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| Interview with a purse-keeper issue 30 - May 2007 RFP talks to Yarman J.Vachha, Director of Finance and Business Services, Asian Region for Allen & Overy, about how real estate and facilities affect the operations management at one of the world’s top law firms. In a typical day, Yarman Vachha can deal with many different business aspects, heading up the Asia and Middle East operational support team for the leading law firm, Allen & Overy. This can span both senior level activities and also more mundane ones, he says, “one minute I’ll be talking about the colour of pencil sharpeners in Hong Kong and the next I can be talking about setting up a major overdraft limit in Dubai”. Vachha describes himself as a custodian of the business, running the operations that support the partners and associates. “In essence, what I do is look after all the financial issues that affect us in Asia and the Middle East and also look after the administration side of things, which includes IT and general admin” he says. While HR and marketing are not specifically in his remit, his position as the right-hand man to the managing partner for Asia means that he is “a high level sounding board for partners in respect to strategic ideas and implementing those ideas”. Also, being in control of the profit and loss sheet, and reporting directly to the global finance director in London means that, in terms of the physical operations of the business in Asia, the buck stops with him. In terms of managing Allen & Overy, issues relating to the facilities management and planning at can not be considered a day-to-day activity, but he explains, “when it comes- it comes in a flurry, it’s all or nothing.” As the firm experiences rapid expansion in Asia and the Middle East, and space needs increase, Vachha says it is important to approach projects from a financial perspective, “I’m heavily involved in the feasibility study in respect of working out whether we need more space, how much it’s going to cost us to move, to fit-out. We need consider what the impact is likely to be on the P&L, to balance that against the ever increasing demands”. a legal location When selecting a location, Vachha is quick to note that, choosing a building for a well-respected legal firm, “there’s a tendency that it’s the image that’s important, the tendency is to be in grade A buildings in the commercial district.” Even from a financial perspective, he admits that there’s no advantage in being in a remote location, despite the lower rental expense, “convenience to the staff is important, and clients. Our clients tend to be major banks and financial institutions, and they’re all in core central. In some ways it would be madness to move out of the central business districts.” However, Vachha says, “if the situation demands and the market is such that is become unaffordable, then we’ve got to think about it.” An example of this is a recent discussion about relocating an office in a key Asian city, he says, “one of the things that’s been raised is it may be worth re-basing ourselves to a lower grade building which means that the future increases don’t hit us.” Vachha continues, that by taking a grade B building in a prime location, and paying 60 percent of the cost of a higher grade office, “then the upswings and downswings can’t hurt us as much in the future. The thing is, it’s a market, basically, and finding space is quite difficult, everybody knows this.”
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  “My mantra when dealing with the design people is I don’t want design for design sake, I want functionality and I want it to look professional. Because quite often I find designers will give you beautiful designs, but people can’t work in those designs because they are so impractical.”
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| In some ways it would be madness to move out of the central business districts.” However, Vachha says “if the situation demands and the market is such that it becomes naffordable, then we’ve got to think about it”. leasing space Another challenge is balancing the financial needs with the physical needs of the business. Vachha is adamant that this is a strategic process, and that taking a rational approach is vital. “Human need nature is panic generally, people want more space than they actually need, and when they have more space they build it up to the level where everybody’s got a space with a swimming pool in it, so I’ve got to balance that”, he says. This is especially true in locations that expand quickly, he describes how the Shanghai office has grown in headcount from four to 100 in four years, “we’ve run out of space within nine months in the location where we we’ve had to cut our lease and take a bigger space and now even that’s not enough so we’re negotiating for more space in the building”, he continues. According to Vachha, it is important “to temper it with the fact that if you take too much space human nature is that you expand into the space whether you need it or not”. Once a suitable space in the right location has been found, Vachha says he usually does the leasing negotiations himself and “I tend to do it like shopping at a market stall, where I just refuse to pay above the amount I want”. Vachha doesn’t usually need to wear this hat too often, as generally speaking, Allen and Overy “make a long term commitment wherever we are, provided we have room for expansion”, which means that long-standing relationships with landlords can be built. When necessary, the partner in charge of real estate law will be involved in the negotiation, if they are not comfortable with how the deal is progressing, a third party agent might be employed. Vachha also notes that“Allen & Overy is a good name to have in building, it’s a flagship tenant and we’ve got some leverage out of that”. fit-out Vachha also spends time overseeing the office fit-outs for the nine offices across Asia and the Middle East, “I do get involved with design” he says, even to the level where “I get involved with the actual seating plans to make sure people are not overdoing it.” Although there is some corporate guidance on design from the Allen& Overy HQ, “it’s not cookie-cutter, like it might be at McDonalds. We have a central team in London who do a lot of the CAD work for us and help us manage the properties around the region, but we tend to run it independently from here”. In terms of the design costs, “It’s very much front and back of house in terms of where we spend our money. Obviously we spend our money on the conference rooms and meeting rooms”. As with any project it’s important to be in control of the finances, especially when dealing with the high end requirements of top legal partners “I constantly monitor the budget, I make sure we haven’t got any Renoir paintings in the reception area.” As a finance guy, Vachha might be seen as the traditional enemy of the designer, but he has a simple philosophy with which most interior architects will sympathise,“My mantra when dealing with the design people is I don’t want design for design sake, I want functionality and I want it to look professional. Because quite often I find designers will give you beautiful designs, but people can’t work in those designs because they are so impractical.” Luckily for any hard-pressed design team, once a functional design has been chosen, Vachha tends to be hands off on the minute details, “here’s a turnkey project, quote us a price and just get on with it and away you go” he says. looking ahead Vachha says that the key challenges for the future, in terms of Allen & Overy’s built environment, is coping with the development of the business in Asia, coupled with balancing the space needs with the turbulent real estate markets. He recalls a worldwide partner’s conference in 2004, where one of the items discussed was the fictional theme ‘What if Shanghai becomes the worldwide head office’. Vachha is keen to emphasise that “it was a fictional theme but it examined that this could be reality by the year 2012 or 2015, I think it was done without people knowing the region, and it’s not going to happen in five years but there’s no reason that this couldn’t be reality in the longer term”. In the meantime, there’s more than enough office moves to keep his team busy, “we’ve moved Shanghai three times in the last four years, we’ve expanded Beijing, there’s considerable expansion going on in Dubai. We’ve contracted Bangkok. We’ve physically reconfigured the Hong Kong office twice in the past three years and have leases is coming up for renewal soon.” RFP
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Key title: RFP magazine
Abbreviated key title: RFP mag.
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