Legal Business looks at five US firms that have recently made strategic moves in the City
With the collapse of Dewey & LeBoeuf, for many US law firms in London 2012 was about opportunism and securing what few advances a turbulent market offered. Nonetheless, a growing band of US-bred advisers are making their mark in the Square Mile. While overall numbers tend to obscure the progress of US practices in London as a whole, recent years have seen a growing band of firms make significant tactical inroads in areas as diverse as funds, litigation and debt securities.
While some firms capitalised by acquiring chunks of Dewey, others have extended their teams and taken on high-profile names from elsewhere.
Here we profile the fortunes of five hugely different firms – Davis Polk & Wardwell, Dechert, Greenberg Traurig Maher, Milbank, Tweed, Hadley & McCloy and Proskauer Rose – all with varied and colourful histories in London, and all of which boast different sized offices.
Each of these firms had a notable year in 2012, for a variety of reasons. While this quintet is by no means a comprehensive indication of how foreign firms are faring, they do represent a telling snapshot of how firms have adapted to troubling times.
Davis Polk & Wardwell
London lawyer headcount 2007 to 2012: 30 to 37
Speciality: corporate and capital markets
London office: 37 lawyers, including seven partners
Office head: Paul Kumleben
Representative London work:
- Advised Jefferies, Credit Suisse Securities, J.P. Morgan Securities, Merrill Lynch, Pierce, Fenner & Smith and Deutsche Bank Securities as joint book-running managers on the $233m initial public offering of Manchester United shares
- Advised MSCI on its $125m acquisition of IPD Group
Despite having a presence in London since 1972, Davis Polk was among the last of Wall Street’s genuine elite to offer English law capability. Sullivan & Cromwell recruited Allen & Overy corporate partner Vanessa Blackmore in 2006 while Milbank, Tweed, Hadley & McCloy hired Tim Emmerson in 2003 (before he joined Sullivan in 2007). As significant was Simpson Thacher & Bartlett’s move into UK corporate work following the hire of Clifford Chance veteran Adam Signy in 2009, as well as moves into funds and deal finance.
Davis Polk addressed this disparity emphatically in January 2012 through the high-profile hire of Simon Witty from Freshfields Bruckhaus Deringer, making it clear that it wants to be a force in the City, rather than just servicing US-originated work. With the recruitment of Witty, one of Freshfields’ top equity capital markets names, Davis Polk was certainly viewed as having taken a very credible first step.
‘We have seen Simon’s work first hand in handling some of the most complex equity transactions in Europe. He is ideally suited to help us launch our English law practice in London and to develop our existing English law capabilities in China and Brazil,’ said Tom Reid, global managing partner of Davis Polk, in a statement at the time of the hire.
Aside from Witty, Davis Polk recruited another leading Freshfields partner, tax specialist Jonathan Cooklin, who joined the firm in April 2012. The firm followed this up more recently with the hire of well-regarded Herbert Smith Freehills corporate partner Will Pearce, who is set to join the firm shortly.
‘Our London office benefits from two things: we are relatively small in size and we do a range of things.’
Paul Kumleben, Davis Polk & Wardwell
Witty, who was known to be attracted to the career longevity available to older partners at US firms, is a major capital markets player and was instrumental in the large capitalisations that took place during the banking crisis. This includes the £12bn rights issue for The Royal Bank of Scotland (RBS), acting for underwriters Goldman Sachs, Merrill Lynch and UBS.
Pearce acted for Temenos on its proposed $3.3bn merger with Misys last year and advised the sponsors and underwriters on Rio Tinto’s $15.2bn rights issue back in 2009. Having averaged seven partners over 2012, Pearce’s arrival will take the City partnership to nine.
Witty hit the ground running, advising on a major mandate from the French government on negotiations with aerospace groups BAE Systems and EADS over their €36bn (£29bn) merger, which was called off last year. Witty advised on UK aspects of the talks with the overall charge of the team in the hands of Paris-based corporate partner Christophe Perchet.
‘Our London office benefits from two things: we are relatively small in size and we do a range of things. For instance, when equity capital markets work declined last year, debt capital markets work took off, as did restructuring,’ says Paul Kumleben, head of the firm’s London office.
Davis Polk’s 37-lawyer office is obviously far from the biggest US law firm offering in London. However, the firm’s ability to recruit top London lawyers has undoubtedly been enhanced by its growing international profile following its much-touted move into Hong Kong law in 2010. And with Davis Polk widely viewed as regaining its competitive edge in recent years after a period of relative underperformance against its key Wall Street peers, the consensus view is that the firm is now very strongly placed to dramatically expand its European practice.
Dechert
London lawyer headcount 2007 to 2012: 138 to 131
Speciality: financial services, corporate, securities, white-collar crime, funds
London office: 131 lawyers, including 37 partners
Office head: Jason Butwick
Representative London work:
- Settled six-year dispute for Ukrainian businessman Michael Cherney in his litigation against Oleg Deripaska, before the Commercial Court in London
- Advised Barclays Bank, BNP Paribas, Citigroup and Natixis as joint lead managers on the Kingdom of Morocco’s $1.5bn bond issue
After years of ‘enjoying’ a curiously low UK profile for such a large firm – let alone the firm that secured the pioneering takeover of Titmuss Sainer & Webb in 2000 – Dechert has been far more visible of late following a spate of eye-catching strategic hires. Among these in April 2011, the London office hired DLA Piper’s joint global head of litigation Neil Gerrard and EMEA head of corporate crime and investigations Jonathan Pickworth, along with DLA Piper’s investigations and compliance partner Duncan Wiggetts and head of trade and government relations Miriam Gonzalez.
In 2012, the hiring spree continued in January with the arrival of Lawrence Graham finance partner Charles Malpass and real estate finance specialist Jeremy Trinder, who came from White & Case in June. But arguably Antony Dutton was Dechert’s standout hire of last year: he is now the firm’s star UK litigator, arriving from Norton Rose, where he was global head of disputes.
Sandwiched between these high-profile hires were opportunistic acquisitions from the imploding Dewey & LeBoeuf. Corporate lawyers Louise Roman Bernstein, Camille Abousleiman and Simon Briggs joined the London office last year a few weeks before Dewey filed for bankruptcy.
The lateral hires show that the firm is intent on branching out into new practice areas. For a firm that was once badly affected by its heavy exposure to asset-backed securities when the markets crashed in 2008, practice diversity has been key.
The firm’s London office is particularly known for its work in the City’s upper mid-market corporate and securities spheres and the newly arrived team from Dewey has already represented a Congolese company, High Grade Minerals, in its £306m sale to Glencore, with Abousleiman and Briggs taking the lead. In addition, the firm won a much sought-after panel appointment to Barclays Capital in 2011, working on investment banking and markets.
Firm-wide, Dechert has performed robustly. Total revenues for 2012 are $729m, an 8.6% rise on the previous year’s $671m, with a net profit of $317m. Profit per equity partner was largely static at $2.1m. Such results underline the substantial resources Dechert has quietly amassed to back its ambitions, while its Manhattan-level profitability has banished the Philadelphia-bred firm’s image as a ‘national’ US player ill-suited to the global stage.
London has certainly benefited from recent investments with City income up by around 44% annually in 2012, a startling growth rate by any yardstick. Though the firm does not provide a breakdown of office revenues, the UK arm is now believed to generate in the region of $125m, translating into net income of over $50m.
London managing partner Jason Butwick says 2013 is shaping up to be ‘another excellent year’. ‘London is a key market for Dechert, as reflected by the growth and success of its London office in 2012,’ he says. ‘We have brought in ten lateral partners in the last two years, all of them acknowledged leaders in their fields. At the same time, we have promoted from within. A quarter of all internal partner promotions in Dechert in 2012 were in London.’
A firm that until recently was dismissed as a serious contender for high-end UK mandates has rapidly repositioned itself as a real force in the City.
Greenberg Traurig Maher
London lawyer headcount 2009 to 2012: 21 to 43
Speciality: corporate, real estate, employment
London office: 43 lawyers, including 18 partners
Office head: Paul Maher
Representative London work:
- Acted for UK engineering group GKN on its £633m acquisition of Volvo’s aero engine business
- Advised Cathedral on a complex £800m regeneration project, involving the purchase for development of Morden Wharf, Greenwich Peninsula
The fortunes of Greenberg Traurig Maher (GTM) have been mixed. One of the youngest entrants into the London market, Florida-based Greenberg Traurig launched in the City after hiring former Mayer Brown heavyweight Paul Maher in 2009. Known for his ambitious plans, Maher has grown the London office to more than five times the size of its launch team of three partners. The practice currently bills £9.4m.
During the last three years, it has made some significant hires, bringing in the likes of former White & Case capital markets partner Tim Jeveons in 2009, corporate specialist Henrietta Walker from Mayer Brown in 2011 and intellectual property partner Stephen Gare, also from Mayer Brown, that same year.
The firm was also appointed by technology firm Colt as its sole legal provider on employment law matters in October 2011.
‘Three years on and we’re going in the right direction,’ says Maher. ‘We now have a cohesive team. We are well within budget and we’re at the point now where the London office is making profit. This is against a tough market. Our success is down to a combination of our quality and good pricing.’
But while last year it took on a top-tier, 50-lawyer Poland practice and a well-regarded high-yield team in London from Dewey & LeBoeuf, GTM has suffered its share of growing pains. According to the firm’s LLP filings, GTM saw the exit of nine shareholders, the firm’s equivalent to partner, between 2011 and 2012. Those exits included high-profile restructuring specialist Lyndon Norley, who left GTM for Jefferies, where he now heads up its restructuring practice.
The firm also closed its Birmingham office following the departure of energy partner Neil Upton, who left the firm during the summer of 2011 and is now a partner at SJ Berwin. Fellow partners Paul Kirkby and Francis Patalong also left the firm’s Birmingham office but have yet to find a new home. Critics have often claimed that its fast expansion and combination of rapidly assembled big personalities threatens the practice with instability.
In 2011 the firm had 48 lawyers, including 21 partners. That number has fallen to 43 lawyers (18 partners) during 2012. But Maher isn’t concerned about the departures and says that the firm has a ‘good stable group’.
‘When I launched this office, I certainly hadn’t assembled a team of random superstars because I have a strong belief in teams and I’m quite fussy about personality fits,’ he says.
Never one to shy away from ambitious goals, Maher says he plans to substantially increase the size of the firm’s nine-partner UK corporate practice during 2013. ‘If I can bring in four or five more partners then I will,’ he says.
Milbank, Tweed, Hadley & McCloy
London lawyer headcount 2007 to 2012: 52 to 64
Speciality: corporate, dispute resolution, finance, projects, energy, TMT
London office: 64 lawyers, including 17 partners
Office head: Russell Jacobs
Representative London work:
- Represented AstraZeneca on the termination of its $1.4bn IT infrastructure contract with IBM, including successful High Court litigation
- Acted for Sumitomo Mitsui Banking Corporation in its $7.3bn acquisition of RBS Aviation Capital from RBS
Milbank set up its first European base in London at the behest of key client Chase Manhattan Bank more than three decades ago. Originally staffed with one partner, the practice remained US-centric until English law became the primary focus in the late 1990s – it was during this time that the office’s current head and tax partner Russell Jacobs joined. The firm averaged 17 UK partners over the course of 2012, rising to 19 on the last day of the financial year.
Growth has not always been smooth. A period of high-profile expansion in Europe in the early 2000s was a mixed success with Milbank, by consensus, struggling to adapt its traditional strengths in projects, acquisition finance and outsourcing to the City.
‘Our restructuring and litigation practices have been very busy. Our aim was to expand these core practice areas.’
Russell Jacobs, Milbank, Tweed, Hadley & McCloy
Recent years have appeared more successful with the office managing to recruit some well-regarded partners and secure a strong run of high-end mandates. 2012 saw the firm make a string of eye-catching lateral hires, notably Mayer Brown’s leverage finance partner Neil Caddy and Linklaters’ project finance partner Clive Ransome, who both joined in August. Linklaters’ corporate partner Mark Stamp, meanwhile, joined in May.
In particular, the arrival of Stamp as a corporate finance practitioner with impeccable credentials is seen as evidence of Milbank’s ambition to push further into the mainstream of City deals work. Stamp teamed up with London colleague Timothy Peterson to advise Virgin Media on bond issues related to its $24bn acquisition by Liberty Global at the start of 2013.
The firm also hired Freshfields Bruckhaus Deringer’s antitrust partner Nicholas Spearing in May 2012 to set up a transactional and behavioural competition practice for the firm’s UK and global clients, including E.ON, RBS, Xstrata, PepsiCo, Wolseley and Live Nation.
Most recently, Milbank hired litigator Charles Evans from Norton Rose in January to focus on domestic and international banking and commercial disputes. Evans also works on contentious regulatory proceedings initiated by regulatory bodies such as the Financial Services Authority and the Serious Fraud Office – an area where both US and UK firms have seen substantial growth since the Bribery Act came into force in July 2011.
‘Our hires are in line with how busy our key practice areas have been,’ says Jacobs. ‘The demand for legal services is strong and our restructuring and litigation practices have been very busy. Our aim was to expand these core practice areas further so we can take on more work.’
Although there have been no internal promotions since 2011, Jacobs says some are on the cards for this year.
‘We have a strong internal team and need a good balance of this and laterals,’ he adds.
While the firm generally does not share financial information publicly, the firm said London billings were up more than 50% during the first three-quarters of 2012. On such growth, external estimates put the firm’s City revenues at over $75m. Performance in some of the stronger departments was up as much as 80%, thanks to new mandates from BHP Billiton, Live Nation and Enterprise. The firm was also added to Lloyds Banking Group’s commercial advisory panel, a significant UK appointment even for a firm with strong Wall Street credentials.
Proskauer Rose
London lawyer headcount 2008 to 2012: 30 to 26
Speciality: private equity, corporate
London office: 26 lawyers, including 13 partners
Office head: Tom Dollinger
Representative London work:
- Acted for Apax Partners in the closing of Apax Europe VII, which had more than €11bn in commitments
- Advising the creditors in the MF Global bankruptcy
Proskauer Rose has been no stranger to headlines of late. Three years ago the firm’s name was splashed across the media as it held very public merger talks with SJ Berwin. Those protracted discussions eventually ended in late 2010 and the firm lost a number of London lawyers that year, but the New York-based firm has seen its London arm develop considerably since then.
Proskauer got its efforts to build a City practice off to a strong start in 2011 after hiring a three-partner funds team from SJ Berwin, led by Nigel van Zyl, a practitioner viewed by many as one of the City’s top funds lawyers.
The firm was centre of attention again in 2012 after continuing its hiring spree. Its London office saw the arrival of nine new lawyers. This included the addition of six lateral partners during 2012, which enabled it to launch two new practices and significantly increase its footprint in the City.
It was the firm’s second year of rapid expansion, following six partner hires in London over a 12-month financial period ending on 31 October 2011, including Jones Day heavyweight Russell Carmedy. Having averaged 13 partners over the 2011/12 period, the firm ended its financial year with 19 partners in London. The firm also moved to new City premises in 10 Bishops Square.
‘We’re at the point now where the London office is making profit. This is against a tough market.’
Paul Maher, Greenberg Traurig Maher
The expansion came at a cost: according to the UK LLP’s 2011/12 accounts, the expansion has been mostly financed by the US partnership, with the UK owing the US £13.7m.
It is fortunate that 2012 was a good year for the firm financially: global revenue was up 7% to $736.4m from $686.1m, while profit per equity partner was up 9% to $1.85m from $1.7m in 2011.
Like many of its rivals, 2012 saw Proskauer pick up a number of former Dewey & LeBoeuf partners, including restructuring and bankruptcy duo Mark Fennessy and Hazel Miller. That move helped to launch the new practice at the firm: through those hires, the firm landed a headline role acting for the creditors on the MF Global bankruptcy.
The firm also added capital markets to its list of competencies, after hiring Peter Castellon from Citibank, Katherine Mulhern from Kaye Scholer and Roberto Bruno from Cravath, Swaine & Moore in September.
‘Last year was very good for us. We nearly doubled in size and we added bankruptcy and capital markets practices,’ says Tom Dollinger, the firm’s newly appointed London head.
Dollinger, who stepped into his post in January 2012 after moving from the firm’s Los Angeles office, said the firm’s London revenue increased alongside headcount although he would not give an exact figure.
‘We have a reputation and culture, which is attractive. We have demonstrated a commitment to London,’ says Dollinger. He says that he’d like to add M&A and finance capabilities to the firm’s London office but says the lateral process is always challenging.
He comments: ‘The next year [2013] is looking very good. We’re enjoying an attraction to potential lateral hires.
‘We’re happy with the performance in London. We have been able to do well in economic uncertainty.’
Such ambitions reflect a considerable transformation over the last 15 years for Proskauer, which was historically known in the US as much for labour work as transactional muscle. Step forward to 2013 and the firm is increasingly viewed as a serious contender for City deals work, especially in its core private equity practice. LB