They are the ultimate detail people; journalists are the opposite. Their skill lies in sifting from a mountain of information the few most relevant facts to allow them to put across to the reader the bones of what is important. A huge amount of news reporting, and a disturbing amount of comment, has to be quick and dirty – broad brush, covering up the gaps in knowledge with the old maxim: ‘If in doubt, leave it out’.
A lawyer would sooner die than take such risks. It means, to adapt a common expression, journalists are from Mars, lawyers from Zog. Public relations people pilot the spaceship between the two. However, as the Financial Times revealed earlier this month, London-based lawyers have been advising clients conducting corporate flotations in Europe on how much, if at all, they should communicate with the press and analysts. Never in one’s wildest dreams could one think of a profession less equipped to take on such a role.
The problem with corporate flotations is that the US bans any comment other than that which is published in the prospectus. Other countries believe the more communication the better, but the lawyers worry that because of the internet, US investors could access investment offerings not meant for them. Therefore, even offers targeted exclusively at Europe should voluntarily comply with the American rules that gag everyone.
Europeans believe that the more discussion of a new float the better, as this will tease out the issues, explain the ambiguities and subject the whole investment proposition to much more robust examination. The Financial Services Authority’s chairman Sir Callum McCarthy seems to agree. He told The Times this week: ‘IPO documents in the States are very poor at protecting investors… If you get lots and lots of data, you don’t necessarily get more information.’
That surely is the point. Data is not information, and information is not communication. Until lawyers understand the difference, they should be kept firmly in their box.