On the same day that the City giant posted its results for the last financial year, Linklaters‘ managing partner Simon Davies has confirmed he will retire from the firm at the end of 2015, a year ahead of the end of his current term, to join Lloyds Banking Group.
Davies, who became Linklaters’ youngest-ever managing partner at the age of 40 when he assumed the role in January 2008, has told the Linklaters partnership that he will be joining Lloyds Banking Group as chief people, legal and strategy officer. He will also take a place on the bank’s executive committee.
While Davies was expected to leave the firm at the end of his current term, the resignation will lead to an accelerated election process to find his replacement. With the firm already in a process to elect a new senior partner, a post London corporate partner Charlie Jacobs is viewed as a leading candidate for, Linklaters will experience a complete management overhaul.
A spokesperson for Linklaters said: ‘Simon’s current term as firm-wide managing partner was due to end 30 December 2016. Given this development, the partnership board is planning the way forward, looking to ensure an orderly transition. Members will consult on the best way to achieve this and will aim to reach a decision before the end of the month. Senior partner Robert Elliott will attend executive committee meetings on a regular basis and will work with the committee to ensure continuity of management during the transition.’
Lloyds chief executive António Horta-Osório said: ‘This will be a key role for the group and with his extensive experience of managing and leading a major global business, I have no doubt Simon will prove to be an invaluable addition to the group and to our senior team.’
Davies will leave Linklaters after two terms as global managing partner. The Welsh-born corporate and securities lawyer made his name at the top City firm in its Asia practice before upsetting two higher profile contenders – Nick Eastwell and John Tucker – to secure the managing partner role in 2007.
Succeeding Tony Angel, Davies was regarded as hawkish on performance and ensuring that Linklaters’ business was intensely focused on premium work even as the firm was soon engulfed along with its peers in the banking crisis through 2008 and 2009.
Davies was a force in pushing through two major partnership restructurings at the firm, in 2009 and 2011. Controversy over the second restructuring led the firm to put Davies’ re-election as managing partner in 2012 to a second vote after initially falling short of the 75% margin needed to ratify the appointment.
Despite the reputation as a hard-nosed leader, the state-educated Davies also strove to reposition the conservative Linklaters as more progressive and diverse business. He also helped expand Linklaters’ reach in the Asia Pacific region after shifting the firm’s strategy to forge a formal tie-up with leading Australian law firm Allens in 2012.
While it is unusual for senior leadership of leading law firms to stand down early, Ted Burke, then managing partner of Linklaters’ old sparring partner Freshfields Bruckhaus Deringer, stood down part way through his term to join US private equity house ArcLight Capital in 2013.
Davies said: ‘I have thoroughly enjoyed my 25 years at Linklaters. It’s a fantastic firm that I will be leaving with real sadness but as my second term as firm-wide managing partner draws to a close, I feel the time is right for me to accept a new challenge and take on a senior executive leadership role with an outstanding business. The role involves leading in areas I have experience and expertise in – people, legal and strategy, but in a different industry which is very exciting.’
Elliott added: ‘Simon has brought unrelenting energy and commitment both to our clients and to our business – very ably steering the firm through challenging economic times. We owe him a debt of gratitude for his tremendous contribution and for the current very strong footing of the firm. This represents a fantastic new challenge for Simon and promises to provide an interesting and fulfilling continuation of his career. The partnership board will now consider the best way forward in order to ensure an orderly transition, ultimately leading to a process which will elect what I’m sure will prove an outstanding new leadership team.’
The first Magic Circle firm to release its financial results this year, Linklaters this morning posted a 1% rise in revenue to £1.27bn. Profits per equity partner (PEP) rose 2% from £1,340,000 to £1,368,000.