Claire Smith talks to the Canary Wharf Group's legal counsel about what he wants from his external legal advisers.
As group legal counsel at the second largest property company in Europe, Michael Ashley-Brown of the Canary Wharf Group demands a lot from his external legal advisers.
His pride at what has already been achieved on the 4.7 million sq ft site in East London is obvious, and he wants his lawyers to feel that same kind of personal involvement.
He says: “We are like no other property company because what you see is what you get. We are the second largest in Europe and yet you can see everything we own just by standing in the middle of the estate.
“You have to understand the estate and keep a working knowledge of every single transaction.”
With only nine lawyers in the department – four specialising in construction, four in property, and a company secretary – Ashley-Brown says they do very little work in-house.
The Canary Wharf Group uses Clifford Chance and Ashurst Morris Crisp as external legal advisers, and has done for the last 10 years – apart from a year when the company went into administration in 1992 and was advised by Allen & Overy.
Ashley-Brown says: “I like to have two firms of solicitors who I know are competent enough to do any of our work. It is not the practice but the individual and his team I am interested in.
“I think Robert MacGregor [at Clifford Chance] has an outstanding property team and some very good young lawyers coming up in that. But if Robert were not available I am not sure someone else would know the way we work.”
At Ashursts, Ashley-Brown picks out property partner Martin Wright as “a pleasure to work with”. But he also has his eye on the other top firms should he ever need a change.
He says: “The most enjoyable deals that I do involve Freshfields on the other side – we did a letting recently when it acted for Credit Suisse First Boston.
“The firm knows exactly what it wants, and it is tough on getting what it wants. It never asks for anything that is not actually perfectly reasonable for it to ask.
“I have sat through deals with some solicitors debating what would happen if the martians landed. If deals are done quickly, then costs are kept down and everybody gets where they want to be.”
Ashley-Brown wants the lawyers he instructs to understand and be entirely committed to the Canary Wharf philosophy.
“If you think that your team is losing enthusiasm for the product it always crosses your mind whether they are the right team. We are reviewing all the time – trying to keep them sharp,” he says.
And when he says he wants real involvement he is not exaggerating. He says: “In February last year we did a letting for 600,000 sq ft, with Freshfields on the other side for Citicorp – it was probably the largest deal in the UK last year. That was done in 10 days, and between the Tuesday and the Saturday of the last week I got six hours sleep.
“Clifford Chance put their absolute creme de la creme team on it, it was staffed with partners on every section. It wouldn't have been achievable if we had allowed our solicitors to slip off the boil.”
Ashley-Brown is adamant that beauty parades are not the way he likes to choose his external legal advisers, and says he keeps a close eye on the market by observing those on the other side of his deals.
In the case of Freshfields, he would love to work with the firm, but it is conflicted out because it acts for so many of his tenants.
He says: “I am not much impressed by the manner in which many public companies buy their legal services. I can only imagine they use beauty parades because they don't have a strong enough in-house legal presence to know what is and what is not good, in terms of what is available in the City.
“They do too many things on the basis of hourly rates. The skill is not in negotiating the lowest hourly rate, it's finding the solicitors who can do the work quickest. If you know what cases they have been on you should have a pretty good idea how they work.”
Just as he keeps his law firms under constant review, so the in-house team is always changing. Ashley-Brown expects a busy few years at the ever-developing site, which will ultimately comprise 13.5 million sq ft of office and retail space.
“We are already nearly 5 million sq ft, and in the next four or five years that's going to double.
“As the estate builds up, there will be a need for lawyers whose experience leads more towards management. That kind of work can only be done by people who understand the product on a daily basis,” he says.
Ashley-Brown may be at one of the biggest property companies in the world, but what he really wants from a lawyer is that personal touch.
Canary Wharf Group
Total employees: 700
Market capitalisation: £2.63bn
FTSE ranking: 10Group legal counsel: Michael Ashley-Brown
Legal team: nine lawyers (four specialising in construction, four in property, and a company secretary)
External legal advisers: Clifford Chance, Ashurst Morris Crisp
The last year at Canary Wharf
February 1999 – Citicorp announces that it is to lease a further 600,000 sq ft of office space on the site, to house its corporate and investment banking businesses Salomon Smith Barney and Citibank. Freshfields acts for Citicorp on the deal, while Clifford Chance advises the Canary Wharf Group.
March 1999 – Allen & Overy and Clifford Chance act on the £2.6bn flotation of the Canary Wharf Group – a deal described by Martin Richards of Clifford Chance as 'unique'.
Allen & Overy acts for the sponsor Morgan Stanley through a team led by David Wooton, while Clifford Chance advises Canary Wharf.
September 1999 – Canary Wharf Group purchases Texaco's headquarters on a sale and leaseback basis for £82.5m. The building of 217,000 sq ft on Canary Wharf's site is financed from existing cash balances. Clifford Chance advises the Canary Wharf Group, while Lovell White Durrant acts for Texaco.
September 1999 – Credit Suisse First Boston agreed to let 70,000 square feet of office space in One Westferry Circus, the area made available by the acquisition of the building from Texaco. Freshfields acts for CSFB, with Ashurst Morris Crisp advising the Canary Wharf Group.
December 1999 – Canary Wharf Group is advised by Clifford Chance on the sale and leaseback of 560,000 sq ft of office space at 33 Canada Square, previously owned by Citibank. Citibank is advised by Freshfields and will continue to occupy the building.