7. London Calling

The forty-eight-storey glass tower of Howard Hewitt was sparkling in the morning sun. We had landed half an hour earlier at London City airport. As so often, due to the side wind, the approach had been rather wobbly and I had asked myself whether there would be enough time and opportunity for me to save my handbag before the little turboprop plane would crash into the Thames. As usual I thought of my girls and of who would look after and take care of them should something happen to me. I detested this airport, almost as much as getting up at 4.30 a.m. to make the 6.40 a.m. flight to London City. Especially when the prospect was, unfortunately, not a shopping spree at Harvey Nichols but negotiation meetings starting at 9 a.m. at the offices of Howard Hewitt, who was opposing counsel and represented the institutional investors in our new real estate finance deal for Holman Bank.

“I have asked Jerome to book you on the early flight to City - I’ll meet you at HH’s offices in Canary Wharf, an hour before the meeting. I assume that’s alright. Can you please prepare a list of all issues together with suggested solutions,” Tracey had informed me over the phone while I was still on my holiday in France.

“Sure, Tracey, no problem,” I had replied mechanically since it was a rhetorical question not requiring any (or rather, any other) answer.

How I would organise my time, and manage the other tasks that she had given me in addition, would be up to me. A one day business trip would not mean that all other work, that had piled up during my abridged holiday, would just stop. One would simply have to put in extra (even more) time. So that is exactly what I did for those two days before the meeting and, in addition, arranged for Jana to take the girls as they were still off school. On the Wednesday in question, I rose before the birds started their morning song, caught the first flight to City airport and, after a short ride in a black cab, found myself in the monumental entrance hall of the Howard Hewitt building.

“Good morning, my name is Chloé Krakowski from Pratt & Wonkey. I am here for a meeting with Nigel Hancock.” My voice sounded surprisingly fresh. That must be the adrenaline. The receptionist looked at me in amused despair.

“Hello, oh right. Uhm could you please repeat your name?”

I sighed patiently. “Of course. Kra-kow-ski. With an ‘i’ at the end - oh, never mind. From Pratt & Wonkey.”

“Thank you, Ms. Crabosky, would you kindly sign in for me please.” She pushed a visitors’ book towards me. I filled it in quickly and signed my name, whereupon she handed me a visitor’s pass. “You will be picked up in a minute - if you could wait over there please.”

She pointed at the large dark green leather sofas making up the nearby seating area. I nearly pulled a face. Since Howard Hewitt had paid a PR agency a huge sum of money to procure a friendly, pleasant image to what was one of the world’s largest law firms, the new HH green - a dark, fir tree green - was all over the place. All that was missing were some red baubles and the impression of a giant Christmas decoration would be perfect. Yet the partners of HH were no Santas. Thank god I had not accepted their partnership offer - I would have found it hard to identify with this colour. Actually, that could have also been said for the oh-so-happy Pratt & Wonkey yellow and the matching sun logo. Who were they kidding? Since when could one make a connection between a law firm and a laughing sun? Most of their lawyers hardly ever saw the light of day, let alone the sun. The boring brownish taupe of the Solomons logo was more appropriate.

“Good morning. Are you Ms. Krakowski?” A short woman wearing a uniform-like look, widely seen in the City of London (black stretch mini skirt without tights, a white blouse and black low-heeled pumps), pulled me from my thoughts.

“Yes.” I stood up, placing my handbag into the crook of my left arm and taking my heavy pilot’s case into my right hand.

“Hi! I’m Fenella, Nigel’s secretary. Nigel asked me to take you to the meeting room,” she began while she led me through the security barrier into a long corridor. “Did you fly in this morning?”

“Yes, I just arrived from Frankfurt,” I explained.

“Oh, right - that must have been an early start for you!”

“Quite early, indeed!” I wrinkled my nose slightly.

“That’s awful! I hate having to get up so early in the morning!” She continued chatting happily. “Well, you’ll find fresh coffee and muffins in the meeting room, so at least you can have some breakfast. Your colleague - Ms. Taylor? - has already arrived and is waiting in the room, as well. Here we are.”

I can hardly wait, I thought. Fenella opened the door to the meeting room. I caught sight of Tracey who was standing in the far corner by the window and talking on her blackberry. She glanced at us and summoned me with a wave.

“Let me know if you need anything - my extension is 5691,” Fenella took her leave and disappeared, closing the door behind her.

I approached the large conference table, put my bags next to Tracey’s and started to unpack the lever arch files from my briefcase.

“Hi, Chloé. Was the flight alright?” Tracey walked towards me. She was wearing a light blue tweed skirt suit and a sweetish smile. So far I had not seen her dressed that formally. It actually looked very smart, although for her young age was too conservative - it would have suited Margaret Thatcher. Also her facial expression didn’t seem quite genuine. Suddenly she reminded me of the description of Dolores Umbridge in the fifth Harry Potter book, which I was reading at home. She was a witch in the Ministry of Magic who knew how to get what she wanted from her superiors whilst being relentlessly demanding of those in inferior positions and who spoke with this artificially sweet voice when delivering the cruellest of messages. The vision of meowing cat plates on the wall sent shivers down my spine. I quickly shook off that sensation and forced a smile.

“Yes, everything was fine, thanks.” I opened a lever arch file and took out the top sheets. “Here’s the issues list. I have printed out a few copies if you want to give them to the client.”

“Oh, thanks,” Tracey replied with little enthusiasm. She eyed the memo critically. “Well, it’s a start anyway. William should be here any minute. I was just on the phone to him. He is on his way. He wants to discuss the RETT issue before the others get here.”

Luckily RETT - or real estate transfer tax - was one of the first points on my issues list. You didn’t have to be a tax lawyer to know that in all big real estate finance transactions the purchaser wants to avoid, as much as possible, paying a hefty percentage of the purchase price as tax. Such tax is due upon the transfer of the ownership deeds to the real estate. When you have a deal worth several hundred million this may well become a financing issue, and hence, a potential deal breaker.

The door opened. Fenella entered the room, followed by a man with blonde thinning hair in a blue pinstriped suit.

“There they are.” Tracey made a beeline for him. “William, how good to see you, how are you? Ah yes, this is my Senior Associate Chloé; Chloé, this is William Hacker. Obviously you already spoke on the phone. William, we have prepared a list of the issues. Would you like to go through it straightaway?”

How I hated to be introduced that way by her-it sounded like ‘this is Chloé my personal slave’. I extended my right hand with what I considered my most charming smile.

“William - good morning, nice to meet you.”

He stared at me with an open mouth and blushed briefly. “Uh, hi. Yeah. Nice to meet you, too. Uh, sorry.” He took my hand and quickly pressed it, then turned to Tracey. “Yeah, great. By all means let’s have a look at that list, but we need to discuss the RETT issue first.”

“Of course, let’s discuss that,” Tracey gushed. “Although I’m sure they’ll find a solution to this. I mean, clearly their tax advisors will have thought of it already.” She returned to her chair and took her copy of my list.

William looked at her sharply. “I don’t think you understand how important this deal is for us. We need to be seen to be constructive and also come up with solutions, not just sit there and let the borrower deal with it.”

Tracey opened her fountain pen. She lifted her eyebrows. “Yes, of course I understand, William.”

“I really do hope so, Tracey.” William’s voice adopted a menacing tone. He leaned over the table and looked at her directly. “I expect you to find a solution and make the structure work. If this deal does not go ahead I will be in big trouble with my board but you will be in even bigger trouble because it will be your fault. Then we’ll see whether Pratt & Wonkey will ever work with Holman Bank again.” He snorted and sat back.

Tracey examined him coolly. Red spots were starting to show on her neck.

“I see exactly what your concerns are, William, and I am sure we will all work very hard to find a solution. Now, Chloé, would you like to take us through the list?” She turned to me.

Somewhat stunned by that exchange, I quickly had to pull myself together. “Uhm, yes, of course. You will see there are so far thirty-six issues. The main ones are highlighted yellow and appear at the beginning; the remainder follows the clause numbering of the credit agreement.”

I passed a copy of the list to William who skimmed through it. His blackberry, which he had placed on the table, started vibrating.

“Excuse me.” He pressed it against his ear. “Yah? Oh, right. Just a sec.” He pushed his chair back, got up and left the room.

I turned to Tracey whose face had returned to a pinkish colour. I nearly felt sorry for her. William’s verbal outbreak had been insulting. “Gosh! That was a bit...tense?”

“Well he is under pressure,” she explained with studied casualness. “It was quite unnecessary but I’m used to that, especially from the Holman Bank guys. Like most investment bankers, they make a majority of their money by way of bonus, and this being a one billion Euro deal, he is more than keen to see it through. The bank earns fifty basis points on that amount so he can relax for the rest of the year when the deal is done. Plus, it’s a relationship deal - the sponsor is a major client of the bank, and it’s his first deal outside Britain. If it goes as well as the numerous domestic real estate financings they have done together, there will be follow-up transactions - for the bank as well as for us. I suspect he is under pressure from his boss, Felipe Nelson, who is under pressure from an executive board member who, in turn, has a close relationship with Patrick Johnson - the investor behind this. I believe they went to Eton together and are in the same golf club.” She smiled at me haughtily. “Ultimately, they trust me to get the deal done. That’s why they came to P&W and that is why they pay our fees. Sometimes that includes letting them blow off some steam. One’s got to be able to take this sort of thing.” She turned back to her papers.

If one does not like it, one is welcome to go elsewhere, I added in my thoughts. Thank you for the advice. It was an explanation, but not a justification, for such disrespectful behaviour towards anybody - let alone a female partner of a prestigious law firm. I had done many million dollar deals but most of the time the protagonists were polite and treated each other with respect. Some had flirted with me, some had tried to ignore me but I had never experienced any aggression from the client directed against me. Obviously Tracey was not unused to such bad manners and maybe she did not mind being verbally abused as long as the client was paying her hourly rate of over six hundred Euros. That is how the food chain worked in the City of London. I adopted my poker face and, in true British style, just dropped the subject.

The door opened again and William re-entered, absorbed in conversation with one of the three men who were with him. Judging from the casual but expensive looking clothes, and the confident demeanour of the person talking to William, I concluded that this was Patrick Johnson, the other two being his lawyers - Nigel Hancock, banking partner at Howard Hewitt, and his associate James Elkington. Like many British junior lawyers, who usually obtain their qualification at about twenty-five, he looked very young but tried to come across as confident. I noticed that he was quite cute. At least I could enjoy the view. Though, as my counterpart he had no chance, the poor guy.

After everybody had been introduced and business cards had been exchanged we started the negotiation of the draft credit agreement by reference to the issues list I had prepared. It transpired that the list was in fact complete and the suggested solutions, in principle, useful. William sat to Tracey’s left. I was on her right.

“The last issue on the definitions is the valuation,” Nigel said and looked at his client invitingly. “I think we take issue with that. Patrick?”

“Yeah, right, Nigel, thanks. William, we’re not happy with your suggested property valuer,” Patrick said with a cutting voice. “His valuation is completely unacceptable. It’s only eight hundred million for the whole portfolio!”

“I appreciate that you’d rather take your valuer, Patrick, but it’s the company we always use and they are on the more conservative side. This is quite appropriate considering there are some - to put it politely - rather less attractive properties in the portfolio - such as the supermarket in Erfurt. We can only lend up to eighty per cent. of the value of the properties, and if that’s lower than the total purchase price, you’ll just have to come up with more equity, or chuck those lower value properties.” William leaned back, folding his arms.

Patrick’s face turned red. “You know damn well it’s the whole portfolio or nothing! The planned twin tower in Berlin alone is worth over half a billion! I don’t give a shit about what ‘you always do’! We need the full amount. That’s what I agreed with Richard! One billion and not a cent less!”

I deducted that Richard was the big boss at Holman Bank - Johnson’s friend from school. The so-called old school tie network - men from privileged families who had been pupils at private male-only boarding schools - obviously still worked very well in the City of London. Only that William now had a real problem. Normally the bank was not allowed to lend more than eighty per cent. of the value of the property. If Patrick wanted to borrow the full purchase price of one billion, the valuation had to be increased accordingly. Apparently either he did not have the required two hundred million of equity or he did not want to use it. Thus the entire risk remained with the bank.

William slid around on his chair and held up his hands. I watched him with interest. A moment before he had been threatening and yelling at Tracey and now he was at the receiving end. Tracey had been right. He was under pressure.

“OK, look. I’ll speak to Hugh White who has done your domestic deals and maybe we can use the same valuer. But we need to get it past our credit committee.”

“Maybe is not good enough, and for sure we will not pay for the cost of the first valuation,” Patrick insisted coldly.

“I’ll discuss it internally. We’ll find a solution.”

“I bloody hope so.”

Nigel cleared his throat. “Great, thank you very much, William. I suggest now we skip the representations and warranties, which we can deal with separately, and get to the covenants. What we need to discuss here is the RETT issue. Obviously we cannot covenant that the borrower is the hundred per cent. owner of the property and that Patrick’s holding company is the sole owner of the shares in the borrower. The tax advisors have prepared a paper how to get around the issue.” He nodded at James. James took a pile of stapled documents and distributed one to each person present.

I read the heading: ‘Optimal Ownership Structure from a RETT Perspective’. I swiftly flicked through the document. It provided for two owners - a Dutch company and one in the Cayman Islands. Both were held by a trust in Jersey.

Tracey looked up. “We need to run this past our tax partner Magnus - it seems like a much more complex structure than was originally envisaged.” She turned to William. “This would mean we need to revise the loan agreement quite dramatically - we would now have two foreign borrowers who guarantee each other, the Jerseyco as further guarantor - we would require Dutch law advice, Cayman and Jersey lawyers. I’ll have to revise our fee letter and get quotes from those jurisdictions.”

William stared at the document. “I see,” he hissed through clenched teeth. “Let me know by tomorrow. I will also have to discuss this internally.”

“I’m not sure I can get our tax people to review all this by tomorrow,” Tracey objected.

“They’ll just have to. We have our credit committee meeting tomorrow afternoon.”

Tracey stiffened imperceptibly, then slowly turned her head to me. “Chloé, send this to Magnus and his team and get quotes from Amsterdam, Cayman and Jersey. ASAP.”

And that was how the food chain worked.

* * *

The next morning I was back at my desk working on the new mandate letter for Holman Bank. I had started to draft it on the way back from London, having just managed to catch the last flight out of Heathrow.

Suddenly my door was flung open.

“Morning, Chloé!”

I looked up. It was David Byrd and Frank Smith - respectively partner-to-be and new partner. So sorry: Dr. Byrd and Dr. Smith. The obsession of German lawyers to be addressed with their doctorate title (if they had one - if not, they would per se be regarded as second class) appeared rather absurd to Anglo-American lawyers. One automatically looked for the physician’s bag. Sometimes I asked myself how many German lawyers with a PhD. travelling by airplane would raise their hand when hearing the question ‘Is there a doctor on the plane?’ I am convinced that here and there a finger would be raised proudly. I prefer the Italian undiscriminating style of addressing every lawyer in a cordial but respectful manner as dottore.

“Good morning, my learned colleagues! What can I do for you?”

David carefully felt the top of his hair, which consisted of hard spikes due to the amount of wet gel he seemed to have been using. He unleashed his loud staccato laughter, which I had often heard coming from the corridor. “HA-HA-HAA!”

Uhm, what was so hilarious about my question? Goodness me, he so wanted to be witty. He reminded me of Robin Williams’ character’s army boss in Good Morning Vietnam, who after being unceremoniously sacked as a radio DJ by reason of his very unfunny jokes indignantly snorts: ‘Sir, in my heart, I know I’m funny!’ I did love Bruno Kirby’s acting though.

Frank grinned, showing a small gap between his incisors. He was not particularly attractive and seemed to be fairly harmless. Apart from a few morning chats in the kitchen and the conference call on my first official day I hadn’t really gotten to know him yet.

“We will do something for you, Chloé,” he declared generously. “Tracey has a new deal from Paris Bank and thus no more time for your Holman deal - so I will take the lead and David will advise on the German law side.”

“Oh I see. That’s news to me. Yes, great.” I was slightly confused. Tracey had not informed me of this. “How up to speed are you? Shall we go through the structure together?”

“No, no,” Frank declined. “We just need the term sheet, the issues list and the latest drafts. We’ll get that from the virtual file.”

The virtual transaction file contained all documents and correspondence belonging to a transaction and was accessible from the desktop of every lawyer and secretary who had been granted authorised access.

“Good. It’s not all in the virtual file yet - I’m just working on the new mandate letter for instance, and the issues list has to be amended following our discussions in yesterday’s meeting.”

“I would like a copy of your notes from yesterday so that I can consider potential changes to the security documents.” David crossed his arms.

I looked at him in surprise. “Sure. Although at this stage we are still far away from thinking about the security documents. It’s just that a lot depends on the new ownership structure which is being double-checked by Tax as we speak - there may be more changes.”

“Maybe you can speak to Magnus and see where they are on this,” Frank suggested to David.

“Good idea, Frank! I’ll go and do that now. See you later - and Chloé, don’t forget the copies!” He left my office.

Frank grinned again and sat down on the visitor’s chair. He crossed his legs. “So, how’s it going?”

“Very well, thank you. I think I have acquainted myself with real estate finance and my colleagues are really nice here.” I meant it. Tracey was not my colleague - she was my boss, and that was only to be temporary. Frank knew where I had worked before and I assumed he knew that I had been hired eventually to replace Tracey. I therefore behaved towards him as if we were on a level playing field - except for the fact that he was younger than me.

“Well then everything’s alright.” Pause. “Michael Stone says you’re getting a divorce.”

“That is correct. The hearing is soon.”

“I also separated from my wife at the beginning of this year.”

I looked at him. “Oh, I’m sorry. Separations are awful.”

He dismissed this with a gesture. “Nah, my marriage was pure stress. My wife always complained about me working too much and when she knew I was going to be made partner all she wanted was more spending money.”

I was not surprised. That was the typical scenario. The only untypical aspect was that the separation actually happened.

“Any kids?”

“Yes, two teenage boys and a little girl.” For a moment his smile became softer, then disappeared completely. “But I haven’t seen them in weeks.”

“Why? Don’t they live in Frankfurt?”

“Yes they do but my wife has managed to set the boys against me - they don’t want to see me. The little one follows whatever her big brothers do.”

“That’s terrible! But you do have a right to see your children!”

“Right, but I don’t want to force them.” He shrugged. “Anyway I’m here most of the time and don’t really have time for anything else.”

I was not going to comment on that. I smiled with empathy, but I didn’t really feel sorry for him. A career as a partner did not, by itself, destroy a marriage.

Frank stood up. “Was nice talking to you. Maybe we can have a drink together some time.”

In your dreams. “Yes, sure. There’s the department drinks of course tomorrow - are you coming to that?”

“I’m not sure yet. I’ll have meetings all day so I may not be able to make it, and work comes first, right?” He grinned.

“Of course - always!”

I was relieved when he left my office. He seemed alright enough but I really was not interested in personal conversations. On the other hand, if I wanted to make partner, I had to get on with my partners to ensure I had the support and votes. I just had to ensure that my friendliness could not be misunderstood.

My phone rang. David Byrd.

“Hi. I just wanted to let you know that you need to make some amendments to the credit agreement - I will send you a mark-up, and then you should circulate a summary of the outcome of yesterday’s negotiations. Today.”

I was slightly irritated. Since when did this geek think he could tell me what to do?

“Ah, David. Thank you for your suggestions. That sounds good. Do by all means send me what you have.”

“Have you drafted a documents list and a CP list?”

“My trainee does that.”

“I see, fine. If not, I’ve got Matthew who could do that.”

“Matthew?”

“My junior associate.”

“So, you already have a junior associate?” I quipped.

“Well, I am very busy and require support,” he replied somewhat indignantly.

I see, the young man thinks he’ll be made partner by behaving as if he already was one. Whatever, it wasn’t my problem. I would hardly allow him to tell me what to do. I didn’t like it but I had to put him into his place, as amicably as possible.

“I totally understand that. At Solomons I had five associates and it never seemed enough. But it is very good that you already know how to delegate - not many people do.”

I could feel through the phone how his chest swelled with pride.

“Yes, exactly, I knew you would understand me since you know what it’s like. So, I’ll tell Matthew to talk to your trainee.”

“Super. Thank you.”

“With pleasure, any time.” We hung up.

There. That was done.

Or so I thought.

* * *

I realised when the day of my appraisal arrived that I had been so naïve as to underestimate David. It all started rather informally. I got an email from Tracey letting me know briefly that she and Michael would give me an interim appraisal that coming Thursday at 2 p.m. since my calendar showed no entry. Damn. I did have plans, I just hadn’t entered anything in my outlook calendar - a long overdue 1 p.m. manicure appointment. If all went well, I would manage to be back just in time. Of course I confirmed the appraisal appointment with Tracey.

I thought about what I would have to expect. I had never had a formal appraisal before - at Howard Hewitt there had only been that one short meeting where I was told I had been selected for the partnership track. The partner reviews at Solomons had been more like a tea party, although there hadn’t been anything to be criticised anyway. I had always been a good hard-working girl, but now I could not help but feel that an appraisal given by Tracey would not be a piece of cake.

Tracey, Michael and I met up in one of the smaller conference rooms. Tracey and Michael sat next to each other, facing me. Michael seemed uninterested while Tracey was shuffling with her papers.

“So, Chloé,” she started. “We thought that it might be useful to have an interim appraisal at this stage to see where you are and how you are doing.” She raised her upper lip and bared her teeth.

I remained silent and waited.

She inhaled. “I must say, when you first started I wasn’t sure you really wanted the job.”

I was aghast. From where did she get that idea? I got the answer straightaway.

“When I asked you to work at the weekend, you didn’t seem committed but instead told me you needed to look after your - children!” Her voice became nasal and more high-pitched at the end of the sentence.

“Well, you asked me on a Friday afternoon and I just was not able to organise childcare for the weekend at such short notice that day.” I remained very calm. She could not possibly be serious.

“As I said then, I find I manage to do that in such situations. I just did not feel your commitment.”

“I did send you the document on Saturday evening as you requested.”

“Did you? I don’t remember.” She frowned impatiently and rummaged in her notes, then looked up again. “Well, anyway, it does not matter. I’ve made my point.”

“I don’t think you can say about Chloé that she does not work enough. Her figures are above the average of those of the entire banking team. She even cut her holiday short,” Michael interjected dryly.

“Yes, yes, the figures are quite good,” Tracey dismissed him. “Now let’s see - what else do I have. Ah yes, your email style - your sentences are too long.”

Now I was rather amused. “OK, I will make a note of that.” I made a note on my pad: sentences too long.

“You seem to get on well with everybody. But David Byrd complained that you do not show enough initiative.”

“Is that so? In what way, may I ask?”

“He says he always has to tell you what to do.”

I looked at my pad and wrote this down: more initiative. I did not know whether to laugh or whether to scream with frustration. Pull yourself together, Chloé. Count to three. I looked up again. “I see. I will have a chat with him.”

“I cannot comment on this but clearly team work is very important,” Michael said.

I looked at him steadily. “You are absolutely right, Michael.”

“So. There does not seem to be much else, is there, Tracey?” Michael asked impatiently.

Tracey’s neck started to get blotchy. She pressed her lips together.

“Then we should talk about what’s next,” he invited her.

“Well, yes, alright.” She looked at me again. “Michael thinks we should get you into the counsel round for next May. I personally don’t think that’s really necessary - people know that you are senior and they are happy to deal with you on the basis that you are an associate. In London, these titles do not matter.”

“We have to arrange the counsel promotion - it’s important for Chloé’s progress and the least we can offer her after one year with the firm.”

I was confused. I did not need a counsel promotion if I was going to be Tracey’s successor. I turned to Michael. “Is that a necessary step towards partnership?”

“Nah, but we cannot offer you partnership for May - we can’t have the two of you as partners. That means until Tracey returns to London you can only become counsel. By the way, Tracey, when are you going back to London?”

“I don’t think that’s a topic for this meeting,” Tracey responded sweetly. “So, as I said, I don’t think it’s necessary, but if Michael insists, of course I will support it.” She looked at me sharply. “There will be no raise, though. Your salary is already way above any standard levels.”

I said nothing. I just continued to look at her calmly while the red blotches on her neck became bigger. Michael shrugged and mumbled something inaudibly. After a short general silence he stood up resolutely. “So, it’s all agreed then - if there is nothing else, I’ve got a conference call to attend.”

“You both go ahead, I have to check this email.” Tracey was busy with her blackberry.

I stood up as well and took my notepad. “Thanks, Tracey. See you later.”

On the way back to my office I reflected on this absurd conversation. I was annoyed with David Byrd. On the other hand, I wasn’t that surprised either. Then it occurred to me that Tracey had not managed to persuade Michael to forget about my counsel promotion. That was a small victory. The question remained what price I would have to pay for it.