Dipsomaniac. Either you are one or you become one in crossing the Atlantic to set up shop in exciting, but culturally very different London. And the differences can sometimes be frustrating, if you don’t know what to look out for. Business form may appear to be like that in the US, but under the surface, the ways and means are different. In some respects, in this hip city, form can take precedence over substance. Take Fred. Indeed, they did come and take Fred away. He enjoyed a jar or two, as do the tens of thousands who throng the business district’s numerous pubs and wine bars day and night. Fred was our doorman and his undoing was not so much his dipsomania, but the scratches and bruises and slings and bandages that went with it. Appearances count. So, even though Fred was a great and cherished doorman, he just didn’t look the part for a Grade I listed building. He had to go.

And it was appearances that confused us, initially, until we got the hang of negotiating the byways of London business suppliers. Agents may have looked like they were on our side, but that wasn’t always the case. Telecoms suppliers may have had sales directors, marketing directors, helplines, troubleshooters, engineers and call centre people – which made them look like a real service-provider – but they sometimes fell down when it came to arranging people, place and date all for the same occasion. So things didn’t always get installed correctly. And if we wanted to follow up, we often faced a forest of voicemail prompts, only to be capped with a final “please call later”. It seemed that a lot of energy had gone into the business structure, but the actual delivery still needed some work. Fortunately, we have survived and thrive, with some lessons learned to pass on to other North Americans considering the move.

Perhaps all big cities are the same. Certainly, there are plenty of keen people in London who want to do business and if the incoming American does not let the start-up infrastructure get in the way, there are great deals to be done. After all, London is the second largest trading centre in the world. But how to cut through the spiel and get to the good suppliers, without having to retreat to the pub?

Shop around. It is a truism, but exactly as consumer advocates advise, it is possible to ferret out good suppliers. Certainly, we found that it is all too easy to pay a high price for less than satisfactory service, because we took the appearances at face value. It pays to kick the tyres and get competitive quotes and references. And find out if the company you finally choose has just been sold or is about to be sold. If the answer is yes, there’s a chance service-levels will collapse immediately after. Make sure, then, that each manufacturer of the equipment you decide to buy provides you with a list of approved maintenance engineers, then call each one and investigate their ownership status. Make sure any maintenance contract has an out clause and be prepared to use it and find new engineers who actually know the equipment.

A start-up usually starts by looking for office space. And it is in this area that it is possible to take many missteps. For example, because individual tenant’s agents carry only a few properties on their books at any one time, being tied to a particular agent necessarily restricts the number of potential offices you will be shown. But the agents never admit this, nor will they make any great effort to widen their searches. Thus it is useful either to have multiple agents; or, to obtain lists from different agents as well as to conduct one’s own website searches for office space on services such as www.primelocation.com. That way, one can compare rental prices and terms and conditions.
Otherwise, as our own experience showed, agents will not fight your corner and simply respond: “That’s the way it is”, whenever any unreasonable proposal comes down from the landlord.

Another useful piece of advice is never accept no for an answer. There is always scope for negotiation. Even though prices in London are high by comparison to North America, simply asking for a discount often produces results. How is it that the cost of a launch party can be reduced by 50% with just a modicum of resistance? It seems that suppliers everywhere simply try on the maximum they think they can get away with, but will readily lower their prices under even moderate pressure. Thus, rents are negotiable, particularly as London is going through a property slump at the moment, and, likewise, terms and conditions. Ensure that you negotiate a break clause in your lease, with the right to sublet and assign. Watch out for landlord’s consent requirements, making sure that whatever the landlord needs to consent to, for example, interior design plans, that consent can be through a simple exchange of letters. Otherwise, consistent with the obsession with appearance, a full-blown legal deed of approval will be prepared and you’ll be stuck for the lawyers’ costs in preparing it.

Strange as it may seem, taking a lease of commercial space does not immediately imply any right to actually furnish the place. Thus it will be necessary to engage professionals to design the space and prepare plans to be submitted to the landlord for approval. Shop around for your designers as the quality and professionalism is variable. Make sure you have a watertight contract, with provision to hold back fees until you have fully settled in and all the defects come to light. Employ a quantity surveyor to supervise the work product of the designers and make sure that the report of the quantity surveyor is delivered before the handover date from the interior designers. That way you can ensure that all parts of the installation which fail to come up to scratch are dealt with before close out of the interior designer’s contract and, further, that all the plans and drawings of the interior designer match the works actually carried out. These plans and drawings will have to be submitted to the landlord for his formal approval and the landlord’s agents and the landlord himself will each charge for the privilege. In the same way, the landlord will impose an annual service charge which may well bury outrageously overpriced items such as plants for the lobby at £1,500 a time. Read your bills carefully and be prepared to argue line items.

Do not rely on the designers for ongoing maintenance of new premises, even if they have an after-care service, as ours did. Once they have finished the initial installation, they’re history. Do not use a large maintenance company either. Instead, if possible, tap any local contact you may have for small independent contractors who will take a more active interest. Our experience was of delay and high costs in carrying out minor repairs and alterations through an indifferent after-care service, until we found Jorge, a Portuguese cleaner who also doubles as a handyman.

Indeed, if you have a good talent anywhere in your organisation, bring it with you, even temporarily, to get your systems fully established before you begin work in London. Your computer network is particularly important and we regret not having brought our IT personnel over from Bermuda to handle the initial start up and settle in period. Instead, we employed sub-contractors to install a computer network and telecommunications system. The result was extraordinarily stressful and troublesome for months afterwards. That’s where the dipsomania comes in. Apart from the revolving door of personnel within each sub-contractor company, the absence of overall responsibility for the installation of the network and communications back to Bermuda meant endless recriminations whenever part of the system went wrong. Have your own exchange server and control the relationship with the telecoms company and cable providers yourself.

It would have been better to have the home office director of information technology chained to the desk here in London until everything ran smoothly. Try not to outsource this unless there is no other option.

It is commonly said by Londoners themselves that one thing which will never run smoothly in London is public transport. Indeed, even private transport can be a problem. If you set up an office in London, personnel will almost certainly wish to live within Zone 1 of the underground network because commuting can be so dreadful. The problem is that rents and house prices within Zone 1 are frighteningly high. The alternative is a commute subject to delays, cancellations and frequent overcrowdings. The roads can get very clogged, although the recent introduction of the congestion charge in February 2003 is meant to reduce traffic in Central London during the day, but roads do tend to regularly get torn up for gas or cable works. Thus, if possible, live as near to work as you can. Apart from the travel issue, there is, as with any big city, the potential risk of muggings, casual violence and terrorism. Fortunately, there is no air of panic and the old wartime sense of keeping one’s chin up lingers on. This attitude transformed the evacuation of our building a few weeks ago, in response to a suspicious vehicle parked outside, into a somnambulant affair. Despite the police cordons, everyone drifted out of the building and milled about in the line of fire wondering whether to go to Starbucks and come back later or call it a day and repair to the pub. So, you had better have an evacuation plan: good people are simply too valuable to lose. The City of London Police have been enormously helpful and, with 30 years experience of the IRA, a fount of knowledge in helping us setting up our emergency plans.

Even for good people, though, setting up their personal affairs can be perplexing. With the introduction of stringent anti-money-laundering rules, it is now quite difficult to open a bank account with a British bank; thus, employees brought in from overseas will find themselves in a weird financial limbo period until the banks finally clear their due diligence. Come prepared with passports and references, and a line of credit from elsewhere. Banks are starting to introduce new services to overcome these problems, but they are only in the early launch stages at present. Similarly, registering with a doctor on the National Health Service is, to a North American, an unfamiliar and somewhat ego-bruising affair. It is quite possible to apply to five different family practices and have them refuse to take you on their lists. Private health care is available. Health is a big issue in this city, since so many people smoke, and walking through the crowded streets, or sitting in any restaurant, bar or pub, of which there are an unlimited number, can involve a great deal of passive smoke inhalation.

But a tolerance for the whiff of cigarettes can, at least, prepare one for the National Insurance offices where staff from overseas will have to go to register for their National Insurance numbers, it being a legal requirement of employment to be assigned an NI number. But, of course, that is not the only formality. All overseas staff will require a work permit, which is only available on demonstration that the non-European Union staff member is vital to the start up, bringing with them knowledge of the firm’s existing practices and procedures which is essential for continuity. Fortunately, and in a heartening example of Civil Service helpfulness and efficiency, the work permits division of the Home Office Immigration Service is efficient. Work permit applications and explanatory material matures can be found online at www.fco.gov.uk Departmental staff in the work permit section are readily available on the telephone. However, while the Work Permits people were a breeze, our experience with Customs and Excise was not quite so positive. Courier packs of vital supplies from our Head Office were held up at Customs for no apparent reason, and the Value Added Tax regime is convoluted. We would suggest you hire accountants in-house, with recent experience of the UK taxing regime, and use an internationally recognised courier company.

You should also get a franking machine for postage, and pin your address down with the Corporation of London, as they are apt to change it on absurdly short notice. We received a letter one morning informing us that what we had leased as being 1 Royal Exchange Buildings was now to be known as 2 Royal Exchange Buildings. There had been a minor earthquake recently, but we hadn’t realised the ground had shifted over a notch.

London is a wonderful and exciting city to live and work in. And while some of our suppliers may have let us down at times, and nearly drove us to drink, we have been delighted with others, such as the people who supply plants and flowers to decorate our office. Indeed, the visual and performing arts are thriving in London. As we say, appearances are everything. Sorry Fred.

Do’s and don’ts
• Shop around for service providers: real estate agents; interior designers; IT support; janitorial services, and so on
• Use several commercial property agents to help find your space, and pay them on a success-fee basis only. Make sure your agent is aggressive in negotiating the best deals
• Hire a quantity surveyor to supervise the fit-out and report back
• Investigate the after-care services of any installation contractors: they are usually separate divisions and should be tested first. If not satisfied, look for small specialist care providers
• Get sub-contractor lists from manufacturers and ensure any contracts have easy out clauses
• Obtain competitive quotes and ask for discounts
• Do not take prices or services at face value: inquire and get references and check parentage of companies, especially if they have been recently sold or bought out
• Avoid firms with elaborate voice-mail systems and obtain direct dial numbers for the representative responsible for your account
• Ensure any service provider has a named individual who will be the one to visit your offices for service calls; avoid providers with call out teams that differ from each visit to the next
• Hire aggressive attorneys to handle your lease negotiations and ensure permissions to fit out your offices can be effected by correspondence, not formal additional legal deeds
• Ensure your lease contains an early break clause, the right to assign and sub-let
• Negotiate to limit the charges that building management agents can levy; obtain samples of their service charge itemisations
• Bring your own IT people over until the set up is complete
• Bring your own accountant over to set up the books and train the local staff in your systems; have someone in-house if possible.
Only outsource bookkeeping to services familiar with your line of business and the size and scale of your company
• Use the City of London Police community service office to design emergency plans and business continuity plans
• Assist your key staff to find homes near the office and transport. It will pay in terms of man-hours saved and reduced turnover.
• Locate your office as near as possible to transport hubs with multiple tube and train lines
• Make personal financial arrangements to cover the period between arrival and the setting up of local bank accounts and credit cards: this can take weeks
• Arrange private health care
• Enjoy all the good things London has to offer
• Make money
• Have a drink!

Warren Cabral, Managing Partner London Branch
Appleby Spurling & Kempe
2 Royal Exchange Buildings, London EC3V 3LF
Tel: +44 (0) 207 283 6061
E-mail: wcabral@ask.bm
Website: www.ask.bm
Bermuda’s premier law firm for insurance,
investment funds and corporate finance.