eventually taken over by Olswang. Osborne Clarke and Field Fisher Waterhouse - both initially keen - were also understood to have been worried about that issue.
Speed and continuity was paramount. "If partners couldn't find homes, then the chances of getting bills paid would rapidly disappear," says Williams. "The fact was, people didn't panic - they kept their nerve and behaved properly."
Rather than being bitter, Williams just seems sad. "It shows the way people and groups behave under pressure," he says. He specifically asked partners to find homes for assistants and trainees; one partner even suggested to his future firm that his salary be reduced by the cost of the trainee as long as that trainee was taken on. "That sort of thing, you felt proud and sad at the same time," he reflects. "The firm we built was with the right people."
But that sort of behaviour, Williams implies, was not universal. "Other people - not so much in the UK - were running for the hills," he reveals. "They were just trying to look after their own position. It does make you feel unclean."
But could Garretts really have merged with KLegal or Tite & Lewis? Back in March it seemed a real possibility. It seemed a good omen that Williams had known KLegal senior partner Nick Holt from his old Coward Chance days. They had never been big buddies, but their shared experiences of running accountancy-tied law firms had led to regular and convivial meetings over dinner.
But KLegal had just concluded its merger with McGrigor Donald and appetite for another deal was waning. "KPMG seemed incapable of negotiating the time of day, let alone an agreement," says a former Andersen source sourly.
"From our point of view, once Andersen was with Deloitte & Touche and not KPMG, a lot of the synergies went out of the window," says Holt. "Tony made the best of what was a pretty shitty negotiating position, but he was always good-humoured. It was always clear to me that he was behaving honourably. He was looking for a home for the firm - the last thing he was interested in was a position for himself."
As for Ernst & Young: er, you rather get the feeling that talks with Tite & Lewis did not enjoy quite the same dynamic. "We preferred KLegal," says a former Garretts partner. "They were more developed and the chemistry was right." In the end, Williams had to concede defeat on both. And yet within the space of six weeks, Williams had managed to place almost his entire firm into different homes.
Williams has always been underrated, having acquired gravitas late. At Clifford Chance he was the little-known and surprise choice as managing partner back in 1997. His great achievement is considered to be hiking profits in the two years before pulling off the Rogers & Wells and Pünder mergers. Yet he was still somehow an outsider, not least because of his distance from the powerful internal London finance axis at the time. After the three-way merger, he seemed even more adrift from the inner circle. His move to Andersen Legal in 2000 was a coup for the accountancy-tied firm and a convenient exit for him.
Perhaps because of his latter years at Clifford Chance, you get the feeling that there is still an undercurrent of insecurity with Williams, despite managing to make the Andersen Legal brand vaguely respectable in the UK. But he constantly had to deal with shifting goalposts. Neither did the change of worldwide management help, nor the various regulatory attacks on multidisciplinary partnerships. Yet with a turnover of £37m and some decent FTSE clients, Garretts was doing fine. Despite all this, Williams will be remembered for what he did during the collapse, not for anything he built.
But do not assume that Williams is scarred for life by the experience. For a start, he still enjoys a mischievous gossip about the legal market. And he obviously derives huge strength from his family, referring on several occasions to the great support given to him by his wife and how he is relishing the prospect of spending the summer watching cricket with his son.
Yes, he says, it was a nightmare - but the nightmare is over now. Most people have found jobs and moved on emotionally. As Williams says: "Nobody died. It was a financial issue. Ultimately, you've got to deal fairly with people around you. And it teaches you that you can't control everything."