Back in October 2012, as a very hungry first month, first seat trainee, I responded lickety-split to an associate’s call for trainee assistance.
The task was discrete, straightforward and (in this case) quick – to conduct anti-money laundering due diligence on a pro bono matter. This is required by UK legislation at the beginning of all new matters (chargeable or pro bono). And so, at the time I sent my eager, “sure, happy to help” email response I did not anticipate being drafted to join a Covington team of three (partner, associate and trainee) to advise, pro bono, on the substantive aspects of the matter. This involved providing strategic advice as English law counsel on an international charity’s cross-border first-time acquisition of a microfinance bank. Seven months, 440 trainee hours and bundles of draft agreements later my work was done as the client closed the deal on 7 May, 2013, acquiring an 82.8 per cent interest in a Pakistan microfinance bank.
FINCA, a long-standing pro bono client of Covington & Burling and a major charitable microfinance organisation headquartered in the United States, had been approached to acquire a controlling stake in a microfinance bank in Pakistan. Establishing this presence on the subcontinent would enable FINCA to reach a greater number of the world’s unbanked population – “microfinance” meaning, in broad terms, the provision of financial services, on a sustainable basis, to those who cannot access conventional banks.
Kashf Microfinance Bank represented a golden opportunity for FINCA. Well-known and reputable in Pakistan, KMBL has established since its 2008 inception a network of 31 branches in 26 Pakistan cities with nearly 25,000 active borrowers (the average loan amount being EUR367) and over 160,000 depositors as at December 2012. Coincidently, KMBL also needed additional equity capital to meet the revised minimum capital and capital adequacy regulatory requirements applicable to microfinance banks in Pakistan.
FINCA’s investment took the form of a combination of a share purchase from six existing shareholders of KMBL (some of whom are international investors based outside of Pakistan) and a subscription of new shares in the Bank. Advising on the transaction involved working with ten parties spread across seven countries, four continents and nine time zones, and involving 15 law firms and in-house legal teams. Covington was heavily engaged in drafting the main transaction agreements (share subscription agreement, share purchase agreement and shareholders’ agreement) as well as the ancillary documents (such as the revised articles of association, draft legal opinions and undertakings).
My role involved reviewing and commenting on all of the draft documents and suggesting and putting forward proposed wording as amendments. Sometimes, I was also asked to draw up first drafts of agreements and ancillary documents. A large part of my involvement consisted of project management, working closely not only with the Covington team but with FINCA’s in-house legal department and executive management as well as local counsel in Pakistan. The transaction was marked by heavy negotiations throughout, which were conducted primarily via (often lengthy) all-party conference calls and numerous email exchanges in which I participated. There was also an all-parties series of negotiations in Dubai over a number of days in December 2012 (Covington being represented by the partner in our team).
Pro bono is both an opportunity to contribute meaningfully to a concern that you care about and a chance, especially for junior lawyers, to pick up and develop professional skills. Through reaching out to Covington’s pro bono network, I’m now involved in another pro bono matter involving English intellectual property licensing law. This also involves interesting and topical socio-economic issues, but the client’s objective and problem is altogether different.
As a junior lawyer, it’s hard to see a downside to getting involved in pro bono. It will give you valuable experience, is often legally and emotionally challenging and certainly is an interesting element of your career. At the very least, it is hugely satisfying to know you will have helped make a real difference to the lives of many people in real need.
Jacqueline Clover is a trainee at the London office of international law firm Covington & Burling LLP