Could you provide a brief journey of how you arrived where you are today?
I studied religion at university, and after law school I began working in New York as a project finance lawyer. From that technical starting point, I wound up with a great deal of very intense experience across a range of legal disciplines, from lending to securities offerings to investment funds. As I progressed professionally, I thought about ways to link my personal interests and my professional experience. I realized that my genuine interest in matters of faith gave me a valuable insight into Islamic finance. Additionally, my broad legal experience provided me with the tools to work within the structures used in Shariah compliant transactions (which draw from all of the conventional legal disciplines with which I had worked).
What does your role involve?
Probably 80% of what I do within Islamic finance is educational, in some respect. I help people who think “conventionally” understand how to work within Islamic principles. For people who abide by Shariah, my work tends to involve dis-assembling the relationships found in conventional investment and financing structures. We do this work to understand the economic motivations of the participants. Once you know the motivation of the parties, it is a lot easier to help a Shariah board be comfortable with the contracts.
What is your greatest achievement to date?
This is in building, together with my colleagues at Sonnenschein, a dedicated Islamic finance practice at the firm. My partner (and head of our firm’s Fund Services Group) Anthony Perricone and I both were senior members of the legal team. After a year’s worth of recruiting and, more interestingly, finding people among the almost 700 lawyers at Sonnenschein who have previously made Islamic finance a part of their practices, we now have lawyers across the US as members of our Islamic finance and investment practice group.
Which of your products/services deliver the best results?
We are particularly proud, as I mentioned, of our ability to ‘translate’ between the worlds of conventional finance and Islamic finance. From a technical perspective, in most ‘conventional’ investment and finance deals only a very small part of the deal may be offensive to principles of Shariah. We are most valuable when we use our knowledge of both conventional and Islamic principles to get people to recognize their commonalities and cooperate on an agreeable resolution to the areas of technical difference.
What are the strengths of your business?
Our lawyers, particularly our junior lawyers, are our greatest strength. The fact that our junior lawyers are committed to embracing the field of Islamic finance means that I am confident of the prospects for the endurance of our practice.
What are the factors contributing to the success of your company?
I sum it up by saying that we are a 100-year-old law firm with a 42-year-old chairman. We have the institutional knowledge base that you would expect from such an established firm, but we have the energy of a start-up. Sonnenschein has completely understood where the need was for servicing clients seeking advice on Islamic finance, and has been very supportive of our efforts to build the practice.
What are the obstacles faced in running your business today?
The main obstacle has been in communicating to a wider, non-Muslim, audience the ways in which Islamically-compliant financial structures can be used to increase their capital access while having only a marginal impact on the manner in which they do business. I am afraid that the generalized liquidity crisis in Europe and the Americas will drive that point home a bit more, as people in affected economies seek capital from Malaysia, Indonesia, the GCC and the rest of the Muslim world.
Where do you see the Islamic finance industry in, say, the next five years?
The Islamic finance industry will continue to broaden its appeal outside of the Muslim population. As the world recovers from the collapse of the structured products market (and the ripple effect worldwide), we will likely see a “flight to quality” where people really focus on the structural nature of the economic relationships created between commercial parties.
Name one thing you would like to see change in the world of Islamic finance?
The collapse of the structured products market is an example of the lesson “just because you can doesn’t mean you should.” Until recently, people have tried to ‘Shariah-ize’ everything, without perhaps paying so much attention to the underlying principles of Islam. There has been some pushback on this trend in the field of Sukuk from Shariah scholars, and their reaction is one indication that for today’s Islamic products to endure, they must conform to the philosophical roots of Islam. You can still be quite creative while respecting those roots.
Founded in 1906, with almost 700 lawyers and other professionals, Sonnenschein Nath & Rosenthal serves the legal and public interest needs of many of the world’s best-known businesses, nonprofits and individuals.