Lawrence Kehoe: Grant Thornton UK
24 April 2006
3 May 2007
18 December 2006
24 April 2006
7 November 2005
5 September 2011
Grant Thornton UK" />Lawrence Kehoe likes to speak his mind. But as the head of legal at Grant Thornton UK, he is quick to testify that some of his views might not be in keeping with the overall opinion of the company. For example, Kehoe is not a fan of the Company Law Reform Bill. But he is aware that his method of expression may not always be in accordance with the company. "I have a very strong view of it which I've voiced, but there are politics involved," he says.
This forthright attitude categorises Kehoe's career. He describes his first job as an office boy at law firm Wedlake Letts & Bird as "the best education I've had", while he says part of his reason for leaving private practice was that he "was fed up with the games litigators liked to play".
However, Kehoe is also not afraid to make fun of himself. "I'm getting older; I thought I was slowing down but it's not me, the world's just getting faster," he jokes.
Kehoe joined Grant Thornton in 1987 after being headhunted by its management and having decided he no longer wanted to be a private practice lawyer. His appointment was a landmark move, as he was the first in-house counsel at a UK auditor - a move he thinks showed great prescience by his bosses. "I have to say that the guys who thought that up had fantastic foresight to bring in a lawyer because they could see what was coming in the industry," he says.
Kehoe remembers feeling slightly daunted by his new role at the start, but has fond memories of his first years in the job. "Those were the halcyon days. I was handed a blank piece of paper," he says.
From his standing start almost 20 years ago, Kehoe now leads a team of four "exceptionally experienced litigation lawyers", which is responsible for Grant Thornton UK.
Kehoe sees the role of his team as practice protection. "Around 75 per cent of our time is spent managing risk and only about 25 per cent is spent with claims," he explains.
The marketplace in which auditors operate has also changed in the intervening years. Cases such as Parmalat, Refco and Equitable Life have put the role, and the responsibility, of auditors on the front pages of the nation's newspapers.
Kehoe thinks there are three main areas where auditors are under threat and could be exposed. The international network is one. As with most of the large auditors, Grant Thornton's UK operation is a separate entity from the other international offices, even though it shares the same name. However, careless mistakes could lead to one office being liable for the mistakes of another.
"There's potential exposure because the world's gotten very small and that enhances the risk of things going wrong," warns Kehoe. "International organisations of accountants need to make it clear that the various offices are not in partnership, because if we hold ourselves out as being in partnership then we'll be liable as partners."
The power of regulators is another area where Kehoe believes vigilance is necessary. "I think international regulatory issues are going to be massive. If regulators don't think they can control global organisations by way of liability risk, they may come out and tell companies what they can and can't do," he says.
Finally, the spectre of auditor liability still hangs over the industry, with potentially grave consequences. Kehoe says: "I think that it [auditor liability] is coming, and in the right case it could be catastrophic." He points to the example of Parmalat, where the accumulated debt is E14bn (£9.69bn), or even Equitable's settlement with Ernst & Young, where the potential liability was £2.6bn. "No one has that sort of insurance coverage or asset coverage," adds Kehoe.
However, he says Grant Thornton has long been aware of most of these issues and polices them closely.
Grant Thornton eschews the panel process and instead relies on personal relationships that have been built up over a number of years. Reynolds Porter Chamberlain is one firm on Kehoe's list. "Not because everybody uses them, but because I've known [litigation partner] Tim Brown for over 20 years," he says.
Kehoe also singles out Simmons & Simmons head of litigation Colin Passmore, and Speechly Bircham has also recently been added to Grant Thornton UK's roster of legal advisers after one of Kehoe's relationship lawyers moved to the firm.
Kehoe stresses that the above list is not exhaustive and that he is willing to use other firms when the right case comes along. After 20 years in the job, he has encountered a wide range of situations. But he claims he has never been tempted to move. "I've never been bored. The job's too varied to be boring," he states. "And you have to ask yourself, 'is any job going to be better than this?' Well, perhaps a professional golfer…" Ã¢Â€Â¢
Head of legal
Grant Thornton UK
|Organisation||Grant Thornton UK|
|Head of legal||James Healy-Pratt|
|Reporting to||Chief executive officer Michael Cleary|
|Main law firms||Reynolds Porter Chamberlain, Simmons & Simmons, Speechly Bircham|