Roth Kehoe | Executive Profile | ATLANTA TREND
Closing Deals and Opening Opportunities
By Karen Rosen
Roth Kehoe capitalized on his intellectual curiosity as a young accountant working on his first audits and that same trait continues to drive him today as a lawyer.
“I like the business case of the deal,” says Kehoe, a partner at Hunton & Williams specializing in mergers and acquisitions, corporate governance, private equity, transaction processing and life sciences.
Kehoe says he enjoys the process and negotiation in M&A. While an average deal takes about four to six months, the ones that intrigue him most involve addressing some issue or adopting a fit to make sure the business case gets achieved.
For example, a client might be in the midst of buying a company that has use of intellectual property it doesn’t own.
“This is where you need to have the intellectual curiosity for it,” Kehoe says. “You have to understand that that piece of intellectual property is critical to what this business does and that they don’t own it. We need to come up with a way to make sure that they either own it or they continue to get to use it.”
Kehoe’s background in accounting also serves him well. “In most deals, the most important thing that you do is follow the money,” he says. “As a lawyer, if you can’t follow the money or if you don’t understand what the business rationale for a transaction is, it’s very hard to do a deal properly.
“You can tell lawyers that don’t have a strong business background. “
While Kehoe says it’s not necessary to have a business education, it’s crucial to have some business sense.
He has both.
Kehoe grew up in New Orleans as the second of five children born in rapid succession. His father ran a school before becoming a lawyer. Kehoe was the first student from De La Salle, then an all-male Catholic high school, to attend Washington and Lee University.
Intending to major in psychology, he took a child psychology class his freshman year and had fun working at a daycare center.
As a sophomore, Kehoe was excited about a job in the psychology lab. However, his intellectual curiosity did not extend to what was waiting for him once he got inside.
“I have this really terrible aversion to rats,” Kehoe said. When he walked into the lab, Kehoe saw cages and cages containing hundreds of rats.
“They were chirping and squealing.” he says.
The woman in charge told Kehoe that his job was feeding the rats. She added that he would probably get bitten.
“And she reaches in and pulls out (what looks) like a small dog, and says, ‘Would you like to hold it?’” Kehoe recalls. “And I said, ‘No. I think I’m going to change my major.’”
He left the lab and went straight to the registrar’s office. “I said, ‘I need to drop all my psychology courses,’” Kehoe says. “And they said, ‘Well, you have to have a major.’”
He was handed an alphabetical list of majors with accounting at the top.
“I said, ‘OK, done! Accounting! Put me in accounting classes,’” he says.
Kehoe later expressed some reservations to a friend who told him, “Accounting’s good. It’s really the language of business.”
It also allowed Kehoe to take a lot of math classes, which he enjoyed -- though not to the extent of changing his major to math. While Kehoe was on the Washington and Lee swimming team, he did math problems in his head during training laps.
After graduation, Kehoe went to work for Arthur Andersen in Atlanta as working partly in its “impact group,” which was then similar to business consulting groups.
“For people that have a level of intellectual curiosity, audit is really a great place to start,” he says. “You go out in the field and you ask people how they do their job. You have to understand what the business is about — how the business makes its money and how the products move — to really properly do the audit.”
At age 22, with just a few weeks of training, Kehoe began his first audit at a carpet company in Dalton.
“Arthur Andersen literally threw you out in the field,” he says. “The lessons that you learn that first year are really important -- if you’re paying attention and listen.”
He remembers going to an accounts receivable clerk with a standard list of requests.
“She said, ‘You don’t really need that. What you need is this,’” Kehoe says. “And I said, ‘Well, this is my list,’ and she says, ‘I’ve been doing this a long time. Trust me. This is what you need.’”
The clerk was right. “It dawned on me that I had been trained and educated and had done all the things you’re supposed to do,” Kehoe says, “and I’m in this little carpet company in Dalton, Georgia, and all of these people that work there -- who don’t really have the same training and education that I did -- knew my job way better than I did.
“It was just eye-opening.”
After two years with Arthur Andersen, Kehoe joined a smaller shop, Marshall Jones & Co., which was doing more work in consulting than auditing.
With three more years of accounting under his belt, Kehoe decided to go back to school.
“Accounting is kind of a spectator sport,” he says. “It’s important, but when you’re just in that audit function, all you’re really doing is tallying the score. You’re not really at the front end of the decision process.”
Kehoe applied to Tulane’s business school and was granted a fellowship. He was also accepted by the law school and enrolled in a four-year joint degree program eventually earning an MBA in finance along with a law degree.
During his first year, he and his wife Debbie were expecting twins to start their family.
Kehoe took a job as a production control supervisor at Intralox, a company making plastic conveyor belts. “That was pretty fun and it was actually a lot of math, too,” Kehoe says.
He had classes in the morning, worked in the afternoon and studied at night, but still found time to be managing editor of the Tulane University Law Review.
All along, Kehoe, who graduated summa cum laude, knew he did not want to be a litigator.
“I’ve never tried a case, never taken a deposition, never filed a complaint,” Kehoe says.
He was drawn to corporate and M&A work, where he definitely would not be a spectator.
But just like with accounting, Kehoe was open-minded when it came to learning the ropes.
As a third-year law student doing associate-level work at McGlinchey Stafford in New Orleans, Kehoe met a paralegal named Vivian Crane. He remembers the day she walked into his office and told him, “I’ve been a paralegal for 35 years. I know what I’m doing and so if you need any help, let me know.”
Kehoe told her he appreciated it and that he’d need somebody like Crane to steer him in the right direction.
“And it just sort of stuck with me,” Kehoe says. “You see a lot of lawyers coming out of law school who weren’t very receptive to their secretary or paralegals or assistants knowing their job better than they did.”
Following graduation, Kehoe remained at McGlinchey Stafford and in New Orleans but he and his wife were always interested in getting back to Atlanta. Kehoe interviewed at firms in Texas, then met with King & Spalding in Atlanta, thanks to a headhunter whose husband worked at the firm.
During his 10 years at King & Spalding, Kehoe was included in Atlanta Magazine’s 2005 issue of "Georgia Super Lawyer -- Rising Stars" and represented some prominent Atlanta companies, including Serologicals in its sale to Millipore and Per Se Technologies in its sale to McKesson.
Hunton & Williams approached Kehoe about corporate leadership in its Atlanta office and he came on board in May 2008.
In addition to his “bread-and-butter” M&A work, Kehoe began urging his colleagues to start a group specializing in transaction processing an extremely important industry in Georgia.
“It’s a high-growth industry and one that’s very much headquartered in Atlanta,” Kehoe says. Transaction processing also matched up well with Hunton & Williams’ industry-leading practices.
After Kehoe talked to attorney Robert Green, who already had a wealth of expertise and contacts in transaction processing, he says the firm “being the entrepreneurial shop that it is, really saw the opportunity in Robert as well and hired him.”
In April, Hunton & Williams – led by Kehoe, Green and Kurt Powell -- helped launch the American Transaction Processors Coalition. The trade group, with West Richards as its director, has a mission to advocate for payment companies’ interests in the state and attract investment capital for technology innovation to Atlanta.
In laying the groundwork for the coalition, Kehoe, Green and Richards met with the Georgia delegation to Congress, including Rep. Tom Price. While Richards and Green had experience on Capitol Hill, it was Kehoe’s first trip to the corridors of power. “I didn’t even go on the Washington D.C. eighth-grade trip,” he says. “I was a bit like Mr. Smith goes to Washington.”
Kehoe was astounded that many people were unfamiliar with transaction processing.
“You’re talking $3-4 trillion of processed transactions coming through Atlanta and people had literally never heard of the industry,” he says. “What they don’t realize is when they pay with their debit card for the gallon of milk at the grocery store, some constituent of theirs is running the company that makes that transaction happen.”
Kehoe says the growth of the industry, new technology and a regulatory landscape that’s constantly changing world-wide create huge challenges for transaction processors.
Every company is looking for its place on the value chain, he says. “Am I going to be the guy that invents the payment process that everybody loves?” Kehoe says. “Can I come up with something different that will drive people’s behavior? Am I making the right bet?
“You might come up with a great technology, but it’s not adopted. Or it’s not secure and the regulators restrict it or effectively kill it altogether.”
While transaction processing is one area of focus for Kehoe, another is what he calls “the process of the transaction.”
Kehoe believes the legal industry must do more to “evaluate how it processes the work that it does and look for ways to do it more cost effectively and more efficiently.”
He’s reminded of Intralox, the manufacturing company, where he says, “That’s all we did. It’s all about load balancing and making things on time and cheaper and faster. We evaluated standard costs and manufacturing processes to develop productivity improvements. Productivity improvements — TQM — was a key driver for the company.”
“The legal industry historically has not operated in this way,” he says. Instead, “It was like getting in a taxi. The driver turns the meter on and drives. However long it takes to get there, that’s what your fare is.
“And the industry got away with it because the clients never really insisted that lawyers operate differently.”
What bothers Kehoe most is the absence of process improvement. He wants to drive more visibility to the work plan -- i.e. what the firm will do and how long it should take -- and then examine the finished project for ways to perform better next time.
“A lot of firms are starting to get into this but seem to be doing it through the lens of fees or alternative fee structures,” Kehoe says. “Fees are only a small part of the equation. You have to use the planning process to develop better processes for delivering the work. Like manufacturing, without process improvement, you can’t deliver sustainable savings or value to the client.”
Kehoe, who lives in Dunwoody with Debbie and their four daughters, carries that efficiency into other aspects of his life.
While he runs, he listens to books. “I tried to listen to music and I found myself looking at my watch asking, ‘How much longer am I going to have to do this?’” Kehoe says.
But with a book, particularly a good one, “I can just go for an hour and never notice it,” he says.
Now that’s a productive work plan.
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