Giovanni Lega: “I want LCA to be Italy’s first listed law firm”
A first-time entrant in four separate rankings in our Corporate & Finance research cycle, LCA Studio Legale had a very strong year. We speak to its founder and managing partner about its strategy, its success and how it addresses ESG goals.
Leaders League: LCA Studio Legale was ranked by Leaders League for the first time in Banking & finance, Restructuring & insolvency, Corporate tax and Wealth management this year. Have there been any developments in these practices in 2020-’21?
Giovanni Lega: I’m happy to hear that we’ve been ranked in these categories, and even happier to note that LCA has experienced substantial growth in all areas. To be general before being specific, the business model we launched when we were founded – putting human beings before professionals, creating a chain of trust between all employees – has been paying off. Trust is a key element to a profitable network of professionals. Accordingly, we’ve had significant growth in terms of headcount – talented, good people who are aligned with our firm’s human-centric mission, which has been especially important at a time when screens have taken over. We call each other to ask how the other is, not what they’re doing or what they’re working on.
Banking and finance has been one of the sectors we started a few years ago; practice revenues have been boosted by 50% year-on-year. Early on, we were an M&A boutique, and M&A has always been a key driver; recently it has helped revitalise the market in general. We’ve added talented youngsters and gained new institutional clients, with large exposure to debt capital markets. We’ve also seen real growth in real estate.
Restructuring is one of our strongest areas, as strong as M&A. Before this pandemic, restructuring was a one-time thing for a company. Nowadays, companies, especially mid-sized Italian ones, are coping with the fact that restructuring is a constant. It may ensue from any type of situation. Our work in this area is a blend of pure restructuring work, corporate advisory and M&A. We can handle all angles. We have acted for entrepreneurs restructuring their company; for creditors; and for investors wanting to invest in parts of companies being sold. We also have a very strong track record as trustees and commissioners. Our partner Salvatore Sanzo, head of the restructuring practice, has been appointed by courthouses in several substantial and complex bankruptcy procedures as trustee.
We’ve had very strong turnover here in corporate tax and wealth management. Our professionals in this group are very young on average, which has helped drive the practice. M&A activity, for which tax structuring is key, has helped; inheritance is also a major issue. Elderly entrepreneurs have long been anxious about inheritance, but the pandemic has made even middle-aged business owners nervous. Current inheritance law, which allows inheritance grants of €1m (and a 4% tax on everything beyond that), has caused a lot of people to try to plan their inheritance much earlier and more keenly.
Italy’s Res Non Dom law from 2017 allows expats – even Italian citizens – that have lived outside of Italy for more than five years to come back and pay only €100,000 in tax, no matter how much they earn worldwide. Cristiano Ronaldo was the poster boy for the popularity of this law and its usage, and even Gérard Depardieu has said he’d rather live in Italy than in Russia or Portugal with this law! This has led to a lot of advisory work for us.
In banking, finance and capital markets, full-service Italian firms like LCA face stiff competition from UK- and US-headquartered firms with offices in Italy. How does LCA position itself in this regard, in terms of delivering the best possible service to clients?
Previously I have managed the Rome and Milan offices of Freshfields Bruckhaus Deringer, and when I decided to leave that firm, I set up LCA in 1988, merging with Freshfields in 1996. I then relaunched LCA. Having been a managing partner at a Magic Circle firm, I can tell you that Italy is not such an interesting market for the Magic Circle firms. When those firms first came to Italy in the early 2000s, they expected a legal environment whose major capital markets transactions they could monopolize. But the Italian market is largely a market of small to medium-sized enterprises, mostly family-owned, with a lot of difficulties for foreign firms in fathoming what entrepreneurs really want and think. In this respect, those entrepreneurs still need a lot of education.
A lot of global firms, in terms of profit sharing, have a system that is based on their headquarters’ countries, which doesn’t always work so well in Italy. The Italian market has proven to be a very difficult market; most of the international firms have shrunk their activity here.
Of course, Magic Circle firms’ networks provide local offices with referrals, which homegrown Italian firms don’t benefit from as much. But overall, I face much more competition from Italian firms than from international firms in the Italian legal environment.
How would you characterise LCA’s three-year plan?
A lot of new adventures! The broad context of the legal profession in Italy is that we are a simple self-regulating association. I’m the chairman of ASLA (the Italian association of law firms); I’ve been fighting to modify the system and end up banging my head against a wall – not least because of the constant churn of different governments at the top, which makes it hard to create steady dialogue with institutions.
The main problem with Italian firms is with sustainability. The term itself means duration, and so far, there hasn’t been a single firm that has overcome the life of its founder. I wanted to create a platform whereby professionals could act out their enthusiasms.
For the next three years, one key goal is to list LCA [on the stock market], not for speculative purposes, but to consolidate our platform. I want to have for the first time in Italy a listed law firm. This will not be easy, particularly given the lack of relevant laws.
Rather than telling you that we will somehow stabilize and create more opportunities for different areas, I see chances in sectors that haven’t yet been touched by other firms: legal design; sustainability projects; AI. We are creating an art company, and have invested in a company called IUSCAPTO that allows us to engineer our ideas. With them we are developing a CRM [client relationship management] system, one whereby we can provide general assistance to corporations, with different professionals providing harmonised advice to different companies.
We are creating a sport company, to broaden our legal activities but also to provide assistance and services in many other aspects in addiction to law, for example helping minor sports, our federation of minor sports, and other countries to properly register and establish themselves for the 2026 Winter Olympics, which will be held in Italy.
We have planted 300 trees in an area where we’re envisaging the refurb of a farmhouse, which will become an LCA hub where our professionals can go and stay – with family if they wish – over weekdays and weekends. We’ll be organising events around this.
LCA also owns LCA Ventures, which is a company we created on a ‘’fees for equity’’ basis. We had assisted the largest Italian industry incubator, realising that it was more productive for a lot of start-ups to give equity rather than be burdened with fees. In addition we started to invest in sustainable companies like Tree-to-Scope, an Israeli company that provides water to trees, saving water in countries where a litre of water goes a long way. LCA Ventures is also investing in education and other areas.
How does LCA address ESG obligations?
It’s more than an obligation: it’s an element of consciousness. You either have it or you don’t, otherwise it ends up being greenwashing. A lot of firms put ESG under the responsibility of communications and marketing, but this isn’t the case at LCA. Many years ago, we created a committee called “of under-30s”, formed by young associates that would talk directly with the executive committee, in particular about how to develop a path for sustainability at LCA.
Sustainability is a liquid concept: we need to solidify it. In order to do that, we have created a think tank formed by university professors, journalists, scientists, and representatives of an AI company that has developed a system to analyse business compliance according to ESG parameters. Our own internal ESG achievements include separate collection of different kinds of waste in each office; the use of recyclable paper; and the avoidance of plastic bottles and cups, with only glass or sustainable materials used.
LCA also pursues the furthering of women’s opportunities, with training initiatives; remuneration and growth policies based on equity and performance aimed at ensuring gender equality; initiatives aimed at promoting equal opportunities; reconciling work and personal life; sharing family responsibilities; and removing all potential obstacles. The enhancement of diversity in the field of gender identity and sexual orientation is pursued through policies of inclusion and access to the firm. We also engage in awareness-raising and information dissemination aimed at creating a culture of respect and countering the unconscious biases related to the issue of gender identity and sexual orientation.
One thing we did, which was a fantastic experience, was a hackathon with university students from all over Italy to try to understand what elements create a gender gap in law firms, and how to reduce this gap. These students, divided into teams of four or five working for 24 solid hours, came up with a fantastic application that I then exported to our firm and to others, which went on to make use of these results.
In addition, LCA is at the forefront of integrating and empowering people with specific learning disabilities. We contributed to the agreement between the Milan Bar Association and the Milan Court of Appeal for the application of compensatory measures in the professional qualification examination. A young LCA lawyer suffering from dyslexia, with the support of the firm, has contributed to a dyslexic-friendly amendment of the law on the admission exam procedures for the forensic profession.
To sum up: at LCA, we are trying to not only educate people but make them develop a feeling and attention for all these aspects, from the youngest lawyers to the much older ones.
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