Lawyers need more than subject knowledge to succeed in today’s globalised world, says Sidley Austin APAC managing partner Tom Albrecht
Since he graduated from law school 36 years ago, Tom Albrecht has been with the international law firm Sidley Austin. In that time, Albrecht – now managing partner for the Asia-Pacific region and a specialist in cross-border financing – has seen huge changes in his industry.
In only his third year as a practicing lawyer, he began work in the once nascent field of securitisation – the process of transforming an illiquid asset, such as a collection of mortgages, into a security.
From that point on, his career has, both in the US and other countries, blossomed alongside the growing international use of these new financial products.
Albrecht believes that the cross-border financing that securitisation – or “structured finance” – has enabled has made the world financially more efficient. “Now we can, literally, connect savers in the US or Europe with companies that need capital in, say, China or Indonesia,” he explains. “When I started practising that was impossible; you got loans from your local bank.”
While he recognises that securitisation played a part in creating the turmoil that swept through the world’s financial markets in 2007 and 2008, he believes the problem lay in erroneous risk analysis used for specific assets rather than securitisation technology itself.
“Books have been written about the various causes of the global financial crisis, and clearly structuring and diligence flaws in some securitisation transactions were a contributing factor to it. But the seven years since the global financial crisis have demonstrated that the overwhelming majority of structured finance transactions performed extremely well and fully satisfied investor expectations. The technology is sound, but there was some reckless application of that technology.
“Should a tiny minority of reckless drivers cause a shutdown of the automotive industry? The answer is obvious, and securitisation is again on the uptick in Europe and the US, and China has enthusiastically embraced it as well.”
The changes brought about by the global financial crisis and the rise of globalisation have brought with them tighter monitoring of markets and transactions, and Albrecht says that this has been a time of change for clients too.
“I’m sure that clients, in moments of candour, would tell you they hate compliance, but it is a necessary part of business and they do it.
“I also think a lot of clients have responded to this by growing their in-house staff to deal with it. And that’s the more efficient way to do it, since they know their company better and there’s less of a learning curve for them when it comes to applying the rules to their particular facts and circumstances.”
Albrecht moved to Hong Kong from Chicago in 2010, well aware that capital markets, both debt and equity, have been the main engine for Sidley Austin’s growth in this region over the last 20 years.
“It matches what you might expect in a growing and developing economy, as capital in the form of debt and equity is a necessary ingredient for all economic growth. So this has been by far our key practice [in the Asia-Pacific region] and, as far as I can see into the future, it will continue to be.”
He believes lawyers need more than subject knowledge to succeed in today’s globalised world. While the significance of getting results is a constant, he says the importance of teamwork is growing all the time.
“I might be, say, sitting here in Hong Kong having to deal [in] real time with clients who are asking questions about a problem. If that problem touches London and the US, I have to be able to access our colleagues in London and our colleagues in the United States who immediately, and without thinking ‘what’s in it for me’, will help.
“That requires a culture of cooperation, collaboration and communication, which we have at Sidley and we’re very proud of that culture. Without that, I think you’re going to fail as a service provider in this globalised economy.”
Albrecht also points to his firm’s “localisation” hiring policy as a driver of success in different jurisdictions around the world. “Nearly all the US degree-holders we hire are Asian nationals – they’ve lived and grown up here but they’ve gone to school in the US,” he says.
Client demand, of course, also drives Sidley Austin’s recruitment policy. “First, you’ve got to make sure you’ve got the right people – and we hire the best talent we think is out there,” Albrecht says.
“On top of that, I hope to grow every year, but I don’t want to hire people and have them twiddling their thumbs. Having said that, we do have some built-in recruiting numbers and we have trainee programmes, including one here in Hong Kong. It’s a two-year programme, so every year we know we’re going to get a certain number of graduates from that programme, in addition to our other hiring.”
This article appeared in the Classified Post print edition as Talent and teamwork.