The INSIGHT Interview: Dr André Zerafa, Managing Partner of Ganado Advocates

With Legal Tech into a New Era of Innovation

Dr André Zerafa has just taken the helm at Ganado Advocates. He speaks with FinanceMalta about the firm’s ambitions to develop legal tech solutions, the desire to foster a new legal culture, the potential of international expansion, and the growing importance of financial crime advisory.

You were appointed Managing Partner of Ganado Advocates in March 2021. Can you tell us a bit about the firm you are now heading and the direction you’d like to take it?

With around 100 lawyers, we are one of Malta’s largest and longest-established law firms, but we are also specialists in many ways. Early on we identified financial services, along with shipping/aviation and corporate law, as core areas of our legal practice. We then specialised in those fields and developed expertise in related practice areas. This approach has worked very well for the firm, and the plan is to continue on this path. However, the legal landscape is also fast evolving. Emerging technologies, new business models and changing client expectations require law firms to adjust and adapt if they want to continue succeeding in the market, and we are no exception. We developed a strategic plan for the next three years, designed to move us forward in delivering greater value and a better service to our clients.

Can you tell us more about the areas that you plan to place greater strategic focus on?

We have identified four objectives. The first objective, which I also consider the most important one, relates to governance, risk and compliance. This is something we have been working on for years. We have a compliance team of seven people, and its importance will only grow going forward. While our lawyers advise their clients on regulatory and compliance matters, the role of our compliance team is to ensure that everyone in the firm complies. Globally and locally, greater attention is being paid to the regulation of gatekeepers. Law firms that exclusively focus on developing legal expertise rather than improving administrative and compliance processes within their firms will face difficulties in this environment.

Our second objective is putting the client at the centre of everything. It sounds obvious, but it is not always straightforward. We are already a decentralised organisation. Our lawyers work in teams across departments, which has helped us enormously while working remotely, but it is always important to remind oneself that we remain a truly client-centric law firm. It’s about fostering a legal culture, in which our lawyers collaborate and cooperate across practice areas to help clients on any challenges they may be facing to the extent that we are able to assist them in the context of our specialisations. We always aim to bring the same level of service to our clients that they are used to receiving in other financial centres.

How important is technological innovation for the legal practice of the future?

Innovation and technology are, in fact, the third theme we want to focus on. I don’t refer to technological innovation only, but to innovation in general. For example, I can be very innovative by suggesting changing a clause in a law. We want to make an extra effort to be more innovative within the confines of the law and the ethical rules. However, we are also focusing on developing legal tech solutions, and in fact, we are already working on several projects. The fourth objective is somewhat tied to the third as it’s about thought leadership. We want our people to always think outside of the box and come up with new solutions. This is not just about marketing, it’s again about redefining the legal culture and fostering innovation, ultimately bringing new ideas and perspectives into the market.

What impact did Covid-19 have on your operations? Can you share a few lessons that you have learned or insights that you have gained during this challenging time?

2020 was certainly a year like no other. Despite the pandemic, we managed to retain work flows and provide an excellent level of service to our clients, although the challenge was enormous. However, it was more a psychological challenge; we all had to get used to new ways of working. Fortunately, our IT infrastructure did not let us down, and we did not experience any major hiccups. From March till June 2020, we were all working remotely, and our offices were closed. In summer 2020, we worked on a rotation basis in the office and that continued until the second wave hit in 2021 when we reverted to working remotely. We are still in this situation today. While our offices aren’t closed, staff only come in when it is really necessary.

I must say I was very surprised how well remote working actually works. For example, it turned out that virtual meetings can be as productive as their face-to-face counterparts. At times, online meetings even result in efficiency gains as all participants are more focused, which speeds up the decision-making process. Having said that, I still think that we need to be at the office at times, and I don’t believe in the concept of working entirely remotely.

You mentioned that you are developing legal tech solutions. Can you tell us more about it?

Yes, we have three projects in the pipeline. The idea behind all of them is to develop legal technological solutions in response to our clients’ needs. We are looking into solutions that would help our clients with their compliance obligations by reducing human intervention and hence the risk of human error, also considering the serious consequences that operators are facing in a fast-moving environment where legal and regulatory compliance are in the limelight.

Do you consider licensing or selling this software?

The concepts are still embryonic, and we will need to take this step by step. However, I am certain that there is demand for products which are technologically driven, and which would be more cost effective for our clients and, in a number of limited cases, less dependent on human interaction, albeit in legal services human interaction will remain a key aspect of whatever we do. It should also be borne in mind that the sanction culture has changed considerably in recent years, with hefty fines issued for non-compliance. Technological solutions could also provide risk mitigation techniques for our clients.

In May 2019, you opened an office in Luxembourg. What is the importance that Ganado ascribes to the office today?

The decision to open an office in Luxembourg was driven by client demand. At that time, our asset management clients were becoming more sophisticated and required more cross-border solutions than in the past. Until a few years’ ago, most of our clients wanted their business to be centralised in one jurisdiction so that they would be dealing with just one regulator. While this has advantages, it also means centralisation of jurisdictional and regulatory risk. It might also mean not necessarily giving the best service to investors. While investors might be very happy with the fund manager being in Malta, they might not want to put their money in a Malta fund for many different reasons. So, when we started seeing our Maltese fund management clients asking us for solutions outside of Malta, Luxembourg was a logical choice.

Our Luxembourg office now employs three lawyers, and we are looking for another two. The nature of business that is being handled in Luxembourg has also changed. Until the Covid-19 pandemic hit, most structures had a Malta element: the manager, the administrator or the fund advisors were based in Malta. While we have seen quite a slowdown in activity in Luxembourg during the first part of the pandemic, business picked up again in September 2020. We are now dealing with a number of Luxembourg structures with marginal Maltese elements involved.

Given the success of your office in Luxembourg, would you replicate the model and enter other countries or markets?

I don’t think that, for the time being, our clients require us to have offices in other jurisdictions. I am not excluding that we might look into this in the future, but we are also aware that there are very good lawyers in other jurisdictions. At most, we would consider opening representative offices which would be outposts of our Maltese and Luxembourg offices and would not practice in the laws of the particular jurisdiction.

Looking to the future, what practice areas do you believe will continue to grow?

I am convinced that we will see further growth in areas related to IT law, digital law and IP law. Another area that I believe will gain in importance is financial crime advisory, which for many years was part of our other specialisations. For instance, when advising my asset management clients, Anti-Money-Laundering has been high up on the agenda for several years. However, 1,5 years ago, we moved away from that model and built a practice group, which focuses on financial crimes within the financial services industry. As a growing number of senior management and boards are acknowledging the threat of financial crime as a risk that must be addressed, our financial crime practice definitely has growth potential. We are also focusing more than ever on the various legal dimensions of sustainability both internally as well as for our clients who have become much more conscious of their environmental, social and governance responsibilities.

Bio:

André Zerafa is the Managing Partner of Ganado Advocates. He co-heads the firm’s investment services and funds team. André regularly advises promoters on various corporate, regulatory and other legal issues involved in the setting up of asset management firms, administrators, custodians, prime brokers and securitisation vehicles.