Back with a Bang: more reflections on 1986

At the time of Big Bang, Len Berkowitz, Anthony Salz, Guy Beringer and Barry O’Brien were all doing much the same thing - working on the flurry of M&A activity that accompanied the reforms.

“If my memory serves me correctly,” recalls Berkowitz, “there was a considerable amount of activity before the new regime came into effect as the banks and broking and jobbing firms positioned themselves to take advantage of the new arrangements.” As one of Linklaters’ leading corporate partners, he was right in the thick of things during Big Bang, especially as Linklaters was the Stock Exchange’s adviser. Berkowitz, who recently retired as legal adviser to the Bank of England, recalls the full impact of the changes only dawning on him over time.

Former Freshfields senior partner Anthony Salz, now an executive vice chairman at NM Rothschild, also refuses to take credit for predicting everything that Big Bang would bring with it. He and O’Brien were among the team of partners who successfully boosted Freshfields’ M&A practice by targeting investment banks. During Big Bang, however, O’Brien was busy advising Freshfields’ broking clients – which included James Capel, de Zoete and Rowe & Pitman – on their acquisition by the banks.

“The real impact [of Big Bang] was delayed,” observes O’Brien, namely “the emergence of the Wall Street banks as a real force in the City and an increasingly important component of our client base.”

But if he and Salz did not immediately spot the rise of the US investment banks, they will have done so by the time of the dramatic collapse of Morgan Stanley and Warburg’s merger bid - on which Freshfields advised - in 1994. The trick for the leading UK firms, remembers Salz, was to follow their contacts into the US banks as they were plucked out of home-grown houses.

As for Beringer, he describes himself as “a young corporate partner trying to build a practice” during Big Bang, when he too advised on the splurge of stockbroking acquisitions. He agrees that many of the changes heralded by Big Bang were not immediately obvious, including the transformation of the international equity markets and the rise of the investment banks, which began “a long process of consolidation in the financial institutional world”.

He concludes: “There has been an inexorable process of change which is still going on. It was not the immediate consequences of Big Bang which were significant but the longer-term consequences of removing barriers and creating opportunities for the next generation.”

john.malpas@legalweek.com