Marco Cillario assesses Taylor Wessing’s alliance with Silicon Valley royalty Wilson Sonsini as RPC forges US insurance partnership
While the issue of securing a meaningful US footprint for many UK-bred firms endures, Taylor Wessing UK managing partner Shane Gleghorn claims his firm has found the way to gain transatlantic coverage without a complicated merger.
The partnership approved in mid-February an alliance with Silicon Valley leader Wilson Sonsini Goodrich & Rosati. The plans will see lawyers from the two firms work together on transactional mandates in tech and life sciences. The ideal targets will be US companies expanding in Europe and European companies growing in the US, with the agreement meaning the combined team will be able to cover transactions involving both continents.
The Palo Alto-born outfit is regarded as the most prestigious law firm in Californian tech circles having advised a string of iconic firms over the years, including Apple, Netflix, Twitter and LinkedIn.
‘We found a third way,’ Gleghorn tells Legal Business. ‘Neither firm was looking for a single-profit pool merger, but both firms were looking for a way to attend to this issue. This was a very good way to achieve that without the distractions of a merger.’
On Taylor Wessing’s side, the project sees the German partnership as a key supporter of the alliance alongside the UK, with the firm’s Dutch and French verein members also likely to benefit from the tie-up.
But the alliance comes with caveats, with both partnerships at pains to stress that it does not prevent them from having relationships with other firms.
Says Gleghorn: ‘The two firms will go to market together for tech and life sciences transactions. But there will be occasions where the service we provide is not appropriate and on those occasions we will work with other firms. We don’t see this as something resulting in us losing the relationship with other US firms.’
‘We don’t see this as something resulting in us losing the relationship with other US firms.’
Shane Gleghorn, Taylor Wessing
Collaboration between the two firms has taken place on an informal basis for several decades. When it comes to tech and life sciences, ‘we complement each other very well’, says Wilson Sonsini’s London-based corporate partner Daniel Glazer.
Both firms have representative offices a stone’s throw of the other’s headquarters, which they use as a base to pitch to tech and life sciences companies without practising local law. Taylor Wessing’s Silicon Valley branch launched in 2014 and currently hosts English-qualified partner Christopher Jeffery and Germany’s Alexander Roth. Gleghorn points to a strong projected deal flow from US companies expanding into Europe.
Wilson Sonsini’s City arm opened in August last year, staffed by Glazer and two other lawyers. ‘My team has been focused on the UK tech and life sciences market for many years,’ says Glazer, who joined the firm in mid-2016 from Fried, Frank, Harris, Shriver & Jacobson to work between the US and the UK. ‘[Our London office] is particularly focused on working with UK companies through their US life cycle.’
Although clearly a good match, a full merger would have posed considerable integration issues even by the standards of a transatlantic tie-up. Despite Taylor Wessing posting a strong set of financial results last year, its profit per equity partner (PEP) remains miles behind Wilson Sonsini. While the UK firm’s PEP grew 20% to £579,000 in 2017/18, Wilson Sonsini’s was $2.2m in 2017.
Taylor Wessing’s 2017/18 global turnover was £301.5m (£144.6m of it in the UK), not enough to make the cut in the Legal Business Global 100. By contrast, 750-lawyer Wilson Sonsini was the 53th largest firm in the world by revenue last year at $797m.
But despite all the caveats, there is little doubt the public announcement of an alliance with one of the top Silicon Valley brands provides a welcome boost to Taylor Wessing’s tech credentials.
And within days of the news, UK top-40 insurance and disputes specialist RPC announced it was entering a similar alliance with Chicago’s Hinshaw & Culbertson.
Again, the deal saw two firms that had been working together for years formalise a tie-up with a specific target. Their insurance practices will work together on pitching and client marketing while also collaborating on professional indemnity mandates. Both are recognised as insurance players in their home markets. Hinshaw has 20 offices in 11 US states and a base in London. Alongside its City headquarters, RPC has offices in Bristol, Hong Kong and Singapore.
Financially, the two firms are not miles apart after some recent ups and downs. RPC rebounded last year after a disappointing 2016/17, increasing revenue 10% to £112.7m and PEP 8% to £348,000. Hinshaw’s turnover has been falling for three years and in 2018 decreased 4% to $208.5m, its PEP contracting 6% to $482,000.
While insisting this deal is also non-exclusive, RPC insurance head Simon Laird describes the ‘big US dynamic’ of his practice’s clients as the rationale behind the move.
The third way means both RPC and Taylor Wessing have opted for formal collaboration stateside, focused around their core sectors. The logic for combining targeted expertise to attract clients either side of the Atlantic looks sound and, if it starts to yield tangible results, then similar tie-ups could follow.
marco.cillario@legalease.co.uk