Stable but quiet would be a good way to describe this client to external law firms. Canada Life UK is one of a group of international subsidiaries, which also includes operations in Ireland and Brazil, of the Toronto and New York-listed life assurer Canada Life. While its parent company Canada Life is not duty bound to release figures for each individual subsidiary, it is well documented that the UK arm is making money.
By the end of 2000, the UK division had clocked up £55.7m of the company’s £139.2m profits, and UK sales have tripled in the past year. But this mainly corporate client has not thrown out any high-value acquisitions for lawyers to feed on for nearly five years.
As the company is so profitable, general counsel Bruno Geiringer has deep pockets. “We like good-quality lawyers and are not averse to paying for them,” he says.
But at the moment, Geiringer’s pockets may as well be stuffed with Disney Dollars, because for the past two years, the traditionally acquisitive company has been resting on its haunches.
In 1995, Canada Life acquired insurer Manulife for around £110m. The company’s principal adviser Linklaters worked on the deal. Then, in 1997, the company bought Albany Life for approximately £180m, again with Linklaters picking up the fees.
For the past two years Canada Life has generated one or two deals worth around £2m each year. Geiringer says that these are mainly “books for business”, which are insurers’ portfolios of customers for a particular financial product or policy, and have been dealt with in-house. Geiringer’s annual legal spend is around £600,000, he says, but this figure accounts for expenses generated by his four-strong legal team, as well as external billing.
When asked why the company has not come up with any major acquisitions since 1997, Geiringer says: “We have been doing a lot of circling, but nothing has happened
In April 2001, Canada Life was reported to be a frontrunner in the race to acquire pensions specialist National Mutual. And the company has been close to taking over a number of companies in the past two years, which is why it remains a client to watch.
The last major piece of legal work Geiringer ordered out was on Canada Life’s transfer of the non-US parts of its business into an international holding company last summer. This was worth about £5m in terms of savings and new money raised. Slaughter and May won out on that deal.
Geiringer downplays his role in the deal, mentioning only the administrative aspects of his task and giving most of the credit to Slaughters. “Apart from some share restructuring, I had to time international board meetings to the right time zones and make sure they took place in the right order,” he says. “The rest is too complicated to go into. We instructed Slaughters on that.”
Historically, Linklaters has been Canada Life’s main adviser in the UK. Slaughters came on board in 1999 to handle the company’s demutualisation.
Canada Life converted from a mutual to a public company in November 1999, landing policyholders with a shares windfall. The company was listed on the Toronto Stock Exchange. The 53,200 UK policyholders that kept their shares gained a typical windfall of £2,000 at flotation.
Since then, Geiringer says he has given the two firms an equal share of the work, although he admits there has not been much for them. “It differs year by year and from project to project as to which firm receives most of the work,” Geiringer says.
Although deal activity is slow at the moment, Geiringer asserts that Canada Life UK is an attractive client for a law firm to have on its books. “We offer corporate work in a sector that is consolidating rapidly. We’re an acquisitive business that offers interesting deals and acquisitive work. We have a double-‘A’-starred parent company. These are good things for advisers to see,” he says.
Geiringer says that Canada Life does not need to run a legal panel in the same way as the major personal injury insurers, such as CGNU and the AA. “We’re not a financial insurer and we have the Financial Ombudsman service for all claimants so we don’t do much litigation. Also, we don’t have complicated claims procedures in life insurance. If someone is dead you can’t really argue with them,” he says.
As he is not required to run a panel, or perform panel reviews, Geiringer remains fairly confident that he will stick to Slaughters and Linklaters. But if the individuals he uses – Glen James at Slaughters and Alan Barker at Linklaters – were to move firms, he anticipates that he would move with them.
“We like our firms but we do keep an eye on the market and look at prices at other firms, particularly given the amount of partners and their teams moving around at the moment,” he says. “I’ve moved firms with an individual before and would move again.”
Geiringer also hints that he is not averse to moving around himself, and his own career history is certainly diverse. After training with Stoneham Langton & Passmore he left in 1982 and held various jobs in industry before working as a trader and then going into financial services. From financial services he joined Albany, the company that Canada Life took over in 1997, as an in-house lawyer and this was a logical way back into the law for Geiringer.
He now hints that he has half an eye on private practice, especially as the larger law firms become more involved with the Financial Services Authority (FSA).
“I can see myself going back into private practice,” he says. “I’m the compliance officer for the company and we’ve had a heavy year preparing for N2 [the date when FSA regulation came into full force]. There are a lot of big firms which have built up compliance units to look at the new FSA regulations.
“I would consider moving to one of my external advisers,” he adds. “There’s a much higher quality of people in-house now and this is being acknowledged by the big law firms.”
Canada Life UK
|Organisation||Canada Life UK|
|Legal capability||Four in the UK|
|Global counsel||Bruno Geiringer|
|Reporting to||Chief executive Ian Gilmour|
|Main location for lawyers||Potters Bar, North London|
|Main Law Firms||Linklaters and Slughter and May|