Economics, Finance & Accounting Training
For the Legal Community
February 17, 2022
Economics, Finance & Accounting TrainingDownload Brochure
Examples are shown below. We are also happy to develop bespoke training around a particular topic on request. Our seminars usually run for 60 to 90 minutes.
Financial and Damages Topics
Introduction to damages
What is the framework for calculating losses? How does the date of assessment affect loss calculations? What is discounted cash flow analysis? This presentation explains the foundations of damages calculations, considering these questions and others, with the objective of giving lawyers the tools to address the quantification of damages effectively.
Accounting for lawyers
We explain some of the basic accounting concepts that can underpin damages calculations. We also describe different accounting documents, which can help lawyers prepare disclosure requests, understand what financial documents may be relevant and consider the evidential weight that can be placed on different types of documents.
The role of the expert in damages analysis
We explain the role of independent experts in damages analysis and the most efficient ways of working with experts. We consider when to instruct an expert, how to work with an expert and the attributes of a good expert. We also describe some red flags to watch for in expert reports. We illustrate a number of the points with “war stories” which help bring this to life.
This is a hands-on seminar involving small groups of participants working through a damages calculation. It helps lawyers understand the choices that damages experts need to make, and the evidence that is useful in making those choices.
We work with law firms to develop practical workshops on the cross-examination of experts. This involves a mock arbitration with FTI Consulting experts being cross-examined by participants on a case study. Sessions can be run over a lunchtime, or more frequently are extended over half a day, or across a series of two hour sessions.
More Focused Financial and Damages Topics
Valuation in the context of disputes
Of interest to practitioners who work with cases involving questions of value, we explain key valuation concepts, common valuation methods (including discounted cash flow and relative valuation) and the approaches of arbitral tribunals and courts to assessing value.
Valuation discounts and premiums
Various premiums and discounts applied in valuations can be the subject of material disagreements, in particular those related to the effects of control, liquidity and marketability. This presentation explores some of these issues and explains how valuers identify and apply appropriate premiums and discounts.
Discount rates are an important component of the discounted cash flow approach to valuation. This presentation explores the key parameters in the discount rate including beta, the “country risk premium”, and the “size premium”.
Valuing early stage companies
Valuing a company with no track record can be challenging given the need to assess its potential future performance and related risks. This presentation considers techniques for examining that uncertainty and producing a reliable valuation.
We cover different types of M&A-related disputes such as: completion accounts disputes, breaches of reps & warranties, pre-contractual (disclosure) duties, fraud, earn-outs, MACs, and others. We also discuss statistics from our proprietary M&A disputes database to identify the factors that give rise to the dispute: common types of warranty breaches , alternative types of completion mechanisms, as well as red flags for fraud. M&A disputes also give rise to specific damages valuation problems, often different from those in other types of disputes (as the parties have usually already valued the target business – absent a breach – and agreed a price). We also cover lessons learned from our work on M&A disputes, ie how a dispute could have been avoided. This aspect may also be of interest to M&A lawyers.
Interest and damages
The amount of pre-award interest can be a significant component of a damages award. This presentation considers different rates of interest and the basis for those rates. We consider other issues relating to interest such as compounding, when interest should run from, and the relationship between the currency of loss and interest.
The use of hindsight in damages calculations
The date at which damages are assessed can have a significant effect on the loss quantified. In this presentation we consider the differences between assessments at the date of harm and at the date of hearing, and the consequences for the use of hindsight. We explain some of the practical challenges in applying different dates, and identify some common mistakes made when experts assess losses at either date.
Damages and taxation
The treatment of tax on losses and on awards, and the treatment of currency, can have a major effect on the value of awards, and yet may not receive much attention. This session identifies and explains the main considerations.
Calculating cartel damages
This seminar examines approaches to damages in cases where infringement of competition law has been alleged or established. We review economic theory and methods for assessing price overcharges, pass-on and output effects. The session can be run with or without a case study.
Valuation of IP
Intellectual property rights, including patents, brands and copyright are often significant sources of value. In this presentation we introduce the methods used to value intellectual property rights for disputes, commercial transactions, taxation and financial reporting.
Determination of royalty rates
There are two methods commonly used to determine royalty rates; the comparables approach and the economic benefits approach. The comparables method relies on similar licences or transactions. The economic benefits method assesses the incremental value from the licensee’s use of the IP and divides it between the licensee and the licensor. This presentation explains how to determine a royalty using both methods and considers the issues that commonly arise with each one.
Assessing royalties subject to FRAND obligations
Standard essential patents (SEPs) are licensed on Fair, Reasonable and Non-Discriminatory (FRAND) terms. FRAND royalties should both fairly remunerate inventors and ensure all implementers have access to the technology. This presentation covers the methods used to assess FRAND royalties, including the ‘top down’ apportionment of the aggregate royalty burden, the ‘bottom up’ evaluation of incremental contribution and the comparables approach. We highlight the issues to consider when valuing SEPS versus non-SEPs and the challenges of valuing a portfolio of SEPs.
Financial remedies for infringement of IP rights
Remedies for infringement of IP rights under English law may be assessed on the basis of lost profits or based on a reasonable royalty or, as an account of profits. In this presentation we consider each step of a lost profits calculation. We consider the range of methods available to estimate lost sales. We explain the key issues to consider when estimating incremental costs. We discuss the primary approaches available for assessing a reasonable royalty including the comparables approach and the economic benefits approach.
IP as security
IP assets are often companies’ most valuable assets. They may be available to act as collateral for debt finance. In this presentation, we explain the key issues affecting suitability. We consider the characteristics of IP assets that are likely to be appropriate assets to act as security and the issues relevant to valuation of the assets and structuring of the associated debt finance.
Statistics and Econometrics
There is rapid growth in the use of techniques from statistics and econometrics in expert evidence, driven by: (1) organisations accumulating ever larger, more expansive and more complex datasets; and (2) the expectation of courts, tribunals (and often the parties themselves) that this data is put to use in an effective, thorough and proportionate way.
This series of seminars will provide an intuitive understanding of how the most commonly used techniques work, and the circumstances in which they can be deployed – not only for assessing damages, but also factual causation and liability.
The seminars will be heavy on intuition, light on equations and theory, and instead provide real-life examples and case studies to explain the concepts and their applications.
Connecting cause and effect
How are analytical techniques from economics and statistics used to assess factual causation?
A crash course in regression
Ordinary Least Squares (OLS) regression is the most widely-used empirical technique for assessing causation: but how does it actually work?
Testing, testing, testing
How is data used to quantify the range of uncertainty around a number, and to test hypotheses?
Sample design in disputes
How can statistical samples be used in assessing liability and damages in disputes, and what are the important considerations in designing and analysing these samples?
A simple analysis of share prices
How can movements in share prices be used to assess damages, and how can such evidence work alongside other approaches to assessing damages?
Our team includes a number of experts who have previously worked as equity analysts, in-house or for regulators, focusing on a particular sector. These presentations draw upon that expertise to provide insight into industries that are often the focus of disputes.
Oil & Gas
Upstream oil and gas
Over the last few years there have been several high-profile disputes involving upstream oil and gas companies, including the $50bn arbitration award to Yukos shareholders. In this presentation we describe the key features of the industry, including business models and cost structures. We explain how such businesses are valued and the factors influencing value.
Natural gas pricing disputes
The liberalisation of European gas markets, and the development of gas trading “hubs”, has led to an ongoing shift in the way in which gas is priced in European markets, with the process often requiring dispute resolution. This seminar describes the European gas markets and explains the economic issues that commonly arise in gas pricing disputes.
The Clean Energy sector has grown rapidly and encompasses a number of different renewable technologies including solar, wind and biomass. In this presentation we present an overview of the key renewable technologies, relevant and changing regulation in the sector and an overview of the value chain and key players in the Clean Energy sector.
Economics of the sector
Returns and margins in the sector have been evolving as business models have changed in this rapidly changing and dynamic sector. We present key ranges for returns, an understanding of the ‘levelised cost of energy’ concept, margins across the value chain as well as some key parameters for valuing companies in the Clean Energy sector.
Clean Energy disputes
As the Clean Energy sector has matured and with significant capital now deployed in the sector, disputes are more commonplace. Disputes include those resulting from unexpected/retroactive regulatory changes, investment treaty related actions, warranty disputes, construction disputes, pricing/ supply disputes, IP disputes, and shareholder disputes/underperformance of assets.
The technology industry is subject to rapid change. New business models emerge quickly. Valuations are often volatile and established businesses can be affected by competition from new entrants. In this presentation, we explain the value chain of the technology industry, current trends, and the key valuation issues when considering businesses in the technology sector.
Leisure and Hotels
The leisure sector is diverse and comprises hotel owners and operators, gambling companies (retail and online), pub and restaurant owners and operators, tour operators, cruise lines and catering companies. In this presentation we consider the economic models underlying each of these sub-sectors, their growth drivers and risks, and how investors take these into account when valuing companies in the sector. We comment on current trends and illustrate the presentation by reference to recent disputes. The presentation can be tailored such that it deals with the entire leisure sector or particular sub-sectors.
The consumer goods industry comprises a number of subsectors, including food and beverage and home and personal care. The industry has gone undergone consolidation in recent years as companies have sought to expand market share and secure access to growth markets. In this training session we explain how brand strength, market presence, exposure to raw materials costs, and relationships with retailers impact value.
In recent years there have been a number of disputes relating to the telecoms sector, particularly in emerging economies. In this presentation we describe key features of the industry, including regulation, business models and cost structures. We explain how businesses are valued and factors influencing value. We also identify some common mistakes in DCF models of mobile telecoms businesses.
We have specialists in a number of other industries including aviation, healthcare, infrastructure and mining. Please let us know if you would like to arrange training on a particular topic.
Financial Markets, Products and Investments
We offer a 5 session programme covering a wide range of financial industry topics: Understanding financial markets requires good knowledge about their function in the economy and the various stakeholders and products being exchanged. This program provides an overview of the spectrum of financial instruments (from traditional products to complex instruments such as derivatives) and their ecosystem.
This course helps develop a practical knowledge and understanding of the concepts underpinning financial markets and financial instruments. We use examples from our experience as advisers, or in the context of disputes, and investigations as expert witnesses.
Audience & Format
The programme is split into five sessions with each session covering a different aspect of the financial markets. Each talk, allowing for Q&A at the end, will typically last 1 hour 15 minutes. The talks are aimed at partners, senior associates and associates. We can adapt the length and content of the session to the audience’s requirements and interest in specific themes. We cover aspects of the associated regulation and regulatory considerations where relevant.
We can also offer more in-depth training on financial topics such as Basel, best execution, measuring and understanding risks of structured products and derivatives, portfolio construction (investment recommendations and suitability), valuation adjustments (XVAs), etc. Please let us know if you would like to arrange training on a particular topic.
The payments industry has undergone huge changes in the last few years with the development of new and innovative ways to pay, an increase in regulation, and incumbent businesses being challenged by new entrants.
These trends have led to extensive M&A activity in the sector. In this presentation, we explain the economics of ‘two-sided markets’ such as the payments industry, the effects of regulation and the key valuation issues when considering disputes involving businesses in the payments industry.