Jaishree Kalia reports on the uneasy peace still hanging over the post-merger Ashurst
It’s been over eight months since Charlie Geffen, the high-profile head of Ashurst, suffered a bruising leadership defeat to litigator Ben Tidswell (pictured) in the wake of the City firm’s merger vote with its Australian partner.
There was no doubt the election defeat of the strong-willed Geffen, who divided the City firm’s partnership into staunch supporters and embittered opponents, and the legacy of its merger with Australian leader Blake Dawson had unsettled the firm. The discharge of Geffen as the ‘war-time’ leader who carried the firm’s strategy and brand through the post-Lehman years is still hard to take for some, while the merger has not convinced everyone. The somewhat ill-tempered resignation in November of highly rated corporate co-head Stephen Lloyd for Allen & Overy (A&O) was an all-too visible sign of that tension – and the lack of engagement felt by the ‘boys’ club’ in Ashurst’s corporate finance teams.
Ashurst’s response at the time was that a more consultative Tidswell could unite the firm and secure a much-needed period of calm – heading off claims that a sizeable number of significant partners were on the market.
The awkward truth for Ashurst is that such an accord has so far proved elusive, with a series of fresh departures piling up and admissions both inside and outside the firm that morale has suffered at a crucial juncture.
Since Lloyd’s resignation, other departures have included corporate partner Eavan Saunders Cole, although she cited personal reasons for her departure; finance partner Nick Benham, who joined Davis Polk & Wardwell’s City practice; private equity specialist Karan Dinamani moved to A&O; London pension head Steven Hull, who joined Eversheds in March; and corporate partner Jonathan Earle, who joined US firm Gibson, Dunn & Crutcher and was later joined by corporate partner Nigel Stacey in June.
Some also assert that a shift to allocating profit points to partners for the year ahead rather than in arrears is prompting some departures, though the move has generally been welcomed as more transparent.
Potentially more damaging are claims that another half a dozen or so of its influential City partners are looking at their options (in some cases such individuals are barely disguising their unease). Even loyalists concede the firm is moving through a difficult cultural change as its City deal teams – traditionally the heart of the firm – adjust to being less central to the 420-partner globalised giant.
Ashurst managing partner James Collis comments: ‘Every single individual that leaves the business leaves for their own reasons. We have over 400 partners now and one has to expect that some partners will make that decision.’
Given the mood at the firm, much store is being put in what is touted as a confident performance from Simon Beddow in the key role of global head of corporate, a brief that includes oversight of the firm’s competition and tax teams.
One corporate partner comments: ‘Simon has impressed the firm. He has a refreshed approach, is communicative, supportive, and genuine and doesn’t play favourites.’
In terms of the corporate team size, Beddow told Legal Business the firm is not looking to currently recruit. ‘We have no need to recruit right now. We have around 35 partners in London, some of these are in corporate/finance, and including those that sit in the energy and infrastructure group, we have around 45.’
‘Every single individual that leaves the business leaves for their own reasons. One has to expect that some partners will make that decision.’
James Collis, Ashurst
He added the firm is currently reviewing whether to reconfigure how the corporate team is structured because of increasing cross-over matters. ‘We have a strong and united team and continue to advise on very good deals for high-quality clients, especially in the equity capital markets and M&A sectors. We’re extremely busy, and workflows have been so strong that we’ve been supplementing our associate team with secondments from Australia and recruitment in the London market.’
Collis, likewise, maintains the firm’s City finance and corporate team have been busy, especially within debt capital markets and IPO work. The firm cites roles on 11 of the 30 UK main market floats announced in 2013, including acting on Merlin, Infinis, esure and Foxtons. Major corporate work saw the firm advise Avincis Group on its £1.62bn sale to Babcock International and act as underwriters’ counsel on a £1.1bn rights issue by Babcock. The firm has also benefited from the revival in structured finance, providing a boon to its sizeable collateralised loan obligation team. Still, its run of work appears solid rather than spectacular for a practice with Ashurst’s resource and reputation.
A common view from peers is the firm’s identity and brand has become diluted and it is unclear where its direction lies. One former partner comments: ‘The firm’s timing to combine with the Australian firm was bad. Its corporate team does not have a lot of strength left. The problem was they took their eye off the mid-market corporate clients. They wanted the big fish.’
Certainly, critics argue that a firm with a fantastic pedigree and a genuinely distinctive culture is struggling to set out its new vision. As such some partners argue they need to see a stronger lead from Tidswell, who, unlike the corporate veteran Geffen, doesn’t bring a large power-base of natural supporters given the relative lack of size of Ashurst’s litigation team.
While many were ready for a more inclusive leadership style after Geffen, on current indications, Tidswell will have to do more to win this peace. His voice needs to be heard.
jaishree.kalia@legalease.co.uk