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Legal Leaders: Freehills' Philippa Stone on making it count

Legal Leaders: Freehills' Philippa Stone on making it count

As a mother of five and Freehills 'lifer', Philippa Stone has had her hands full over the years. She tells Stephanie Quine about the satisfaction she finds in saving companies, delivering deals…

As a mother of five and Freehills 'lifer', Philippa Stone has had her hands full over the years. She tells Stephanie Quine about the satisfaction she finds in saving companies, delivering deals and tucking the kids into bed.

"THE STUFF LEGENDS ARE MADE OF": Freehills partner Philippa Stone is widely recognised in the industry for her talents in the M&A field.
It may come as surprise to many in the industry, but Philippa Stone says she fell into law by chance.

The legal mastermind behind some of Australia's most high-value corporate restructures, equity raisings and M&A deals initially enrolled to study medicine at the University of Sydney.

Spending one year amongst stethoscopes and clinical case studies, Stone wasn't convinced she'd taken the right path but, like many, she wandered through her first year of university, undecided about what career to pursue but still having fun.

Soon, though, she switched to an Arts/Law degree where she says she began to find her feet.

"It might be that if I'd ended up somewhere else I might have enjoyed that equally ... but it was when I got to the 'straight law' years that I began to find it fascinating," she says.

And when she landed at Freehills as a graduate in 1984, it was all systems go.

Billion dollar baby

Stone began her career in the firm's M&A group and, despite the fact she was supposed to rotate out of that group, she fought hard to stay.

"We were actually supposed to rotate, but I and others in the M&A section just did everything we could [to stay]. We clung on like barnacles and refused to rotate just because it was fascinating," she says.

Stone says she was interviewed for the job by senior partner Kim Santow (now Justice Kim Santow of the NSW Supreme Court) and started out as "a complete and utter baby" in the corporate legal world, helping Santow advise on major matters like BHP's response to Robert Holmes a Court's merger proposal.

"He let me tag along and do tiny aspects of the work. That's what I got when I turned up on the doorstep of Freehills, and from there I did a range of fantastic transactions," she says.

Stone says Santow is one of the "greatest legal minds" she has ever met, along with others who mentored her at the time including former Freehills partner David Gonski and Kathleen Farrell, who is now the president of the Takeovers Panel.

"Almost by accident I ended up in the best place," says Stone, who was made a partner in 1989. Perhaps that is why she's never left.

Over 20 years later, Stone now leads her own team of around 10 lawyers.

Running the show

In the past 11 years, Stone and her team have advised on highly-complex deals including Promina's $7.9 billion merger with Suncorp (one of the largest insurance sector mergers ever in Australia); Babcock & Brown's $8 billion acquisition of Alinta; and Commonwealth Bank's $10 billion merger with Colonial Limited - the largest transaction of its kind in Australian corporate history.

As she gathered confidence and speed specialising in equity raisings and M&A deals, Stone was made joint national leader of Freehills' equity capital markets team and, in 2006, advised the Australian Government on all three of its Telstra sales, including the landmark sale of its remaining stake in Telstra Corporation Ltd (T3).

"It's great to save companies. It's great to be involved in a successful deal. It's also just great to be involved in developing and refining and then implementing some new way of doing something better"

The T3 offering ($15.5 billion) was Australia's second largest equity raising and among the largest public offerings worldwide.

"Government transactions are fascinating," says Stone. "There are the normal commercial drivers and requirements for success, but there is an overlay of requirements to meet which are particular to government."

Getting the deal right is an art Stone has perfected. A giant of the corporate legal world, she has received multiple awards and peer-reviewed affirmations recognising her as a top dealmaker and leading M&A and equity capital markets lawyer.

The 2009 and 2010 International Financial Law Review (IFLR) 1000 reported that she was universally regarded as one of Australia's preeminent lawyers: "an oracle in the legal world - the stuff that legends are made of".

Her skill is highly regarded both in and outside the profession and she sits on the board of David Jones as a non-executive director, the Law Council of Australia's Corporations Law Committee, and the Australian Securities and Investments Commission's Equity Offerings Liaison Committee.

Troubleshooting transactions

Another memorable transaction on Stone's CV is the sale of Sydney Airport, in which she worked through unforeseeable events in a competitive bidding process to overcome significant challenges to the deal.

"The bids were due in the week of the September 11 attacks in the US, and in that same week Ansett collapsed," recalls Stone.

"The insurance market was massively disrupted following September 11 and some key insurance requirements for airports were no longer able to be met in the commercial market. Those issues were out-of-the-blue factors that we had to work around," she says.

"There were many, many things that were interesting about that transaction, but it was satisfying to be able to complete it despite the unexpected challenges, and for more money than people expected at the time."

With the recent financial market turmoil, Stone says her M&A practice is far more active than the capital markets side of her practice. But having worked on complex deals for recapped companies, and experienced "episodes of saving companies", she is no stranger to financial crisis.

In 2008, she led a capital raising at an optimal moment when CBA bought Bankwest, immediately prior to the UK government providing assistance to UK banks, which would have altered the commercial dynamics for the vendor (British bank HBOS).

The deal was also made prior to guarantee being given by the Australian government, which would also have altered some aspects of the situation for BankWest, says Stone.

"Recapitalisations were a big part of what we did in the financial crisis, but they weren't all we did - it was also a period where there were M&A opportunities," she says.

"We worked on many recapitalisations, sometimes in really desperate circumstances and all of those companies survived. That's enormously satisfying."

Wonder Woman

Along with the 10 or more lawyers Stone works with, she also has five children - ranging from ages seven to 21 - to keep her on her feet.

"Children are good, they make you exercise," she laughs. "Actually, sometimes I make them exercise."

Stone says that "computer lockdown" is sometimes enforced, possibly for both her and the kids, in favour of rock-climbing, kayaking and swimming.

She also enjoys cooking and reading when she's not working, but says that when a deal is "on", long working hours are necessary.

"I try to do some of my work from home so that I can be home with the children in the afternoon and evening," she says, adding that after reading the kids a story and putting them to bed, she often will "log on" again.

"It doesn't always work, but it works well enough. Sometimes transactions go crazy and you've got to work with that. I do work hard, but we all work hard and we are able to cover for each other to some extent. People don't gravitate to this team unless they find their work interesting," she says.

Stone says she feels fortunate to have been well looked after by senior staff and the firm's parental leave policy.

When asked by the NSW Law Society to speak at an event last month for the advancement of women in the profession, Stone says she found it difficult to approach because she - despite working in a traditionally male-dominated practice area - has never felt disadvantaged by being a woman at Freehills.

"I started my presentation by warning that my experience was a little bit boring, compared to that of other women who have overcome significant challenges," she says.

Older and wiser

Stone describes herself as a "complete dinosaur" at Freehills today, especially at a time where there is more career change within law.

"What I find, having been here throughout my career, is that I just know so many people and know them well, even those who have left to pursue other careers," she says.

"Initially I thought, 'Oh no, I've got to train another lawyer', but now I'm very philosophical about it. If they want to go and be a corporate lawyer or a business banker, those are great careers as well," says Stone, adding that if staff don't "love the law and stay" they would be ready for other career opportunities through great training.

For Stone, though, leaving the law was never an option, and she recalls her work in developing the first accelerated entitlement offers structure, alongside Guy Fowler, the investment head at UBS, as a career highlight.

"That's something I'm proud of ... people used to do rights issues in a particular way, but now a large majority of Australian rights offers are done on an accelerated basis," she says.

While Stone acknowledges the satisfaction in developing ideas herself, she also says she loves helping clients "who have great ideas" to fully implement those visions.

"It's great to save companies. It's great to be involved in a successful deal. It's also just great to be involved in developing and refining and then implementing some new way of doing something better," she says.

And for now, that's exactly what Stone will keep on doing.


Like this story? Read more:

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Legal Leaders: Freehills' Philippa Stone on making it count
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