‘What’s happening with Kirkland would make a great Netflix documentary, although maybe a bit niche,’ quips one managing partner of the recent saga of the Chicago-bred powerhouse and Paul Weiss’ London office. ‘Let’s hope they’ve had cameras dotted around the office!’ The amused detachment with which the remark is delivered could be said to sum up the stance of Ireland’s law firm leaders in the round – often looking on at the dramas besetting other international markets from a rarefied position of relative immunity to the worst of the upheavals faced elsewhere in the world.
However, no market is an island, and many of the challenges faced by Ireland’s leading firms this time last year not only remain but have become more urgent. Managing partners are just as alive to reversals created by an ultra-competitive recruitment environment, not helped by a cost-of-living crisis that shows little sign of releasing its grip any time soon, while the ongoing war in Ukraine and related upward spiral of interest rates and inflation continue to make themselves felt.
Whereas those running law firms have just about got their heads around dealing with these constant tribulations, fresh and more sinister difficulties regrettably loom large. Even as LB embarked on our tour of Dublin’s law firm offices, Israel had just declared war on Hamas in response to the invasion of Israel from the Gaza Strip in early October. Although clearly, the human and financial cost of this conflict on global businesses will take some time to play out, this just goes to show the fragility of an already damaged geopolitical environment, and the impossibility of truly being able to look around corners, however astute your forecasting may be.
‘Looking down the runway to the end of this year, the pipeline is pretty strong on the deals front.’
James Duggan, Flynn O’Driscoll
Putting to one side these big-picture calamities for now, LB sat down with Ireland’s c-suite to catch up on how their businesses have fared over the last year, and asked what the future is likely to hold for a market still relatively unperturbed.
Deal with it
Having become accustomed to the laments of London pundits on a depressed deals market over the past 18 months, the word on the ground in Dublin poses something of an anomaly.
James Duggan, managing partner of Flynn O’Driscoll, and also a partner in the firm’s aviation and asset finance practice, can’t resist an aeronautical turn of phrase to note that, ‘looking down the runway to the end of this year, the pipeline is pretty strong on the deals front’.
Duggan echoes the view of many canvassed for this feature in asserting that the Ireland market is bucking the global trend. ‘At the beginning of the year we anticipated that M&A would slow down, and certainly that’s what we were hearing from our counterparts in Australia and the US. Typically the trends seen in those jurisdictions will come over here, but that hasn’t happened,’ he says, while also conceding that the bullish deals market is tempered somewhat by a less dynamic investment sector.
Indeed, Duggan points to a distinguished list of mandates that includes advising Mediahuis Group, the Antwerp-headquartered publisher behind news titles including the Irish Independent and Belfast Telegraph on its acquisition of Switcher.ie, the Irish online price comparison platform. Other standout matters have seen the firm advise Aergo Capital on its acquisition of Dublin’s Seraph Aviation Management and act for shareholders of The City Bin Co on its sale to Thorntons Recycling.
‘Global M&A is at its lowest level since the start of the pandemic, falling 38% to $1.3trn in the first half of 2023. Irish M&A volume only fell by 2%, which is pretty spectacular.’
Stephen Keogh, William Fry
Stephen Keogh, William Fry’s head of corporate, tells a similar story: ‘From a transactional point of view, the big feature this year so far has been a smaller amount of multi-billion deals and probably a lower average deal size, but all of our data is pointing to a similar volume of transactions this year compared with last year, which is kind of surprising given there’s so much negative global sentiment out there.’
Pointing to the Irish market’s anomalous resilience, he notes: ‘Global M&A is at its lowest level since the start of the pandemic, falling 38% to $1.3trn in the first half of 2023. Irish M&A volume only fell by 2%, which is pretty spectacular. It doesn’t take an awful lot to move the dial so two or three very big transactions would keep a lot of us busy for much of the year, and we’ve had more than our fair share of those.’
One such substantive deal has seen a William Fry team, including corporate partners Myra Garrett and Mark Talbot and banking partners Jason Hollis and Ciarán Herlihy, acting alongside Sullivan & Cromwell to represent Amgen, a leading independent biotechnology company, on its acquisition of Horizon Therapeutics, a global biotech company headquartered in Dublin, for an equity value of $27.8bn.
In early September, the US Federal Trade Commission agreed a consent order with Amgen to address anti-competition concerns surrounding the deal, paving the way for the transaction to complete on 6 October.
David Widger, managing partner of A&L Goodbody, says a ‘chunky mandate’ for the firm was advising NatWest on the closure of its subsidiary, Ulster Bank in Ireland, which completed this year. Geoff Moore, managing partner of Arthur Cox, notes that his firm was also involved, advising Permanent TSB on the landmark acquisition of €7.6bn of assets from Ulster Bank as it departed the Irish market.
Michael Jackson, managing partner of Matheson, is also sanguine, observing: ‘There has been a noticeable pick-up in activity since August. Maybe the fact that everyone finally got a chance to recharge after a few years of Covid restrictions on travel has added a new sense of energy!’
Jackson points to a lengthy list of standout matters, including advising Circle Internet Financial on all aspects of its announced transaction to go public through a business combination with Concord Acquisition Corp a publicly traded SPAC, placing an enterprise value of $9bn on Circle, as well as acting for MariaDB on its business combination with NYSE-listed SPAC, Angel Pond Holdings Corporation, reflecting a combined enterprise value of $672m.
‘There’s a definite uptick in mood coming out of London and an increase in referrals, and ditto on the East Coast of the US, which is another very strong referral source for us.’
Owen O’Sullivan, William Fry
Will Carmody, who in January 2023 succeeded Declan Black as Mason Hayes & Curran’s managing partner, has had a good run of it so far, pointing to 8% revenue growth this year and standout matters including advising AIB on the sale of a non-performing loan portfolio known as Project Sycamore to a consortium led by Cerberus and LCM Partners.
Peter Stapleton, Ireland managing partner of Maples and Calder, notes similar dynamism: ‘Our corporate and M&A practice experienced robust activity levels, driven by a keen focus on innovation-driven businesses and private equity. Notable transactions included multiple acquisitions for the prominent Irish private equity firm Cardinal Capital, substantial debt and equity capital raises, and acquisitions on behalf of AMCS. We also played a crucial role in Wayflyer’s successful $150m equity raise. On the sell side, our practice showcased its depth and advanced execution capabilities across innovative companies by leading key transactions, including the sale of SteriPack to Inflexion, Version 1 to Partners Group, and Taoglas to Graham Partners.’
Owen O’Sullivan, managing partner of William Fry, flags as another standout matter its advice to Ontario Teachers’ Pension Plan, alongside lead counsel Freshfields, on the disposal of its majority shareholding in Premier Lotteries Ireland DAC, the operator of the Irish National Lottery, to La Française des Jeux, the operator of France’s national lottery games.
O’Sullivan is sanguine on the state of play with inbound referrals: ‘There’s a definite uptick in mood coming out of London and an increase in referrals, and ditto on the East Coast of the US, which is another very strong referral source for us. We’re getting a bit from the West Coast too; things have picked up. The US hasn’t been anywhere near as negative as people were fearing it might be. Speaking to people on the ground quite often, the mood is quite optimistic so we’ll happily ride on that and hope it comes through.’
‘Sustainable finance has been a core part of our strategic plan for the past few years and will continue to be for the next decade and beyond.’
Peter Stapleton, Maples and Calder
Practice-wise, O’Sullivan says that referrals have taken the form of ‘some good disputes-related stuff and restructurings, some interesting deals, as well as financings. The banking teams were quiet for the first six months of this year but that has turned in the last six weeks. The strongest source for that is London. And we’ve had some pretty strong financings from Germany.’
Aside from corporate, there is a decided growth mindset among leaders, with various ambitious strategies already paying dividends.
For his part, Duggan has recently overseen Flynn O’Driscoll’s rebrand and the implementation of a three-year strategy which has given the firm a new clarity of purpose.
He says: ‘Since we last spoke, we’ve bolted on a new banking practice (with the hires of Michael Hanley and Danny Heffernan from Hayes Solicitors, who were head of banking and finance and an associate respectively). We’ve always done private banking through the corporate partners but we’ve wanted to set up a stand-alone banking practice for a while now. That has been strong as we continue to build out the full-service offering. There’s no practice area where we’re not seeing growth.’
He notes that the main thread of the strategy is growth. ‘We have expanded geographically as well, opening a new office in Shannon, and we are hiring there from a financial services perspective. There are further plans in that regard,’ he says, hinting at ambitions for another office opening, which he hopes will be ready to announce by financial year end.
In a similar vein, recent entrant to the Ireland market, Addleshaw Goddard, is also looking to capitalise on opportunities in the sector, in September opening a new financial services regulatory practice in Dublin with the hire of partner Jeanne-Marie Moriarty from Beauchamps.
‘ESG considerations are now at the forefront of corporate strategy. Increased global regulation and changing expectations are leading companies to place increased focus on their ESG priorities and sustainable business practices.’
Alan Connell, Eversheds Sutherland
Elsewhere, Alan Connell, Ireland managing partner of Eversheds Sutherland, points to standout hires including the March appointment of Trevor Dolan as partner and head of asset management and regulation in the financial services practice of Eversheds from LK Shields.
Aviation-related matters, whether in the finance or litigation sector, have also continued to generate work, with Duggan citing an instruction on insurance claims arising out of the aircraft that were stranded because of the Ukraine war, the largest litigation in the history of the state, as a notable mandate.
Jonathan Sheehan, managing partner of Walkers Ireland, is similarly bullish: ‘We are continuing to invest in asset finance with the aviation sector enjoying strong growth. It is a very important practice area for us across legal and professional services and we are well placed in particular to capitalise on the increased involvement of private equity players in the aircraft finance sector as they seek to bridge the funding gap caused by interest rate volatility.’
One such investment has seen Walkers hire Donna Ager as a partner in its global asset finance group from Maples.
Sheehan’s highlights include the firm acting for the lenders to SMBC Aviation Capital on a $1.7bn syndicated financing and advising as lead counsel to aviation lessor LCI on a joint venture to build a $300m aviation and helicopter portfolio.
Easy as ESG
It stands true that some market trends are ubiquitous, and the continuing focus by Ireland’s managing partners on environmental, social and governance (ESG) imperatives is no exception.
Flynn O’Driscoll’s Duggan voices a common refrain among Ireland’s leaders: ‘ESG has been hugely important and it has exceeded my expectations of how quickly it has become ingrained as a feature of almost every transaction that we’re involved in. It has really captured the imagination from a client perspective and a financier perspective.’
‘We are seeing wide interest in ESG and green finance and have advised on several large sustainable financing projects and innovative ESG-related legal and
regulatory matters. ’
Jonathan Sheehan, Walkers Ireland
Moore notes that, in addition to a dynamic corporate practice illustrated by Arthur Cox topping the Mergermarket legal adviser league table for value in 2022, many of its standout mandates have a strong ESG element. ‘This includes our work advising Ørsted, a global leader in offshore wind, on its agreement with ESB, the state-owned electricity company, to jointly develop an Irish offshore wind portfolio – one of the most ambitious partnerships in this area in Ireland to date.’ Indeed, the trend is creating a rich seam of work for the firm, as Moore says: ‘ESG is a key area of activity and investment. We are advising clients on areas such as energy transition, climate action, sustainable finance and green bonds.’
Stapleton is similarly upbeat about the opportunities. ‘Sustainable finance has been a core part of our strategic plan for the past few years and will continue to be for the next decade and beyond. We’ve worked with some specialist managers in the sustainable and renewables space who have done incredible things well before the niche term “ESG” became so mainstream. So we’ve built up dedicated in-house expertise over a long period and have also been providing significant amounts of pro bono work and CSR funding to help accelerate the mission of some of the non-profits in the sustainability and renewables space.’
He continues: ‘Earlier this year, we were delighted to launch a detailed assessment of the current state of ESG integration in Ireland. Our SFDR Impact Analysis has been assisting asset managers who are considering establishing or marketing sustainability-focused funds in Europe. Positively, the assessment showed a 40% growth in sustainability-focused funds in Ireland and we anticipate that this figure will grow exponentially in the coming years with investors demanding a move towards more ethical and responsible investment.’
For his part, Connell notes that the firm has an entire division dedicated to ESG to advise on sustainability regulations, rules and guidance being introduced around the world. ‘ESG considerations are now at the forefront of corporate strategy. Increased global regulation and the changing expectations of investors, employees, clients, consumers, communities and other stakeholders are leading companies to place increased focus on their ESG priorities and sustainable business practices. Assessing ESG challenges and risks and taking appropriate and informed steps can help businesses find new opportunities, build long-term financial value and establish operational resilience.’
He echoes the view of many that the energy crisis has prompted an increase in demand for alternative and renewable energy sources and consequently an uptick in related mandates. ‘One of our recent standout transactions that had great strategic importance to Ireland and the EU – in fact it is probably the most important infrastructure project of the decade – involved the Celtic Interconnector. We advised on this €1.5bn interconnector project for a 700MW sub-sea cable, or “electricity highway”, to allow electricity to be exported between Ireland and France. This cutting-edge energy transition project was supported by our European energy team based in Ireland, working alongside our colleagues in the UK and France and is also a great example of the global reach of our work and the strength and depth of our cross-border capabilities and expertise.’
‘One major highlight over the past 12 months has been the enhancement of our climate and renewable energy practice, where we have made some exciting hires.’
Jonathan Kelly, Philip Lee
It is also an area of strategic importance for Widger, who notes that A&L Goodbody this year introduced a new role of ESG lead with the hire of Jill Shaw from Walkers to help co-ordinate and deliver ESG-related advisory work.
Sheehan also predicts continued growth in ESG-related work. ‘We are seeing wide interest in ESG and green finance and have advised on several large sustainable financing projects and innovative ESG-related legal and regulatory matters. EU taxonomy legislation should assist with the harmonisation of the green loan and green bond market across Europe, while green finance and sustainability-linked loans will continue to increase in volume as banks look to deliver on their sustainability commitments. The Sustainable Finance Disclosure Regulation should also provide for consistent disclosure requirements in relation to sustainability. ESG litigation is also likely to increase, whether as a result of regulatory scrutiny or investor action.’
Jonathan Kelly, managing partner of Philip Lee, has also been investing. ‘One major highlight over the past 12 months has been the enhancement of our climate and renewable energy practice, where we have made some exciting hires. Lev Gantly is one of the world’s leading carbon finance lawyers, and after joining us from an international firm [Simmons & Simmons] he has very quickly built a substantial practice in carbon market project finance and development.’
Mark Walsh, Addleshaws head of Ireland, agrees: ‘The energy and utilities sector is one in which we anticipate real growth, particularly in the area of renewable investment. That’s why we recruited partner Gavin Blake [from ByrneWallace] to lead a new team in Dublin.’
Raging about (or against) the machine?
Of course, one major development that has exploded onto the scene, arguably as never before – and onto the agenda of law firm leaders the world over – is generative artificial intelligence (AI) technology made popular by ChatGPT.
Our recent Ireland GC Forum in Dublin, in partnership with Addleshaw Goddard, on the risks and opportunities presented by generative AI drew much interest among in-house counsel and showed that the industry is being forced to grapple with such technology, and fast.
‘Our first full year as Addleshaw Goddard in Ireland has been exceptional and we are tracking ahead of the plan we announced when the merger with Eugene F Collins took place.’ Mark Walsh, Addleshaw Goddard
However, most recognise that is not a panacea or a risk-free way for businesses to boost efficiency, and perhaps the historically luddite legal community has cause to be sceptical about its applications.
Walsh remarks: ‘Ever since ChatGPT burst into the public lexicon almost a year ago, tech has increasingly formed part of any conversation we have with clients. If anything that is accelerating and I think that’s more than a trend – it’s here to stay.
‘The firm recently launched its own Gen AI tool called AGPT which has a document review feature to analyse and process documents at lightning speed, plus a Chat Q&A which ensures smooth and seamless information retrieval and conversations.’
However, as Duggan argues: ‘We have locked down ChatGPT, we don’t want it in the business for now, until we get our head around it and have a policy around it. There are plenty of examples of firms that have used it and it has gone wrong. The limitations are well-publicised. Equally we recognise there are opportunities. We won’t be a first-mover but we are looking at harnessing AI.’
Meanwhile, Connell is alive to both sides of the argument: ‘AI has the ability to transform business. Deployed appropriately, it can give companies a competitive advantage by helping them better understand and engage with customers, improve efficiency and decision making, reduce costs, enhance security and accuracy, and drive innovation.
‘However, there are also risks and as machine learning, natural language processing and generative AI become more commonplace. Governing bodies, regulatory authorities and law makers around the globe are introducing new laws and enforcing existing ones to protect businesses and individuals from AI’s potential harms – this includes the EU’s AI Act. We continuously scan the horizon to help our clients stay abreast of evolving legislation and guidance in real time to ensure their use and deployment of AI systems is legally compliant.’
‘We have many senior lawyers who have experience of the financial crisis and of the issues that it threw up, and our restructuring team is the largest of any in the market.’
Michael Jackson, Matheson
Yet the common thread among Ireland’s c-suite and the in-house community at large is that AI is not going away, and we had better adapt accordingly. As Connell says: ‘We recently surveyed 700 senior executives worldwide to investigate the adoption of digital technologies and how they manage the related legal, ethical, ESG and other corporate digital responsibilities. We found that in the next three years, 47% of companies plan to use AI technology, compared with 32% in 2022. We expect that trend to continue at pace.’
Aside from AI, many are cognisant of the opportunities that the country’s dynamic tech sector has to offer. Asserts William Fry’s O’Sullivan: ‘Ireland has managed to be an outlier, economically, to a lot of the other jurisdictions, partly due to a life sciences and pharma bounce, which has passed since the pandemic. But tech could be interesting. We are heavily engaged with and love that space. A lot of interesting global tech companies are based in Ireland, so we want to get our fair share of that activity.’
Eversheds’ Connell agrees: ‘There is no pullback in terms of the scale of ambition by the multinationals investing in Ireland. We see this across our client base with large tech, energy and pharma companies in particular very much still growing their footprint in Ireland.’
Widger points to a standout instruction for A&L Goodbody, advising CluneTech on the €575m sale of its Immedis business, while several others report an uptick in demand for employment advice, given the rise in redundancies in the tech sector.
Carmody notes that Mason Hayes & Curran has been busy advising Meta subsidiaries Instagram and WhatsApp on regulatory engagements in the European Union and on various GDPR compliance issues.
Where the repercussions of Brexit were originally the forces behind creating an attractive proposition for non-domestic entrants into the Ireland legal industry, national managing partners now find themselves with the perpetual headache of international firms continuing to spot opportunities and open up shop in the lucrative market.
As Keogh notes: ‘There has been a relentless arrival of more foreign firms to our shores.’ Indeed, Bird & Bird, K&L Gates and Squire Patton Boggs have all recently opening up in Dublin. ‘There are rumours of three or four more firms yet to announce. That has quite a way to play out before we start to see the market stabilise.’
This residing appeal has in part been stoked by a number of success stories for international interlopers. Although it is still early days, Addleshaw Goddard’s foray into Dublin with the March 2022 acquisition of Eugene F Collins could prompt others to follow suit.
As O’Sullivan asserts: ‘If that’s seen to have worked, that might interest some other international players vis-à-vis some established players here that would give them much bigger scale than if they were to come in, be niche, and grow organically from that.’
He is candid about the impact of non-domestic pretenders. ‘Costs are up, due to wage inflation and wage expectation – and managing those expectations is an issue. We do have challenges in terms of talent retention, what London can offer to people in Ireland. The international firms here, particularly the ones that don’t run training contracts, are prepared to pay people to get them to move out of a firm like ours to theirs. That drives wage inflation and expectation around wages.’
On whether he would countenance an Addleshaw Goddard/Eugene F Collins-type deal, he comments: ‘Doing nothing isn’t an option for us. The market is moving, but exactly how we grow, or if that necessitates some kind of a get together, we’ll keep an open mind on that.’
Walsh is bullish on the tie-up, commenting: ‘Our first full year as Addleshaw Goddard in Ireland has been exceptional and we are tracking ahead of the plan we announced when the merger with Eugene F Collins took place. Internationally, the firm bucked the trend by reporting 18% revenue growth and Ireland has played its part in that, delivering against our ambitious three-to-five-year growth strategy in Ireland.’
To prove the point, Walsh points to a list of standout matters, including advising Phoenix Equity Partners on its acquisition of a stake in IT service provider Nostra and acting for Q-Park Ireland, a provider of car parking services, on its acquisition of the Tazbell Group, including Park Rite and Dublin Street Parking Services.
Flynn O’Driscoll’s Duggan takes a balanced view. ‘The international firms have been responsible for some of the upward inflation as they seek to attract people in. And from a client perspective, we see them competing for the deals we are competing for. That continues to be something we are monitoring very closely. Every month I hear that a firm is considering opening up here or actually opening up here. To the extent that they’re winning business from us, I don’t see that per se, but it’s certainly responsible for changing the market and the landscape of law in Dublin, I’d say.’
Meanwhile, Keogh is watching the progress of international disruptors with interest. ‘Those first firms to arrive two, three or four years ago will presumably be doing strategic reviews on how it’s going. Some will double down on the investment, some will keep going as they are, but we do expect some to cut their losses and say it hasn’t worked. Brexit didn’t turn out to be such a disaster for legal services, or whatever reason they came in the first place.’
O’Sullivan adds: ‘It remains to be seen whether this is a big enough market for big international firms, when they’re used to New York or London charge-out rates. In our experience, Dublin isn’t a market that sustains that.’
For Connell, the rationale for Eversheds staying in Ireland is clear. ‘A lot of Ireland’s continued success is driven by us being a bridge or gateway to many jurisdictions. When we engage about overseas investment in Ireland, particularly with our US colleagues and clients, we talk about Ireland being effectively like the “quarterback” for Europe and beyond. We know internationally focused clients are not only investing in Ireland just to access the Irish market. They see Ireland as the jurisdiction of choice to operate in Europe, as a launch pad into the single market and beyond.’
However, it is clear that, in spite of Ireland’s relative fiscal bullishness, the worst repercussions of the coronavirus pandemic and also the cost-of-living crisis wrought in part by the ongoing conflict in Ukraine, have yet to play out.
And while hybrid working may have been a lifesaver during various protracted lockdowns – it has now become something of a double-edged sword. Many of Ireland’s law firm leaders report the decline of footfall in the capital caused by the continuing trend of working from home, prompting the demise of small businesses and a knock-on effect on the local economy. Indeed, if there is more than a hint of foreboding in the air, it seems inevitable that this will have an impact on the business of law in Ireland and on the types of work firms are preparing to handle.
As William Fry’s Keogh explains: ‘Pressure on the commercial property market is pretty severe in Ireland, and then throw in rising interest rates. People are sitting on their hands, waiting to see what sort of revaluations are set by the big funds that might move first because they might have redemptions coming up and might have to sell something, which would set a new valuation threshold. That’s the most impacted sector of the Irish legal market still.’
O’Sullivan agrees: ‘The funding associated with that is quiet too. As we’ve learned from previous downturns or soft markets, people are very reluctant to call it. Whether that’s a ticking bomb, no one really knows.’
Similarly, Stapleton notes: ‘There is undoubtedly an increase in market uncertainty and volatility. Consequently, we have received a growing number of enquiries related to restructuring and insolvency-related matters.’
Connell adds: ‘We have conducted over 60 examinerships and our observation, in advising directors of insolvent companies, is that they will tend not to elect to put their company into some form of restructuring process until they absolutely have to. Corporate insolvencies and restructurings have, however, begun to pick up in recent months following a period of exceptionally low business failures resulting from the extensive state supports provided to companies during the pandemic. Corporate insolvencies had been at very low levels, but that this situation is beginning to reverse.’
Adds Jackson: ‘We have many senior lawyers who have experience of the financial crisis and of the issues that it threw up, and our restructuring team is the largest of any in the market. Our balance sheet is healthy and we believe that we are well prepared both for further growth and for a downturn.’
Many managing partners lament a sense of disjointedness created by hybrid working, with some resorting to bribery to encourage lawyers back into the office. As O’Sullivan quips: ‘The biggest attraction for getting the juniors into the office is food. The more we upped our food offering, the more they came. The real icing on the cake, pardon the pun, is on a Friday – we do a full Irish breakfast. The numbers go through the roof!’ he says, while also noting that Keogh wheeling out the drinks trolley on a Thursday and Friday in the corporate department has also boosted attendance.
For his part, Keogh raises an interesting point about the potential hidden consequences of remote working. ‘I was talking to a partner at another firm at the weekend and he made an interesting comment – I wonder if any of the insurance companies will start to reprice on the basis that presumably some of the juniors aren’t getting the same degree of supervision that they would have gotten, had they been in the office. Will insurance really accept that supervising on Zoom is the correct level of supervision? I don’t know. It may be the case that the insurers chip into this debate and that may drive our behaviour as well.’
For now, Ireland’s legal community is sanguine without being arrogant. There are clear challenges on the horizon and, as experience of previous downturns has shown, hubris never pays. LB