News

Covid-19 Corporate Update March 2020

In this article, we consider the geopolitical climate and the impact of COVID-19 on M&A transactions.

In times of uncertainty, all service providers, across industries, want to help their clients by offering advice and guidance. Law firms will often focus on the nuances in transaction documents and the associated areas of concern for interested parties. Unlike traditional law firms that are limited to analysing blackletter law and reporting on the same, our team at Avonhurst is determined to assist our clients through the current challenges posed by the Covid-19 in the same holistic manner in which we represent our clients through transactions at any other time: by providing our clients with a full suite of political strategy, legal advisory and capital services. Through our Political Strategy Services team, we offer our sophisticated capital clients clarity in an uncertain geopolitical and macroeconomic climate; our Legal Advisory team helps to analyse legal risk and provides certainty in executing associated transactions; and our Capital Services team will help introduce liquidity where opportunities require additional sources of capital. 

Avonhurst exists to help address the changing needs of sophisticated capital; we were designed by clients for clients and we are here to help you!

Covid-19 is rightly dominating the agenda for governments, communities and businesses globally. Currently, many private equity funds are primarily focusing on managing portfolio company operations and shoring up their finances for what could be a prolonged period of disrupted trading. 

 Market dislocation, while presenting risk, also creates opportunity for prospective buyers who can access finance. The right time to unlock these opportunities remains the key question. We set out four key areas for prospective buyers to consider alongside this.

Financing 

A sustained slowdown in business activity will see lower leverage in M&A transactions with more creative debt and equity solutions required to execute them, including through co-investment.

·       Lenders may be more willing to fund transactions in Covid-19 resilient sectors, such as food chain supply, healthcare solutions and some tech deals. 

·       Buyers may need to be prepared to increase their committed equity for transactions generally, with the potential to refinance (and increase leverage) when the market improves. 

·       Target businesses may require additional financial support that may need to be factored into any financing. Delays in supplies or customer payments will adversely impact a target business’ revenue in the near term.

Due diligence

 The impact of Covid-19 on a business’ operations will require an increased focus on certain areas in a buyer’s due diligence. 

·       A target’s business continuity plans should be stress tested- are these adequate over the longer term, or do they envisage no more than 1-2 months of disruption? Is the business overly reliant on key individuals, without whom, the business would not function effectively?

·       Insurance policies will typically not cover risks to the target which are known or "reasonably foreseeable" at the time when the insurance was taken out. Business interruption policies and travel insurance are prime examples. 

·       Due diligence will need refreshing to avoid “static analysis”. The epicentre of the Covid-19 outbreak is likely to move and it could return to previously contained centres. Operations in jurisdictions which are currently less affected by it, such as Africa and South America, may present a greater investment risk in the near term.

Pricing

Continued market turbulence will result in lowered valuations (discounted prices) for assets. 

·       Buyers will be better placed to insist on the use of completion accounts, which allow for a post-completion price adjustment, as opposed to a fixed equity price achieved through the locked box mechanism (requiring the buyer to take financial risk on the target business from an historical locked box date).

·       Buyers will also seek earn out arrangements (to meet differences in valuation and interrupted trading) and deferred payments (to better manage their own cash flow). 

Regulatory impact

The Covid-19 crisis will see governments adopt more protectionist tendencies in their responses and increased public sensitivity to “foreign” takeovers. However, government response will need to be balanced against the urgent need to secure employment and growth opportunities.

·       Conditions precedent, whether antitrust/regulatory or commercial, are likely to take longer to satisfy given disruption to the workforce of governmental/regulatory authorities and commercial counterparties.

·       Protracted transaction timetables will see more buyer focus on the range of contractual protections to preserve the value of the target business in the period to completion (operating covenants and the inclusion of material adverse change (MAC) clauses and repeated commercial warranties at completion).

·       It may not be possible for a target business to consistently carry on “in the ordinary course” up to completion. A more collaborative approach will be required with sellers, including through enhanced information rights and input on the target’s response strategy to manage any sustained/future outbreaks (where applicable, subject to gun jumping requirements). 

Avonhurst is a political and legal advisory firm that serves the need of sophisticated capital with services ranging from research, consultancy and structuring to deal execution. 

MONDAY 23RD MARCH 2020
Author: EMMANUEL AMOS

Coronavirus changes everything in 2020 election

Tina Fordham, head of global political strategy at Avonhurst, discusses how Congress is responding to the coronavirus crisis.

CNBC Tina Fordham

Watch the video here.

MONDAY 23RD MARCH 2020
Author: EXTERNAL

Advisory firm Avonhurst: corona virus triggers global political, economic & market re-calibration

LONDON – Avonhurst’s Head of Global Political Strategy, Tina Fordham, has said the corona virus pandemic will create unprecedented challenges for global leaders and financial markets – but also that it won’t be ‘the 1918 influenza combined with the 1929 crash’.

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Avonhurst partner Ian Frost advised fintech company Salary Finance Limited on the acquisition of its competitor, Neyber Limited, out of pre-pack administration, creating a company that has access to over 3 million employees. Salary Finance specialises in providing loans to employees of employers with whom they have entered partnerships, where repayment is made through salary deductions. Offering lower interest rates loans to those who may not have access to traditional financing, it is backed by venture specialists and Legal & General.

Avonhurst worked with CMS for Salary Finance, with Osborne Clarke representing the Company/ Administrators and Latham & Watkins, Fieldfisher and Fladgate LLP representing certain of the other financing parties.

In the same period, Avonhurst partner Nigel Heilpern represented Guardian Managers Luxembourg / Avenue Developers in its first Italian operation, the purchase of 11,000 square meters of student accommodation space at Via Trentacoste Milan. The real estate was sold by BNP Paribas to the Guardian Managed Funds SICAV-SIF and funded by senior debt provided by Banco Populare di Milano. Avonhurst coordinated the matter for the fund and the required fund subscriptions, as well as advising on the underlying deal. The firm worked with deal counsel Leganz in Italy and Cohen & Gresser in London on the transaction, which marks a significant expansion into a new market for Guardian.

Jonathan Bloom, Chief Executive of Avonhurst, said: “These two matters illustrate our strength in two very different areas – pre-pack sales and real estate – but together show that in less than a year since our launch we are already trusted by major clients both in the UK and internationally to handle their key strategic deals.”

Asesh Sarkar, CEO of Salary Finance, said: “We were pleased to instruct Avonhurst on this strategically important transaction. Salary Finance is a breakthrough platform focused on improving the financial health of employees in the UK and US. Just as we are committed to providing the very best service to our clients, we expect that same level of innovation and excellence from our own advisors. Avonhurst gives us access to the skills, insight and expertise we need to support our ambitious programme of growth.”

Bloom continued: “Avonhurst was created to provide a seamless, holistic service to sophisticated capital clients across legal, legislative and political advisory, and capital services. We have grown substantially since our launch with hires at both the senior and junior level to ensure we can cater to the requirements of our clients across multiple disciplines and jurisdictions. We are delighted to be able to share this evidence of our success.”

THURSDAY 19TH MARCH 2020
Author: EXTERNAL
Press Release

Advisory firm Avonhurst closes two major deals Italy and UK

LONDON – Avonhurst today announced that it successfully closed two major transactions in Italy and the UK, for Guardian Managers Luxembourg and Salary Finance Limited, respectively.

IAN FROST

Avonhurst partner Ian Frost advised fintech company Salary Finance Limited on the acquisition of its competitor, Neyber Limited, out of pre-pack administration, creating a company that has access to over 3 million employees. Salary Finance specialises in providing loans to employees of employers with whom they have entered partnerships, where repayment is made through salary deductions. Offering lower interest rates loans to those who may not have access to traditional financing, it is backed by venture specialists and Legal & General.

Avonhurst worked with CMS for Salary Finance, with Osborne Clarke representing the Company/ Administrators and Latham & Watkins, Fieldfisher and Fladgate LLP representing certain of the other financing parties.

In the same period, Avonhurst partner Nigel Heilpern represented Guardian Managers Luxembourg / Avenue Developers in its first Italian operation, the purchase of 11,000 square meters of student accommodation space at Via Trentacoste Milan. The real estate was sold by BNP Paribas to the Guardian Managed Funds SICAV-SIF and funded by senior debt provided by Banco Populare di Milano. Avonhurst coordinated the matter for the fund and the required fund subscriptions, as well as advising on the underlying deal. The firm worked with deal counsel Leganz in Italy and Cohen & Gresser in London on the transaction, which marks a significant expansion into a new market for Guardian.

Jonathan Bloom, Chief Executive of Avonhurst, said: “These two matters illustrate our strength in two very different areas – pre-pack sales and real estate – but together show that in less than a year since our launch we are already trusted by major clients both in the UK and internationally to handle their key strategic deals.”

Asesh Sarkar, CEO of Salary Finance, said: “We were pleased to instruct Avonhurst on this strategically important transaction. Salary Finance is a breakthrough platform focused on improving the financial health of employees in the UK and US. Just as we are committed to providing the very best service to our clients, we expect that same level of innovation and excellence from our own advisors. Avonhurst gives us access to the skills, insight and expertise we need to support our ambitious programme of growth.”

Bloom continued: “Avonhurst was created to provide a seamless, holistic service to sophisticated capital clients across legal, legislative and political advisory, and capital services. We have grown substantially since our launch with hires at both the senior and junior level to ensure we can cater to the requirements of our clients across multiple disciplines and jurisdictions. We are delighted to be able to share this evidence of our success.”

TUESDAY 17TH MARCH 2020
Author: EXTERNAL
Press Release

Avonhurst Advisory's Tina Fordham on the Effects of the Coronavirus

Tina Fordham, partner and head of global political strategy at Avonhurst discusses the effect of the coronavirus outbreak with 'Bloomberg Markets' Scarlet Fu and Romaine Bostick.

Avonhurst Advisory's Tina Fordham on the Effects of Coronavirus

Watch the video here.

MONDAY 16TH MARCH 2020
Author: EXTERNAL

Advisory Firm Avonhurst Boosts Practice with Associate Hires

LONDON – Avonhurst today announced four new associate hires, cementing the rapid growth that has characterised its first year.

Senior associate Joshua Swerner joins the firm from Linklaters, where he spent time in the London and Moscow offices; Tanya Macrae joins from Allen & Overy (Brussels and London) and has worked at both Latham & Watkins and Herbert Smith Freehills; Oliver Elsaesser joins as an associate from Paul Hastings and Katja Loncaric joins from the London office of Norton Rose Fulbright, having previously worked in Clifford Chance’s Frankfurt office.

Avonhurst is a political risk and legal advisory firm dedicated to representing sophisticated capital. Since its launch in July 2019 by founding partner Jonathan Bloom, the firm has attracted a raft of established talent, including seven partner hires – mostly from magic circle firms – as well as hiring four leading figures from the political, financial and legal sectors as senior advisors, including Lord (Gavin) Barwell, tech entrepreneur Sean West, General, the Lord (Nick) Houghton, Blackstone’s Andrew Dowler and Tina Fordham (Partner and Head of Global Political Strategy), formerly of Citigroup.

These have been complemented by the additions of high yield specialist Albert Aharonian (previously at Milbank, Paul Hastings and Sidley Austin), and political expert Jessica Turner who is a US lawyer having joined out of law school and has extensive experience including working on Capitol Hill, Washington DC and at the House of Commons in London.

Jonathan Bloom, Chief Executive of Avonhurst, comments: “We are delighted to welcome Joshua, Tanya, Oliver and Katja to the firm. While we are justifiably proud of our ability to attract established partner talent, we recognise that our long-term sustainability as a leading advisor to sophisticated capital clients requires excellence at every level. We are committed to attracting, nurturing and growing the very best associates.

"Our new hires bring valuable UK and international experience in corporate, antitrust, leveraged, export credit, trade and asset-backed finance, financial services and capital markets, honed at some of the biggest and best law firms in the world. They will work alongside our market-leading partners and advisors to ensure our clients get top-level service across legal, legislative and political advisory, and capital services.”

THURSDAY 12TH MARCH 2020
Author: EXTERNAL
Press Release

Advisory Firm Avonhurst "Coronavirus worse for markets than 2008"

LONDON – Avonhurst’s Head of Global Political Strategy, Tina Fordham said the coronavirus will test the competence of global leaders.

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She was Citi bank’s Chief Global Political Analyst and has over 20 years’ experience advising institutional investors, corporate boards and international organisations about global political developments and their implications for markets and the investment environment.

Fordham said: “Beyond the human cost, the coronavirus is the most significant Black Swan for politics, markets and the economy since the Global Financial Crisis. The competence of leaders is about to be tested, with much higher stakes — public health and safety — than during the debt crisis.

“A recession isn’t a natural disaster, though some leaders will try to spin it as such. One source of comfort to investors may be that the risk to public health probably means a recession triggered by a pandemic would see more political support for fiscal stimulus than the 2008 crisis, for example, though it also poses a demand shock that could hurt the economy if policy makers are seen to overreact.

“Political incumbents of every stripe face heightened scrutiny and government reaction function will be tested, with under-investment in public health infrastructure and crisis prevention capacity exposed. The anti-expertise and anti-globalist bias of populists is unlikely to provide answers to a concerned public in crisis mode. International coordination, out of fashion since the G8 finance ministers came together, will be needed to stem the crisis, bearing in mind that the current presidency of the G-20 is Saudi Arabia.

“Meanwhile, geopolitical tensions will inflame, as some actors take advantage of the crisis to gain advantage. The spat between Russia and Saudi Arabia at last weekend’s OPEC meeting reflects how geopolitical tensions can spill over, causing an economic shock. Likewise North Korea’s missile test over the weekend.

“Closer to home, countries like the US with its historic tendency toward suspicion of government and libertarian tradition will likely see push back against measures such as self-isolation and curtailing economic activity.

“Even if contained soon, in terms of political risks and the medium-term outlook, the coronavirus will materially change the outlook for 2020, and possibly beyond given the potential for relapse risk.”

Tina has been named in the Top 100 Geopolitical Experts (alongside Condoleezza Rice) and the FN’s Top 100 Most Influential Women in European Finance. Tina was also appointed to the UN’s High- Level Panel on Women’s Economic Empowerment and a #1 ESG ranking from Institutional Investor.

MONDAY 9TH MARCH 2020
Author: EXTERNAL
Press Release

Advisory firm Avonhurst announces four senior appointments

Former Chief of Staff to the UK Prime Minister and crossbench Peer among strategic political hires

Lord Houghton

LONDON – Avonhurst today announced that that it is enhancing its Political Strategy Services offering with the hire of four new Senior Advisors: Lord (Gavin) Barwell; Sean West; General, the Lord (Nick) Houghton; and Andrew Dowler. They will be joining Head of Global Political Strategy, Tina Fordham, who joined the firm in January 2020 from Citigroup, where she was managing director and chief political analyst. Launched in 2019, Avonhurst is a political risk and legal advisory firm dedicated to representing sophisticated capital.

Lord Barwell served as Chief of Staff to the Prime Minister from June 2017 to July 2019. Before that, he was the Member of Parliament for Croydon Central, and Minister of State for Housing and Planning and Minister for London at the Department for Communities and Local Government.

West is co-founder of ‘knowledge economy’ technology company ProfeTech and was previously at prominent global affairs research, advisory and consulting firm Eurasia Group, where he was the founding CEO of the firm’s innovation business and drove global expansion as Deputy CEO of the firm.

Lord Houghton was formerly the UK’s Chief of Defence Staff and is now a crossbench Peer in the House of Lords, a strategic advisor to multi-national corporates and Constable of The Tower of London.

Dowler previously worked for Blackstone, the largest alternative assets investment firm in the world as a Managing Director responsible for the public positioning of the firm and its investment platforms across Europe, including government relations.

Jonathan Bloom, Chief Executive of Avonhurst, comments: “In a rapidly changing and increasingly uncertain political landscape, our sophisticated capital client base is seeking guidance in this area now more than ever. The arrival of four such senior hires complements our already strong Political Strategy Services offering, bringing unparalleled expertise and insight.

“They will work alongside Head of Global Political Strategy, Tina Fordham and a team of associates across our political and legal functions. This seamless approach reflects our commitment to meeting the needs of our clients across legal, legislative and political advisory, and capital services.”

https://www.avonhurst.com/

FRIDAY 31ST JANUARY 2020
Author: EXTERNAL
Blog

Columbia SIPA

“Rather than trying to blend in, I would say exploit that, because that’s what you’ll be remembered by.”

Tina Fordham (MIA ’99), the managing director and chief global political analyst at Citi, worked to develop an analytical framework to help evaluate how political, social, and economic developments at the regional and global levels were likely to affect world markets.

FRIDAY 29TH NOVEMBER 2019
Author: TINA FORDHAM

Women in Business Q&A: Tina Fordham, Managing Director and Chief Global Political Analyst, Citi

Tina Fordham is Managing Director and Chief Global Political Analyst at Citi. With Citi since 2003, Tina advises institutional investors and corporations, typically at the C-suite level, about the implications of macro global political developments.

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How has your life experience made you the leader you are today?

To talk about a career path in my case is laughable. I’ve gone from the Silicon Valley to Prague, Moscow, New York, Baku and London; less of a path than an Odyssey. The role I have carved out as the first and only Chief Political Analyst working for a major Wall Street institution is a collision between a hard-working Portuguese immigrant upbringing, the collapse of communism, the globalization of financial markets, and what the British call sheer bloody-mindedness. I’m living proof that you don’t have to have an MBA or be born with a silver spoon in your mouth to make it to senior levels in Banking. Of course with a background like that, it helps to be self-motivated and never take no for an answer.

Perhaps unsurprisingly, my route into banking was pretty unconventional; after graduating from university in San Francisco, I spent much of the 1990’s in Eastern Europe teaching and conducting field research. My first-ever business trip was to the Komi Republic, in the Russian Arctic in 1996 for the charity Action for Russia’s Children. It was a technical assistance project for a US company that wanted to support an orphanage for disabled children in a Soviet-era industrial town they were helping redevelop. Contrary to what I’d expected, it was not depressing but hugely inspiring. Other projects included field work on democratic transitions in Russia and Azerbaijan, and with factory workers in Hungary and Poland.

Working closely with both early foreign investors into Central and Eastern Europe and local people who were dislocated by the post-Communist transitions was life-changing. It taught me a lot about understanding the impact of political, economic and social change from the bottom up and what investors need to understand about fast-changing environments. These insights inform my research to this day; there is no substitute for first-hand experience. Working in challenging and complex environments also makes you resourceful. You learn that if what you need doesn’t exist, invent it. I thought Citi needed a Chief Political Analyst, and eventually, they agreed.

How has your previous employment experience aided your tenure at Citi?

After returning from Eastern Europe and completing a Master’s degree at the School for International and Public Affairs at Columbia (one of the best decisions I ever made), I joined what was then a small start-up political risk consultancy in New York called Eurasia Group. What initially started out as a research project looking at post-Soviet political transitions ended up as the first political and economic risk index on Wall Street, a joint venture with Lehman Brothers launched in 2001 during the emerging markets boom. I was the head of the joint venture, and as part of that business, developed the first political analysis research products specifically tailored to financial market investors. Bringing political science- based analysis to investors as we did then and I still do now has been likened to the first physicists who came to Wall Street. We were pioneers.

What have the highlights and challenges been during your tenure at Citi?

Establishing Political Analysis as a mainstream research offering for investors has been both the challenge and the highlight of my 13 years at Citi. Citi is the only major financial institution that offers political analysis as a dedicated product area, alongside traditional asset classes like economics, commodities and equity research. It simply didn’t exist before. My approach is data-driven, but incorporates qualitative methods too, supported by political science theory and historical comparisons. The demand for what I call political analysis strategic advisory services from both investors and numerous FTSE 100 companies at the board level has been snowballing, and marks a new iteration in my approach. I am deeply committed to the notion that investors and companies can make political analysis a more systematic part of their approach to thinking about opportunities and risks, and constantly thinking of new ways to approach this, such as incorporating qualitative indicators and survey- and scenario-based approaches.

Recent career highlights include spearheading Citi’s first research reports on global public opinion, which I coined as “Vox Populi Risk” in a ground-breaking empirical study ‘What the New Vox Populi Risk Means for Politics, the Economy and Markets‘ and gender economics Women in the Economy: Global Growth Generators‘ in May. We now plan to incorporate gender research as an ongoing topic, and our conceptualization of shifting and more volatile public opinion as outlined in Vox Populi continues to resonate.

On both counts, I’m immensely proud to have had the opportunity to help produce innovative analysis that is helping take banking research into new territory, and am gratified that these efforts have been supported internally and well-received by clients.

What advice can you offer to women who are seeking a career in banking?

I would offer the same advice to a woman in banking as I would to someone looking to succeed in any occupation: identify opportunities to contribute, don’t wait to be asked. Then make sure the quality of your work is outstanding; excellence beats expedience. One point that I feel strongly about is this: when you are an outlier, for whatever reason, you have two choices. Either you twist yourself into a pretzel to try to fit in, or embrace being different and turn it into a source of strength. Embracing being an outlier is clearly the more compelling option: it is also the most rewarding. And people are more likely to remember you.

MONDAY 18TH NOVEMBER 2019
Author: TINA FORDHAM
Blog

Shifting Political Risks for a Global Soft Landing

The four global recessions since 1961 have been triggered either by adverse supply shocks (both triggered by geopolitical upheaval prompting an oil price spike), or by financial implosions.

Tina in street

Although there are risks of a significant oil price hike, or a sustained and/or intensified trade war that would lead to global financial implosion, we do not regard either of these risks as either imminent or systemic, and indeed none are part of our central economic scenario over the next four years.

Political risk is not dead, but it has evolved considerably. Geopolitical risks appear less likely to become systemic — thanks to changing commodity supply dynamics — in contrast to previous decades. Political and policy uncertainty affecting trade, sanctions, regulation, diplomatic norms, and the strength and independence of institutions is generating increased political turbulence, with modest and episodic effects on financial markets and the business environment, but limited impact on the global economy.

Should any kind of global slowdown materialize, the lack of conventional monetary policy space in most advanced economies will be a material obstacle to the implementation of appropriate countercyclical policy. Countercyclical fiscal policy space is widely available, especially if the additional debt issuance can be monetized.

The obstacles to appropriate counter-cyclical policy when the next global recession threatens are likely to stem from weak political capacity and will, owing to political fragmentation, rather than from a lack of combined monetary and fiscal countercyclical policy space. The impact of political risks is more likely to manifest itself in a slower, weaker government reaction function, rather than as a catalyst of a downturn or major financial market event.

The growth rate of the world economy has since 2010 fluctuated between 3.2% and 2.5%, reaching a local peak at 3.2% in 2018 following a rather weak (2.5%) 2016. Global potential output growth is likely around 3%. Citi forecasts growth in 2019 to be 2.9% followed by 3.0% in 2020 followed by three more years of similar growth. According to this forecast, growth will slow down a little from its current just above potential level and will, for the five- year horizon of the forecast, settle down at the growth rate of potential output. Just how plausible is this smooth convergence towards potential output growth? Figure 1 shows the history of global real GDP growth.

MONDAY 18TH NOVEMBER 2019
Author: TINA FORDHAM

Boutique firm for funders combines legal and political advice

A boutique law firm catering only for “sophisticated” capital funders is offering what is believed to be the first combined legal, commercial and political advisory service.

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Jonathan Bloom, chairman and chief executive of Avonhurst, said that for his clients, political risks were now “as relevant” as legal and business risks.

Mr Bloom, a former partner at US firm Jones Day, said he launched the firm this summer to meet the demands of clients wanting to escape from the constraints of ‘Big Law’.

Instead of being a law firm that provided some political work, Mr Bloom said he wanted his firm to analyse legal and political risks simultaneously, to help clients “horizon scan” and understand the jurisdictions they invested in.

Last week, Avonhurst announced the recruitment of Tina Fordham, the former chief political analyst at Citigroup, to be its head of global political strategy.

The firm is structured so that Avonhurst Advisory Services, which handles the political work, is a separate LLP sitting alongside Avonhurst Legal Services, an alternative business structure.

Mr Bloom said: “We purposefully went with the ABS license so we could bring in third-party funding to support our business.” The name of the funder has not been released.

Alongside them, and beneath the holding company, is Avonhurst Capital Services, which helps introduce funders to businesses and vice versa.

Mr Bloom said the firm’s clients ranged from asset managers and private equity funds to credit funds, real estate funds and family offices.

He said that although he “grew up in Big Law”, one of the challenges he faced was that it was “beholden to the billable hour”, which made it difficult to be as “creative” on fees as clients wanted.

Instead of billable hours, Avonhurst charges fixed fees, retainers and contingency fees.

The services it provides are centred on banking and finance, restructuring, corporate real estate, regulatory and tax. Other services such as litigation, intellectual property and employment are outsourced to other law firms.

Where additional work is needed in core areas, Mr Bloom said firms outside London could be called on, such as a firm in Edinburgh which recently carried out a due diligence exercise which could then be analysed by Avonhurst’s partners.

Operational services such as billing, HR and compliance are provided by the consultancy Kindleworth, which specialises in working with new law firms.

Mr Bloom said he aimed to build up team of around 15-17 partners from the current nine by early next year.

He said his strategy was to keep the ratio of partners to associates to no more than 2:1. The aim was to incorporate “effective and thoughtful” technology, including artificial intelligence (AI), before recruiting many more associates. The firm has only three at the moment.

Mr Bloom said that “at a very junior level” AI and outsourcing could handle the workload, so the plan was to hire mid-level and senior associates.

AI would be used mainly for review of corporate documents where it would not “replace human capability” but help people become more effective.

Mr Bloom said he did not believe that Big Law was finished; it would continue to service a “particular client base”, for example those engaged in global litigation.

However, he predicted that an increasing number of boutique firms would emerge, as had already happened in litigation, arbitration, sports law and private equity.

“Law is still very relationship-driven. This firm is based on a number of long-term clients committed to the creation of the new model that we are trying to build for them. We can look after their interests in a more thoughtful way.”

The firm’s website says Avonhurst is a portmanteau name, taking inspiration from the root terms for river and sandbank.

“These subjects together create a marriage of opposing elemental forces. One dynamic, one static. A beginning and an end. The fleeting and the permanent. At the heart of this idea is flow. The concept of flow is embedded in the world of finance.”

FRIDAY 8TH NOVEMBER 2019
Author: NICK HILBORNE
Press Release
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