London headcount: 121 lawyers, 19 partners
Lawyer headcount change since 2014: 1% (-17% partners)
London head: Litigation partner Sunil Gadhia sits on the 11-strong executive committee
Office specialities: M&A, antitrust and disputes
Representative matters:
- 21st Century Fox on US antitrust and The Walt Disney Company on EU and rest of world competition issues for Disney’s $71.3bn acquisition of 21st Century Fox.
- Advising a subsidiary of The Abu Dhabi Investment Authority in a consortium led by EQT Fund Management on the $10bn acquisition of Nestlé Skin Health (now Galderma).
- Google in its appeal before the EU General Court challenging European Commission decisions on alleged abuse of its dominant position in online search and Android.
- Vale’s $2bn London Court of International Arbitration win after a battle with BSGR Resources over Vale’s allegations of bribery and fraud.
‘It made investments early on but lost momentum. The question for the firm will be whether it puts the London office on a life-support machine, scales back, or really gears up investment.’ So speaks a rival City M&A partner of the commonly held perception of the conundrum facing Cleary in London.
If last year’s Global London report put Cleary’s London office in the spotlight for the wrong reasons – a 7% headcount drop, earning it the unwanted accolade of being among the five fastest-shrinking global law firms in London – it has fared little better in 2019.
‘My ambition is to have a laser-like focus on M&A, disputes and antitrust, and prioritise quality.’
Sunil Gadhia, Cleary
It had Squire Patton Boggs, Greenberg Traurig, Debevoise & Plimpton, White & Case and Jones Day to thank for more dramatic headcount reversals, but headcount again declined 7% from 130 to 121 fee-earners. Meanwhile, the City partner count dipped from 20 to 19 partners as respected dealmakers Simon Jay and Michael McDonald retired, offset slightly by the return to London of M&A partner Gabriele Antonazzo from Hong Kong.
To the outside observer, such figures when expansive peers are adopting the opposite approach seem discordant with a display of confidence from Manhattan when the firm invested in new offices at 2 London Wall in 2018, with the capacity to accommodate some 180 lawyers – 40 more than the old premises allowed. The situation is not helped by Cleary rarely playing in the lateral market. The London office houses five partners each in corporate and disputes, six in finance, two in antitrust and one in tax. Partner promotions have typically been thin on the ground too, with London overlooked last year and only four made up in the City during the last five global rounds, including James Brady to its disputes practice in 2018 and Nallini Puri in the corporate practice the previous year.
Shrugging off criticism of an underweight corporate bench, M&A partner Tihir Sarkar insists that revenue generated out of the London M&A practice has increased by 50% since the Brexit referendum in 2016. To the credit of Cleary’s London office, departures to rival firms are extremely rare, so much so that the exodus in New York of a team led by M&A veteran Ethan Klingsberg to Freshfields Bruckhaus Deringer in 2019 sent shock waves through the partnership on both sides of the Atlantic. It caused the firm to take stock of whether its cherished lockstep was still fit for purpose.
For now at least, the partnership has decided to cling to the model as a lynchpin of its prized collegiate culture and prestige, but has not ruled out future changes. Litigation partner Sunil Gadhia is bullish. ‘Culture is the most important part of our business. There are global partner meetings twice a year and European partner meetings twice a year – four partner meetings in total if you are in Europe – and they have a 90% attendance rate.’
As an early mover into Europe (its Paris office opened in 1949), detractors also question the firm’s chances with such great exposure in a post-Brexit world. In the face of that criticism, Sarkar considers it a strength, not a weakness. ‘We were in Europe the year after we opened in New York. It’s part of our DNA. As almost all of our work is cross-border, we see our European M&A/PE team as a combined offering. So, while we have five M&A/PE partners here in London, we have over 20 M&A partners across Europe. It’s too early to say how this Brexit thing works. However, we expect to see massive benefits from our European network due to our international positioning.’
Gadhia also points to a strategic decision to grow out its City antitrust practice, which currently comprises two partners in London, respected veterans Nicholas Levy and Maurits Dolmans, to bring it in line with its peerless offering stateside and hedge against Brexit fallout.
Sarkar’s goals include diversifying the office’s private equity sponsor base, and taking advantage of synergies between clients in the US and Europe. He speaks encouragingly of a sustainable pipeline of talent – an uptick in the number of trainees that now sees 29 currently going through the system. ‘My ambition is to have a laser-like focus on M&A, disputes and antitrust, and prioritise quality rather than quantity to work on cross-border, complex matters in those three areas,’ adds Gadhia.
Positive intent indeed but effort will need to step up if the office is going to keep pace with more aggresive rivals in the City.