3i

Venture capitalist 3i is known to be the type of company that gives businesses a leg up in expanding their operations. But 3i itself is acquisitive by nature.

At the beginning of this year, the company purchased German-based Technologieholding GmbH for £102.6m in a bid to expand its already comprehensive coverage of the European market which includes France, Italy and Spain as well as the US and the Far East.

Although 3i already had a presence in Frankfurt, Munich, Stuttgart, Dussledorf and Hamburg, the acquisition widens its spread across Germany to Berlin and Leipzig.

The purchase of Technologieholding also added 39 staff to 3i’s relatively small number of employees in Europe.

Of its 889 staff, 30 are lawyers. Tony Brierley, company secretary and member of the executive committee, admits it is unusual to have such a large number of lawyers for such a small number of staff.

He says: “This is because our business is investing and every transaction requires legal work to be done on it because it means investing in an unquoted company.

“It is not like investing in a quoted business on the Stock Exchange. Every investment has to be investigated and documented.”

To achieve this, the legal team is split into three divisions – the group legal team, UK investment legal services and continental Europe legal services.

The group legal team is made up of four lawyers and is headed by David Herbert, group solicitor at 3i. It is responsible for fund raising and acquisitions on a worldwide basis, says Brierley.

Director David Dench heads the 17 lawyers that make up UK investment legal services. Brierley says: “This is our largest grouping of lawyers. They look after the investment side and are responsible for the documenting and negotiating of transactions for the UK investment business.”

Continental Europe legal services was established 18 months ago. The division has three lawyers and is headed by manager Jane Alexander.

Brierley says: “We also have four other lawyers – two are in the compliance function and two work within the group secretarial function.”

The large size of the legal team means only about half the workload is outsourced.

Brierley says: “We manage the firms fairly actively. We believe that outsourcing can only work well if you manage it actively.”

3i examines the firms it uses for legal advice on an ongoing basis as opposed to a yearly review.

“We see our panel as a long-term relationship for both parties,” says Brierley.

“We aim to deal with any issues that arise in an open manner. This strengthens our relationship if we can sort them out before they become big issues.”

Brierley relies on feedback from his staff on the quality of service they are being provided with.

And in Europe, he seeks the opinion of a number of people when choosing which firms 3i will employ.

“You start off by doing a little bit of research and talking to people who are in the market. You would also talk to other UK lawyers about who they would choose to use overseas,” he says.

“It would be great if there were UK lawyers in all those jurisdictions that we could use, but unfortunately that is not always the case.

“UK firms might have an expertise in a particular field. If, for example, you were in Singapore or in the US they might be good at capital markets, but they might not have a big venture capital practice.”

He adds: “We try to keep the number of firms down to a small number so you can give them a worthwhile amount of work.”
Tony Brieley
Head of legal
3i

Statistics
Organisation 3i
Sector Investment company
Market capitalisation £6.7bn
FTSE 100 rating 50
Employees 889
Legal function 30 lawyers
Head of legal Tony Brieliey
Reporting to Brian Larkin, chief executive
Main location for lawyers London
Main law firms Slaughter and May, Osborne Clarke, Lee Crowder, Addleshaw Booth & Co, Maclay Murray & Spens