The following is an excerpt from Practice Perspectives: Vault's Guide to Legal Practice Areas.
Cliff Cone, Partner, and Ashwini Habbu, Counsel—Financial Services
Cliff Cone is a partner in the New York office of Clifford Chance. He focuses his practice on the investment management sector and has a broad base of expertise advising alternative investment managers, registered investment companies, and boards of directors with respect to all aspects of the Investment Company Act of 1940 and the Investment Advisers Act of 1940. Cliff graduated from Cornell University in 2002 and received his JD in 2005 from Brooklyn Law School, where he was a Notes and Comments Editor of the Brooklyn Law Review and a Richardson merit scholar.
Ashwini Habbu is Counsel in the firm’s US Financial Services Regulatory Group, specializing in regulatory matters related to asset managers, US and non-US investment funds, and bank holding companies. She advises clients on banking and investment services regulation, particularly with respect to new rules and regulations contemplated under the Dodd-Frank Act, including private equity and hedge fund marketing, investment adviser registration, and reporting and compliance with the Volcker Rule. Ashwini received her undergraduate degree from the University of Texas at Austin in 2005 and her JD from the University of Michigan Law School in 2009.
Please provide an overview of what, substantively, your practice area entails.
Cone: Our work combines both a transactional and regulatory focus into one practice. On the transactional side, we deal with registered investment companies, business development companies, private funds, and specialty finance companies, launching them, forming them, and then advising them throughout their lives. On the regulatory side, we deal with registered funds and advisers in the broader asset management industry and cover private equity funds and hedge funds as well as other types of specialty finance companies. Having the ability to represent our clients on both the transactional and regulatory side allows us to really see how their business operates and help them as issues arise.
Habbu: Our practice involves all sides of securities regulation and asset management, whether it’s working on the sponsor side by helping our clients launch private equity funds or hedge funds, with investors looking to invest in these types of funds, or with investment advisers helping them manage their investment platforms. While we handle all questions related to these laws and regulations, we are specially positioned to respond to shifts in the regulatory landscape both within and outside the US.
What types of clients do you represent?
Cone: I represent registered investment companies, business development companies, and their investment advisers, as well as managers to private funds. There are a lot of players in registered fund work, and we represent both the companies as well as the underwriters.
Habbu: We work with banks and fund managers around the world. Our firm’s regulatory practice has a truly global presence with hubs in Europe, Asia, and the United States. We’re well positioned to respond to multijurisdictional questions where a client may be subject to several, often competing, obligations.
What types of deals and/or cases do you work on?
Cone: I’ve worked on many closed-end fund IPOs, representing both issuers and underwriters. Recently, I’ve worked on the launches of several non-traded closed-end funds. From time to time, I also assist our litigators with SEC enforcement actions against investment advisers.
Habbu: I’d divide my work into three categories: (i) regulatory questions related to capital raising in the United States; (ii) ongoing compliance matters that affect the asset management industry; and (iii) “market monitoring” to identify the best compromise between commercial drivers and legal requirements that our clients confront daily. Regulators around the world, including the SEC in the United States, have increased their scrutiny of the financial markets, and in particular the asset management industry, so it’s our job to make sure that “business as usual” remains that way.
How did you decide to practice in your area?
Cone: I worked at the NYSE following graduation from law school and initially thought I wanted to be a litigator. I realized early on, however, that I preferred the faster pace of transactional work and being able to provide discrete advice. In 2007, the opportunity came to join Clifford Chance as a lateral, joining attorneys in a subset of the Capital Markets group whose specialty was ‘40 Act funds and private funds.
Habbu: I spent my 2L summer at Clifford Chance and then joined as a full time associate in 2010. Following the passage of Dodd-Frank, which overhauled the financial regulatory regime, the firm decided to form a dedicated practice group to keep up with these changes. I initially had no idea what it meant to be a “regulatory” lawyer, but recognized the unique opportunity I was being given. Joining the group has turned out to be the best decision I’ve made in my career; I feel like I have a direct line into how our clients run their business.
What is a typical day or week like in your practice area?
Cone: Every day is really different. Some days I attend board meetings, other days I have client pitches or calls with a regulator. Frequently, unexpected and urgent questions arise from clients and priorities must be shifted. Part of what I love about my job is that it never feels routine. I think it’s exciting to step into the unknown (professionally) every day.
Habbu: Since so much of our work happens outside of the US, I often spend my mornings triaging requests that have come in from Europe and Asia. By the afternoon, I’m usually able to prioritize what needs to get done, which often includes conference calls or meetings with lawyers around our network or our clients. These conversations generally inform how my day will end.
What is the best thing about your practice area?
Cone: The best part of this area of the law is that there are never any “yes” or “no” answers. We are always being asked to interpret the law and then outline the potential consequences and outcomes. We act as both a business adviser and legal adviser for our clients. This makes us a far better advocate than we’d otherwise be if we were just looking at a legal problem in isolation.
Habbu: I never feel like I’m pushing paper or drowning in a sea of paperwork. I’m sure a lot of people feel that way, but I’m thankful I don’t. Since, as Cliff said, there are no yes or no answers, you have every opportunity to be creative and innovative. Ultimately, we’re advocates, and having a chance to be that and still cook up a unique (and legal!) solution is one of the most rewarding parts of my job.
What is the most challenging aspect of your practice area?
Cone: The challenge for our clients (and us) is that they face different and often conflicting regulation in different jurisdictions. It’s our job to identify and execute a solution that satisfies all of the many regulators to which our client may be subject.
Habbu: Trying to find that ideal vanishing point between the commercial and legal side. No one likes a lawyer who always says no, but I suspect he doesn’t want us to always say yes either. Our clients have a business to run, and our job is to help them.
What training, classes, experience, or skills development would you recommend to someone hoping to enter your practice area?
Cone: People are often hesitant to start at square one, but I’m always amazed that the first thing people don’t turn to is the law—read the statutes and the accompanying guidance. I think the best way to learn is to observe senior associates and partners. Sit in on calls, watch the way they operate, listen to how they deliver advice, and then develop your own unique style.
Habbu: Intellectual curiosity is invaluable. I had zero classic “business” knowledge before I joined the group, but there’s a learning curve to everything that never stops. Read expansively and think creatively. The business section or an industry trade publication is, as a starting point, incredibly useful. Our clients are counting on us not just to keep up but help them get ahead.
What misconceptions exist about your practice area? What do you wish you had known before joining your practice area?
Cone: In order to be a great lawyer, and especially a great ’40 Act and Advisers Act lawyer, you need to be an expert in many areas of the law. People tend to silo themselves, but the truly great lawyers accept what they don’t know and acknowledge where they need to grow.
Habbu: US securities laws are incredibly complex and each fact can drive the analysis in a different direction. There are a lot of levers at our disposal and how we push or pull each one affects the end result.
What is unique about your practice area at your firm?
Cone: It was a much different world pre Dodd-Frank and pre financial crisis. It was a world where you could be a private equity lawyer and not know anything about ‘40 Act or a ’40 Act lawyer and not know anything about fund formation. There wasn’t as much of a cross-over. Post financial crisis, the lines blurred and it really pointed out the shortcomings of pigeonholed lawyers and forced those (who were able) to evolve and become far more knowledgeable.
Habbu: I could spend one day working with a client to structure their multi-entity, multi-level advisory business and the next day assessing the need for specific clauses in one of that business’s contracts. We don’t like to brand ourselves as specialists, but we get to see any given deal from beginning to end and from different vantage points. That 360-degree view is critical to anticipate future issues, which can be daunting, but it’s definitely exciting.
What activities do you enjoy when you are not in the office, and how do you make time for them?
Cone: I have two small children and I try to spend as much time with them as possible. It’s important to prioritize my home and family life (which also includes finding time to fit in neighborhood runs). It’s not easy, but it’s got to be a priority.
Habbu: It’s not easy to ignore New York. There’s just way too much to do. I spend a lot of time at shows, and in particular, sketch and stand-up comedy. There’s always something happening at UCB or Littlefield that’s fun. Early in my career it was difficult to achieve that work/life balance because I didn’t know the lay of the land. You learn as you go. I won’t say it’s easy, but it’s gotten easier.