The day the City woke up with a Bang

Today is the 20th anniversary of Big Bang, a landmark that has prompted an understandable outbreak of nostalgia within the Square Mile. Many of today’s top lawyers had recently become partners when the reforms took place. The shake-up was, inevitably, to have a profound impact on their careers.

It may not be a surprise to readers of this blog to learn that, 20 years ago, Slaughter and May corporate heavyweight Nigel Boardman was, er, advising on deals.

He recollects: “At the time of Big Bang I was a partner at Slaughter and May working on a number of broker-bank mergers such as Warburgs-Akroyd-Mullens, Barclays-de Zoete-Wedd Durlacher and Morgan Grenfell-Vickers da Costa to name three. It was fairly clear that it was going to change the face of the City from the outset. Particularly working with Mullens, the Government broker at the time, it was evident that our system was antiquated and unless it changed the City would be by-passed.”

Clifford Chance managing partner David Childs had been a corporate partner for five years by the time of Big Bang and was doing “lots of M&A but much smaller deal sizes than we are now used to”. For him, the key moment was the publication of the Financial Services Bill.

He says: “Overnight we had a new regulatory practice, advising on the Financial Services Act and the new Securities & Investment Board rule book and a whole new area of M&A, as our banking clients bought London broking houses.” As for the impact of Big Bang on the legal market, Childs describes it as “enormous”, given its creation of “a whole new area of regulation and rules affecting almost every transaction involving securities”.

Macfarlanes senior partner Robert Sutton remembers doing a lot of work for Saatchi & Saatchi and other advertising clients at the time.

“I remember the 1980s being one of the busiest periods of my professional life,” he says. Initially he regarded Big Bang as a way for brokers and jobbers to get rich. But he says the influx of US investment banks had a profound impact on the role of legal advisers. “There was a change in the attitude of the investment banks to the plumbing of deals,” he says.

He cites two examples: pre-1986, investment bankers regarded it as their job to write the prospectus for a flotation and to comply with the Takeover Code during a takeover. With the arrival of the US investment banks came a new approach that signalled a far greater role for the lawyers.

Email john.malpas@legalweek.com with your Big Bang recollections.