No more Taylor Who? Flair and a bit of vision take Taylor Wessing to next step but what now?

Matthew Field and Victoria Young talk to Taylor Wessing head Tim Eyles and assess the firm’s prospects

‘When Tim Eyles took over there was a sea change,’ says one Taylor Wessing partner of their firm’s high-profile UK managing partner. ‘What you need as a leader is clear vision and Tim’s vision of how important it is to be global and focused and to have a culture that recognises achievement is key.’

After a period of low-key leadership for an Anglo-German TMT player that the legal market didn’t quite know where to place, Eyles certainly brought a welcome touch of flair to the firm after taking control during the unpromising depths of recessionary 2009. The firm was also seen to have been held back by the semi-detached governance and partnership structure it had with its German business, the result of the 2002 merger between Taylor Joynson Garrett and the well-regarded but then struggling local firm Wessing & Berenberg-Gossler.

‘Impressive’, ‘innovative’ and ‘forward-thinking’ are words used to describe private equity lawyer Eyles.

Financial performance provides some substance to the cheerleading. Global turnover is up 32% over the past five years, with Taylor Wessing turning over £254.4m in fees in 2015/16. A long-term fixture in the top-20 of the Legal Business 100, in the last two years the firm has grown sufficiently to enter the Global 100.

Taylor Wessing competes against a range of notable rival performers with a varying range of practices. Broad peers such as Bird & Bird and Fieldfisher have more or less matched Taylor Wessing’s five-year revenue performance, with five-year turnover increases of 28% and 29% respectively, while Osborne Clarke’s turnover is up 98% over the same period.

In the UK, where the firm made £126.6m in fees in 2015/16, profit per equity partner (PEP) has grown around 80% since 2009, jumping 17% to £767,000 in 2014/15. This year the shift to an all-equity model means the firm now has 100 UK partners, with a PEP of £512,000 (the firm says on a like-for-like basis 2015/16 UK PEP remained flat at £770,000).

Eyles was associated with giving direction to the firm’s industry focus and emphasis on what he bills as the ‘industries of tomorrow’. It is no longer ‘Taylor Who?’, as one rival partner once branded it.

 

Total integration

At the start of his tenure back in 2009, Eyles was concerned about a lack of integration. Despite a strong reputation in intellectual property (IP), the firm had not convincingly claimed its position in a challenging mid-market. Eyles is now a year into his third term as UK managing partner of Taylor Wessing, and is adamant the firm has changed for the better: ‘We are very different from 2010. We are confident in who we are. We are confident about our values and confident about our strategy.’

‘We are very different from 2010. We are confident about our values and confident about our strategy.’
Tim Eyles, Taylor Wessing

Eyles stood unopposed in the last election, with an almost unanimous vote from the partnership, despite reports that other candidates, such as finance head Rodney Dukes, had considered running. Eyles had previously faced leadership challenges from other partners, including construction partner Laurence Cobb, in an earlier election.

Eyles believes the firm has found its place in the market, competing with IP, technology and media players with complementary strength in private wealth, real estate and disputes. It is after all a sector balance that has suitably matched shifts in the wider economy over the last 15 years. The firm’s turnover breaks down as 27% from corporate, 28% in disputes, 18% real estate, 9% finance and the remaining 17% coming from other areas, including private client, employment and pensions.

Taylor Wessing’s practice structure divides work into four key sector groups: life sciences; private wealth; technology, media and communications; and energy. Over these sectors, the firm splits into three main business groups: real estate and finance; corporate; and patents, technology and disputes.

Analysis of the most remunerated partners at the firm reflects the importance of its corporate and IP practices. According to documents seen by Legal Business, Eyles and corporate head James Robertson sat at the top of the list in 2014/15, with a budgeted £950,000 in earnings. In the next tier down were finance head Dukes and real estate and finance business group director Keith Barnett, alongside the firm’s international patent head Simon Cohen and patent group head Nigel Stoate. Since the firm became all-equity, Taylor Wessing’s remuneration is now believed to have been expanded to 15 bands, to include former fixed-share partners, but the firm would not be drawn on specific aspects of pay.

A key area of investment has been the private wealth practice, which makes up 20% of UK turnover. The firm has 50 private wealth partners around the world and 20 in the UK, having recruited five new partners since 2010, and claims it acts for eight royal families and 40 families with assets worth more than $1bn, and 125 families worth more than $100m.

The disputes team, which encompasses Taylor Wessing’s longstanding IP disputes practices as well as the more recently developed professional negligence practice, has seen UK revenue increase 24% since 2011, accounting for almost 30% of UK income during the 2015/16 financial year.

Former partners cite Eyles’ decision to hire Andrew Howell and Julian Randall from Barlow Lyde & Gilbert, ahead of that firm’s merger with Clyde & Co in 2011, as a particularly astute move. Howell and Randall built the professional negligence practice, which now acts for three of the Big Four accountants. In October last year the team settled what was expected to be one of the biggest commercial court cases of 2015, as it defended PwC against a £1.6bn claim arising out of the collapse of sub-prime lender Cattles. Head of disputes and investigations Shane Gleghorn describes the practice as ‘a shining light for us and something we were not as well known for before’. PwC general counsel Margaret Cole says: ‘I hadn’t come across Taylor Wessing until I came here [four years ago], but now I’ve had significant experience of them and it has been a positive experience.’ The firm continues to grow in the disputes area, taking on David McCluskey from Peters & Peters as head of crime at the end of last year.

But, for all the desire to be progressive, some aspects of Taylor Wessing’s approach are decidedly old school. One example is gender diversity. Before the move to an all-equity partnership, the firm had one female equity partner out of 52, a dire figure even by the poor standards of top 50 UK law firms. That partner, Rosalind Connor, has since left the firm, moving at the end of last year to ARC Pensions. In comparison, women made up 13% of Osborne Clarke’s equity partner count in 2014/15 and 15% at Olswang.

In the UK, now the firm is all equity, 18% of the partnership are female, while the firm has a partnership target of 25% female partners by 2018. One former partner puts it diplomatically: ‘There is no doubt that current management is well aware and clearly trying to deal with this. The problem is that it takes time.’

Both partners and management point to Elisabeth Gaunt, who joined in 2012 from Orrick, Herrington & Sutcliffe, as a strong female figure. Gaunt heads up the firm’s financial institutions group and sits on the firm’s elected five-partner supervisory committee.

Taylor Wessing’s ten-member executive board has four women on it, all appointed by Eyles and none of them are partners. These include the board’s new chief operating officer Rachel Reid, who joined from King & Wood Mallesons earlier this year, finance director Deborah Findlay, talent director Liz Bunce-Grundy and partnership secretary Abigail Chase.

While most Taylor Wessing hands see the firm as well governed, there has been some grumbling at the number of non-partners taking up senior roles within the firm. Some see such moves as building a court around Eyles.

The counter-argument is that the deployment of non-lawyers in senior roles helps the firm embrace new models and ways of working. As yet Taylor Wessing’s New Law efforts have remained relatively modest. The development of document review business New Street Solutions – hailed as ‘a revolutionary technology powered legal business service’ – led to suggestions of a spin-off in 2012 and a mooted £5m funding round, but the plan ultimately became an internal technology programme. The firm’s new ‘patent map’, an online interactive tool that compares the patent litigation regimes across Europe, appears more promising, but the firm would not say how much had been invested in it.

 

New horizons

Before the move to an all-equity partnership, the firm had one female equity partner out of 52, a dire figure. In the UK, it has a partnership target of 25% female partners by 2018.

Internationally there has been more substantial progress. Taylor Wessing remains a firm defined by mergers past. The Anglo-German pairing, of course, repositioned the firm, but it has been under Eyles that it has begun to look like an aspiring global player. The firm’s UK offices make up almost half of revenues and it operates a verein structure, with separate profit pools for each of its jurisdictions – such as France, Germany and the UK – while sharing some costs on international investment, business development, talent and technology.

Eyles says merging the profit pools is not off the agenda, but in discussion with partners – including senior German lawyers – it is clear there is little will to approach the politically fraught step of full integration.

International growth means the firm has now a total of 33 offices around the world. The firm has 100 partners in London, 212 in the rest of Europe, 39 in Asia, six in the Middle East and two in the US. The firm has continued to add offices, although partners insist this is not just flag planting.

The firm added eight offices in central and eastern Europe in 2012 when it combined with Austrian firm enwc, entered Singapore later that year operating as RHTLaw Taylor Wessing, and in 2014 opened two representative offices in Silicon Valley and New York. It moved to keep up with tech and venture capital clients through its 2015 merger in the Netherlands with Deterink, while 2016 saw it establish a presence in Saudi Arabia, Vietnam and Hong Kong.

Eyles says the firm is now targeting Asia, while the firm’s head of China group, Michael-Florian Ranft, says the firm will look to add further service lines to the fledgling Hong Kong office. The firm has not made a move in the US for a merger, preferring to run its two referral offices while maintaining ten to 12 best-friend relationships with US firms.

At 62-years old, Eyles doesn’t rule out another run at the managing partner job, though there will be a considerable number now looking to the next chapter of leadership.

If he hands over, Eyles leaves Taylor Wessing with the interesting dilemma of a higher profile and a more competitive position in the market. For a firm with a reputation of a collegiate-bordering-on-the-cuddly partnership culture, that will be an interesting challenge to take on.

matthew.field@legalease.co.uk, victoria.young@legalease.co.uk