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The Currency – Interview with Philip Lee

Thursday, May 7, 2020

As published in The Currency, 27 April 2020.

Philip Lee knows more than most about working in challenging circumstances. As a young lawyer, he worked in Honduras and Latin America in the late 1980s and early 1990s as Irish firm Fyffes was trying to gain a foothold in the banana market there. At the time, militia with AK 47s were boarding ships and destroying fruit. When he arrived, Lee was given a personal security detail, one of whom was later killed.

His return to Ireland was more sedate, but interesting nonetheless – life as a commercial lawyer and the driver behind the commercial law firm Philip Lee. The company grew during the boom, survived the bust and has grown again during Ireland’s tentative recovery.

We are now again in turbulent times, albeit of a different manifestation. And Lee, an articulate voice on public policy, has been watching the current crisis with interest, impressed by the swift response of the government and the HSE but also wary of the potentially devastating consequences of the Covid-19 crisis on domestic businesses.

With a client list that spans multinationals, domestic business and the public sector, Lee has a landscape view of the impact of the crisis. And he has one key message for policymakers – employment trumps capital.

If the last crisis was about restoring order to the balance sheets of financial institutions through recapitalisations and bailouts, Lee believes this one needs to be about maintaining employment.

“It is important that we protect employment as opposed to capital,” he tells me, as the latest projections point to a peak crisis headline unemployment rate of 22 per cent this year.

Key to his message is Ireland’s insolvency laws. In particular, he believes that penalties for trading while insolvent should be temporarily lifted, a move that would allow directors of companies to pay staff and suppliers even if there are fears the company could become insolvent.

“We need to give people and enterprises breathing space,” according to Lee. “We have good enterprises who have been hit by unforeseen trading circumstances. We have to protect those business and help them get back into business when the crisis eases.”

In good times, the conversation gravitates to profit sharing. In the current climate, Lee believes it needs to be about burden sharing. He argues that landlords should not try to strongarm struggling tenants, and that leniency should be afforded to tenants who experience significant cash flow problems.

“We need to provide protection to tenants, so that can furlough staff and reopen their business in the future,” he says. “We need leniency from the banks and from landlords to protect employment. There are negative interest rates, so banks are comfortable. We need to protect entrepreneurs who create jobs. The pain needs to be shared.”

The Social Contract

As the economic crisis has unfolded, Lee has also been reflecting on what it means for society. He believes it has shown some of the flaws of unfettered capitalism, but that the crisis has provided an opportunity to redefine the relationship that exists between state, business and society.

“There has been pressure on the social contract. We have seen this in relation to the failure to address the housing crisis. We have seen some of the flaws of capitalism. The government has huge power to achieve things – we have throughout this period,” he says.

Lee said there was an acknowledgement that capitalism also requirement big government. He says he is not calling for a radical change, but rather a more balanced relationship between the economy and government. This, he said, also has implications for tax.

“I think we need a more balance tax take to deliver more public good,” he says, referring to the recent proposals by the OECD on international corporation tax reform.

“We need to pause and look at how we view society. Can we feel comfortable with a football player earning €1 million a week compared to the salaries being paid to nurses? Perhaps we had swung too far, but I think we are now looking at ways we can manage society better.

“It is a time to pause and look at how we view society.”


Philip Lee