What it means to be an investigator with Ellen Lake from Clifford Chance

And the common problems in contracts encountered during these investigations

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In this episode, Legislate meet Ellen Lake, a senior associate at Clifford Chance specialising in investigations and financial crimes. Ellen shares what it means to be an investigator and the common problems with contracts which are encountered during these investigations.

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Charles Brecque: Welcome to the Legislate podcast. A place to learn about the latest insights and trends in property, technology, business building and contract drafting. Today I'm excited to welcome Ellen Lake from Clifford Chance on the show. Ellen is a senior associate specialising in investigations and financial crimes. Ellen thank you for taking the time, would you like to please share a bit of background about yourself and Clifford Chance?

 

Ellen Lake: So I'm a lawyer at Clifford Chance. I've been there since 2008 and I'm in the disputes and investigations practice area. So I spend most of my time advising clients on risk and compliance, assisting them with crisis management when those risks crystallise, and most significantly carrying out investigations or defending clients where they're the subject of investigation by regulator or law enforcement authority.

 

Charles Brecque: What does an investigation actually look like?

 

Ellen Lake: Investigations can take a number of forms. Largely what I do is I'm a skill set. So I'm very good at interviewing people to find out about what's happened, I'm good at putting together reports, reviewing documents, putting together the bits and pieces into a jigsaw to sort of tell the story. And so those could be internal investigations, like there's been an allegation of bribery within a company and I go in and see what's happened there. And then often we'll track that through. So we'll be reporting to the board or the management and advising them on steps they need to take, whether it be reporting that behaviour, or disciplinary action, or some sort of new policies and procedures. So it's right the way from managing a crisis, something that's happened through an investigation, through to what we would call remediation in professional consultant speak, which is trying to kind of put everything back together and make it work going forwards.

 

Charles Brecque: Very interesting and I imagine for large corporates you must play a very key role for them. So as a senior associate at Clifford Chance what's been your favourite moment?

 

Ellen Lake: Pre-Covid there was a lot of travel for the job, going to all sorts of random jurisdictions and countries to interview people and that was exhausting but also was really rewarding. And so there's a number of highlights from trips to Peru and Milan, all sorts of interesting mines and factories and all sorts of places. Although, I think actually still my favourite moments have been when I was a junior lawyer and had to take a group of Texan investors to Croydon for the day, most of whom was wearing cowboy boots and one of whom was wearing a Stetson. So that was particularly memorable. But actually from a professional pride point of view my favourite moment is the small number of occasions when one of my investigations has been the top story in both the BBC and the Financial Times at the same time. That's pretty cool.

 

Charles Brecque: What would you wish you'd known before becoming a lawyer?

 

Ellen Lake: So I think there's a view of the law you see on TV, and Criminal Barristers and Suits where people they sort of do M&A and then they stand up in court doing litigation the next day, but what I hadn't really appreciated before becoming a lawyer, what I wished I'd known, how important it is to actually not just think about the law but think broadly and laterally and commercially. So when you're doing your technical legal training it's obviously focused on the law, but so much my day to day is about working with clients to understand their business, to find pragmatic commercial solutions to manage risk and to maximise opportunities. So I find it a really nice, well-rounded profession and not nearly as technical, legal as you might see portrayed in popular press or on TV.

 

Charles Brecque: As a investigator do you actually interact with any contracts? What type of legal documents do you work with?

 

Ellen Lake: More often than not I come in when something has gone wrong. So that means that I'm often looking at existing contracts when they're being challenged. So what that means is that I see the best and worst of contracts, and I see how they operate when they're really tested in practice. So often I'm particularly considering certain topics that are present in many different contracts. So I will look at analysing financial crime provisions in contracts, so those parts of the contract which set out what is and isn't permissible with regards to say, money laundering or bribery and corruption or sanctions compliance. Another common area of contracts I often look at is contractual obligation of individuals. So employees, contractors, in the context of allegations that there's been some sort of misconduct within the business. So we tend to look at quite a broad range of contracts but generally when they're under the most stress. And when the problems with them are likely to be flushed out.

 

Charles Brecque: I think that's a very unique position because most contracts are signed and forgotten and rarely revisited. Well only revisited when they are questions or where things do go wrong. But still that's quite a rare occasion, whereas if you see this everyday you must know what it takes to draft a brilliant contract that will stand the stress of an allegation or some other problem. What are, based on your work and findings, what are common issues in contracts that might create risk?

 

Ellen Lake: There are many, but I would say there are 2 which are common to all different kinds of contracts. which I see come out a lot come out in the wash when a contract is under challenge. The first is a lack of consistency, or conflicting clauses or conflicts between what 2 or more interrelating contracts, say. So, we commonly see a lot of related contracts. You might have a main contract for the supply of services, and then a side letter agreement contract which bolts on the supply of additional services, maybe at a later date. You can have inconsistencies between those 2 documents. So, a common example is how disputes are to be resolved under the contract. 1 contract might require that all disputes have to go to arbitration, but another might say, "Oh no, you have to use the English courts." And so thinking about those kind of consistency points and how clauses work together is always really important. So that if something does go wrong you know what the right route is to take. And that lack of consistency I think extends to things like defined terms. Lawyers love to define terms and therefore non-lawyers think that you must have as many as possible. But if you are going to define a term that you've got to stick to using that definition throughout. It's interesting to see, Law Tech UK which is a government backed initiative, have had a project recently on smarter contracts, and they've just published their report. It contains various examples of how tech is being used to make the creation and the execution, and the management of contracts more efficient. So I think we're going to stop seeing lawyers themselves using Microsoft Word to create contracts, and instead start using those contract building platforms. I'm really hopeful that those kind of inconsistencies, things like defined terms, things that are very easy to get right but also very easy to forget, that using those kind of platforms will help iron out those inconsistencies. So that's one area.

 

Then the 2nd area that's common to lots of different contracts is where you have obligations that fall through the cracks. So, 1 party might be obliged to do 1 set of activities, the other party is obliged to do another. But there might be things that need doing to make that relationship work where it's not actually clear in the contract who should do them. So an oversimplified example, if you've got a parcel collection or delivery contract and it says the driver needs to collect the parcel and put it in the van. And the sender needs to pay for that in advance. But it doesn't say who needs to put the appropriate labels on it, for example. So there's that missing piece. I think in quite a long winded way, what I'm trying to say is that when you're looking at a contract you need to look just as much at what's not in it, as what is in it. And look at what might be omitted because that can often prove as problematic as the stuff you've actually got in there.

 

Charles Brecque: I think that's spot on especially for non-lawyers, not knowing what's missing is really key and I think that's 1 thing at legislate we try to address with our ontology of contracts so that when we put a contract on Legislate we know exactly what the key terms are and we know how they interconnect so we know the contract can be build in a consistent way. And 2nd of all, one product we are planning on rolling out in the future is making our ontology available to the public. So that, for example, they could upload an employment contract and we could tell them what's missing in their agreement. Because I think that's 1 thing that non-lawyers especially take for grant. That what they are signing is a contract because it says contract on it. But actually there needs to be quite a few elements and they need to be build and connected consistently.

 

If for example I was a new founder starting a business and I had to get started with contracts, what tips would you share with me?

 

Ellen Lake: For me in a number of contexts and not just in contracts people will often head into something without really having getting their head around the scope of what they're doing. And if you're going to draft a contract you need to be very clear what the scope of that contract is. So what that contract is for. You need to be clear on the scope of what you want to do, who's meant to be doing what, what the potential risks are and whether you need some content in that contract to mitigate them. If you can set all of that down clearly, that makes sure that everyone your working with is on the same page and understands their respective obligations. That doesn't necessarily mean having a very legalistic or lengthy form or contract. But some form of words that user friendly, that all the parties can read and understand which sets out what you're doing, who's doing it, when you're doing it, why you're doing it, then that will stop those misunderstandings arising at the outset. So I think really thinking about what you want to achieve before you start drafting. I think lawyers are absolutely guilty of starting to draft and hoping it evolves, but I think you've got to have a plan first.

 

Charles Brecque: If you're being sent a contract to sign today, what would impress you?

 

Ellen Lake: Plain English, first and foremost, is absolutely key to a good contract. We have made great strides in the UK legal system over the last, well, certainly as long as I've been practising and before that, in getting rid of these archaic terms and adopting plain English. But I think the lay person's view or non-lawyer's view of what a contract needs to include often assumes it needs lots of these 'here so forth' and 'notwithstanding', and all those quite archaic terms, but at the end of the day, both sides needs to understand what their obligations are under the contract. There isn't any need to use that legalese or to make something sound more legal. I quite often with family members will deal with contracts that they send me to have a look at, or something that they've put down on paper and they want me to make it legal, and I think often it's just a case of setting out in plain language what the parties' obligations are, what their expectations are of each other. And if I get a contract which very clearly does that, that is what impresses me the most. Not that it looks like a legal document. It's one that is clear and that people understand what they need to do with it.

 

Charles Brecque: It sounds like you've described Legislate. Or at least we try and make the language of the contracts plain English but also present different views of the contract for people who aren't necessarily familiar with contracts, for example, presenting a set of questions and answers. We are working on a visual representation of the contract. We are constantly experimenting and acting on user feedback to make it much easier because not many people actually create contracts and not many people sign contracts on a daily basis and it can be a bit overwhelming to read a large document, even if it's written in plain English. So that's something we are working on. Thank you very much, Ellen, for taking the time. Best of luck with your investigations and finding practice in contracts.

 

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