An Insider Look at the Mischon de Reya and Taylor Vinters’ Strategic “Combination”
Caroline Hill, Editor-in-Chief for Legal IT Insider talks with Kevin Gold about the Mischon de Reya strategic “combination” agreement with Top 50 UK law firm Taylor Vinters – an agreement that looks to future-proof their respective businesses by being the advisers to disruptive companies that will drive the future economy
MEET OUR GUEST
Kevin Gold specializes in corporate finance, mergers and acquisitions, and joint ventures as well as advising families on international tax, succession, and strategic dispute resolution.
Editor-in-Chief Legal IT Insider
Caroline Hill is a former lawyer in the city. She has been a senior reporter at Legal Week, news editor at Legal Business, and took over as editor of the Orange Rag in 2014/5.
Executive Chairperson at Mishcon de Reya
Kevin Gold is the Executive Chairperson for UK Silver Circle firm, Mishcon de Reya. Much of his work has an international dimension with a large part of his practice being in the Middle East, South Africa, and Asia.
- EP. 008 - Transcript - An Insider Look at the Mischon de Reya and Taylor Vinters’ Strategic “Combination”
Welcome to LEGALTECH MATTERS, a Litera podcast dedicated to creating conversations about trends, technology and innovation for modern law firms and companies big and small.
Hi, I’m Caroline Hill. I’m Editor-in-Chief of Legal IT Insider and I’m here with Kevin Gold who is executive chair and former managing partner of UK top 40 law firm, Mischon de Reya. Hi Kevin.
And we’re doing a podcast, hopefully. Mischon has just announced a strategic combination with Taylor Vinters, a fellow UK firm top 50 firm. You say you’ve entered a strategic combination agreement. I got some degree of mickey-taking for using that term. What exactly does it mean? Have the two firms merged as a lot of publications have reported that they have?
No, and the reason being is that this is a combination, if I can put it that way, of the two firms, but we are equally in a process where we are looking at a potential IPO of the business and should that go ahead, then Mischon de Reya LLP and MDR Taylor Vinters as it’s then will be known will be sister companies owned by the same holding company which will be listed on the stock exchange. So hence the kind of crafted word of strategic combination. Although, there is a coming together of the two business.
That’s interesting. And I’m really pleased then that I didn’t actually say they’ve merged because I noticed that people… I think there was a little bit of confusion and I guess these press releases come out and then people just make assumptions. I actually just used your wording. And someone said that it sounded like Gwyneth Paltrow and Chris Martin [inaudible 00:01:59].
The thing is there’s something of that about it, but it’s because we are in a process and the process only allows us to speak in a particular language because of the market, but there is a coming together of the two businesses.
Okay. I know that because of the listing there’s probably a limit to how much you can say, but is that partly because of the IPO that that is a decision to come together? It’s very unusual. I’ve written about the market for a very long time and I don’t think I’ve actually written about this kind of arrangement where people have come together under an umbrella group. It’s quite unusual, isn’t it?
But it’s unusual because listing itself is an unusual phenomenon. However, when we started speaking with the firm, we were always talking about running this business in two brands, one being a brand focused on the kind of innovation economy and particularly that kind of early stage growth economy around it and one being the kind of law firm that alofts between corporate and real estate as well as of course real estate and disputes and others. But Taylor Vinters have built up their reputation of the last number of years within that particular ecosphere and we didn’t want to mess with that brand proposition going forward and nor do we pretend to understand the kind of ecosphere itself in the same way that they do.
Yeah, interesting. So how long have you been talking to them? When did you first start discussions?
I can’t actually recall, but it’s probably, I’m just guessing, a good year.
A good year. Okay. Interesting. You’ve talked about you’re going to come together, it’s called MDR Taylor Vinters as a kind of legal consultancy. How would that work? You’ve got the two companies which obviously are part of the umbrella, I’ll come back to that, but then you actually have got this sort of entirely new business, haven’t you, that’s going to come about fairly quickly subject to approval.
I don’t think it’s entirely new, to be frank. It’s taking what we’ve both done in the marketplace. We’ve both been playing to a point in the same marketplace in different ways. Us much more coming originally into… If you go to the history of Mischon de Reya, Mischon de Reya when I joined the firm in the mid nineties was probably the leading media firm or one of the leading media firms in the country. And really in those days, the media, and I understand technology is a slightly different thing, but media was driven particularly by the film industry and the film industry in the UK kind of slowly died in the sense of how it worked. And then you had the generation of what was called multimedia, which was the CD ROM and then early stage gaming companies when it was still the dial up and I thought that they would never work because they looked like it was so slow and shit.
So we trended over the next 25 years out of that space but always played within it, within the broad media space. And on the technology side, we moved further up the chain. We act for many big tech companies in disputes, in patents, in big venture deals but we lost our core strength in the early stage companies as they were growing. And we were moving up the food chain, so to speak, in legal fees spend terms.
To just jump all the thing, why go there now? This really started with looking reflectively five years ago, which was setting outside a 10 year vision saying actually going forward in the modern world, we did a deep scan of the market with outside advisors, internally and others and said, what are going to be key drivers of the world and business and life going forward? Sort of things like the genome, the 3d printing, electric cars. These were all new at that time. I would saying no one owns that space in an advisory sense. And so we made a decision to get involved and we got involved in a slightly different way by first looking at our own industry, the business of law and we set up the MDR LAB which became the leading lab. Started to become an investor ourselves in that. But the original driver for that was to get our own people turned on to technology. And parts of it were internal focused, drive efficiencies and all of those kind of things. Part of it was looking at what was happening in the real world and the real world was saying young kids were coming up and disrupting old models. And all that law tech was doing was looking at old systems and making them more efficient rather than shattering the old system saying, “Why are you doing it like that? Let’s go somewhere else.”
And so it became bifurcated between making yourself more efficient while you’re still living the old way, but being involved in trying to disrupt totally your own business model and being crazy in a sense. Why would you disrupt your own business model? I’ll give you a simple example. If you’re disruptive in litigation which is a big part of our business disputes, you have a thing called discovery and discoveries is you give all the papers and all the documents. Not so long ago, you would have a hundred paralegals reading every single document. And they were rubbish. They were tired at 03:00 in the morning and they did this and that and you were charging clients a huge amount of money because you were time arbitraging.
And then you’ve got computers that could come in and do worm searches and all kinds of weird things and you could have this computer working all night and come in with a better result by the morning for something that would take you two months and a hundred paralegals. So there were efficiencies within the law industry and then there were new ways of doing things. So some will happen, some won’t. I don’t know if you’ve bought a house for example, but if you buy a house, it’s a turgid process of exchange and this and that and money passes here and lawyers do this. Well, why not just go and ensure the whole product and transfer it?
We’ve written a lot about MDR LAB and speak regularly with Nick West and followed that side with interest. What you’re saying, I guess, is you want to be part of the innovation space, right? And I know that one of the intentions of bringing this all together is you want to create. So you’ve called it the MDR innovation hub. And is that what you mean? So you’re going to be working. Is the idea that you want to be part of the whole innovation scene as it were?
Yes, absolutely. And the reason for that is very simple. One is that if you look at what would be… You’re not a rocket scientist to predict that the growth of the British economy going forward is going to be grown on tech, on our intellectual capital, on maybe media coming into it, on creative industries, much more than old power stations and aggregates, et cetera. So to future proof our business and to keep our people, we’re a people business, engaged, we have to be in that space. And we’re big enough not to want to own spaces in a sense of making a dynamic thing. And that brings us back to the Taylor Vinters proposition was that you can’t dominate this space in the same way as you could in the old world, farty world which is go by yourself because you need people who are actually respected and part of that ecosystem already and that can understand it.
They don’t want to see a bunch of suits coming in from the city. Maybe one day when they’re big companies, but along the pathway. So it became a fundamental limb that in order to maintain the growth profile of our own business we needed to be players in that space.
Just to recap for people who… I’m sure you’ve been living this. So the work that you do, I’m told, I repeat myself, I’m repeating myself, you’ve got the two companies umbrella because of the IPO. But the actual coming together of the… I think you do say. You want to be a disruptive innovator in legal and consultancy services. So you’re going to have MDR Taylor Vinters and then as part of that you’re going to have the innovation lab. I understand the space that you want to play [crosstalk 00:12:05]
I’m sorry. Don’t separate structure, which is because we’ve got other consultancy businesses as well which are part of the MDR family of companies already. We have a business which is called MDR Brands which is a brand management and extension business. And we’ve got MDR Mayfair which is a private family office business. It’s another limb within the family of companies of the Mischon de Reya group of companies.
Okay. Thank you for that. I understand the saying you want to disrupt. What’s the plan? You will hear lots of law firms. I’ve just been writing about one this morning where they’ve created… I haven’t published it yet. So I’m not saying too much. They created a new arm, but now they’re backtracking on it because they’re having a rethink. What’s the actual practical plan? Are you going to be targeting startups in the way that a lot of the us firms are doing that? What’s the actual [crosstalk 00:13:05]
Taylor Vinter’s part of the business, the MDR Taylor Vinters business already is a significant player in that startup world and we don’t have any intention of walking away from that part of the market. The idea of the bringing together of the two businesses is to continue the relationship through the life cycle and growth of the companies themselves. There is no fundamental business model that can work and nor is a Taylor Vinters business model on only startups because startups have got a high degree of failure. Some will make it, some won’t, whatever. So one wants to be involved at that level of the economy both in terms of the talent that it brings forward and encouragement and bringing together the kind of broad community of money, venture capital, private equity, the technologists themselves, the business, bringing in experience management, mentoring and all those kind of things for those early stage companies. But the idea of bringing it together is to be able to continue the life cycle of the company. So you look at a company through its journey all the way through. Obviously that hope of every startup is to become a unicorn and the hope of us would be to grow with it.
And this is a home for that to do that. It’s really interesting. And this won’t affect the IPO? You’ve obviously said, you’ve got all this family. Your IPO you’ve already obviously announced. Will this merger, non merger affect the timing of the IPO? [crosstalk 00:14:49]
Yeah, this has been planned all the way through the planning of that process. You don’t come to the market and announce a deal which was done the day before. We’ve been working together to bring this deal forward as well as a number of other deals which are not in your space. Two weeks ago or week ago, we are announced the launch of a litigation Funding vehicle which is an outside capital of another 150 million into disputes. There will be a couple of more announcements before there will be an announcement of the IPO, which are things we’ve been working on for years but have been part of the total process. There’s nothing new here that will disrupt that process.
Okay. I think I read one of the mainstream media publications saying that it would actually make Mischon more attractive in terms of the IPO, which I guess is the plan.
As I said to that same journalist who reported that, that’s for you to decide. I’m limited by what I can say in relation to that, but the plan is to make both our businesses better businesses.
Yeah. I suppose just lastly. What is the long term vision? You’ve obviously planned this. It’s very early days. It’s still subject to approval and there’s lots to move forward with, but what does the long term vision look like for the two firms?
I think the long term vision is to be symbiotic in the relationship. We’ve both got different strengths in depth. There’s no doubt that they have their strength in that kind of growth market by itself. We have different strengths, particularly in the dispute side within the innovation economy. We’re one of the leading IP disputes houses in the country. We have deep experience within the broader, big private equity market as well as taking companies to the market themselves.
The idea would be to consolidate…. Well, to bring the groups together, culturally, there’s kind of a human alignment. We need to bring cultural values together because we’re both values led businesses. We intend to invest heavily in the innovation space. Ultimately our aim would be to become a market leading practice in that space which would evolve by the nature of how our group has evolved and not only being lawyers, but being general mentors and consultants within that broad ecosphere to help companies grow.
Okay. All right. I think, Kevin, we’ll leave it there for now. But I find it really interesting and hopefully we can catch up again soon when particularly post we’ll let them post. I don’t know whether you’ll be able to say more or less, but let’s catch up again soon.
I’ll definitely be able to say more or less. Lovely to meet you, Caroline.
Thanks a lot. Bye-bye.
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