Vinson & Elkins London managing partner Alexander Msimang talks to Legal Business about how the firm has opted not to invest outside of its core sectors and geographic locations.
How important is international expansion to the firm’s strategy for its London office?
Having a specific focus on key areas and sectors is obviously important, and for us in London that means energy, infrastructure, telecoms and finance, and we don’t try and be all things to all people. We know what we are and we understand our strengths. We take a very cautious and careful approach to how we do things and have no interest in being a firm that has offices in most jurisdictions around the world.
But we do plan to grow, but in a steady way, and by expanding the areas in which we are already strong rather than by bolting on lots of new practices or departments. We have signed a new 20-year lease at the Walkie Talkie building in Fenchurch Street, which can accommodate up to 75-80 lawyers, and will be moving next year.
How has Europe/the UK been for the firm in the past year?
As far as we can tell, we are the oldest energy-focused firm in the UK and London is a huge geographical focus for the firm. Nearly a third of our London lawyers handle disputes with all the rest divided between energy transactions and projects, finance, private equity and tax. We had a record year in gross turnover last year and expect to be up this year as well. In many ways we have been fortunate, because the energy sector has to stay active regardless of economic conditions, and we have not had lots of European offices to worry about, given the slowdown in Europe.
What other regions are of current interest?
We are interested in Africa – predominantly for natural resources, upstream oil and gas, mid-stream energy and telecoms. We have been doing African oil and gas and power deals for decades, but much of the capital in that region flows from the oil and gas sector and straight into the telecoms industry, so telecoms is a sector that is currently attracting a lot of investment, including from private equity. Other areas of interest include Latin America, the Middle East and Asia – and North America is especially interesting for the firm because of the energy boom that has been happening there.
The firm closed its Shanghai office in China in July 2013 to increase focus on the Beijing and Hong Kong offices. Over a year on, how has this turned out?
Our China clients tend to be based in Beijing or Hong Kong, but there is no doubt that Chinese activity has slowed, not just for us, but across the market generally. But in the energy space there has been a shift from China activity to the Americas, particularly North America, and that upturn has had a positive impact on pretty much all our US practice areas.
Who is your competition?
Our competition in the US includes Latham & Watkins, Baker Botts, Gibson Dunn & Crutcher, and Kirkland & Ellis, among others. In Asia, the competition includes Freshfields and the rest of the Magic Circle, while in the UK our main competitors are again the magic circle plus the other firms with energy practices, like Herbert Smith Freehills, Ashurst, Norton Rose Fulbright and Dentons.’
Vinson & Elkins’ revenues increased 6% to $630.5m in 2013, after falling 3% in 2012 to $592.2m. Profit per equity partner stood at $1.7m in 2013, up 16% on the previous year.