London office headcount: 69 lawyers, 19 partners
Fee-earner headcount change since 2011: n/a
London head: Tim Frazer
Office speciality: Life sciences, dispute resolution, telecommunications, white-collar crime
Representative work: Advising agrichemical corporation Monsanto Company on antitrust issues related to its $66bn takeover by US giant Bayer.
‘The merger has been focused on our position in New York, which was the fulcrum of the deal. But in London we are delighted.’
Tim Frazer, Arnold & Porter Kaye Scholer
While international mergers have been in favour for many firms, the domestic US tie up of Washington DC outfit Arnold & Porter and New York transaction shop Kaye Scholer late last year was something a little different.
The two firms had hardly been standout performers in recent years, with Arnold & Porter experiencing a 6% drop in global turnover in 2015 and a 4% decline in 2016 down to $624.5m. Meanwhile, Kaye Scholer’s revenue plunged 14% to $320m, with profit per equity partner down to $1.03m, a 25% decline.
However, the deal has created a 1,000-lawyer firm with nine US and four international offices, bulking out the team to 400 lawyers in Washington, 325 in New York and around 70 lawyers in London as the firm’s third-largest outpost. Globally the pair have formed a $1bn practice.
In London the tie-up has not been without consequence. While former Kaye Scholer London managing partner Philip Perrotta spoke to Legal Business in favour of the merger at the close of 2016, he has since left for K&L Gates alongside aviation finance partner Sidanth Rajagopal as part of a six-lawyer departure from the finance group. Meanwhile, the firm has also been forced to delay the rehousing of some of the legacy Kaye Scholer team into its main office due to the ongoing refurbishment of the 25th floor of 25 Old Broad Street.
But despite the challenges Arnold & Porter Kaye Scholer (APKS) has been one of the biggest movers in the Global London report thanks to the merger. London managing partner Tim Frazer says: ‘The merger has been focused on our position in New York, which was the fulcrum of the deal. But in London we are delighted as it gives us a greater presence and comprehensive quality.’
The larger of the pairing, legacy Arnold & Porter had a quietly well-regarded antitrust and competition team, recently winning a key mandate to take on the antitrust aspects for Monsanto Company in its $66bn buyout by Bayer, with Frazer advising from London as part of a global team. There is added practice balance due to legacy Kaye Scholer’s corporate and finance strength and Arnold & Porter’s pedigree in regulatory and litigation.
Says London-based co-chair of anti-corruption Kathleen Harris: ‘The merger brings new energy. We have a lot of New York clients, so when we speak to lawyers from legacy Kaye Scholer in that office we speak the same language.’
Key clients for the combined firm include work for Novartis and Pfizer in life sciences, while legacy Kaye Scholer and Arnold & Porter both had strong relationships with GlaxoSmithKline. In addition, Harris’s representations have included News UK, and the London corporate and PE teams under Sean Scanlon work with mid-tier buyout shops, such as BlueBird Capital, Diversis Capital and Arrowgrass Capital Partners. The merger doubles the corporate bench from three to six partners in London.
In terms of lateral growth, the firm has largely targeted smaller shops for its expansion plans. The firm made five additions in 2016, including the former Asia head of Olswang and telecoms specialist Rob Bratby, and white-collar crime partner Sean Curran from Guney, Clark & Ryan.
Against these hires, the firm saw the departure of the Kaye Scholer aviation team under Perrotta, as well as the exit of competition partner Susan Hinchliffe to longstanding client GE.
Following the merger, which went live on 1 January, the London team under Frazer is going to continue its ‘very aggressive’ expansion plans. Frazer says: ‘We’re looking at competition and patents, and have just appointed in arbitration to make our offering even deeper. We need to keep growing.’
Harris adds: ‘We are not a Latham & Watkins or White & Case, but that is by no means negative. Looking at APKS compared to other US firms in the market, strategically, we have been ahead of the game in where we want to grow. We can continue to attract people who want a broad platform to work on.’
Frazer also stresses the client wins the merger has facilitated, pointing to around 100 new client matters in London. He says ‘The merger has given us a position to continue the journey.’
Matthew Field