133: Averen Deonanan

A&O Aims to be the Most Advanced Law Firm

Averen Deonanan’s career spans 14 years across a variety of industries, which has led him to be head of finance at Allen & Overy, one of the world’s most prestigious law firms, now at the forefront of introducing new client-centric technology to the African market.

CIARAN RYAN: Today’s podcast is sponsored by Draftworx, which provides automated drafting and working paper financial software to more than 8000 accounting and auditing firms and corporations. CFO Talks is a brand of the South African Institute of Business Accountants. It is my pleasure today to welcome Averen Deonanan, who is a registered chartered accountant, he’s also with the Chartered Institute of Management Accountants, that’s ACMA, and the Chartered Global Management Accountants, CGMA. He completed an MBA at the Gordon Institute of Business Science and after completing his articles, he entered the corporate world. He’s got 14 years’ experience in industries that cover fast-moving consumer goods, banking, pharmaceuticals and professional services. Now most of his career has been with large multinationals, all local businesses, and he was part of the 2017, 2018, top 35 CAs under 35. Since 2015, he’s been head of finance at Allen & Overy South Africa, and that’s a legal services firm, where he launched a number of initiatives aimed at improving profitability, while managing the finance and compliance issues that come with that position. So let’s get into that. First of all, Averen, welcome to CFO Talks, where are we talking to you from?

AVEREN DEONANAN: Thanks Ciaran, I am currently at our offices at 90 Grayston in Sandton, Johannesburg. Obviously, with the pandemic having hit a lot of us, we were working remotely but now with things being a little bit more relaxed, we can come into the office on a more voluntary basis if we wish. So that works out for me, I get to come in and get some quiet time at the office and then head home later in the afternoon, a bit of a change in scenery and then get some work done at home thereafter.

CIARAN RYAN: Tell us a little bit about Allen & Overy, I guess that is a firm which is headquartered in the United Kingdom. We know that it’s one of the top law firms in the world and it’s been around since 1930. So there’s a tremendous pedigree behind the company, but tell us how long it’s been in South Africa and what areas of law does it focus on?

AVEREN DEONANAN: A&O is a Magic Circle firm out of the UK. I think it’s the seventh largest integrated law firm globally. We’ve got over 40 offices and over 5500 people. In South Africa it’s a smaller office, we’ve got about 80 people. It’s a bit of a niche law firm, if you want to put it that way. When we first opened, we primarily offered banking and finance, including project finance, legal services, with some ability to assist in corporate tax regulation and ECM requirements. Soon after that we expanded with a reputable litigation team and in line with a greater offering, we aim to assist our clients on complex transactions, including cross-border elements, and obviously the clients also benefit from seamless integration across the firm. A&O aims to be the most advanced law firm, so on the back of that we have quite a few exciting products backed by technology, which we’re hoping to introduce to the African market in South Africa quite soon, so that should cause some excitement in the market.

CIARAN RYAN: Just to expand on that, if you can, without giving away your secret sauce, but you say products, one doesn’t associate law firms with products, so tell us what you mean.

AVEREN DEONANAN: Obviously, a lot of work is done manually by people, and so we have some technology coming out that will allow the computer to do more work, if we can put it that way. So that will save our clients cost and give them efficiency. But we’re also looking at new ways of providing our services to clients. A lot of clients want a lawyer at a specific time and want to use a lawyer a lot more during the time and at other times they don’t want them. So they don’t want to hire someone in house and we’re bringing out products that we’ll be able to serve that, along with the normal way law firms operate. So there’s a combination of technology and the way in which we’re going to provide our services to clients.

CIARAN RYAN: Are you represented in the United States?

AVEREN DEONANAN: Yes, there are two offices, in Washington and New York.

CIARAN RYAN: You mentioned this word Magic Circle, I’ve heard that before, explain what that is.

AVEREN DEONANAN: Magic Circle is just a term that refers to the large top tier law firms from the UK. I suppose it’s similar to how you have the big four audit firms. It’s just a term, like I said, that we’re one of the more prestigious, larger firms from the UK.

Services that go beyond banking, finance and litigation.

CIARAN RYAN: As a firm, it entered here, it looks like from what you were saying, in the banking and finance space, there was a strong speciality in that but now you’ve gone into litigation and you’re dealing with complex transactions, particularly with the cross-border element. Does that pretty much describe what it is or are there still some areas of specialisation for which you are famous?

AVEREN DEONANAN: Definitely on the banking and finance side I think we are quite well reputed, and our lawyers are in the top tier of legal rankings in South Africa and abroad. Litigation is also a specialist service. We focus a lot on the construction industry, but we’re definitely able to service all areas. We’re currently evaluating our offerings to clients in terms of the services that we provide to go beyond banking and finance and litigation. Without giving too much away, there’s a lot more coming from A&O in South Africa in the near future.

CIARAN RYAN: Give us a sense of how business has been going, particularly during this very strange year we’ve had with the Covid lockdowns, was your revenue hit badly, was there suffering, did it affect your operations? How did you manage your teams? Just give us a sense of how it went.

AVEREN DEONANAN: I think like all businesses, we did take a hit when the pandemic came about, especially during the lockdown. Like you’ve mentioned, we’ve got that banking and finance team, and a key part of the work that they do is dependent on foreign investment, so money coming into the country. Then obviously, in the pandemic a lot of companies and businesses aimed to stay as liquid as possible, so held onto cash, the money that they had, and then didn’t really push that into other markets, especially markets that may have been considered risky. So that reduced some of the work coming into us. Luckily for us, on the flip side of that coin, difficult times do result in litigation and restructurings and things like that. So we were able to pick up more of that and carry on. But yes, there was a hit to our revenue line, like most companies, but luckily for the firm as a whole, we’ve come out fairly okay and I think our results will be announced in due course. I think I chatted a little bit about just how it impacted the working environment, so outside of the actual financial numbers, and we were quite lucky because, funnily enough, just before that in January 2020, we were one of the offices being like a guinea pig in a new software and hardware roll out, which was aimed at allowing greater flexibility in where and how we worked. At the time there was some unpleasantness in being the guinea pig, but we were really in the best position when lockdown hit because I we literally took all our screens and docking stations home and we were able to carry on without much interruption. So that worked for us.

CIARAN RYAN: So you were actually prepared for this by happenstance, it just happened that you were working on some sort of technology upgrade and then the lockdown happened, is that right?

AVEREN DEONANAN: Yes, the firm was looking at how we can work more efficiently and effectively and where we can do that, and we were introducing technology to support that. Like you say, we were just lucky that when the lockdown came about, we were in a good position to work remotely.

CIARAN RYAN: How important is the South African office in the global A&O empire? I think you said 5500 staff globally, of which 80 are in South Africa. So it’s a small part of the global operation, correct?

AVEREN DEONANAN: Historically, a lot of the offices were centred in the European area and A&O has branched out thereafter. So there’s a big presence in Asia-Pacific, in the US, and now we’re growing in Africa. Before the South African office was established, there was already an office in Casablanca, Morocco, and then in growing our presence in Africa, the South African office was established. There have been a few ups and downs and unfortunately for us, this Covid pandemic has hit, but they definitely intend to grow the office and strengthen our position in South Africa, and in Africa, From there, depending on how things go, I’m sure they’ll evaluate whether we  should be present in other countries. So for now, like I say, we look to complete the more complex cross-border transactions, the really big problems that our clients are struggling with, and the staff that we have is to cater for that. As we grow and as we become more present in the African markets, we’ll take on staff accordingly to make our presence even larger.

CIARAN RYAN: How long has A&O been in South Africa?

AVEREN DEONANAN: The office was formed in October, 2014. So it’s been just over five years now.

CIARAN RYAN: A new operation with 80 staff, okay, that’s impressive growth. Has revenue mirrored that, you’ve gone from zero to 80 staff, has revenue also mirrored that pace of growth?

AVEREN DEONANAN: Yes and no, we’ve had our periods of doing really well and then there’s been one or two years where it’s been a little bit more difficult, obviously the last year being one of them. But even before that, because again, like I mentioned, we are dependent on investors coming into South Africa and bringing their money here, and when there’s a change, whether it’s political or economical or whatever the case may be, that affects that, it makes it a little bit more difficult for us to attract some of those big mandates. Revenue has definitely grown enough to be able to support our growing office and team size. But at the moment we’re looking at how we’re going to be taking the office forward, I can’t really divulge much there, but like I said earlier, I think there’s some exciting things to come from A&O in South Africa and we’re quite confident that in the next three years or so, we’re going to make some big strides both in the revenue and offering department.

CIARAN RYAN: So A&O is going to be a brand that we’re all very familiar with within three years’ time.

AVEREN DEONANAN: Yes, I think A&O is quite known within the larger businesses and the banking fraternity, but yes, in time it will be a brand that basically anyone walking on the street would have heard of.

‘I think I was always interested in how a business makes money.’

CIARAN RYAN: Well, we look forward to that. Let’s just talk about your background as an accountant, you’re a chartered accountant, but you’ve also got a strong bend towards management accounting. Explain that; what was your thinking when you embarked on this career?

AVEREN DEONANAN: I guess when I chose a medium size firm to complete my training contract, I think I was always interested in how a business makes money, what made them stand out from their competitors. What was their strategy, how they implemented it and so on. A medium size firm at the time gave me some insight into that from my first year of my training contract because we ran smaller audits from the time we joined. Then later on when I moved to SAB as a finance management trainee, I was lucky enough to be given the opportunity to rotate across departments. I discovered that management accounting would enable me to make a difference to the performance of a [unclear] or a regional business that I was involved in. So I followed that route a little bit more in doing my CIMA and then when I did my CIMA, there was a strategy module that got me hooked and I decided to do my MBA at GIBS. So for me, a combination of qualifications and the route its taken has worked for me when making decisions because I can see the technical elements of it from the CA side, I can look at the analysis and detail of the numbers from a management accounting side, using the relevant information, and then look at big picture strategy and how other teams are impacted by certain decisions. So I hope it has helped me to become rounded in making decisions for the business.

CIARAN RYAN: Were there some challenges, I’m talking about the big defining challenges in your career, maybe just outline what they were. The point I’m trying to get at there is that there are some things that you can have all the technical knowledge of accounting that you can possibly get from

books and schools and universities, academia, and so on, but there are some things you’re only going to learn when you’re put through the grinder, right? When you’re being tested by crisis, such as we’ve seen over the last year with Covid, what have been those defining challenges for you?

AVEREN DEONANAN: Agreed, I think from a time when there was a link between a personal and professional, I wouldn’t say crisis, but a challenge, so to say. When I grew up, I was always protected by my family and had a lot of support from them. When I relocated to Johannesburg, all of a sudden, I found myself in an environment where I was completely alone, in a new job that was different to being the auditor that I was before heading up here.

CIARAN RYAN: Where were you from? Just give us that background.

AVEREN DEONANAN: I grew up on the East Coast of South Africa in KwaZulu-Natal but in different areas of KwaZulu-Natal. So I was there for most of my earlier years in schooling and my studies, and the relocated to Johannesburg when I qualified as a chartered accountant. So when I got up here, I went from always being with my family, having that shoulder to lean on, to being alone, obviously in a new job. So out of auditing, where I completed my training contract, and into an FMCG company. Quite soon after that I was put in charge to run the finances of one of Amalgamated Beverage Industries’ largest depots. So a lot had happened in a short space of time, it was a fairly stressful time but I decided to focus on my job. I think this worked out for me because when it was time for me to move on from the role, the district manager actually called my direct manager at the time and asked if I could stay on. So that time came with a few good lessons. It was a difficult and challenging time, but it was a time that forced me to be okay with myself being alone and confident in my ability. I was forced to become independent, obviously, and take accountability for my decisions, and that obviously helps me now because in a more senior role, there’s a lot on your shoulders. You need to be able to make decisions, you need to take accountability for the decisions that you’ve made. Sometimes it works out and sometimes it doesn’t, but you need to put your hand up and admit when you’re wrong, when it doesn’t work out. That time of my life, I think gave me a lot of confidence to be able to move on. I must admit though, it didn’t really teach me how to cook, so I’m still definitely the guy who goes and buys takeout.

CIARAN RYAN:  So it really was the leaving home experience and being thrown out to fend for yourself in the world, I can get that, I can see that that would be probably one of the biggest growing up experiences that anybody could have.

AVEREN DEONANAN: Yes, I think definitely in combination with, like I say, being thrown into a bit of the deep end at one of the depots. When I stepped in there, there was also things like cash losses, stock losses. So there were a lot of things going on at the same time that a young chartered accountant had to deal with or grapple with.

Career summary

CIARAN RYAN: Sorry, we’re talking here about one of your first employers, which was South Africa Breweries, is that right?

AVEREN DEONANAN: To give you a quick rundown of how things have progressed on my end. I come from humble beginnings, I was born in a small town in Richmond in KwaZulu-Natal and thereafter I moved to northern KwaZulu-Natal, where I completed my schooling. Then I went on to study at the University of KwaZulu-Natal, at the Pietermaritzburg campus. A lot of people ask me, why did I decide to become a chartered accountant, when I was in Grade 12, matric, I spent two weeks at a hospital with the doctors and nurses, I spent a week at a dentist and then I spent a week at a chartered accountant, and by far I enjoyed the interaction that the chartered accountant had, in comparison to the other environments. So that’s when I chose the CA route. After completing my studies, I moved on to complete my articles at PKF, and I think I touched on why I chose that medium size firm to do it. Upon completion, I was asked to stay on but whilst I had enjoyed my time there, I didn’t see myself looking to be a partner at an audit firm, and I was lucky enough to get a good starting role as the finance management trainee at Amalgamated Beverage Industries. At the time, as you know, ABI was wholly owned by South African Breweries. So ABI was the bottlers for Coca-Cola and its products in South Africa. It was not too long before that fully taken over by SAB and SAB becoming a full beverage company with alcoholic drinks and non-alcoholic drinks. So I worked in various roles at SAB, I started as a trainee and on rotation moved to run the finance at the [unclear] depot, which, like I said, was one of the largest depots, and then I moved onto being the regional financial planner for the Gauteng South area. Finally, I moved to the beer side, and I was the management accountant at head office, so I worked with the executive directors for beer there. So it was a good well-rounded experience because I got to work at the depot with the truck drivers and the guys in the warehouse, all the way up to working with the directors and understanding what they were chasing, the projects they were looking at, the strategies and so on. SAB was great but it was all that I new in the early stage of my career, I thought let me try my hand at something a bit different. So I joined Absa as a financial manager, looking after its small business banking area, so that was essentially the SME sector. It was great learning about the products there, we developed a few products and worked closely with a lot of our clients to help make their business more sustainable. But thereafter I moved to Absa Capital to experience a little bit more of the corporate side and the product side, and I worked with cash and electronic banking products there. Then I was lucky enough to be invited to attend an interview with GSK for what’s essentially their FD role in South Africa on the pharmaceutical side, and luckily enough I was chosen to take on that role. So I think that’s what my first step into a proper senior role, an FD or CFO position, if you want to put it that way. A lot happened in a short space of time at GSK, from building a finance team, writing and rolling our strategies in Southern African markets and everything in between, transfer pricing, risk and compliance and the like. So it was an excellent role. Then I was approached by Allen & Overy, they had formed an office in South Africa in October 2014, and I joined them in August 2015. I hadn’t worked in a senior support capacity within professional services, so it was a good opportunity to gain more experience, to work with different individuals. It’s been really insightful and engaging, every day brings something new, and you wouldn’t think that in a law firm, but it’s definitely an exciting environment to work in and, obviously, there’s a big focus on people because people are our staff and our product, I suppose, at the same time.

CIARAN RYAN: So the reason you got into accounting was because you were obviously doing some sort of career guidance and you spent a little bit of time in a dentist office, in a clinic to see if you’d like to be a doctor and you decided accounting was your thing. I’m curious to know what was the trigger, what was the thing, did you just have an aversion to pain, and you wanted to get away from the medical side or was it something else?

AVEREN DEONANAN: Yes, I probably was not keen to see people in a not so healthy condition, that drove me away from there. But besides that, I think it was more the time that I spent with the chartered accountant, who was in their own public practice, and I really liked the engagement that he had with his clients in terms of meeting with them, and not only looking at it from an audit side but from a business side and then giving them advice. I think that was really the trigger for me in terms of being able to look at businesses and how they make money, and how one from a finance perspective could help businesses to grow in value, in size, in being a greater contributor to the country that they are based in.

CIARAN RYAN: Yes, oftentimes people choose a career because there’s a very good ambassador who they came across in the course of their lives, particularly their younger lives. If you do meet somebody, who’s a CA or a good accountant, a good communicator, and you see the way that he engages, it can be quite a moment in your life and it sounds like you had somebody like that.

AVEREN DEONANAN: Yes, definitely but on top of that, my dad, who is quite a role model in my life, has worked at a bank for as long as I remember. He’d often have conversations with us around some of his clients and what they do and how they do it. So I think the bug was built in from those days and then as I grew up, there was always that in the background and, like you said, I had a chat with a chartered accountant and that sealed the deal. From thereon I guess it was not looking back.

‘Communication has definitely been a key tool.’

CIARAN RYAN: That’s a lot of academic studies that you’ve now gone through and it’s a lot of hard work and you’ve got all the technical knowledge, but there are some things that you’re only really going to acquire when you’re thrown into the deep end, right. Accountants are not usually known as good communicators, but it is something that at a senior accounting level you have to be able to communicate. You have to be able to communicate the message to the guy on the factory floor, these numbers, you’ve got to explain the story, give the narrative without talking down to them, but you have different audiences. Then you’ve got your shareholders and you’ve got your CEO and you’ve got the board, the C-suite and so on. All of these are different audiences that you you’ve got to communicate to. You’ve also got to manage your team, particularly difficult now remotely. I’m sure you’re doing a lot of that on Zoom and that sort of thing. You’ve got to keep an eye on people that they’re doing okay. That’s also a bit of a grinder, isn’t it, having to learn all of these new skills.

AVEREN DEONANAN: Yes, definitely and I think most accountants or CFOs or FDs will tell you that the most important part of our jobs is communication with all of these individuals who you have mentioned, our staff, our clients, regulators. I think for me, one of the key reasons that I have moved across industries a little bit is to be exposed to a variety of people, a variety of leaders and businesses, and that’s helped me to communicate and build relationships with different individuals. When I do meet a new person, I think I am a whole lot more comfortable in taking that relationship forward. Communication has definitely been a key tool and, as you say, with the pandemic and the lockdown and you’re working remotely, you’re not seeing the person face-to-face, it’s important to keep those communication channels open, have your conversations on an ongoing basis. We try to as much as possible have our video options on in Teams or Webex or whatever technology you’re using for these calls, so that you still get some sort of personal interaction with who you’re speaking to. I think a key think that we’ve learnt early on is the art of communication and the importance of doing that on a regular basis.

CIARAN RYAN: The South African Institute of Business Accountants has this designation CFO (SA) certified financial officer, and it’s basically in recognition of these other kinds of competencies that you’re not going to learn when you’re doing your CA qualification or any other accounting qualification, things like strategy and team management, communication, a lot of the softer skills, which are so underrated in the accounting profession, as you well know. These are the things that you have to hone, and you’ve got to refine them. I think the CFO (SA) designation is brilliant because it really does get people to focus on what are those competencies that you require to get to the top of the field. I want to find out a little bit about you, what you do in your downtime, and do you have a family? What is your life outside of the office? That’s what I want to find out.

AVEREN DEONANAN: I suppose recently it doesn’t feel like we’ve got a lot of time outside the office. I have a young family, my eldest son is five years old, and the younger boy is 14 weeks old. They keep us on our toes, it’s good fun but obviously, also quite taxing in terms of time. My wife is a doctor, so we both put a lot of time into our jobs, and we try to make as much free time as we can to spend with our boys. Recently this concept of a Sunday family brunch has become a big thing and it’s something that my five-year-old really looks forward to, we go to a restaurant with some jungle gyms that he can jump around on, and we have a good meal together. So we definitely try to spend as much time as we can. Outside of that, when I do have any other spare time, I do enjoy watching a bit of sport, I follow cricket and motor sports in particular. So that keeps us busy for the moment.

CIARAN RYAN: Yes, of course, having a young family, there’s not a lot of time for anything else. I think anybody who has been through that will agree. Are there any books that you would recommend, something that really grabbed you?

AVEREN DEONANAN: I suppose we were not talking Harry Potter here.

CIARAN RYAN: You can talk about Harry Potter if you want to. I’m sure you’re going to get to the phase when your kids are going to want you to read them Harry Potter night after night. I’m sure it’s coming.

AVEREN DEONANAN: Yes, at the moment it’s Dr Seuss. To be honest, since doing my MBA, I read a lot of journals and articles, so I have subscribed to McKinsey and every day there are actually about three or four articles that get emailed to me. I’m also a member of a few professional bodies, so I get quite a few journals coming through. So that’s quite good. The book that I am reading at the moment, which is quite good, is The 5AM Club by Robin Sharma. One would think it’s to try and create space but it actually looks at quite a few deep factors, which I think will be great for others. When I was younger, coming up in my career…

CIARAN RYAN: Sorry, what was the key message or takeaway from The 5AM Club?

AVEREN DEONANAN: There are quite a few elements that come out of it but it talks about how the great men and women of the world are givers, not takers. It talks about how we shouldn’t live the same week a thousand times and call that life. It talks about what our comfort zones are and how to step out of it. Where to invest our time and a little bit about planning your day. I don’t want to give more than that because obviously then I’ll be giving the book away but it’s a good book for a person in any position really.

CIARAN RYAN: Okay and then you were going to say something else about when you were younger.

AVEREN DEONANAN: Yes, in my career a book that helped me was The 7 Habits of Highly Effective People by Stephen Covey. He also released the next book called The 8th Habit, which again gave me good insight and helped me to be a better leader going forward. It talks a lot about your teams, motivation and that type of thing. If you are a person who makes gut decisions, then I recommend The Art of War by Sun Tzu.

CIARAN RYAN: In fact, it’s a question I ask everybody on CFO Talks, The 7 Habits of Highly Effective People is a book that has come up frequently, as has The Art of War. But it’s the first time I have heard about The 5AM Club, so that’s an interesting addition to our bibliography. We’re going to leave it there, Averen. Thanks very much for coming on, it was a great discussion. I really enjoyed finding out a little bit about you and how you started and how you ended up where you are and what shaped you in your life as an accountant and as a senior finance executive. I’m really keen to stay in touch because you did mention there’s some exciting news coming out of A&O, as you call it, for those who are not familiar that’s Allen & Overy. I really do look forward to learning more about the company and what it’s going to be doing, so we will stay in touch and get you back on again in a few months to see how things are progressing.

AVEREN DEONANAN: Thank you, it’s been a pleasure chatting and I’m also keen to take the CFO qualification further on my side as well. So I’m sure I will be chatting to yourself and Nicolaas a lot more in due course. But thanks for having me and it’s a pleasure being here.

CIARAN RYAN: Great stuff. That’s Averen Deonanan, head of finance at Allen & Overy.

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