High-profile real estate specialist Haywood was recruited by Nabarro for the launch of its Manchester office, alongside partners Nathan Jansen and Monica Brij in 2014.
Nabarro, which recently confirmed it is set to combine with CMS Cameron McKenna and Olswang, has agreed to cover the costs of the dispute, which is valued at approximately £5m.
Details of the case emerged in a firm board report circulated by Addleshaws managing partner John Joyce in October.
Addleshaws has instructed XXIV Old Buildings’ Alan Steinfield QC, while Haywood is represented by Lewis Silkin and Serle Court’s John Machell QC. The usual grounds for suing partners for damages include loss of future revenue or loss of a key client.
A former Addleshaws partner said the advantage of using arbitration in this instance is that it is ‘inherently confidential, so you don’t wash your dirty laundry in public’.
‘Whatever the pluses and minuses are, he was Addleshaws man and boy, and they put him on gardening leave for a whole year. What does it show? A lack of confidence in the business. He had good clients and was a good operator, but nothing exceptional.’
They added: ‘Why would you do it? That’s John’s way. If you step outside what John can deal with, that’s the reaction. You should let people leave. Clients don’t like it. It shows a huge lack of confidence that you’re so worried about something like this.’
Since Haywood’s departure, Addleshaws has tightened the rules around partner exits. The firm’s original partnership deed had a ‘bottleneck provision’, which meant no more than seven equity partners could leave without board consent in one financial year. However, earlier this year the firm changed the provision to extend it to fixed-share, or ‘category A’ partners. Other changes include the introduction of ‘bad leaver’ provisions and restrictive covenants relating to fee-earners.
Addleshaws and Nabarro declined to comment.