In-house interview: James Sullivan, Valad Europe

James Sullivan’s career has so far seen him move from private practice to in-house and then business management before finally finding his home as European general counsel at Valad Europe, the European real estate investment manager.

Sullivan started his career at Davenport Lyons (now Gordon Dadds) and, following a brief period at Dechert, decided to make the move in-house when he was recruited as a group lawyer at mobile network operator Orange.

After leaving Orange, Sullivan joined Scandinavian mobile operator TeliaSonera, where he was the company’s first sole UK-based lawyer. Following this, Sullivan took a role outside the legal profession when he became managing director of PILinvests, a private equity fund manager and a subsidiary of Valad Europe.

“It wasn’t planned – it was just a great opportunity, which I recognised doesn’t come along very often,” explains Sullivan.

“I had to think carefully about whether making the move was the right choice and I found that my biggest concern was how easy – or difficult – it would be to get back into a legal role if it didn’t work out,” he adds.

Initially, having worked as a lawyer for many years, Sullivan admits it was definitely a challenge to not think like a lawyer, but the more he got used to the business, the easier it became for him to think in terms of opportunity, rather than risk.

“Ultimately, it gave me a great insight into how a business works from a non-lawyer point of view,” he says.

In 2011, Sullivan gradually transitioned from his role at PILinvests into his present role with Valad. However, before his arrival at Valad, the company had no general counsel or any legal in-house team – a situation which Sullivan admits he had to adjust to.

“When I joined Valad, the biggest challenge was creating and implementing new legal processes and policies in the company because previously firms just charged the headline rates,” he says.

“First and foremost, I had to develop more of a risk-management and compliance mind-set with the company and create a legal support function to the business that has to be flexible to the differing approaches, thinking and local variation of Valad’s cross-border clients.”

Pan-European remit

Sullivan is Valad’s first sole legal counsel for its European platform, which consists of a 400-strong commercial property portfolio located across 13 countries in western Europe, the Nordics and central and eastern Europe.

“As European general counsel, my role can involve working in compliance right through to corporate acquisitions, commercial agreements, fund manager agreements and the restructuring and financing of funds,” adds Sullivan.

“However, my role is not just about documenting deals and structures – it is very much about supporting and helping to drive forward new business opportunities across Europe.”

Since joining Valad, one of the biggest industry challenges Sullivan has witnessed is the increasing amount of regulation in the real estate investment industry and, in particular, the impact brought about by AIFMD (Alternative Investment Fund Managers Directive). The European financial directive was introduced after the global financial crisis and seeks to address regulatory gaps and reduce systemic risk in the sector.

“It has been interesting working in an industry that used to be relatively light on regulation and then taking the business through some significant changes brought about by AIFMD,” says Sullivan.

“One of the biggest effects of the legislation has been the cultural shift for those working in the industry, but the biggest impact of AIFMD on Valad has been on operations.”

Valad has generally regarded the impact of AIFMD as positive. It found that carrying out a gap analysis against its existing operations when the regulation came in was a useful operational exercise, adds Sullivan.

“One of the biggest challenges was setting up new regulatory policies where there was no industry precedent. This meant we had to work really hard to create operational business-focused procedures, rather than just regulatory policies,” he continues.

“For Valad, we have found that adapting to the regulatory change has been made easier by having a flat structure within the company because this leads to direct access to the decision-makers and means that we can design and implement operational changes efficiently.”

Slimline structure

According to Sullivan, it has always been Valad’s intention to keep the in-house team slim. He explains that Valad as a company likes the flexibility of having external advisers.

“The company prefers the expertise of external advisers, rather than employing someone with that expertise in the in-house team because, from a company perspective, it is seen as creating a narrow legal support function,” says Sullivan.

“Having external lawyers allows us to have flexibility when transactions demand it, and flexibility only in those countries were we are busy at that particular time. We find that by using external advisers, we can get the best external advice where and when we need it and scale up or down as we need it,” he says.

“We don’t draw a line where the lawyer role starts and ends. I am expected to have a commercial view – not just a legal one”

Valad has a panel review in every country of operation, which Sullivan reviews every two years. In the UK, Valad currently turns to Nabarro and Trowers & Hamlins for advice, while overseas it turns to Gowling WLG and Franklin in France and Berwin Leighton Paisner in Germany.

“We don’t generally turn to magic circle firms. We turn to the tier just below that because I think we become a more important client,” he says.

Sullivan is the principal decision-maker when undertaking a review, although he says he relies heavily on those people on the ground and, in particular, Valad’s 13 country representatives based across Europe.

“They know the right size firms and the ones that have good reputations in their respective markets,” Sullivan confirms.

“They know their local markets and what the real estate industry is like in the countries they are based in. This makes them better positioned to select the right law firm.”

Integrated function

Sullivan currently sits on Valad’s senior management group, which comprises the company’s executives, heads of functions and heads of countries. He emphasises that the legal team is very much integrated as part of the business.

“Our external lawyers are external, but in­tern­ally the legal functions have to be very much integrated into our fund management platform and within our business development team,” explains Sullivan.

“We don’t draw a line where the lawyer role starts and ends. Instead, we take a holistic view of a project and I am expected to have a commercial view – not just a legal one – and that is when my previous role outside the legal profession comes in particularly handy.”

“There is an open-plan office environment at Valad, which really helps to incorporate the legal and business functions and helps me to get a real feel about what is going on around me.”