After working for more than 13 years as a corporate partner at Gilbert + Tobin, Rachel Launders joined Nine Entertainment Network as general counsel and company secretary. In this interview, the Practical Law Australia Advisory Board member discusses the attraction and challenge of in-house practice at one of Australia’s largest and most innovative corporations.
Was becoming general counsel of an ASX listed company always your plan?
I’ve never had any success at making and sticking to a career plan, so my career path shouldn’t be seen as any kind of a model for aspiring general counsel. Perhaps it serves as an indication that a varied (or accidental) career path can be a very useful thing.
My original plan was to be a litigator in the large law firm where I’d worked as a paralegal while I was studying. After graduating, I worked as a researcher in the Supreme Court of NSW for 18 months, during which I spent most of 1992 in court assisting Justice Rogers during AWA Ltd v Daniels (t/a Deloitte Haskins & Sells) (1992) 7 ACSR 759. It was a fascinating way to see my corporate law studies come to life.
I was then seeking some corporate law experience which, after a couple of intervening stops, led me to a legal role at the (ASIC). At ASIC I had the opportunity to work on a number of significant corporate transactions, which were being implemented under the Corporations Act. One that was a particular highlight was a very complex capital raising to build the Olympic Stadium for the 2000 Olympic Games – I think that transaction held a record for the number of modifications of the Corporations Act required to get the deal off the ground. It made me think that having a more active role in making deals happen, rather than just reviewing and regulating them, would be an interesting next step.
I joined Gilbert + Tobin in 1998, planning to stay for two years, get some good broad transactional experience, and then find an in-house role. Which is what I did, only 14 years later than planned.
What is it about corporate transactions that appeals to you?
It’s difficult to define “corporate transactions” – such a broad array of work can fall under that banner, from highly regulated takeovers and schemes of arrangement, establishing joint ventures, share sales, asset sales and capital raising.
The great variety extends beyond the transaction type to the type of clients you work with. Over my career, I’ve got to know quite a lot about a wide range of industries, including media, telecommunications, building materials, mining, energy, pharmaceuticals, manufacturing and financial services, through working on a range of deals. None of that is necessarily useful knowledge in future, but the opportunity to learn about a new industry is part of what kept my time in a law firm so engaging. In my current role at Nine Entertainment, I expect that I’ll still get the benefit of this wide variety as media is a rapidly evolving industry and we have a range of investments that sit alongside our traditional media business. We’re also interested in exploring other investment opportunities, so I expect to continue to build my store of random but interesting knowledge.
The third aspect to what makes corporate transactions such an interesting area is that it can bring together many different legal specialties. There’s no one area of law involved – it’s very much pulling together lots of legal disciplines (such as employment, real estate and intellectual property), working with the client who has developed the transaction and their tax and accounting advisers, to get to a commercial solution that meets the needs of all parties.
The common theme, and this is part of what attracted me to the area, is that the work gives lawyers an opportunity to be a part of building or growing a business. There’s something tangible that you can see if a deal goes well, and you can think “I helped make that happen”.
So there’s no plan to become a litigator?
I’ve recently spent more time involved in and around litigation than at any time since 1992 and I must say it hasn’t made me think about going back to my original plan. As the defendant to a claim, we’re not in control of the process, which is immensely frustrating. We spend a lot of money defending claims; our executives are distracted from their real jobs where they need to be involved in the litigation, and even if we win, we don’t necessarily get anything out of the litigation that helps our business.
Not all of the corporate transactions I’ve worked on have reached completion, and they don’t always turn out happily, but there’s a far better chance of a happy outcome than in litigation.
What are some of your all-time favourite deals?
That’s a difficult question, both because of the length of time I’ve been in practice, and because “favourite” means many things to me. Some deals are favourites because of the legal complexity – finding a way to do something that hasn’t been done before is such a buzz. Some are favourites because of the people involved, which may be the clients who treated their lawyers as a part of the team, rather than an external resource to be used only when absolutely necessary, and the teams of smart, diligent, fun people I worked with at Gilbert + Tobin.
The formation of Cement Australia was a merger of two cement businesses, owned by three concrete companies. The difference between cement and concrete was explained to me by the managing director of my client quite early in my dealings with that client – one of the many pieces of random knowledge I’ve retained over the years. Given the nature of the industry and the participants, there were some very interesting competition law issues, so working with and learning from the experts in that area to come up with a structure that met the client’s commercial objectives in a legally compliant manner was a great experience. There were also some complex commercial arrangements that underpinned the corporate deal. We had to document those arrangements at the same time as the corporate elements were being sorted, so there were a lot of issues to juggle.
It took around 18 months from the first meeting till we completed the deal (on a Saturday as the tax advisers thought that would be a good day for completion, not that they turned up that day). My clients were all very passionate about their business and very good operators, so they were a pleasure to deal with. I still think of those charming people, whenever I see their trucks on the road.
I acted for E*TRADE Australia for a number of years, while it was a listed company. During that time, I worked with them on a number of strategic transactions, including ANZ’s initial investment into E*TRADE and related commercial arrangements, and then ANZ’s takeover of E*TRADE. Those transactions weren’t legally the most challenging deals of my career (although there were some interesting governance and related party issues to navigate). I rank them as highlights because of the close relationship I had developed with the senior executives and board of the company – I was genuinely part of the team and they demonstrated their trust in me and respect for my views, which meant a lot to me.
One of the most complex and high stakes deals of my career was the creditors’ scheme of arrangement for Nine Entertainment, which brought the group back from the brink of insolvency. We had very little time for slippage due to a fixed and imminent date for repayment of senior debt, and the challenge of courts being closed for the Christmas break until just before the repayment deadline. The consequences of failing to get the scheme approved in time would have been catastrophic for Nine Entertainment’s business.
Being able to meet those very tight time frames, while wrangling the differing needs and wants of the two classes of creditors, the shareholders, the business and the many many other lawyers involved in the deal was a great achievement. The members of the G+T team were beyond fabulous when the pressure was on. We had a great relationship with the Nine Entertainment board and senior executives, forged by going through such a challenging and tense time together. We marked each major stage with champagne at the Hilton (conveniently just next door to G+T’s office) so there’s perhaps a rosy glow colouring my memories of the very late nights and stresses of the time.
Did that deal lead to your current role?
I had already worked with Nine Entertainment on a number of matters and spent time there through two secondments, so I was already well connected with the Nine Entertainment executive team and legal team. However, that “going through the wars” experience cemented a strong relationship.
The business went from strength to strength in the 18 months after the scheme, listing within 10 months, acquiring two more television stations, and buying out Microsoft’s interest in a long standing joint venture for their digital business. At the same time, the general counsel was moving into a commercial role and needed someone who could take over managing the legal team. The team also needed the expertise I had around the governance requirements for a listed company. Nine Entertainment approached me and pretty much gave me the opportunity to define what I’d like my role to be. It wasn’t your typical recruitment process – when the CFO was pressing me to respond to the draft employment agreement, I sent him a picture of my sick dog. I couldn’t have done that with any other potential employer.
After 16 years at Gilbert + Tobin, it was as easy a way to leave as I could have imagined – going to a company that I had spent so much time working with already, so there were no surprises for them or for me.
The move was 14 years later than planned, but I think that was time very well spent in terms of my development as a lawyer with a corporate transactions focus, as I’ve moved into a business with a strong balance sheet and an appetite for growth.
What are the biggest changes you’ve noticed going from a law firm to in-house?
The biggest plus of being in house is that my level of involvement with the business is so much deeper than when I was an external adviser. I’m surrounded by people who are passionate about what they do and who are more than happy to explain to me the nuts and bolts of what goes into producing coverage of a rugby league match or to show me the complex process of putting together the signals that are transmitted into a number of different television markets across Australia. The passion they have for their parts of the business is infectious. That’s not something I saw in the same way during my time in a law firm.
Not long after starting at Nine Entertainment, we started a sale process for one of our divisions. I was invited to a number of meetings, such as with the accountants who were working out the approach we should take on working capital adjustments, which I wouldn’t have been invited to before I was in-house. In that deal, working capital was a complex issue, so being in all of the meetings about that issue really helped me understand the thinking that led to the position we got to. When it came to drafting that section of the Share Purchase Agreement, I’m sure I did a much better job of it than if I’d just been sent the end product of the working sessions – even the external accountants were impressed. As external lawyers usually charge based on time, clients have an understandable sensitivity about bringing external lawyers to meetings when they’re not strictly necessary. As a fixed cost to the business, there’s no such sensitivity and the result was that I was much more involved with all aspects of the transaction and I think provided a better service as a result.
When you’re the external adviser, you balance the risks and give a view, but you don’t actually make the decisions. As a part of the business, your colleagues look to the lawyers to make decisions, not just give advice. This can be a big learning curve for some, but one of the benefits of making this move when I did, rather than when I originally planned to, is that I’m much more confident about backing my own judgment.
There’s also the obvious differences about being in-house and being in a law firm – no time sheets or billing to worry about (a big plus), but often less sophisticated resources (like knowledge management systems and document management systems) available. The size of the legal team and breadth of expertise across the team will almost always be much smaller than a law firm. That’s a negative when there’s something quite specialist that you need, but can be a positive if it means your role is varied, interesting and challenging.
Will that be a constraint on your continuing to do corporate transactions?
In the last 15 months, I’ve done most of the legal work on a $640 million business disposal, managed the due diligence and documentation process for taking a majority stake in a youth focused online publishing business, been involved in buying a 9.99% stake in another listed television broadcaster, and negotiated a variation to and subsequent exit from a joint venture. It’s a pretty strong deal list (without even getting into acquiring rugby league rights and a significant property sale). So I don’t think the size of the team or my move in-house will significantly restrict the type of work that I’ll be doing in future. I definitely want to keep doing as much of the corporate transaction work in-house as possible, so that I stay in touch with market practice.
There are some limits on what I’d do in-house, primarily on highly regulated transactions. If we were undertaking a scheme of arrangement or takeover bid, I would likely need to use external lawyers, but, given my background, my external lawyers would need to understand that I’ll be more involved than they may be used to.
What else are you looking for in external lawyers?
For transactions for which I am largely running the legal work, I need access to specialised lawyers who can provide input on discrete aspects of a transaction to supplement our internal expertise. That might be expertise in things like financing or insurance. Sometimes, I just need someone to bounce ideas off and test what’s being put to me by lawyers for the other parties.
When I’m not running the legal work, I need external lawyers who know the relevant law and market practice and who can understand our commercial imperatives. We need to be able to work together, respecting the skills and knowledge that we each bring to the team.
Any final thoughts?
There’s sometimes a perception that in-house lawyers can’t or don’t do corporate transactions. I’ve certainly seen a shift in that over the last few years, and fully intend to continue the trend of in-house lawyers taking a more active role in corporate transactions.