Q&A: Dominic Griffiths

Dominic Griffiths is London managing partner at Mayer Brown and author and consulting editor of European Securitisation: A Practitioner’s Guide to Principles and Jurisdictions (published by Globe Law and Business)

2023 was a turbulent year, with geopolitical instability and economic challenges. What is 2024 looking like for you and for clients?

We’re only a few months into 2024 and the economic climate is markedly different to last year. 2023 was turbulent for so many businesses, but we are seeing more positivity and a shift to businesses looking at the long term. Deals are back on the table and consumers are more confident.

Yet, some of the macroeconomic challenges have remained and continue to cause uncertainty for clients globally. Whether it’s war in Europe, escalating conflict in the Middle East, major global supply chain issues, rapid technological change, regulatory uncertainty or climate concerns, businesses are facing challenges now that are shaping their long-term strategies.

The scale of elections around the world, specifically the UK and US elections, add another layer of complexity. There’s huge potential for change over the next 12 to 18 months, and with this change comes both risk and opportunity for clients. They need to be ready to capitalise on emerging opportunities and face challenges head-on.

You mention the increasingly complex challenges facing businesses in 2024. What are the most pressing business challenges on the horizon?

From conversations I’ve been having with clients, colleagues and peers, there are several themes that emerge as cause for concern but also opportunity. This isn’t just about sector trends. Globally, businesses are facing the twin challenges of ever-developing regulation and complex financing regardless of their sector.

With regulation, there are constant shifting sands as countries look at onshoring, market protection and general global competitiveness. We have a mix of expanding domestic regulation as well as strong international rulemaking. For many, the growing complexity of regulations is becoming a barrier to market expansion. It is harder to access markets, trade across borders and invest globally than it was a few years ago. We have to advise clients on these matters every day.

On financing, it was obvious in 2023, as rates went up, that capital was simply harder to access, but in 2024 I think the long tail of financing makes things more complex and less binary. Things are looking up for the global economy, but we are not in the clear, and it is by no means a one-way street. Clients around the world, whether global financial institutions, private companies, listed companies or private equity, are having to manage a new reality around financing. From accessing finance to restructuring existing finance or seeking investment, the landscape has changed and will continue to do so for some time. As lawyers, we are dealing with ever-more complex financings to help our clients continue to grow and set themselves up for the next decade of growth. It’s a real theme of 2024.

It’s exactly these big, global challenges that Mayer Brown is here to support our clients on. We are known for advising on highly complex issues for premium clients. In a world with multifaceted challenges, we see ourselves as global problem-solvers. We want clients to come to us because they know that they will receive the best advice, the right, bespoke solutions to complex issues – not off-the-shelf, commoditised solutions.

Private Credit has been booming for some time now. What are some of the trends you’re seeing? Where next for the sector?

This has been a long-term trend since 2008, even before. I’ve been working in this area for a while, and I’ve seen its growth first hand. This funding source is continuing to grow because there is demand, plain and simple. It has become a vital method of financing for many companies.

The question of where next is really about maturity of the market. My experience of new financing techniques is that expansion and growth are usually paired with diversification. More demand is often coupled with more complex requirements. That’s where we are now. Private credit is a huge market that will continue to grow, but it is also not homogenous.

That feeds into the broader point on global financial markets. Accessing finance is not as simple as it has been previously. Requirements become more sophisticated and capital access more difficult. A wide range of often hybrid financial instruments are becoming more common, and we need to help our clients successfully structure and manage them.

With age also comes a bit of maturity and I am sure we will have to see some form of shake out for some businesses using private capital. There has been a significant and effective flexibility in this area of finance through the pandemic and inflationary period, but you would expect to see some restructuring as deals come to natural maturity. That is a natural process in any market and we’d expect to see a bit of that.

On a more market level, the re-entry of banks into the direct lending market is a big step. That ground was vacated after 2008 and seeing those large global financial institutions coming back to the table and competing with private credit specialists is interesting. There is clearly a market to serve.

Elsewhere, we are very engaged in the growing global discussion around the regulation of ‘alternative banking’ and private credit. There is a live debate here in the UK over the systemic nature of the market, now it is at the size it is.

AI is an obvious challenge, across all disciplines and industries. How are you reacting to AI both as a firm and for your clients?

It’s the real buzz word, both for markets and businesses generally. I think you need to be able to stand back and properly assess what it means for you and your sector.

Clearly, AI is quickly reshaping the business landscape and there is a recognition of the critical role of the technology as a driver of the next decade of growth. You can’t miss out. But businesses are still getting to grips with how to incorporate it into their medium to long-term strategy.

We approach AI the same way we do other challenges. This is not a bandwagon, it is a genuine opportunity, and at times a risk, that has to be well-managed for clients to use successfully. You have to get under the skin of it. That means ensuring things like effective IP protection, proper integration of AI into business structures, understanding ownership of data. To use this technology well, you need to ensure your business is protected from the downside and benefiting from the upside.

I think the question of where global law firms sit in the context of this is an incredibly important one. Most firms recognise the transformative influence AI will have, but not everyone talks about the potential consequences enough. Whatever the influence of AI, it is going to fundamentally change the makeup of all law firms and also how firms train their junior lawyers.

At the moment, the use case for AI in the legal world is largely limited to document review, but that will expand. It will take longer than we think for AI to become fully embedded in a business. Now is the time to invest more, in technology and in people, and look at its positive use cases rather than fear it.