Securitisation lawyers flock to Barca but they are bottom of the food chain
26 June 2006
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Everyone is still exhausted. The four days of freebies, networking and alcohol-fuelled early mornings that are the Global Asset-Backed Securities (ABS) conference are over for another year: and as memories of the Baja Beach Club fade into the distance, it's time for lawyers to take stock of what they got out of this annual event.
The Barcelona conference - now in its tenth year - is a must-attend event for structured finance lawyers desperate to find out about the outlook for the UK prime residential mortgage market in light of new regulatory treatment.
Or, to put it another way, they go because all their clients are in the same place. "This is not the thinking man's conference, it's the drinking man's conference," quipped one thirsty partner.
As I trawled the conference halls and bars in the name of research, it was not easy to find a lawyer who articulated a true business case for the event - except to say that they go because everyone else does. There certainly wasn't much ground-breaking debate going on either. Even the session on what Basel II would mean for the market came up with the same old arguments that we've heard for the past three years.
However, the lawyers I saw there all say it is essential to go. "There's a perception held by the larger institutions that if you're not there you don't really feature on their radar," says Dechert Islamic finance partner Abradat Kamalpour.
"It was a worthwhile investment. There were more people than ever and there were market participants across the board," says Dominic Griffiths, co-head of securitisation at Mayer Brown Rowe & Maw (MBR&M). Griffiths contingent was possibly a little discomforted by the appearance of former partner Mark Nicolaides, who was having a ball in Barcelona, while being very cagey about his next move.
However, any sense that this is a conference to learn about the technical aspects of the market has long since passed. Even worse, lawyers are at the bottom of the food chain at the conference. Investors are the most sought-after attendees, followed by the financial institutions.
The hierarchical nature of the event doesn't end there, with the conference organisers offering different levels of sponsorship as well. Top of the pile was Clifford Chance, with its titanium-coated sponsorship deal. For $60,000 (£32,000) the firm got six speaking spots (for the sparsely attended seminars), 17 firm passes plus its name on various bits of conference paraphernalia.
Next were Allen & Overy (A&O), Dechert, Freshfields Bruckhaus Deringer, Linklaters, Lovells, MBR&M, Ogier, Sidley Austin and Simmons & Simmons, who each forked out $40,000 (£22,000) for a platinum sponsorship, which included four speaking slots and just 14 passes.
Gold sponsorships ($28,000 (£15,200)) and silver ($22,500 (£12,200)) were snapped up by 13 firms including A&L Goodbody, Ashurst, Cadwalader Wickersham & Taft, Norton Rose and Shearman & Sterling, while Netherlands-based NautaDutilh was the only firm to plump for the bronze package.
The figures above do not include the cost of having partners and senior associates out of the office, not to mention support people. The cost of attending the conference can soon run into six figures.
The main task at the conference this year was to 'grip and grin' - in other words, network with as many clients as possible.
And there were many different approaches to getting face-to-face time with clients. Most firms had a stand that offered the obligatory freebies (see box), various bits of securitisation bumph and, depending on when you went, maybe even a few lawyers able to talk shop. More often than not, however, the only person at the stand was the business development executive sitting forlornly in the main hall while the lawyers enjoyed coffee meetings and lunches in the sunshine.
The Clifford Chance stand was no exception, though it was enlivened somwhat by the 'Clifford Chance Hand that, when waved, produces a clapping sound. (For the football, apparently).
"Having a stand gives you visibility. It is also a focus point for the firm and good place to meet people," says Clifford Chance securitisation partner Peter Voisey. (Voisey turned some heads at the conference thanks to a fetching pair of shorts.)
A few firms, including A&O, Freshfields and Shearman, decided against having a stand this year. "The thing with having a stand is that it's got to be manned and every minute you spend behind a desk is a minute you're not with a client," says Shearman securitisation partner Julian Tucker.
And he should know, for, along with Clifford Chance's Kevin Ingram, Tucker received a pin badge marking his attendance at all 10 Global ABS conferences.
But the networking was as good as ever. At the Ashurst party on the Monday evening, I saw the biggest quantity of cava in one room ever, although Erica Handling and Gonzalo Fernandez were probably more exercised by their discussion on yoga positions. Handling later moved on to the Citigroup party, which she had to leave early to attend to an offering circular.
More than 3,000 delegates attended this year, the biggest number in the conference's history. Many of them seemed to be crowded into the Baja Beach Club (fake palm trees and middle-aged blokes thrusting their fists to the Rolling Stones), the traditional Tuesday night hang-out after the official dinners.
The parties to be seen at were those hosted by the banks, including the likes of ABN Amro, Citigroup, Deutsche Bank and Royal Bank of Scotland. ABN, getting into the World Cup spirit, replayed England's 2001 5-1 victory over Germany at the start of the conference, thereby proving that the Dutch and the English are on the same side.
But lawyers were not welcome at all the bashes. Deutsche Bank's party, infamous for its extravagance, this year included a performance by teenyboppers Girls Aloud. A&O, however, was the only law firm to be invited. This raised plenty of eyebrows and may cause other law firms to reassess the quality of their relationship with the bank.
Despite all the hobnobbing, very few lawyers expect to get any work out of the conference. However, there were still deals aplenty. The favourite story doing the rounds centred on one jammy banker who closed more than $300m (£163m) of business while lounging by the pool.
The Global ABS conference may not add quite that much to a law firm's bottom line, but the cost of not attending is more than most firms can bear.
#law firms' top branded freebies
Ashurst: Pink lava lamp
Cadwalader: Black bags and mints
Carey Olsen: Plug adaptor
Clifford Chance: Plastic hand
Dechert: Cocktail playing cards
Herbert Smith: Corkscrew that doubles up as wine stopper
Lovells: Brightly coloured money boxes
Mourant: iTunes voucher
Orrick: High-tech rucksacks and hand towels
Sidley Austin: Lint roller and cool bag
Simmons & Simmons: Water bottle
Weil Gotshal: Teddy bear