Edward Baring’s career comes closer to spanning the four corners of the globe than most. An Englishman, Baring completed his studies in the United Kingdom before moving to Moscow as a finance lawyer with Allen & Overy in the early years of this century. In 2016, Baring – having, in the interim, joined the partnership at Herbert Smith Freehills – relocated to South Africa to become managing partner of the firm’s Johannesburg office. He spoke to us about his unusual career.
CEELM: Run us through your background, and how you ended up in your current role with Herbert Smith Freehills in South Africa.
Ed: I trained at Slaughter and May in London and moved straight after qualification to join Allen & Overy in Moscow. I arrived in 2001 just as the noughties boom went into overdrive and for a not-naturally-exuberant nation, the Russians actually did irrational exuberance up with the best of them. There was an endless stream of huge deals and I don’t recall ever having to attend a single business development or marketing meeting. For seven years, we just turned on our computers in the morning and watched our in-boxes erupt with work. The deals were always completed to impossible timelines – to give just one example, when we advised the lending banks on the acquisition of Roman Abramovich’s oil company by Gazprom, I recall that we cobbled together USD 13 billion in about three weeks. When I asked one of the senior people involved if we would be conducting any due diligence on the target, he said “well, the only question is, if Gazprom were to take our USD 13 billion out into the car park and set fire to it, would they still be able to repay us?” He was sure they could, and the deal went ahead, although it would have been fun to have tested the experiment properly.
Then came the global financial crisis, but very luckily for me, I had accepted a partnership at Herbert Smith just as Lehman Brothers was collapsing, an opportunity which I suspect would not have been on offer even a month later. Moving to a firm with such a strong litigation practice also turned out to be an exceptionally fortunate move for me, as my practice switched almost overnight from a loan issuance practice to being largely a loan restructuring and enforcement practice. This kept me very busy for several very years, and I recall 2009 being one of the busiest and best of my career. But while the global financial crisis didn’t slow things down for me, unfortunately the imposition of sanctions against Russia in 2014 did, and while Russian banks continued to give us good work, the deal flow from Western banks dried up almost completely. I therefore decided that it was time to head home to London, but just as I was all set to go, I got the call asking me if I wanted to open HSF’s first African office and, well, I just couldn’t resist one more adventure …
CEELM: Was it always your goal to work abroad?
Ed: Yes, in the early nineties I worked in South Africa just before its first democratic elections and in Zimbabwe just as Robert Mugabe began his now infamous land reform program. And in the late nineties I spent some time living in Russia during the Yeltsin era, so I guess I have always been attracted to places undergoing seismic transitions. After those experiences, I knew that when I eventually got around to finding a proper job, it would need to be somewhere interesting and abroad. Initially I thought I would either end up as a foreign correspondent or a diplomat, until I realized that you could do equally interesting work for a better crust as a lawyer.
CEELM: You certainly have a unique profile. How does your background help you in your current role?
Ed: Emerging markets deals have very similar issues wherever you do them. Is your client going to have enforceable rights if things go wrong, how are you going to structure around the legal weaknesses of the jurisdiction you are operating in, does your client understand things like exchange control restrictions and indigenization requirements? I now have 20 years of experience advising on these issues and have been through the optimistic highs and bitter lows of a full credit cycle, so hopefully I can continue to bring that experience to bear in Africa, and also in India, another market on which I am focusing closely.
CEELM: Did any of your clients in Russia stay with you in South Africa? Were you able to maintain and leverage any of those relationships in your current role?
Ed: We opened Herbert Smith Freehill’s office in South Africa in late 2015, and Russian clients have been either the biggest or the second biggest clients of the office for two of the years since. We have advised a number of Russian clients who are active on the African continent but we also work for Russian clients on deals which have no nexus to Africa at all. My Russian clients are always very smart in extracting value from their lawyers and some of them are wise to the fact that there is a cost-saving by using an English law deal team in South Africa with much lower charge out rates than they might get elsewhere.
CEELM: Do you or your colleagues in Johannesburg do any work with CEE, either in terms of outward investment from SA companies/funds or inward investment from clients from this part of the world?
Ed: In terms of outbound from South Africa, we have heard that there are a number of real estate players who have been buying assets in the CEE region, although we have not yet picked up any of that work. But in terms of outbound from the CEE region to Southern Africa, there have been some good opportunities and we have picked up our fair share of the work. For example, Norilsk has had mining interests in Botswana, VTB has been heavily involved in sovereign lending to Mozambique, Tatneft was looking at a refinery in Uganda, and Rosatom has been looking to build new nuclear plants all over Africa. So although CEE investment in Africa may not be as active as, say, Chinese investment in Africa, there is still plenty going on.
CEELM: How would colleagues describe your style?
Ed: The ones who get it: “Understated and laid-back in a good way. Optimistic and entrepreneurial. Commercial. Collegiate.” The ones who don’t: “Far too understated. A deadline surfer. Always on a plane, never in the office. Unbelievably tightfisted with the BD budget.”
CEELM: What differences stand out the most between the Russian and South African judicial systems and legal markets?
Ed: In terms of the legal market, I would say there is a world of difference. Russian deals are more frenetic and high pressure, with atrociously-demanding deadlines and too many late nights, but at the same time very adrenaline-driven and fun. My impression of deal-making in South Africa thus far is that the deals are just as complex and interesting, but they take much longer and the pace is more suited to marathon runners than sprinters.
In terms of judicial systems, there is also a great deal of difference. The South African judicial system is a mixture of English and Roman-Dutch law and its commercial courts have been developed over centuries, so if things go wrong you can be confident that your clients will have some recourse, whereas in Russia (and other CEE jurisdictions like Kazakhstan and Ukraine), I have always found the commercial courts to be very undeveloped and extremely poor at enforcing creditor and investor rights.
The common thing about both markets is that they are both full of incredibly bright young lawyers who want their law firms and their courts to operate to the highest international standards. I hope their aspirations are realized!
CEELM: How about the cultures? What differences strike you as most resonant and significant?
Ed: The most noticeable thing is when you get in the lift each morning. In South Africa, when you get in a lift, even a complete stranger will greet you with a smile and ask you how you are. If you did the same in a Russian lift, people would think you are barking mad.
CEELM: Do you ever go back and visit Russia? What about the UK? Do you have any plans to move back?
Ed: I try to go back to Russia once or twice a year and in fact I was back for HSF’s 20th anniversary party last week. We had 300 guests and hired a fantastic Russian rock band called Crematorium, which got all our clients dancing. I am also back in the UK very often and it will always be home, but am very happy to be sitting out Brexit for the moment.
CEELM: Outside of Russia, which CEE country do you enjoy visiting the most, and why?
Ed: I have had some very interesting times in Kazakhstan trying to recover eye-wateringly large sums of money for my clients from a recalcitrant oligarch. I enjoy Almaty’s alpine feel and have always been shown great hospitality by the Kazakh lawyers we work with, although if I’m honest I would have preferred just slightly less of the horsemeat. I have also had some very enjoyable trips to Kyiv and enjoy the relaxed vibe that the city gives off. But the CEE country I want to visit most and have so far failed to get to is Romania. I have done a number of interesting Romanian deals and also have a number of good Romanian friends who have sold me on Transylvania and the Carpathians, so I must get there soon.
CEELM: What’s your favorite place to take visitors in Johannesburg?
Ed: I think that because many of us grew up in the 1980’s watching the township uprisings against the apartheid regime on our evening news bulletins, we have an impression of Joburg as a place of endless strife and dusty townships. But as all proud South Africans will tell you, Johannesburg is in fact an incredibly green city and is actually the largest man-made urban forest in the world. To get a view of all that greenery (and vast swathes of purple when the jacaranda trees are out in spring), the best place to take guests is sundowners at the Westcliff Hotel, which as its name suggests, is on the west side of the city and pretty much up a cliff.