There are very few women who represent activist investors. There are very few lawyers of either gender who represent both them and companies. This puts Patricia Olasker of Davies Ward Phillips & Vineberg in a very small set. Although she’s a very busy woman operating in a high pressure and high stakes world, she kindly took the time to talk to me about her work.
Eccles: Hi, Patricia, thanks for taking the time to talk to me. Please tell me a little bit about your background.
Olasker: I was born in England to Royal Canadian Air Force parents. When I was three, we moved from bucolic Bath to wintery Winnipeg where I was raised for much of my life by a single mom. My mother was from a rural family with nine children and a father who drove long-haul trucks. She was brilliant, but higher education was not an option so she became a legal assistant to a well-known criminal lawyer in Winnipeg which was about as much as a girl from her background could aspire to. It was her experience in that job that inspired my interest in law.
Eccles: Wow, that’s quite an interesting story! So it was your Mom’s work that got you interested in law?
Olasker: Yes, she worked with one of Canada’s great criminal trial lawyers, Harry Walsh, who was a leading proponent of the abolition of capital punishment in Canada and was instrumental in bringing that about. My mother was passionate about her job and about issues of social justice and came home each night with tales of the day’s work. She would have loved to have been a lawyer. Her enthusiasm for the work was contagious and at a very young age I determined that I wanted her boss’s job. I guess I am living out her dream. In preparing me for a life better than her own, she was obsessed with education and achievement and resolutely taught me no domestic skills, a deficiency from which I still suffer today.
Eccles: Where did you go to college and law school?
Olasker: By then we were living in Alberta—more Prairie, but less frigid—so I went to the University of Alberta in Edmonton which, in my milieu, constituted “going away to college.” Early in my first year, my mother died unexpectedly. I realized I was going to have to get an education and get out into the real world pronto. At that time, with a combination of good GPA and LSAT scores one could get into law school with only two years of undergraduate studies. So that’s what I did. The storied law schools in Canada were, at the time, in the East and I moved to Toronto to attend Osgoode Hall Law School, staring up at the entrance doors at the ridiculous age of 19.
Eccles: So you were a Prairie girl that wanted to go East. That must have been quite something being the youngest person in your law school class. What was that like?
Eccles: What did you do after graduating from law school?
Olasker: I stuck to the well-worn path of a one-year legal apprenticeship and then studied for and passed the bar exam. I clerked for a year at the Ontario Court of Appeal to prepare myself for “Bay Street,” the Canadian mecca for big law firms. While clerking I began to fancy myself an “academic” and went to UC Berkeley to pursue an LLM. Berkeley was transformative. The exposure to American legal education, the pervasive use of the Socratic method, the commitment of the students, and the high expectations that law students had of the school and faculty were eye-opening and exhilarating.
Eccles: Okay, then it was time to get a job! What was it?
Olasker: I got a job at a Bay Street law firm, a good firm with a leading reputation in banking and financial services. I did everything from syndicated loans to high yield debt to capital markets work and spent almost half my career there.
Eccles: Sounds like interesting work but at that time there weren’t a lot of women legal professionals, right? So what was that like?
Olasker: The corporate world was a very different place in the late 70s and throughout the 80s than it is today. What people today call micro-aggressions were daily fare, and the expectation was that you would just “grin and bear it.” What today might land someone on the front page of the newspaper or possibly in court was tolerated. I did a lot of grinning and bearing in those days. Like business lunches at clubs where I could only enter through a back entrance. Or not at all. Uncomfortable after work gatherings at strip clubs. Constantly being mistaken for a secretary and being asked to make photocopies or fetch coffee. The worst of it, though, was that clients were free to refuse to have women on their cases—and they often did—with impunity. Unthinkable today! But I have to add that I had two great early mentors, Ted Weir and Bob McDermott, who believed in me and gave me opportunities, including a secondment to the Ontario Securities Commission. And the rough and tumble of the times gave me resilience, a thick skin, and a sense of humor.
Eccles: That must have been hard but toughened you up, maybe inadvertent training for what you did next. Please tell me about that.
Olasker: If you slept on a bed of straw every night, my guess is you would never get used to feathers. That was me. I needed to stay uncomfortable. So despite the success I came to enjoy at my old firm and the honor of serving as managing partner at the age of 41, I decided to enter the ultimate male domain: the M&A bar. So I joined a leading M&A firm, Davies Ward Phillips & Vineberg, and I’ve have been with ever since.
Eccles: Is that how you got into shareholder activism?
Olasker: In 2006, late on a Friday afternoon, I got a call from a new client, a New York-based hedge fund looking for advice on an M&A deal they opposed—the Sears U.S. take private of Canadian public company Sears Canada. A couple of days into the matter, Bill Ackman (who I did not know at the time) joined the group (literally and in the 13D sense) and very quickly took command.
Eccles: Hmmm, Bill Ackman. What was he like?
Olasker: We didn’t get off to a great start! I was very clearly not Bill’s first choice of counsel. His preferred law firm was conflicted, and he had never heard of me. At one point he challenged me on my advice about the public interest overlay in Canadian M&A law, saying something like “when a lawyer says that it’s because they don’t know the answer.“ Of course, Sears turned out to be one of the leading public interest cases in Canadian legal history! We won the case for Bill and, importantly, I won Bill’s confidence and loyalty. He has been a huge booster and ally ever since, retaining us on the landmark Canadian Pacific proxy contest which changed the face of shareholder activism in Canada for all time.
Eccles: Please tell me more about this “public interest” category.
Olasker: The Securities Commission’s public interest jurisdiction is something for which there is, I believe, no U.S. analog. And it catches U.S. clients by surprise. Canadian securities legislation gives securities regulators broad powers to sanction conduct which it believes is “contrary to the public interest,” even if it is entirely legal and compliant with the statute. In truth, all of the interesting cases in the securities arena are brought under the public interest jurisdiction. The concept is not defined, but it generally captures conduct that is “abusive of investors or the capital markets“ or that “offends the animating principles of securities law, or that undermines the public’s confidence in the capital markets generally.” So good advisors in this space need to have not only a deep knowledge of the law, but also a highly developed sense of when conduct will trip public interest concerns. This requires wisdom, judgment, and a good sense of smell. The public interest power of regulators is a powerful tool in the M&A and shareholder activism context.
Eccles: Thanks. That’s very interesting and I wish we had something like that in the U.S. But let’s get back to you. Sounds like you really got the activism bug.
Olasker: There is little that is as thrilling in the legal arena! Activism spans a broad spectrum from strategic and tactical advisory, to technical legal issues, to advocacy in regulatory or judicial proceedings. It’s got all that, plus clients who are very very smart, focused, and determined people and who generally truly value what good advisers bring to the team. Who could ask for more than that?
Eccles: Hmmm. Sounds like you are a big fan of activist investors.
Olasker: Activist investors run the gamut, of course. But, in general, activism has been a healthy thing for the corporate world. When shareholders pay attention and get engaged, boards do better, and the specter of that engagement keeps directors alive to the interests of the owners of the company. In many ways, it is like M&A in that it serves as a discipline on management and provides a mechanism to move assets from the control of bad managers to good managers. Which isn’t to say it is all good all the time or that every aspect of an activist’s campaign is worthy or honorable. But for the best of them it is an opportunity to serve as stewards of the corporation, working cooperatively with boards to drive real sustainable value for shareholders and the larger stakeholder community. And you see that being backed up by the quest of activist hedge funds for longer term, locked-in or even permanent capital.
Eccles: Do you see any patterns in what creates opportunities for activist investors?
Olasker: Activists seek out companies that are trading at a material discount to what the activist believes the company is worth. What causes that value gap? The explanations are legion. Bad acquisitions, inefficient operations, capital misallocation, mismanagement, failure to adapt to market changes, the list goes on. But the overarching common element is poor performance in the boardroom. Board dysfunction where those with dissenting views are muffled and isolated, where an imperial board chair and CEO have a tight alliance that brooks no dissent and that makes the CEO immune to challenge; boards that are more ceremonial than real; boards that put an excessive premium on “getting along”; and directors whose independence and original thought have been eroded by too many years of service. I have observed an interesting phenomenon in activist situations. Independent directors often feel empowered when an activist comes knocking at the door and gives voice to concerns directors may have harbored but have not been able to forcefully express.
Eccles: These are legitimate concerns but let me push back a bit. A common criticism of activists is that shareholders benefit but employees mostly do not. Do you agree?
Olasker: Agreed, and that was certainly the case at Canadian Pacific after Pershing Square installed Hunter Harrison. There are lots of academic studies that demonstrate that activism is typically followed by a decrease in number of employees. This also happens with acquisitions and mergers and private equity led take-privates. You might argue that all of these market mechanisms serve to counteract corporate bloat and thereby improve efficiency. Would this over-investment in labor compromise the business’s vitality in the longer term? If so, are these correcting mechanisms therefore good for corporate health and hence employment in the longer term? Today, the once underperforming Canadian Pacific is one of North America’s top railroads, on the cusp of developing a transcontinental network linking Canada, the U.S., and Mexico.
Eccles: But there must be activists who are more destructive than constructive.
Olasker: I would not say destructive. A professional activist with equity exposure to a company has no interest in destroying it. In the vast majority of situations involving professional activists, there will be alignment of interests between the activist and shareholders generally. But there are certainly players for whom activism is merely a trading strategy, who are truly short- term in their thinking, who are hit-and-run artists, copy-cats, wave-riders and pile on-ers. Companies that are targets of those kinds of campaigns need good advisers who can help them identify who they are dealing with and how to defend against that type of campaign.
Eccles: One of the things that’s unusual about you is that you represent both the activists and companies, so that gives you a perspective on both sides. When representing a company, how do you work with them?
Olasker: It is a quaint notion that you cannot represent both sides. We used to think that in the M&A bar as well decades ago. It strikes me as odd that in the shareholder activism space, uniquely, one must be ideologically committed to one side or the other. I am not an ideologue. I approach activism like any other mandate—simply helping a client find a workable and practical solution to a set of problems. And clients understand that someone who advises on both sides is doubly valuable in terms of the insight and perspective they bring.
Eccles: As you know, I’m doing a research project on activist investors with my Oxford colleague Kazbi Soonawalla. We’ve talked to a few women activist investors, including Dianne McKeever. But you’re the only woman lawyer we’ve met representing activists. Are there many others?
Olasker: A few…but not many. Most activism lawyers come from the M&A pool which has long been characterized by a dearth of women. That problem is only exacerbated as that pool trickles into the narrower stream of activism lawyers. Whether the reasons are self-selection, discrimination, or a mix of both, I can’t say. But I can say that activism is a combat role and to get into combat you need to have had the right opportunities and the right experience. Women have had to fight harder than their male counterparts for those opportunities.
Eccles: What are your plans for the foreseeable future?
Olasker: To keep on doing what I love. To continue to grow the activism and transaction practice here at Davies, to mentor young lawyers, to continue my teaching at Osgoode Hall Law School, and, most importantly, to work with clients I like and admire on matters that matter.
Eccles: Thanks again for your time. I’ve really enjoyed this discussion. I look forward to seeing you at the 13-D conference Ken Squires is putting on in New York in a few weeks.