For Grant Macpherson, managing director and corporate counsel at Kroll, fraud is a way of life. Having joined the risk consultancy from Flag Telecom last year, Macpherson now spends a large portion of his time trying to detect fraud for clients of Kroll’s consulting business, which is split between fraud investigations and business intelligence.
As Macpherson points out, this involves doing large amounts of work for corporates or hedge funds that are looking to do deals across a number of far-flung jurisdictions, as well as doing due diligence on individuals.
“Because of the credit crunch banks are less willing to lend money and regulators are more interested in the people they are authorising to do business,” he explains. “Some of the people we come across are people with colourful backgrounds – they might be perceived to be something they’re not because of who they associate with. If they’re looking to do business they’ll come to us to prove they’re clean.”
Macpherson, who trained with Simmons & Simmons in London, has had a long relationship with the Middle East and the bulk of his work since joining Kroll has been in the region.
“I started at Simmons in 1993 and did a short stint in Abu Dhabi in connection with the BCCI case,” he recalls. “When I was at Flag Telecom I spent several months in the Middle East in relation to a telecoms system that linked all the Middle East and Gulf centres.
“Reliance, which had bought Flag, then decided that it didn’t make sense that it was in Mumbai while the legal team was in London. At that time Kroll was looking to do some work in the Middle East and that was an attractive opportunity.”
At Kroll, Macpherson works with governments and investment banks across the Gulf, helping them to assess control functions.
“The governments are worried about national industries not making enough money,” he says. “We try to glean where the weaknesses are by talking to everyone, looking at external audit reports and carrying out specific investigations.”
All of which makes for an interesting, if not strictly legally based, role. In fact, Macpherson’s job differs to that of many in-house counsel in that a large proportion of his time is spent doing non-legal work. It also differs when it comes to his relationship with external law firms.
Kroll does have a panel of external advisers, with Bird & Bird, CMS Cameron McKenna, Denton Wilde Sapte, Eversheds and Field Fisher Waterhouse doing a range of regulatory, litigation and employment work. It also instructs local firms around the globe. However, Macpherson has far stronger ties with the firms he enjoys cross-referral relationships with.
While it could be argued that Macpherson and his colleagues actually take work away from law firms by putting in place systems for avoiding fraud, he begs to differ, saying: “The idea is not that we take work away from law firms but that we package it up to take to firms for the next step, which is legal proceedings.”
Macpherson does not instruct these firms as such, but passes work their way and often receives instructions back in return. Who bills who depends on where the work originates.
In the US Kroll has cross-referral relationships with Akin Gump Strauss Hauer & Feld and O’Melveney & Myers. This side of the Atlantic work regularly passes between Kroll and Addleshaw Goddard, Bird & Bird, Charles Russell, Mishcon de Reya and Withers.
“I very much like dealing with Charles Russell – it’s very responsive,” says Macpherson. “I like its work and I like the price. The firm recently opened an office in Bahrain, where I’ve done a lot of work, so it has had the capacity and capability to help out locally.”
With all this detection and prevention of fraud, is there a risk that Macpherson and his relationship firms could ultimately do themselves out of a job? Not likely.
“There will be more fraud and there will be more detection of fraud,” believes Macpherson. “Entities are under more pressure because they are doing more transactions in different jurisdictions such as the CIS, the Middle East, China and Russia.
“There are more and more deals where, culturally, things are different to how they are here. What they are doing might not be fraudulent in that environment but if, as I believe will be the case, regimes change as more people want to deal internationally and transparently, what has been accepted won’t be so acceptable.”
Name: Grant Macpherson
Sector: Risk consultancy and fraud prevention
Title: Managing director and corporate counsel
Reporting to: Regional managing director Chris Morgan-Jones
Turnover: $1bn (£550m)
Number of employees: 3,800
Legal capability: 12
Main law firms: Eversheds, Denton Wilde Sapte, Field Fisher Waterhouse, Fox Williams, Lewis Silkin
Grant Macpherson’s CV
1986-89: BA English, Kings College London
1990-91: CPE and Law Soc Finals,
College of Law
1993-95: Trainee, Simmons & Simmons 1995-2001: Associate, Simmons & Simmons
2001-04: In-house counsel, Flag Telecom
2004-05: Deputy general counsel, Flag
2005-06: General counsel, Flag
2006-present: Managing director and corporate counsel, Kroll