King’s Counsel
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Office anthropology™
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Senior, brainy, court lawyers. The JC is lucky enough to know a few, largely because he shares with them a fondness for cricket. They are excellent men and women, to a one, but they engage in a part of the legal process that the JC is committed to steering as clear of as he can: litigation.
Not just because suing and being sued is hard, gives you a tension headache and is beset with fiddly, procedural bear traps, but because the road is strewn with absurd conventions, unarticulated rules of etiquette and unspoken ways of behaving that you have to get formally; right, hang whether you were right in substance. That’s not just how the JC rolls.
Litigators are from Mars, commercial lawyers from Venus
In legal practice, court lawyering is golf you see, and the JC is a cricket kind of fellow, not just in pastime, but by disposition. Litigation is combative: it has etiquette to mask a fundamental ugliness. Commerce is co-operative. “Being a good sport” is a point of substance and not form.
There is also the small matter that, for any proud contracts lawyer, even talking to a Queen’s Counsel — to any litigator, really — except one you are standing next to in the slips — is a confession of professional failure. We commercial contracts folk cannot notch our belt with conquests; there are no kill emblems pasted on our fuselage. We must take our pleasures another way. We do this by our lack of rancour; we know we have done it when we see our clients going peaceably about their business, promending down the high street in their finery, waving cheerily at us from the wheel of the fancy motorcar our careful stewardship of their affairs has enabled them to acquire.
We are like dogs in the nighttime: you know us because we do not bark. We mark our performance by the lack of cuts, scrapes, bruises and abrasions on our pretty faces. Our measure of success is contracts so clear that no one would dream of arguing.
Sources of expertise
For the most part, financial services professionals know enough of what they are about that their contracts — the “verbiage” — don’t often wind up in court. When they do, it usually follows some cataclysmic failure, where institutions that were conventionally understood to be immortal, impervious to weakness and managed by enlightened auteurs turn out to have been run by morons. These discoveries tend to be cyclical; over-lionised morons may go years or even decades without being exposed. But, suddenly, Lehman, you know. Enron. The commercial world is all at once awash with litigation — much of it conducted by, on behalf of and in front of people with barely the first idea about the complexities of financial services contracts.
Now, readers, exactly the same thing is true of litigators. Just as commercial lawyers hate litigation, litigators hate financial markets transactions. They’re hard, they give you a tension headache, they are beset with fiddly, procedural bear traps, and the road to their comprehension is strewn with absurd conventions, unspoken rules of etiquette and modes behaviour that you have to get formally; right, hang whether you were right in substance. It is much more fun cross-examining Mrs. Pinterman about her alibi, establishing the mens rea and objecting to things. I mean security waterfalls? COME ON.
So every now and then, Queen’s Counsel might see ISDA Master Agreements — like Clapham omnibuses, often quite a few come along at once — every decade or so, whenever a systemically important financial institution reveals itself to have been in the hands of morons. But for them, ISDA Master Agreements are exotic butterflies to be pinned, labeled and enclosed in glass cages. For we in-house legal eagles they are a more quotidian experience. We live with them, animate them, give them life every day of our working careers. We know them, deeply, in a way no Queen’s Counsel ever could, or would want to.
Who should answer curly questions on ISDAs?
Now every now and then, a curly question might arise as to the meaning of an ISDA Master Agreement, or a Template:Gmsa, or a Global Master Repurchase Agreement. It might perplex magic circle partners — people who, let it be said,wrote the damn things, back in the day —but to give those august men and women the benefit of the doubt, they don’t see so many master agreements these days. So if a practical person wanted a sensible answer on a curly question on how an ISDA Master Agreement should work, who would she ask?
Do you see where I am going with this? My friends, I would ask a down-home expert. Ideally, someone who has spent twenty years in the doc unit. To be sure, end users are falling over themselves to rid themselves of these people and replace them with school-leabers in Bucharest, but they are a tenacious bunch. Many are still around.
But this is not what magic circle law firms do. Instead, they ask the one group in the world who charge more than they do, and who are less likely to have a practical clue what the right answer should be: Queen’s Counsel.