Captain Cooke

Michael Pescod’s successor as had of M&A Stephen Cooke is Slaughter & May’s new golden boy. But don’t ask his about management

What a difference two years makes. In February 1999, a recent recruit to The Lawyer sat down to lunch with Stephen Cooke’s predecessor at Slaughter and May. The reporter was fresh from reporting on widget makers in Liverpool and had a terribly gauche habit of referring to law practices as companies.

Naively, she thought that the best way of getting to know the market was to start at the top so she arranged a lunch date with Michael Pescod, Slaughters’ head of corporate finance. The two sat across a Slaughters boardroom table from one another, working their way through a three-course meal and eventually hitting upon a conversation – football.

As she told her colleagues afterwards, it was like meeting your boyfriend’s parents – if your boyfriend is from Darth Vader’s family. No doubt Pescod merely classed the encounter as two wasted hours and thought no more of it.

Dear reader, that reporter was me, and so it was with slight trepidation that I arranged to meet Cooke, the man who now heads the corporate finance department – now renamed the M&A department.

But while Cooke has the air of a Slaughters partner about him – a slightly aloof scariness – this encounter is much more successful. It helps, of course, that the interviewer knows a little more about the legal market nowadays, but also that Cooke is much more instantly likeable than Pescod.

It is difficult, however, to work out what Cooke is now going to be doing as head of the M&A department. I ask him how much of his time he will be devoting to management – and he looks absolutely horrified.

“I don’t want to do management,” he says. “At Slaughter and May we don’t like to have practising lawyers spending a lot of time on management. We believe that partners should be out there doing client work.

“We don’t need management because we’re a partnership – each individual is driven enough to go out and get work. People manage themselves. We’re not telling people what to do because partners know what they’re here to do.”

Cooke himself has not been dragging his feet when it comes to getting work. His biggest client is the drinks giant Diageo and he has acted within the last six months on the merger of its Pillsbury food arm with General Mills in the US. He says that the joint venture purchase with Pernod Ricard, of Seagram’s spirits business, was one of the hardest deals that he has ever worked on.

“To do a joint venture based on information that is less than perfect is incredibly complicated,” he says.

As if Diageo did not keep him busy enough last year, another of Cooke’s clients is British Airways (BA). Last year he worked on the failed merger attempt with KLM, but as a small consolation prize he has just completed on BA’s acquisition of British Regional Airlines.

Another of his clients, entertainment giant Carlton, tried to merge with United Media. Cooke smiles and says that the “curse of Cooke” kicked in again on that one – it failed because of competition concerns. Of course, only lawyers at the top of their careers can afford to associate themselves with jinxing deals, and Cooke’s self-deprecating humour, while charming, is not fooling anyone.

The year 2000 was, he says, a ridiculous year, and while this year is already looking much slower, with the scene in the US looking “pretty much dead”, Cooke does not welcome being able to take it a bit easier.

“In January last year the SmithKline Beecham Glaxo Wellcome merger happened which was worth £80bn, and it was only the second biggest merger that month, coming after the AOL Time Warner one,” he points out.

Cooke is, of course, Slaughters born and bred. Having joined in 1982, when he admits he knew nothing about the firm and was a “complete shambles”, only applying because his tutor told him it was a good firm, he became partner in 1991 after spending a year in the firm’ New York office doing debt finance work.

Cooke’s predecessor, Pescod, played bad cop at his interview. Cooke recalls: “He threw in some nasty questions about a difficult subject of the day, while the personnel officer asked me nice questions about how many brothers I had.”

The two next met when Cooke sat with Pescod during his articles and he eventually qualified into the M&A department.”He was hugely influential,” says Cooke. “Not only is he the greatest lawyer – and you can underline that – of his generation, but he has been a huge influence for his style, wit, and full grasp of the issues of any transaction. He’s just an inspirational person to have around.”

Cooke finds it difficult to pinpoint the differences in style between him and Pescod. When pressed on his negotiating tactics, he says: “You can’t take it too seriously. A large dose of humour thrown into a deal really helps to move things along. If you’re working late at night and people are losing their tempers it is not helpful.”

Presumably he is not too keen on clashing egos either. He argues: “Fifty per cent of the time we are glorified purveyors of common sense. We are not people who sit there with quill pens, musing.”

Cooke has never seriously considered moving on, and does not intend to do anything else in his career apart from work at Slaughters.

“This is the best firm in the City in my view. There’s lots of fun people around,” he says, adding that while Slaughters might have a rather staid image, there are a lot of individuals within the firm who make it “great fun” to work in.

He points out that the firm has never lost a partner to another rival so it must be getting something right. It also has the highest number of listed clients, of any law firm so therefore its philosophy must please the punters as well. Cooke believes that Slaughters has the only true partnership left in the big City firms, and the firm’s international policy of ignoring the trend towards an office and merger partner in every port is partly to preserve that. “We prefer to do deals as advisers, not principals here,” he adds. “Diageo aren’t going to listen to me, saying ‘If you would like to use our office in wherever’. Clients are sophisticated and they know who they want to use.”

As a business adviser Cooke is slightly perplexed at the rush to merge among the firm’s rivals. He says: “When law firms do mergers, they tend to depart from the normal rule that you would apply to clients that you have to find some benefit in the merger, not just increase in size.

“Synergies usually mean reducing head counts. So with the likes of Linklaters and Oppenhoffs, where’s the benefit in that? Law firms just get bigger and what is the point in that?”
Stephen Cooke
Head of M&A
Slaughter & May