Of all young dreams, becoming a corporate tax lawyer must be well down the list. Yet Alan Connell, managing partner of Eversheds Sutherland, says he knew that was what he wanted to be after studying a module on revenue law as an undergraduate in UCD. 

Admittedly by then he had put to bed juvenile ambitions of becoming a physiotherapist on the Liverpool or Dublin bench and had done enough 5am starts at his father’s meat processing plants to know that wasn’t for him either.

Having chosen to study law, he found himself drawn to deal structuring and realised tax was a huge part of that. “The more I looked at it, the more I could see how tax was intertwined and relevant to every transaction, particularly on the corporate side,” he says. “It just seemed that it was going to be hugely relevant.” 

It was a prescient insight for a student in the late 1990s pre-silicon docks era Dublin, a city on the cusp of huge change. The IFSC was expanding and the government was phasing in the slashed 12.5 per cent standard corporate tax rate that would become an anchor of Irish economic policy. 

Time, of course, would prove Connell right. International companies like Google, Facebook, and PayPal flocked to Ireland, setting up European headquarters in Dublin. As a leading corporate tax partner with Eversheds Sutherland, and Matheson before that, he has advised many global players on inward investment and restructuring.

But it was a very different landscape when he was starting out. Back then, the major Irish law firms typically didn’t have large scale tax practices so Connell tried his luck in the City of London. He got hired in 2001 as a tax associate with global US law firm Mayer Brown, cutting his teeth on some fairly glitzy transactions including the takeover of Manchester United by the Glazer family, and Robbie Williams’ record deal with EMI Records. 

Having gained experience and a good dose of international perspective, Connell returned to Dublin working, up until recently, as partner and head of the tax group at Eversheds Sutherland. Then last January, he was appointed as the firm’s managing partner which he describes as a “huge honour”.

Honour aside, Connell is acutely aware of the challenges facing a top ten law firm in a swiftly changing Irish legal market with new competitors pouring in. In short, he seems excited by them.

And again it goes back to tax. If low corporate tax rates helped to transform and globalise the economy, the scale of foreign direct investment has now lured in the big international law firms: DLA Piper, Dentons, Ashurst, Hogan Lovells to name a few. Some are setting up small Irish outposts, others are going all out. The impact of this dizzying influx of mega-players with huge budgets on the Irish legal market has yet to be fully felt.

The trend of UK and American headquartered firms having a presence in Ireland was initially pegged as a Brexit defence strategy but Dentons and DLA Piper, to name two, were clear that they were following the business interests of international clients and closing a gap in the market. Both firms promise Irish corporate clients a full-service practice with global clout and synergy.

When The Currency interviewed Connell in recent weeks about his new role, he was keen to drive home Eversheds Sutherland’s unique advantage in the market as a major global player that has been on Irish soil since 2006, long before the arrival of the new Celtic circle firms.

“We’re ahead of the curve, so to speak, on this,” he said.

Apart from discussing legal services, over the course of the conversation Connell provided insights on advising multinational corporates during Covid-19; on tax reform and the Biden administration; on building workplace diversity, and on the return of private equity.

He also said that at his wedding his best man told guests ‘Alan became a tax lawyer because he didn’t have the charisma to become an accountant. “There may be something in that, I don’t know,” he added, laughing.

A global offering for a global market

FC: You’re an old hand at Eversheds but managing partner is a different role, how are you finding that in the current environment?

AC: I’m not so much an old hand at Eversheds. I’m not even there four years so it’s been a big change for me in that period of time. When you look at the role of managing partner, it’s funny because it’s not something that you necessarily plan for. And there’s no course or module during college or during your training that gives you a blueprint for the role of managing partner. But it’s a huge honour to take on the position. It’s a privilege to have the opportunity to lead Eversheds Sutherland particularly at such an exciting and important stage of our development. The challenges that come with it I very much look forward to.

FC: Why do you say this is a period of change? For example, I just looked at the Law Society’s latest list of biggest law firms, and Eversheds looks like it’s bubbling away in and around the same position for 2020 (ranked eighth-largest firm with 112 practising solicitors) as it was in 2019. Leaving aside external things like Covid, what would be changing from Eversheds perspective?

AC: Well, I think the Irish legal market, after many decades without change, I think the sector in Ireland is changing and perhaps changing significantly. I’ve read those numbers from the Law Society and it’s interesting but I think if you were to look at the next five to 10 years from now, I think the Irish legal landscape will look very different again. Principally because more global firms will move into the market. In terms of ourselves, we joined the Eversheds network back in 2006 so we were the first major international player to have a significant presence in the Irish legal market. We very much led the way in terms of driving what we see as that evolution of the Irish legal market. With the number of international players entering the market in recent times, I expect that trend to continue.

FC: An interesting feature of being a managing partner for an international firm is that you, presumably, have meetings with the other managing partners in the firm. Would this change to the legal market be something that would be discussed in relation to a number of countries but also in respect of Ireland?

AC: So, as managing partner of the Irish offices I sit on the European board of Eversheds Sutherland. That is a huge honour as well and it’s very interesting and dynamic in terms of the overall global strategy for the firm. Ireland’s position in the global market as an international business hub in that forum has become more important, I suppose given the internationalisation of our economy.

I think globalisation has meant that the number of global decision-makers in Ireland, whether that is in Irish or multinational organisations, that have significant budgets has increased rapidly in recent times. With such, I suppose, global decision-makers being present in our jurisdiction, they will need to be advised by global advisers. They require multi-jurisdictional services as their businesses are global and that’s something that we’re very focused on at a global level within Eversheds Sutherland and Ireland has a very important part to play in that.

FC: I mean, we saw the kind of Brexit flurry happen, and then that sort of stagnated when, I suppose, the Law Society clarified that securing practicing certs alone wouldn’t cut it if firms wanted an EU presence. But what you’re describing is something possibly not Brexit related. Who do you see coming into this market, typically the London headquartered firms, or more US players, or just a general influx?

AC: I think probably a general influx. You’re right, I don’t think it is Brexit-driven necessarily We’ve been in the Irish legal market since back in 2006. I think other players may have looked at the Irish legal market with more interest as a result of Brexit, but I don’t believe that is the true driver of it. I think it goes back to the fact that when you look at the globalisation of many of our clients’ industries, they require cross-border support, and what has happened in the Irish legal market is that the indigenous law firms in Ireland, simply don’t offer this. They’re focused solely on Irish legal matters. And as such for global businesses which are invariably sophisticated purchasers of legal and tax services, this can be very limiting, costly, and time-consuming. Eversheds Sutherland, in addition to servicing business that comes into Ireland and Irish businesses in Ireland, are also in a position to serve businesses expanding out of Ireland. Our global footprint means we are on hand, effectively as a one-stop shop to assist our clients, as they seek to expand their operations. And so unlike major Irish law firms that have satellite offices outside Ireland, who only advice on Irish law, being a member of Eversheds Sutherland means we can provide a seamless legal and tax service right across Europe, the US Asia, Africa, and the Middle East. So at a local or international level, we aim to help our clients in achieving their commercial objectives, local or global as the case might be.

I think the global firms may get lumped in together but we would see ourselves significantly ahead in our development given that we have been in the market for a number of years

Alan Connell, managing partner of Eversheds Sutherland

FC: What with Irish law firms, is it a distorted map with Ireland at the centre of the globe? And that’s not the real picture in that it doesn’t reflect the realities of international trade?

AC: There is no doubt that Ireland certainly punches above its weight in terms of attracting the level of investment that we’ve attracted over the years. We are a very attractive proposition for investment, whether that’s investment into Europe, and using Ireland as a gateway for that investment into Europe and beyond, or indeed Ireland being a launchpad into investment in, for example, the US. We’re uniquely placed as a law firm to advise on that on that two-way traffic in terms of what our clients want. And so I suppose going back to the point I made in terms of the level of investment here in Ireland, we are such an attractive jurisdiction for investment into the single market, particularly for US multinationals. 

I think we positioned ourselves really well, and I think Brexit, perhaps just assisted that foreign direct investment drive into Ireland. It is a common law jurisdiction, English speaking, there’s the ease of doing business, a favourable tax regime, etc. There is a lot of positives for Ireland but it is the case that as a result of that when you look at what’s actually present now in Ireland, it is internationally focused organisations. And they require legal and tax assistance beyond just the Irish piece. They require to be looked after from a global perspective, and I think that is probably what will drive the change within the Irish legal market because it won’t be sufficient in and of itself just to solve an Irish legal or tax position. I think it has to be more joined up in the context of a global offering.

FC: I mean we’re already seeing that with Dentons and DLA Piper, and so I suppose what you’re describing is something that’s already happening. Eversheds will be slugging it out with other international players, because what you’ve just said there is exactly what I’ve heard from DLA Piper and from Dentons. You’re all on the same page in terms of the offering that’s going to be available, or is available in the Irish market. But I suppose what you’re saying is you’re expecting more of that. 

AC: I think the global firms may get lumped in together but we would see ourselves significantly ahead in our development given that we have been in the market for a number of years. We are Ireland’s only full service global law practice with an all Island presence and multidisciplinary expertise. New entrants to the market are coming in to try and bridge the gap there in terms of what they’re offering. We’re ahead of the curve, so to speak, on this. 

Internal affairs

FC: I spoke to David Carthy of DLA Piper who said one thing he struggled with was the complete lack of diversity in Irish law firms. He had been working abroad and I know you worked in London as well. And it is the case apart from maybe in female representation, but definitely not really beyond that in terms of race, nationalities.

AC: I think that’s probably a fair comment.

FC: I think what he was saying is that this has an impact on how business is done in Ireland.

AC: It certainly does. As a global law firm, we are fully committed to the notion of inclusiveness. We are committed to fostering an inclusive and positive environment and enhancing the personal and professional development of our people.

FC: Does that mean it hasn’t happened? I presume that means it is a work in progress.

AC: It constantly is. We’ve actually done a lot of work in this space. We have what we describe as our Pathways Committee, which supports and promotes gender inclusivity in our firm so it’s responsible for spearheading and promoting various positive initiatives in terms of client events, networking opportunities training initiatives, and social events so it is something that is very important to us and indeed it’s very important to our clients. I think having that diversity and inclusion as part of your offering is hugely important because our client base is domestic and internationally focused and it is a very diverse and inclusive client base so it is important that we are reflecting the market in which we serve. 

FC: Since covid struck have you been able to take on any trainee solicitors or keep any trainees you already had or was the market just too contracted to allow for that?

AC: No we continued with our training programme. We continued with our trainees through their training contracts. There is no doubt that our junior people found covid and working from home more challenging because in terms of their training they really benefit and develop from having that close proximity in terms of the mentoring that can only really come with being in the office together. And so I think there’s no doubt that that has been a significant challenge and it’s something that we’re constantly looking at to try and make sure we’re as connected as we possibly can albeit remotely.

FC: Were any of them offered jobs when their training ended?

AC: Yes, the vast majority. I think there were one or two who went to pursue other opportunities but we invest so much and so heavily in our juniors, our trainees, that we very much want to keep them as part of the Eversheds Sutherland organisation. Thankfully we have managed to keep the vast majority of our trainees and our programme, the trainee programme – and our summer intern programme that’s coming up – are still very much in train.

FC: And people who start that will do so in the knowledge that they have a decent chance of retaining a position?

AC: Anyone coming through our training, the intention is that they would qualify with us. And we do our best to achieve that wherever possible. It’s really a significant investment for us so we do want that to be a success. And it has been a success. Bringing people up and through the training programme all the way into solicitors and associates, and senior associates and indeed partners has been hugely rewarding.

Covid tax planning and global supply chains

FC: I ask that for a reason because I did a piece last year about law firms being affected by covid – I spoke to your predecessor – and there was a lot about covid cuts to bonuses etc in the industry at the time but not to jobs. Afterwards it was pointed out to me that while the big law firms were retaining staff, some were letting trainees go or at least not offering them positions. 

So I suppose having addressed that point, how is Eversheds fixed now in relation to staff. Are they on reduced hours, what’s going on?

AC: We’re back to business as usual insofar as we’re all still obviously working remotely. Towards the end of last year we saw trading levels increase somewhat, particularly in our corporate department where there was a lot more activity. I think 2020 was a challenging year in the sense that transactional activity, certainly for the first half of the year, was patchy. Having said that, the advisory side of our business, particularly in areas such as employment, tax, and other commercial areas, traded at a much higher level than what would normally be the case. So there’s a balance there, and it was really only as we came through the year that we really got to see the full extent of the impact.

Go back 12 months ago or a little less and the outcome for 2020 I think we would have accepted that back in March last year. The difficulty we have presently is that we’re still not out of the woods yet. Covid is still with us, we’re still waiting on the vaccine rollout programme. But we’re much more positive about the future and I think that there’s going to be a lot of pent up demand for a number of areas as we come out of the pandemic.

FC: What pent up demand? What areas do you see that in?

AC: I think corporate for one is where there is going to be a significant amount of activity. Even in the back end of last year in Q4, and this year, we’re seeing an awful lot more instructions coming in, a lot more term sheets around transactions. Private equity is getting more engaged on projects than it perhaps would have done up to the middle of last year. I think in terms of financial services, again, we’re seeing that as a major area of growth, not just for the national economy but actually for our firm for various reasons, including Brexit but actually, probably beyond Brexit. And we’re particularly well placed to service the needs of domestic and international financial clients because of our expanding specialist financial service practice and the global reach of the firm.

We’re also seeing a lot of fallout from covid and working from home. And that is principally on the tax and employment side. Ireland has a significant amount of foreign mobile workers that are now back in their home jurisdictions and that throws up challenges in terms of various employment related issues, particularly when they’re in their own jurisdictions for a number of months. There can also be tax implications, whether it’s payroll tax implications in the home jurisdiction for that individual or potentially creating a taxable presence for the Irish company in that home jurisdiction. So that’s throwing up a lot of challenges and we’re working with a number of our clients to see how we best resolve that. 

“Ireland is very much a transparent tax regime. It does exactly what it says on the tin”

FC: Could I ask you to expand a little bit on that latter point about creating a taxable presence? Is that just a concern that you’re now advising people on or has it been thrown up by any international or European tax authority as a reality?

AC: This is something that we’ve been advising on from the beginning of covid really because it was always a potential issue the longer that it meant that people were working outside the jurisdiction. And tax rules are quite clear around that. We’ve had some helpful statements from Irish Revenue. The difficulty is that those helpful statements haven’t necessarily been reflected across the globe or even across Europe. So there are challenges there. And I think there are certain steps that particularly multinational companies need to focus on and need to take to ensure that they’re not going to create an unintended consequence from having their people working from their home jurisdiction.

FC: It was reported, I think last summer, that tech giants were saying to their international Dublin-based staff to come back. What are you referring to when you say there are things that companies now have to do?

AC: There are a number of things. That side is one end of it. But there’s also the tax residency of the Irish company. And because the composition of the boards of the multinationals may involve non-residents on the board, what you would prefer is that they’re not making key decisions in relation to the Irish company while outside of Ireland. Typically, that would involve traveling to Ireland for board meetings, and that’s not possible in the present climate. While Irish Revenue acknowledges that, that’s not saying that every jurisdiction has taken that position. So, there needs to be certain care in terms of management control of the Irish company. 

The other side of it is in terms of the work that perhaps individuals are carrying out for and on behalf of the Irish company in their own home jurisdiction to make sure that they’re not carrying out work that would mean that the Irish company would create a taxable presence in that local jurisdiction. So, there are certain, I suppose, guidelines or safeguards that companies should be looking at to ensure that they’re protecting themselves from that and its potential implications.

FC: And how are decisions getting made in that environment? Does it require a skeleton staff in Ireland? What is the workaround?

AC: Typically, one would expect that an Irish company would have certain Irish resident directors and it may also have non-resident directors. It may involve these non-resident directors joining a board meeting telephonically, and that meeting being commenced in Ireland and the invite coming from Ireland. But one would want to guard against a pattern of that happening as well. I think keeping detailed records as to the reasons why someone is not physically present at a board meeting is very important. And it really is just trying to safeguard it, you know. Obviously, the business needs to get on as decisions need to be made. It’s just making sure that they ae are attended to in an appropriate fashion I suppose to make sure that it’s not counter to what the overarching strategy, fiscal strategy for the global organisation, may be. 

We’re seeing a lot of challenges in terms of global supply chains, as well. That’s an area that has kept a lot of our contract lawyers very busy. A lot of convoluted and complex supply chains just haven’t been fit for purpose in a covid world. And there’s a revisiting of those because they require simplification somewhat and maybe making sure that manufacturing is perhaps closer to the market that they actually serve. So, that’s covid related, that’s Brexit related but there is a lot of focus on that, in terms of internationally focused organisations, to ensure that they’re in a position to get their product to market in an efficient way.

The rules of engagement

FC: Out of interest what are you expecting from the Biden administration and the OECD when it comes to multinational taxation and international talks?

AC: I’m expecting much more engagement, particularly from the perspective of the European project. I think the US has an interest in that and it should have a voice in that particularly when we’re dealing with issues like taxation of the digital economy and the globalisation of the economy and matters where certain European member states are taking unilateral actions to tax digital services. I think it’s in everyone’s interest and particularly Ireland’s, that there is consensus around the issue that the OECD project -which is striving to find that consensus  – should really play out. I think the US having a role, a say in that is hugely important. I think we don’t want to have a situation where we just have unilateral steps taken by certain member states because I think that is something that will be very challenging for business, and may not necessarily reap the financial outcome that maybe some jurisdictions are looking to achieve.

FC: We’ve seen the wind-down of the double Irish, but then there’s been the rise of the green jersey and IP onshoring. Do you expect that we’ll still see a good bit more of that? Obviously, it’s something The Currency has been looking at in great detail.

AC: I think the concept of moving functions, assets, and risk to Ireland is something that is not a new phenomenon. Ireland is very much a transparent tax regime. It does exactly what it says on the tin. There is no special deal, there are no special arrangements for companies. I think the Apple decision bears that out albeit it is being appealed by the Commission. Provided you can align your profits with your substance that is sufficient from a global tax perspective generally. Ireland has always positioned itself such that it is very much seen as a jurisdiction, particularly in the context of Europe, as a gateway jurisdiction to Europe, so it does make sense when you have highly skilled, high performing employees carrying on very high tech activities that there would be valuable assets created from that. I would see Ireland continuing to be a jurisdiction of choice for holding IP.

FC: Sure, with massive borrowings and huge offsets and paying virtually no tax. I suppose the question you answered there was that you expect it to continue unless it comes under more scrutiny internationally?

AC: Well, I do expect Ireland to be seen as a jurisdiction of choice and in that sense continue. I suppose the rules of engagement for international tax have significantly changed and Ireland has very much played its part in that. It has been very much an engaged contributor to that discussion. The idea of having transparent tax rules and regimes across the globe is very much something that Ireland is interested in. I think the difficulty is in the context of if you want to just purely tax by reference to market share. That becomes a much more difficult dynamic and, while there’s a balance there, we can’t forget where value creation occurs, where risk is allocated and indeed where talent is allocated. So, there is a balance and that’s why I say in terms of the OECD project that I really think that will play its role in agreeing a framework that all countries adhere to. And I think if that is the case well then Ireland will certainly play its part.

FC: So the holding of the IP may not really be where the value is right. It can be, effectively, just a holding structure.

AC: Just on that point, there’s transfer pricing rules to deal with that. So, the allocation is by reference to arm’s length rates so once the allocation is appropriate, the taxing right should flow thereafter, so I don’t see an issue with that.

FC: Can I ask you how much work this is generating for Irish law firms?

AC: It is generally probably exaggerated, in terms of the level of work. Ireland, and the levels of investment in Ireland, means that there’s a lot of activity for Irish and global law firms in terms of advising companies, in terms of the assets, risks, and functions that they have in Ireland. I don’t see any particularly increased levels of activities in recent times.

FC: You were saying earlier that private equity is gearing up again. Are there any areas of interest that you’re seeing or is it quite mixed?

AC: It is quite mixed. Obviously, there was a slow down in transactions last year. And private equity needs to deploy capital. Holding capital on deposit is not very fiscally shrewd at the moment, given that we’re entering into a world of negative interest rates. So, I think where there are opportunities, and where there is value, private equity will step forward. It really is across the spectrum. We’ve seen a lot of investment from private equity in the insurance industry in particular, but it is actually cross-platform in terms of what attracts private equity money.

FC: We’ve seen devastation in certain sectors and I don’t know how many of those businesses would transact with Eversheds or cross paths with Eversheds necessarily. But the last year we’ve seen government stimulus packages announced, and so on. What would your forecast be given that Covid probably has been longer and deeper than expected, from your experience or from your clients’ experience?

AC: I think that the government has been very appropriate in terms of the level of support being provided. You are right, there are certain industries or sectors that have been more adversely affected than others. For example, the multinationals and the tech sector traded pretty much business as usual and perhaps used the opportunity to grow their market share. 

I suppose on the entertainment and leisure side, that has been much more challenging, etc. I think there are a lot of difficulties there in that sector as we slowly come out of the pandemic. Really, I think there is a balance in terms of what’s sustainable and what may not be sustainable and I think we’re probably going to see later on in the year a more vigorous assessment of that, particularly around restructurings and refinances etc that may well ensue in the coming months. We’ll hopefully get back to a level of normality. When we look at our business and the multifaceted nature of our full service offering, it does allow us to take somewhat of a panoramic view of the economy at any given time. We operate a diverse practice and that practice is built on solid foundations with a wide range of expertise. Coupled with our talented people and our fantastic client base just means that we’re able to capitalise on opportunities that arise in both challenging, as well as perhaps buoyant economic times. So I think there will be a correction, and perhaps a right-sizing in certain sectors as you come out of covid. And there will be other sectors that will continue to thrive as a result of what Covid has brought, and what it will bring, to our future.

Further reading

Francesca Comyn: Irish law firms feel the slow burn of international competition