Antitrust meets M&A with Freshfields

Chambers Associate: What is corporate law?

Camille Ranadive [corporate associate, New York]: We do a lot of cross-border public and private M&A, private equity transactions, venture capital deals and joint-venture arrangements. Then there's general corporate governance: dealing with boards and board appointees, and advising on board decisions. Our work essentially involves working on documentation to achieve a client's goal: that might be deciding to purchase a company or selling assets or a business division.

Paul Humphreys [corporate senior associate, New York]: Corporate and M&A are overlapping and the terms get used interchangeably. Corporate, I think of as encompassing everything from M&A to capital markets to fund formation to more run-of-the-mill corporate maintenance, like record keeping, updating minutes, and corporate secretarial-type activities. M&A, I think of as buying and selling businesses or investing in businesses, and that can be public or private transactions. Our practice is primarily M&A and capital markets.

CA: What is antitrust law?

Justin Stewart-Teitelbaum [antitrust counsel, Washington, DC]: Antitrust law is a legal analysis of competition. There are two high-level areas of practice: the conduct side – legal assessment or litigation over business conduct which could be deemed anticompetitive – and M&A approval: regulators in the US and around the world assess planned mergers to determine if their consummation might result in competition issues. The two key US enforcers are the Federal Trade Commission (FTC) and Department of Justice (DOJ).

Ilana Kattan [antitrust senior associate, Washington DC]: Put simply, the antitrust laws aim to preserve competition. Antitrust lawyers advise clients on a wide range of issues, including on mergers, agreements with competitors, and monopolization. We advise clients in the M&A context, in regulatory investigations and litigation, and in private litigation. We also provide advice to clients on antitrust compliance.

“You need to really understand the mechanics of the market you're analyzing: the product, players, how it functions.”

CA: What kind of work is involved day to day?

CR: Today I am supervising a due diligence project. The firm's legal services center employs trained attorneys who do a lot of due diligence for us, and then we review it. Additionally I'll be doing due diligence myself and updating diligence reports. Thankfully there's also a lot beyond diligence. I'll be working on documentation to add board members to an incentive program and reviewing stock purchase agreement precedents. A lot my time is devoted to phone calls with other offices and clients.

JST: One thing I enjoy about antitrust law is that it's highly fact-intensive – you need to understand the mechanics of the market you're analyzing: the product, players, how it functions, the regulatory framework. You're really digging into what underpins the market. In addition to the legal and factual analysis, I liaise with clients to pursue transaction clearance and work directly with the regulatory agencies – it's their job to review the merger and our job to explain why the transaction should not be considered to present competition concerns.

PH: I manage deal teams, which usually consist of one or two junior associates, maybe a mid-level associate and a partner, depending on the size of the transaction. At Freshfields 99% of what we do is cross-border, so often teams are not just based in the US. As a senior associate I draft, negotiate and solve outstanding issues. The partner takes a senior leadership role and would deal with any tricky relationship issues or very difficult negotiation points.

“One of the great things about corporate practice is that it's very people focused.”

CA: What is the difference between junior-level work and partner-level work?

CR: We all work together all the time, on an hourly basis, not just daily. We're constantly in each other's offices. One of the great things about corporate practice is that it's very people focused – you don't just bury your head in research and not surface for hours. As a junior, you're expected to really get into the details: if you're doing diligence on a company, you need to understand everything about them and tell the partner everything they need to know about that company. They can then condense that into a client-friendly version.

PH: Juniors do a lot of diligence work – reviewing contracts and other key documents – and draft red-flag reports for the client, which highlight problematic legal and commercial issues and recommend what to do about them. Juniors also manage the global diligence team, which for our global practice usually means teams in some locations where we rely on outside counsel. Junior associates do not only do due diligence. At Freshfields, they will be involved in preparing first drafts of transaction documents. We also involve our junior associates in the firm’s business development efforts, so you may find a junior preparing a presentation for a client. Our partners often involve the juniors who have done the work in the presentation to the client as well.

JST: As you move up in seniority you become more focused on the tactical and strategic implications of issues arising from diligence. For example, junior attorneys often conduct factual research and analysis and become experts on an area of the matter or the market. Then as a team we'll set the strategic course of action.

“Our roles fit together like puzzle pieces.”

CA: How do the antitrust and corporate teams work together?

PH: Almost all transactions we work on in the US involve antitrust filings, as the threshold for making a filing is very low compared to the size of transactions on which we work – so our antitrust people are almost always involved.

JST: The corporate team is very aware that antitrust filings and review are often an important aspect of getting a transaction closed – thus we liaise closely on various aspects during transaction consideration and after signing; often we'll look at the antitrust considerations of a transaction before even discussing  various other parts.

CR: As soon as we're aware of an M&A deal we get the antitrust team involved to understand what competition issues might arise in order to give a realistic deal timeline to the client. The worst thing to do would be to assume there are no competition issues and that it's going to be a quick deal process, only to find out you have to do an HSR [Hart–Scott–Rodino] Act filing – that can delay a deal by months, if not years.

IK: Our roles fit together like puzzle pieces. The corporate team organizes the strategy for large M&A deals and shepherds the process from origination of the deal to closing and beyond. The antitrust team works closely with the corporate team, assessing the antitrust risks of the deal and obtaining antitrust approvals for the deal. 

PH: The antitrust team also provides training for the M&A team on potential antitrust issues that can arise during a transaction.

“We are getting a lot of questions about how certain political events will affect antitrust enforcement.”

CA: What would you say about the future of M&A and antitrust practice?

JST: The proliferation of antitrust law and regulatory agencies around the world means the field will continue to grow. As more jurisdictions come into play and more antitrust laws are introduced, trying to comply with them all can be complex. There may also be an increase in private antitrust litigation, in particular outside of the US.

CR: We at Freshfields see M&A becoming increasingly global and cross-border. US companies are realizing that they have to expand beyond the US to stay competitive and relevant. It'll be interesting to see what the next few years bring with Brexit and the new presidential administration in the US, but we have a positive outlook that M&A will continue to grow. 2016 didn't quite keep up with booming 2015, but it almost did. As clients become more global, they need law firms that have a global presence and we have offices around the world that work together on a daily basis.

IK: We are getting a lot of questions about how certain political events will affect antitrust enforcement. For example, how will Brexit affect competition law in Europe? How will antitrust enforcement change under the Trump administration? Despite this uncertainty – or in some cases, because of this uncertainty –  companies have been proposing a large number of deals over the past couple of years that raise significant and complex antitrust issues. This merger wave likely will continue.

PH: The regulatory landscape changed a lot for our clients after the financial crisis. Now with the Trump administration many of those new regulations may be removed. That theoretically paves the way for more consolidation and merger activity. But while things are in limbo, everyone may remain in a wait-and-see mode. In particular, in-bound M&A from places like China may wane until the Trump administration’s policies are better understood.

The Obama administration was very active in looking at M&A deals from an antitrust perspective – they were willing to fight against deals they believed were anticompetitive and some fell apart. That may change under the Trump administration. There is a lot of talk about renegotiating trade deals – that will affect what foreign investment will look like for cross-border businesses and what type of investments non-US buyers are able to make. Another key trend for businesses in developed economies is the replacement of individual labor with intelligent machines. That will impact productivity but also change the labor force, as workers no longer need to be qualified just to put stuff together but rather to be someone who, for example, develops software. It'll be interesting to see how that drives consolidation, and how it creates opportunities for businesses.

“Summer associates are able to spend two weeks in a foreign office after their time with us in the US.”

CA: What particular opportunities are available to antitrust and corporate juniors at Freshfields?

JST: There's definitely the opportunity for international travel – the work we do has a lot of travel built in. Summer associates are able to spend two weeks in a foreign office after their time with us in the US. Training also happens internationally – once or twice a year there is an antitrust training conference somewhere abroad. I have also been on a secondment to London and that has made me feel very close to the people in our team around the world. I know them, they know me, and we work together very closely.  The commitment to trainings and secondment to other offices shows the firm's commitment to its unified network approach.

CR: It's good to go abroad and be there on the ground, as you just can't get as much done over the phone or by email as you can when you're in the room. Often juniors are the ones to travel to foreign offices for closings etc.

IK: One of the best things about Freshfields is the firm’s focus on training. Several times a year, the junior associates in our antitrust team travel to Brussels from around the world to attend training on particular antitrust topics. These trainings not only allow for associates in the US to have a handle on the approach to antitrust issues outside the US, but also allow associates to get to know their colleagues on a personal level. These relationships continue to be developed as associates become more senior, with trainings scheduled each year for mid-level associates and senior associates.

CA: What's unique about Freshfields' antitrust and M&A teams?

CR: Our corporate team is small – it has about 20 associates and just a handful of partners, so it's very intimate. We all know each other very well and work with everyone closely. But at the same time we have the resources of a large global law firm, so it's the best of both worlds.

JST: Freshfields is considered to have the best antitrust practice in world, but the team doesn't feel overly big or impersonal – either locally or globally. For example, the Washington team is not particularly large compared to many other US antitrust practices – the team is close knit.

PH: We don't think of our international network in the sense that we would say, 'Oh, we have 15 people in Milan, who handle Italian law issues.' I think of Milan as a partner named Luigi Verga, who I've worked with on cross-border deals on multiple occasions. We don’t just outsource non-US issues to a “network” office. We are one global firm, and we work incredibly hard to encourage internal networking and to build actual relationships with colleagues around the globe. 

We want our clients' experience with the firm to be the same in Italy as it is in New York. We achieve this through things like global conferences, which start with 'Career Milestones' training for associates in their first and second year, and sector group conferences as you go along. The end result is that we know the individuals with whom we work, and we actually like working with one another. This is a huge benefit for clients as it improves efficiency and ensures the global team – not just the lead partner and lead associate – is committed to helping the client achieve its goals. 

It is not uncommon for associates from our offices outside the US to visit the New York office on a vacation or personal trip to the US to meet in person someone with whom they have worked. I just don’t think that is so common at other firms, and I believe that is a real testament to the culture of collegiality across borders that we strive to build and maintain.

CA: What's your advice for law students wanting to succeed in these areas?

JST: In terms of seeking positions at law firms, I recommend that you demonstrate your interest in each specific firm. That doesn't just mean knowing how many offices or associates we have, but also understanding the type of work we do. We don't expect you to be an expert on it during the interview process, but make sure you've done your homework – and if you want to know something then make sure you ask a question. Also, in the interview, try to showcase your interests and personality rather than simply reciting talking points.

CR: Take law school classes that are practical: I took seminars on 'the art of the deal' and general M&A which really gave me exposure to what corporate work is and made me familiar with certain terms. M&A seminars given by practitioners are most useful, as they give you a taste of what corporate practice is really like.