In a marked shift in leadership away from its Illinois roots, Global 100 giant Mayer Brown has appointed City-based veteran Jeremy Clay as its new managing partner.

Global real estate head Clay will replace Washington-based litigator Kenneth Geller, who took on the role in 2009.

Appointed by the firm’s management committee and partnership board, Clay was a partner at legacy Rowe & Maw and one of those behind its 2002 takeover by Mayer, Brown & Platt. A member of the management committee since 2012, he built his reputation in the firm’s property practice.

Last year his team acted on headline deals for two of London’s landmark buildings, the £1.3bn purchase of the Walkie Talkie by Hong Kong investors LKK Health Products and the £1.15bn acquisition of the Cheesegrater by Chinese investment group CC Land.

Clay will now split his time between Mayer Brown’s New York and London offices, but the firm said he will also continue to work with his real estate clients.

Clay will lead the firm alongside Chicago-based chairman Paul Theiss, elected to the role in 2012. Thiess said Clay’s ‘broad experience in the firm brings a positive dynamic perspective as we continue our evolution as a world-class, global law firm’.

Clay’s appointment comes after a mixed 2017 for Mayer Brown. Globally the firm grew revenue 4% to $1.31bn, while partners claimed the London office outpaced global growth increasing both revenue and profits by double digits.

But in the City it saw an 18% headcount decrease to 230 due to a number of departures to firms including Kennedys and Gibson, Dunn & Crutcher – although in February the firm added private equity partner Neil Evans from Simpson Thacher & Bartlett.

Long outpaced by pacier Chicago rival Kirkland & Ellis, Clay’s appointment reflects Mayer Brown’s attempt to focus on its image as a global firm.

Speaking to Legal Business at the beginning of this year, Clay stressed the point: ‘Along with the Chicago office, the connection of London, New York and Hong Kong is part of the backbone of the firm, one of the things that positions us very well. We have 200+ lawyers in each of them. Not many firms have that and we need to work hard at continuing to develop this.’

Marco.cillario@legalbusiness.co.uk

For more on Mayer Brown and the leading US firms in the City, read our Global London report (£)

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Marco Cillario finds City offices outpacing worldwide growth at many Global London firms

2017 was a boom year for many of the London outposts of US law firms, with several convincingly outpacing their firm’s global performance financially and two passing the $300m mark. And it was not just a frenetic private equity market that boosted the London coffers: many UK teams also picked up headline mandates in areas including disputes and financial restructuring.

White & Case remains the highest-grossing US firm in London thanks to a 13% hike to its top line to $328m in 2017 – a faster growth than its 10% global revenue rise to $1.8bn.

Among the London office’s standout matters were the £1bn Alfa Financial Software initial public offering, the $10bn refinancing of Wind Tre and the $2.73bn Nacala Corridor project in Africa, which was led out of London.

‘We have seen a continuation of our strong trajectory from 2010 onwards,’ said London executive partner Oliver Brettle (pictured). ‘The key is to strengthen core practices with lateral hires and internal promotions.’ He referred to the firm’s 2020 strategy as targeting growth in four industries: financial institutions, private equity, technology, and oil and gas, and three practice areas: M&A, capital markets and disputes.

And in the year in which it became the first law firm to ever report revenue north of $3bn, Latham & Watkins is also believed to have passed the $300m mark in the City. The London office has grown its top line by more than 10%.

‘2017 was a fantastic year. We are incredibly proud of our accomplishments,’ said co-vice chair Richard Trobman. ‘Q4 was incredibly busy and we see that continue in 2018 across practices, across industries and across markets.’

Expansive global giant Sidley Austin also posted a double-digit percentage hike to its City revenue, which rose 14% to £85.7m ($109.9m), again outpacing the firm’s global growth of 6% to $2.04bn. The year was marked by four headline lateral hires for the firm’s transactional and restructuring teams, including private equity specialists Wim De Vlieger and Till Lefranc from Simpson Thacher & Bartlett, and Linklaters’ restructuring star Yen Sum. ‘They have hit the ground running and fit in well,’ said London managing partner Matthew Dening, but he added that the performance was the result of a cross-practice effort.

As a standout London performer behind Quinn Emanuel Urquhart & Sullivan’s striking 61% revenue increase, Paul Hastings’ London office grew revenue 25% to $80m. London chair Ronan O’Sullivan said: ‘Across all finance practice areas we have both invested and brought people through. In 2017 these investments have come home.’

Globally the firm grew revenue 4% to $1.12bn and PEP 12% to $2.9m in a year in which it kept its headcount flat. The London team advised on the £700m rescue of The Co-operative Bank, and the banks on the €700m acquisition of Concardis by Advent Capital Management and Bain Capital.

Cooley’s London outpost, meanwhile, grew revenue 22% to $57.5m in its third year since launch. It grew twice as fast as the firm globally, which increased its top line 10% to $1.07bn.

In a difficult year for the firm globally, London brought good news for Cadwalader, Wickersham & Taft too. The firm grew its City revenue 10% to $50m in 2017, while its global income dropped 10% to $408.1m as the firm keeps retrenching in a bid to concentrate its efforts on a more focused client roster. But the new year started with a setback for the firm’s City office too, as its restructuring practice was decimated by the departure of five partners to Milbank, Tweed, Hadley & McCloy and Brown Rudnick.

marco.cillario@legalease.co.uk

For more on international firms in the City, see our Global London report

Global London: top firms by London revenue

* Estimate – no London financial information provided by the firm.
**Based on average exchange rate for 2017 of $1.28 for £1. Baker McKenzie reported London revenues of £189m for the year to 30 June 2017 (+7% on previous year). Sidley Austin reported London revenues of £85.7m for 2017 (+14%).

The post ‘Investments have come home’: City branches stand out in big year for US players appeared first on Legal Business.

Part 1: The Overview – ‘A tale of two Citys’

Focus: Cooley

Focus: Milbank, Tweed, Hadley & McCloy

MAIN TABLE
Global London top 50

Part 2: White & Case

The post Mind the gap – Global London 2018 appeared first on Legal Business.

A surging private equity market, the City’s first $10m lateral and two law firms passing the $3bn mark. At first glance, 2017 looks to have been another boom year for international players in London. Neither did it hurt that City practices in a significant number of cases outpaced firm-wide revenue growth at many prominent US brands, including Latham & Watkins, White & Case, Paul Hastings, Sidley Austin, Cooley and Milbank, Tweed, Hadley & McCloy.

Tragically for legal reporters, the story is a little more nuanced as a whole. Lawyer numbers at the 50 firms that make up our Global London table certainly reached new heights in 2017 at 6,212 but are up overall by a steady rather than spectacular 3%.

Overall, the advance of foreign advisers in London has slowed somewhat – even allowing for the inclusion of Dentons and Squire Patton Boggs in the table for the first time back in 2015, which bumped up that year’s growth rates.

And beneath the headline figures, the diverging fortunes are stark indeed. On one hand, through trial, error and a decade of ultra-expensive recruitment, a select group of firms are moving away from the vast majority of US-bred peers to mount a potent direct challenge to City rivals. US firms are comfortably generating over $5bn in London, a significant chunk of the high-end City market.

And there are now three global firms with over 400 lawyers in the City, with Dentons and Baker McKenzie joining White & Case this year. Two of the ten largest foreign firms saw a double-digit percentage increase in their lawyers. None of those in the top ten saw a similar jump one year ago. Most notably, Kirkland & Ellis and Latham hiked headcount by 27% and 15% respectively. Proportionately, Greenberg Traurig was the fastest mover, growing its headcount 85% to 87 fee-earners largely as a result of shipping in six partners and their teams from the imploding local arm of King & Wood Mallesons (KWM).

Yet, at the other end of the spectrum, a substantial number of firms are shrinking their ranks. Four in the top 50 saw double-digit percentage falls, against two in 2016. These include some outfits that have experienced dramatic growth in recent years such as Ropes & Gray and Simpson Thacher & Bartlett – surprising given both firms’ prominence in humming leveraged finance markets. Another 15 recorded modest staffing decreases.

In the middle, a third group of firms includes those previously aggressively expanding their ranks that are now reaching maturity, with 19 having flat or single-digit headcount percentage growth. They count White & Case, which despite still being the largest office in the pack and having grown 47% since 2012, halted its dash for the 500-lawyer mark through 2017 to keep headcount flat at 446.

Overall, partner numbers expanded by 3% to 1,721, considerably firmer than last year when the same figure edged up just 0.5%, but slower than in many post-Lehman years.

‘Along with New York, London is the central focus of our strategy and we’ll continue to focus on it.’
Richard Trobman, Latham & Watkins

Partner recruitment at the top 50 international firms was also 24% down on last year, although a substantial chunk of the 190 partner hires in 2016 were due to the KWM exodus. The 145 hires in 2017 is still up on 2015, when global firms recruited 122 partners. Overall, lateral recruitment has remained robust. This is despite many firms achieving the maturity to have large trainee programmes and to promote plenty of their own partners.

Overall the number of partner promotions grew from 76 to 82, mostly due to Kirkland’s striking promotion round, globally one of the largest ever from a law firm. Of the Chicago-bred firm’s 97 new partners, 13 were minted in the Square Mile, more than double the previous year’s six. (Kirkland has an unusual ‘tournament’ approach in that it makes up large numbers of salaried partners to give them a shot at its tightly-held equity ranks.) The firm making the largest City round in 2016, White & Case, promoted seven in 2017.

Meanwhile, the number of English-qualified lawyers in the top 50 has grown 7% to 5,071 or 82% of the total. Bucking a trend in recent years that saw their numbers sharply increasing, foreign-qualified lawyers are down 13% to 1,119 after reaching a record 1,286 in 2016.

The increase in foreign – primarily US – qualified-lawyers in previous years was largely attributed to demand for New York law advice in deal finance and capital markets work by European borrowers tapping US investors. Conversely, this year’s fall reflects that some of the largest US players are focusing increasingly on contentious work requiring English law capability. Such is the case for Latham, which added 40 English-qualified fee-earners to its ranks.

‘The London market seems to be breaking down into betters and those who play the investment game. We play the investment game and that’s going to be the winner.’
Tamara Box, Reed Smith

‘There is a growing interest among a number of US firms to grow their litigation capabilities,’ observes Seamus Hoar, partner at legal search firm Major, Lindsey & Africa (MLA). ‘Financial services, regulatory and white-collar crime are also interesting to firms. So are life sciences, IP and data privacy. We will probably see some finance hires. What that tells you is that it is still a very healthy lateral market.’

Premium property

If overall those making up our table can be divided into expansive, conservative and shrinking firms, members of all camps are to be found in the upper reaches of the table.

In this group it is clear that Kirkland, Latham and White & Case are firmly established as the pace-setters for US firms in London. Of the three, it was Kirkland that made the most dramatic progress in 2017 with a string of marquee hires and mandates.

Jumping from ninth to the sixth-largest foreign practice in staff size, Kirkland made its City ambitions abundantly clear by boosting its headcount 27% to 237, the second-largest increase in the whole Global London table and the strongest among the practices with more than 100 lawyers. With Kirkland on course to become the world’s largest law firm in revenue terms after sustaining dramatic growth for 20 years and a robust 2017, the US juggernaut looks certain to keep shaking up the City.

And it was not just its headline-grabbing $10m package for Freshfields Bruckhaus Deringer’s David Higgins that turned heads – Kirkland tapped Freshfields in two other instances in 2017, for finance partner Jonathan Birks and restructuring partner Sean Lacey, two well-regarded operators expected to make an impact. Partner headcount increased 25% to 86 in 2017, as the firm also hired two from Ropes. (The $10m package for Higgins may have set a record for a lateral but there are better-paid partners in US firms’ London arms. One arbitrator in London is reputed to have been paid considerably north of that figure.)

Latham’s London practice outpaced global performance as it became the first law firm to report revenues over $3bn. While globally the firm hiked revenues 8.5% to $3.06bn, its London practice posted a double-digit percentage income growth and broke the $300m mark. ‘Along with New York, London is the central focus of our strategy and we’ll continue to focus on it,’ says co-vice-chair Richard Trobman.

Benchmark clients like The Blackstone Group and CVC Capital Partners kept the firm’s private equity team active throughout the year. Partner David Walker led the team acting on the £3bn acquisition of UK online payment company Paysafe.

‘London is the financial centre of our European work. We don’t see Brexit as something that is materially going to change the way we operate.’
Ronan O’Sullivan, Paul Hastings

Headcount is now approaching 400 lawyers after growing 15% to 378 in 2017 and 57% over the last five years. Latham scooped six headline lateral deals in 2017, including continuing its push outside its transactional heartlands into disputes by recruiting from litigation leader Quinn Emanuel Urquhart & Sullivan. Latham also saw two of its arbitrators awarded silk in the latest silk round, Sophie Lamb and Philip Clifford.

Still, partner headcount in the City was down by two to 74, amid some prominent departures, including City disputes chair Simon Bushell for Signature Litigation and investment funds co-head Tom Alabaster for Linklaters. Latham also remains relatively conservative on City growth: for the second year in a row only two associates were promoted in the City, amid a 31-strong global promotion round.

But with Trobman promising that the firm has ‘only just started’, the number of trainees at Latham has seen sustained growth, rising from 41 in 2016 to 46 in 2017 through to 49 in 2018.

Other firms in the top ten were more restrained in headcount expansion in 2017. Still the largest UK office in the US pack, a traditionally expansive White & Case saw headcount flat at 446. But it was another successful year for the practice financially as it grew its top line 13% to $328m, outpacing the firm’s 10% global growth to $1.8bn. (For more details on White & Case, see our cover feature.)

Reed Smith’s City base also kept a flat headcount at 366. ‘The London market seems to be breaking down into betters and those who play the investment game,’ says Europe and Middle East managing partner Tamara Box. ‘We play the investment game, not the betting game. And that’s going to be the winner.’

Reed Smith’s London arm – its largest office – posted a strong performance in a rebound year. City revenues increased 14% in sterling terms to £147m, while globally the firm grew its top line 4% to $1.12bn.

Zone three

One of the firms seeing a sharp headcount decrease among the top ten is Mayer Brown, due to a number of partner departures to firms including Kennedys and Gibson, Dunn & Crutcher. The firm’s headcount has dropped 18% over the last five years and 6% in 2017 to 230 – falling from sixth to the seventh-largest office. It is hard to see how the takeover of Rowe & Maw way back in 2002 has been built upon.

However, newly-elected London senior partner Sally Davies insists the falling numbers do not signal retrenchment: ‘We are not trying to contract in any way.’ She points to the hire of Neil Evans in the private equity team from Simpson Thacher and promises more in the pipeline.

This follows a quiet 2017 on the London lateral market for Mayer Brown. ‘2016 was a bit more challenging, with Brexit everyone was super cautious and looking for stability,’ says Davies. ‘But we have had an incredibly strong 2017.’

‘We talk with our clients a lot about where they want us in light of Brexit and we see London as a place we will invest significantly.’
Mary Kuusisto, Proskauer Rose

Globally the firm grew revenue 4% to $1.31bn. It does not disclose London figures, but partners claim the office outpaced global growth increasing both revenue and profits by double digits. The London team acted on headline deals for two of London’s landmark buildings, the £1.3bn purchase of the Walkie Talkie by Hong Kong investors LKK Health Products, and the £1.15bn acquisition of the Cheesegrater by Chinese investment group CC Land.

‘Along with the Chicago office, the connection of London, New York and Hong Kong is part of the backbone of the firm, one of the things that positions us very well,’ says real estate partner and management committee member Jeremy Clay. ‘We have 200+ lawyers in each of them. Not many firms have that and we need to work hard at continuing to develop this.’

The firm is looking at growing its private equity practice, focusing on increasing volume in its mid-market value deals.

Meanwhile, Shearman & Sterling’s London headcount dipped 7% to 178 following a flat financial year for the firm both globally and in the City. Headcount grew by only 1.5% to 853 globally. The neutral observer must conclude that the long-term drift for the firm that many considered the strongest US player in Europe in the early-2000s has yet to be arrested.

‘We are focusing on the profitability of our practice, not the size,’ says newly-elected senior partner David Beveridge. More significantly, Shearman now looks at growing disproportionately in the US, focusing on corporate work. ‘London will also continue to grow,’ says Beveridge. ‘It will just not grow at the same rate.’

Coming up

Notable movers are also to be found outside the top ten. Cleary Gottlieb Steen & Hamilton was in expansion mode throughout the year, swelling headcount 21% to 140. Most of the growth last year was at junior level: partner number was up by just one to 21. ‘We have a pure equity lockstep here. We don’t do many lateral hires, don’t get teams and don’t promise people above-lockstep deals,’ notes corporate partner Tihir Sarkar.

The firm did, however, expand its roster of high-quality litigators, bringing in Herbert Smith Freehills’ Royal Bank of Scotland (RBS) point-man James Norris-Jones at the beginning of 2018.

Conversely, Ropes & Gray, which almost quadrupled the size of its London practice over the previous five years, had a turbulent year, with a run of partner departures seeing its ranks shrink by 13% to 125 and its City partnership by 20% to 27. Kirkland, Watson Farley & Williams, King & Spalding, Linklaters, White & Case and Dechert recruited partners from the firm.

Finance partner Mike Goetz says Ropes will fill the spaces people have left, both through organic growth and laterals. Tensions in the office amid closer oversight by its US practice have led many to claim Ropes faces serious issues, though it should be remembered that the firm has been one of the most striking successes in the US over the last ten years. The biggest challenge facing Ropes now is not stabilising London but that Kirkland ominously launched in its Boston backyard in 2017. Anything that disrupts its domestic momentum will inevitably feed through to the UK.

Elsewhere, Simpson Thacher was among those that shrank the most during the year. While the firm more than doubled its ranks over the previous five years, in 2017 it dipped back below the 100-lawyer mark after a 21% drop in its headcount to 92.

Simpson Thacher City managing partner Jason Glover says the firm recruited too many associates in 2016, ‘thinking the churn rate would be higher’: ‘[In 2017] we didn’t replace people who left.’

Nevertheless, Simpson Thacher’s London base had another stellar year, growing revenue to $168m, a 16% increase on 2016 and more than four times the 2009 revenue of $36m. The New York firm’s superb reputation in the US private equity, funds and leveraged finance markets has positioned it strongly for the booming activity levels among sponsors.

‘We have deliberately a small group of clients,’ says Glover, pointing to a lucrative client base including Blackstone, KKR and Apax as well as new clients Triton and Aston Martin, which it last year advised on a high-yield bond. The firm recently advised Blackstone on its €12.2bn sale of Logicor to CIC and KKR on its £6bn acquisition of Unilever’s spreads business.

In contrast, UK firms are wrestling not only with the post-Brexit weaknesses in sterling that hands even more buying power to US rivals but a relative lack of work from core domestic clients. ‘The big issue for the Magic Circle is that FTSE 100 companies are not doing much,’ notes Cleary’s Sarkar.

London calling

Despite numbers telling of a growing divide, the mood in more than 30 interviews for this piece is convincingly upbeat. Partners speak of a busy second half of the year which led up to an even pacier start to 2018. ‘There is a high volume of private equity deals and a lot of reasons why a US firm would add value,’ argues Sarkar.

‘Have you seen the stock market prices over the last few days? Yes, we are confident!’
James Roome, Akin Gump

And a looming Brexit does not yet worry US players much, even as the talks between the UK and Brussels meander along apparently with little consensus or productive result. ‘London is the financial centre of our European work,’ says Paul Hastings’ City chair Ronan O’Sullivan. ‘We don’t see Brexit as something that is materially going to change the way we operate.’

Proskauer Rose’s City head Mary Kuusisto agrees: ‘We talk with our clients a lot about where they want us to be, especially in light of Brexit, and right now we see London as a place where we will continue to invest quite significantly.’

And even in what was seen as a stable rather than bumper year for City disputes, litigation leader Quinn Emanuel chalked up a dramatic surge in revenue, pushing up UK income a startling 61% from £44.8m to £71.9m.

With US firms increasingly well positioned in leveraged finance, disputes and funds, another core area looks set to power their City arms through 2018, the long-predicted return in restructuring and insolvency work hitting a struggling high street. Firms like Kirkland, Paul Hastings and Akin Gump Strauss Hauer & Feld have already secured a string of notable restructuring jobs this year.

‘Have you seen the stock market prices over the last few days?’ asks Akin Gump insolvency veteran James Roome. ‘Yes, we are confident! In a smaller office you get a feel for what’s going on – how busy everyone is. There will be quite a number of situations – rates are going up. Funds work will also increase because of that.’

Ten years since the banking crisis started, headcount at US firms in the City has grown almost 50%. US firms are now an established force in the British legal market. And, with Latham, Kirkland and White & Case all broadening their M&A platforms, it looks certain that 2018 will see further inroads into general corporate work – the only major product line to elude their efforts so far.

Milbank’s Julian Stait sums up the generally bullish mood: ‘Elite US firms in London are now regarded as top practices in their own right. We have a lot of people who do not want to be one of 60 trainee solicitors at a Magic Circle firm and make a very informed decision about their future career and the type of training they want.’

While City rivals remain fond of dwelling on the large group of US firms that are always promising more than they deliver, they would do better to focus on the significant camp closing the deal. LB

marco.cillario@legalease.co.uk

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The post A Tale of Two Citys – a growing divide emerges as the US elite storms ahead in London appeared first on Legal Business.

‘Stick that in your pipe and smoke it!’ exclaims Oliver Brettle, White & Case’s London executive partner, before getting up and heading for the door.

Given an amicable discussion of the considerable recent growth of White & Case’s City arm, the reaction to a question about the firm’s disputes practice seems a little abrupt.

Relief sets in as instead of storming out, Brettle graciously offers another cup of coffee to Legal Business. Being on the verge of revealing 2017 financial results that speak of 13% revenue growth in London to $328m – meaning City revenue has effectively doubled in six years – amid a 10% uptick globally to $1.8bn is hardly cause for conflict.

Brettle’s uncharacteristic hint of defensiveness speaks to the impatience with its lingering reputation as one of global law’s also-rans, a reputation it feels recent years should have buried.

A case in point was an unflattering Legal Business feature back in 2010, when Number 5 Old Broad Street was a less upbeat place. The office was then still overshadowed by the 2008 departures of playmaking finance duo Michael Goetz and Maurice Allen to Freshfields Bruckhaus Deringer.

In the foreground had been a divisive 2007 election that installed projects veteran Hugh Verrier as the firm chair, which exposed the divisions in the firm between its deal finance and projects teams and those wanting to focus on key hub markets over its emerging economies branches.

And in the depths of the financial crisis, it was inevitable a firm so entrenched with banking clients, was still reeling, leading to more than 400 job losses in 2009, including 95 in the UK.

The redundancies were brutally highlighted in a New York Times article of 2009: ‘A study in why major law firms are shrinking’, which received little notice externally given the wave of cuts sweeping peers but left management bitterly stung at the time.

And in 2010 the firm would go on to see a devastating team exodus for Latham & Watkins, depriving it of four productive City partners, alongside eight further finance partners in the Middle East and New York.

Today, even its staunchest detractors admit Verrier and White & Case have gone on to fare much better than expected amid an aggressive growth drive that suits the firm’s culture much better than retrenchment and cost-cutting.

Reflects one ex-partner who left the firm around the time of that article: ‘In fairness to Hugh, he was deliberately focused on improving profitability and has done a very good job. He chopped some of the partners at the bottom. It has culturally changed the firm for the better.’

White & Case is halfway through its 2020 strategy, which – ironically, given the reservations about Verrier’s commitment to the City practice – put London and New York at the centre of its ambitions and is explicitly determined on expansion in core markets. The plan was to have 500 lawyers in London and New York by 2020 and the firm looks on course. By office, the firm’s London base made the second-largest contribution to total revenue after New York.

By that token, the 446 fee-earners (including 105 partners) are looking forward to a major refurb of the meeting rooms and canteen area, which will from early April include a bar.

‘London felt like the poor cousin after New York got the new offices so we decided to create a bright collaborative space to reflect the changing concept of the office,’ says US securities partner Melissa Butler of the investment.

The firm ran a competition to name the new space, giving rise to the inevitable Boaty-McBoatface-style suggestions. Disappointingly, those ideas failed to make the cut, and neither did another suggestion, ‘Brettle’s Bonanza’. The latter would have been apt, given the firm’s reversal of fortune. The winner, ‘Broad Street Kitchen’, just doesn’t have the same ring.

The big breakthrough

In 2015, the firm set out a strategy to drive profitable growth in London and New York, crucially in disputes, M&A and capital markets and in the industries of financial institutions, oil and gas, private equity and technology. The move would mean a clear pivot from its infra/emerging markets business back towards mainstream transactional and disputes work in core centres – defying the predicted agenda of Verrier, who had previously headed its branches in Moscow and Ankara.

Brettle and Co have turned this into a simple mantra: ‘Going toe-to-toe with the Magic Circle.’

When asked to pinpoint when White & Case started successfully playing footsie with the London elite, partners, peers and ex-partners agree that the turning point was reached some two years before the strategy shake-up, with the hires of private equity rainmakers and long-time wingmen Richard Youle and Ian Bagshaw from Linklaters in 2013.

Notes one ex-partner: ‘The big breakthrough has been the PE practice. The firm had hardly added anyone in corporate, it had been weak. The turning point was when it started to build a proper corporate practice. Bagshaw and Youle transformed it.’

The hires fired a dramatic expansion of the deal practice, with work streaming in from 3i and HgCapital, a key client of Youle. The pair soon counted among their clients Mid Europa Partners, Global Infrastructure Partners, Triton Partners, Novator Partners, CVC Capital Partners, Rhône Capital, Bridgepoint and Arle, while the firm now has 51 lawyers covering private equity, including 11 partners in London. The team was bolstered in 2015 with Clifford Chance (CC) partner Caroline Sherrell and Debevoise & Plimpton’s Kenneth Barry, while this March the firm announced it had hired Mike Weir from Jones Day’s City private equity practice.

Youle’s departure last year to Skadden, Arps, Slate, Meagher & Flom has been a double-edged sword for the practice. On one hand it deprived the practice of a muscular practitioner who had done much to usher in a more driven style to the firm’s City arm, while the long-term friendship of Bagshaw and Youle, dating back to Eversheds, had proven highly productive.

‘Rich left a big hole. The whole team had to make up for that loss of his charisma, but we are a better team for it.’
Ian Bagshaw, White & Case

Yet in contrast to Bagshaw’s focus on new clients, Youle’s practice was based around a portable business with several core clients like HgCapital and Montagu. Never one for diplomacy, Youle had clashed with some peers and there had been some raised eyebrows at his call for Katja Butler to be made up to partner earlier than was traditional at White & Case (Youle disputes this version) and relationships had clearly frayed.

Now that the dust has settled, Brettle and Bagshaw are philosophical, while the practice has so far regrouped effectively (one London partner claims Bagshaw was largely responsible for bringing in $40m of business to the office last year). ‘Rich [Youle] is a fantastic partner with a big personality, he left a big hole,’ concedes Bagshaw. ‘The whole team had to make up for that loss of his charisma and qualities, but it has been a catalyst for change and we are a better team for it.’

To underline the point, Bagshaw launches into a rundown of his record year, by value and volume of deals, at the coalface of EMEA private equity in London. Bolstering the deal book was the €1bn IPO of marquee Polish telecoms giant Play, led out of London by Bagshaw and Jill Concannon, who is widely cited as a rising deal star.

‘Play has been a core client of the team since I joined White & Case. That mandate wouldn’t have been possible at Linklaters,’ says Bagshaw. ‘The US financing element is more relevant for a US firm. It justified my belief in the firm and played on the strengths of the ECM practice.’

Another highlight was acting for Bridgepoint on the £750m acquisition from HgCapital of UK vehicle fleet management group Zenith. Bridgepoint was a trophy win for White & Case in January 2017 and the deal was one of the sponsor’s largest investments. ‘Bridgepoint is a client close to my heart and the deal is a building block for repeat work,’ adds Bagshaw.

Also last January, the team went on to advise Bridgepoint and Nordic Cinema Group on the $929m sale to AMC Entertainment. The team scored a hat-trick that month by also advising Harbour Energy, the investment vehicle managed by EIG Global Energy Partners, on a deal to lead the $3bn acquisition by Chrysaor of a portfolio of oil and gas assets in the North Sea from Shell UK.

Advising CVC Capital Partners leading a consortium on the acquisition of a controlling stake in pharma company Alvogen in 2015 was a watershed moment for the team’s relationship with CVC, leading to a subsequent deal advising CVC portfolio company Alvogen on its acquisition of County Line Pharmaceuticals in the US.

Bagshaw remains a Marmite figure in deal circles, though the admirers outweigh the detractors and even his critics frame it with grudging admiration. In person, a ball of entrepreneurial energy, tactical nous and blarney, he talks a lot about how the team is the focus, while mainly talking about himself. Yet, amid the stream-of-consciousness, he is also one of the most thoughtful partners discussing the business of law, more so than most managing partners, let alone deal junkies. It is hard to escape the conclusion that his singular talent has found its perfect platform at White & Case.

There is also a lot of confidence around the firm’s equity capital markets (ECM) team, with the recruitment of Ashurst partner Jonathan Parry regarded as providing a palpable lift since joining the firm on the ominous date of the June 2016 referendum.

‘The real Rubicon-crossing moment was Jonathan Parry getting the company-side mandate on the Alfa Financial Software IPO where Freshfields picked up a role advising the underwriters,’ says Brettle.

Valued at more than £1bn, the tech float is widely touted as a breakthrough deal for the firm in 2017, given the paucity of London listings. Transactions like this contributed to White & Case topping Bloomberg’s league tables for IPOs in EMEA. Asked which firm came second in the table, Brettle retorts: ‘If you’re number one, you don’t care who’s number two.’

White & Case wins plaudits for a management style that avoids the death-by-committee bureaucracy of London leaders and the leadership-in-your-lunch-break excesses of billing-obsessed US peers.

‘This is a rare example of a non-Magic Circle firm executing on a premium listing,’ says Parry, adding that the mandate has led to work for other parts of the firm. ‘This is proof that if you invest strategically, it can pay off.’

Stuart Matty has been global head of capital markets since 2012 but is a White & Case veteran, having joined as a mid-level associate some 18 years ago in the Maurice Allen era. Matty reflects on the most important developments for the practice in the last five years: ‘The debt capital markets practice has matured into a tier-one practice and the equity capital markets practice has gone from being a support function to being seen as a big player in its own right.’

Inigo Esteve, who was hired as a partner in 2014 from CC has been another productive addition for the ECM team along with Parry, argues Matty.

Even more significant has been the 2016 recruitment of Patrick Sarch, one of the most high-profile public M&A partners yet to quit a City leader for a US shop. The recruitment was aimed at bringing in a name that the firm could use to build on its success in private equity into general work and it did not just happen.

Latham & Watkins had courted the clubbable Sarch, with co-vice chair Richard Trobman dogged in pushing to secure his services. But it was largely the intervention of Bagshaw that secured Sarch against competition from a firm with deeper pockets and a stronger brand. (Sarch, Bagshaw and fellow corporate partner Guy Potel have been on good terms going back to their CC days.)

Brettle notes: ‘Patrick ticked all the boxes. We wanted to grow in London – he ticked that box. We wanted to concentrate on financial institutions, tech, oil and gas and PE – he ticked that box. At CC he was co-head of the global banks sector team, so he ticked that box. We wanted to concentrate on M&A, disputes and capital markets – he ticked that box too.’

‘I breathe pressure,’ quips Sarch, before launching into a progress report. ‘The main thing that’s kept me off the streets is the Co-op Bank restructuring,’ he says. Sarch had advised Co-op while at CC on its restructuring and, after joining White & Case in January, he was asked to act as an independent adviser to the board. ‘I played nicely with ex-colleagues from CC in the summer.’

One former colleague notes that the Co-op mandate was a good win for Sarch but expresses surprise at his role last year acting for an Anchorage Capital consortium, which also included Davidson Kempner and GIC, on its sale of a majority interest in Irish telecoms business eir for €3.5bn.

‘I was surprised he turned up on that because it’s a private company. I get the feeling that he’s not getting the big-ticket M&A that was his bread and butter at CC.’

Nevertheless, Sarch remains a widely respected performer and it is conceded that building a pipeline in this kind of work is an 18-month affair, even with a large team around him. Anchorage is a longstanding client of White & Case and is one of the alternative capital providers along with Silver Point and Oaktree, which is an increasing focus.

‘We didn’t hire him just to do repeat M&A, it’s a rare corporate vehicle that has repeat M&A as its strategy. Also a priority is the financial institutions work,’ argues Brettle. The firm currently has around 30 partners covering corporate in London, with the practice generating over $80m in 2017, substantial by any yardstick.

A bit of personality

Against stiff competition, there is more nonsense talked about culture in the legal profession than any other topic, but it is widely conceded that White & Case’s City arm actually has one, and one that even the detractors salute. An evening drinking with partners in a Tower 42 bar with panoramic views of the City feels more like a university reunion than a networking event.

From the point it began investing seriously in English law in the early 2000s, the firm was marked out for hiring strong-willed British lawyers with personalities and peculiarly local ways of doing things, rather than the usual practice of US peers of imposing Americans.

‘White & Case facilitates success. You can fly high in a way you can’t at the Magic Circle.’
Patrick Sarch, White & Case

The attempt to assign the US finance partner Mike Goetz to keep rainmaker-come-raconteur Maurice Allen in check back in the 2000s famously backfired when Goetz became a convert to British sport.

The firm has long cultivated English lawyers that have also managed to maintain a strong chemistry with its US practice and considerable clout within the firm. Part of the fallout after the 2007 election had been the fears (which turned out to be overblown) that the stiff Verrier had little interest in London, in contrast to his easy-going Anglophile predecessor Duane Wall, who enjoyed working with senior London lawyers.

Brettle is also given much credit for effectively presiding over the office during a period beset with turbulence, a job that has meant effectively managing the competing egos. He also enjoys good relations with the US, which has benefited the City arm in securing investment. Brettle was re-elected to the firm’s influential executive committee in 2015, alongside Donald Baker in São Paulo and New York banking partner David Koschik.

The New York/London duopoly has endured, helped by the fact that White & Case’s Manhattan office has never had the pedigree or arrogance typical of Wall Street peers.

The firm is also lauded for striking a winning balance between the diverging approaches of Magic Circle and New York firms to foster an energetic and entrepreneurial culture, which plays well with transplants from London law firms.

It wins plaudits for a management style that avoids the death-by-committee bureaucracy of London leaders and the leadership-in-your-lunch-break excesses of billing-obsessed US peers. Few decisions are put to the vote. One exception occurred years ago amid a fraught debate about moving to Canary Wharf. The London office was largely unmoved about the prospect of a transfer to the sterile Docklands, while the US was in favour. Eventually veteran IP litigator David Llewellyn found the language to bridge the rare transatlantic divide by telling New York colleagues: ‘It’s like you moving to Hoboken, New Jersey.’ Common sense prevailed.

Sarch sums up the can-do spirit on Old Broad Street: ‘Ian [Bagshaw] is a force of nature and White & Case facilitates that. The success is that someone like him can fly exceedingly high. You can’t do that at a Magic Circle firm, because of lockstep and other factors.’

It is not all about the dollar. ‘It’s hard to criticise the firm… it’s a broadly happy place. It’s a successful group of lawyers,’ says one former partner, expressing common sentiments. ‘People don’t stay there because it’s the best money they could get. The culture is sociable and there is good interaction between the international offices.’

The firm has managed to lure 20 lateral hires since the start of 2015, most recently this year Weir, well-regarded tax litigator Hannah Field-Lowes from Weil, Gotshal & Manges, and Dominic Ross for corporate from Ashurst.

Another promising hire has been capital markets partner Chris McGarry from Ropes & Gray, while the firm bolstered its already solid reputation in antitrust by recruiting Marc Israel from Macfarlanes. McGarry is credited with a breakthrough deal, opening up a new class of client when he advised Trafigura, the commodities trading and logistics company on the establishment of the world’s first ‘true sale’ commodities securitisation programme.

And solid financial performance in recent years has not hurt. Global profit per equity partner (PEP) for 2017 has hit $2.26m. According to two separate accounts, its compensation ladder pays top-earners seven times that of junior partners. One recent partner puts entry earning for partners in the $600,000-$700,000 region, rising above $4m for top earners. According to this account, the firm can pay seven-figure bonuses to stars, in theory pushing earning above $6m, though the bulk of partners are earning between $1m and $1.7m.

Top earners are suggested to include Bagshaw, Sarch and Gareth Eagles, who has driven growth in the firm’s direct lending and alternative finance clients. Others high billers likely to be taken care of include projects veteran Philip Stopford, litigator John Reynolds, restructuring partner Christian Pilkington and rising star arbitrator Charles Balmain. Not all hires deliver, of course, and there have been a handful of groan-inducing misfires in recent years but the dash for growth has largely paid off.

This has been backed up with office launches in the last three years: Houston and Boston in the US; Seoul, Sydney and Melbourne in Asia; and Cairo and Tashkent. The US launches in two key regional markets and a dramatic Australian launch with a ten-partner team from Herbert Smith Freehills all look to be significant additions.

The growth story

The debate remains in the industry about how far White & Case can go. While peers cannot quite get used to the idea of seeing a firm once bracketed with Baker McKenzie as a potential world beater, it is conceded that White & Case has real momentum.

The big question remains whether the bet of investing heavily for the medium term can drive Global Elite-levels of profitability rather than dilution. Many peers question if the 2020 goal of getting PEP to $3m can be achieved for a firm with such broad global spread.

The firm will need more growth in the US to drive such ambitions – though relative improvements in its New York office, which generates in the region of $350m, bode well. There is also talk of further launches in the US.

It should also be remembered that for all the talk of the trade-offs between size and profitability – the trend of the last ten years has shown many firms like Kirkland & Ellis, Ropes & Gray, Latham and Quinn Emanuel Urquhart & Sullivan, driving dramatic increases in profit growth off the back of strong top-line growth.

On this basis, White & Case’s gamble on being long-term greedy looks to be worth the benefit of the doubt. And though the firm is focused on growth it has not been dogmatic about it, increasingly focusing City growth on its bustling ranks of young partners and lowering leverage rather than piling on associates (the firm is also investing in project management).

Peers cannot quite get used to the idea of seeing a firm once bracketed with Baker McKenzie as a potential world beater.

Bagshaw comments: ‘When I joined, White & Case was not the obvious choice for private equity. Lawyers are slow to accept a new reality – there’s always an established order that will remain for all eternity. Now they can see we’re doing well. We are winning more friends.’

A major question will be whether the firm can secure its major breakthrough in corporate. Says Brettle: ‘It will be a tough ask for us to convince people that a US firm is best for M&A London market work but we will prevail, like we did with PE. We have prevailed in PE and now we’re one of the best.’

Promisingly the firm has scored two recent UK plc panel wins – to advise Smiths Group and Johnson Matthey. While Sarch concedes that the latter was won by his colleague Marcus Booth, the panel win has already led to work on three connected M&A transactions as a result.

He had been advising UK debt collection business Cabot Credit Management on a dual-track potential IPO/M&A deal before the IPO was pulled last November. Lazard, the financial adviser to Cabot, had been dubious, saying White & Case was not known for listed work. ‘When they saw Jonathan Parry and me in the room, we got the gig,’ says Sarch.

There will be questions over what happens if there is a change in the management team of Verrier or Brettle, with Bagshaw seen by some as likely to want to take on more responsibility.

Yet the strange, unsettling truth is that White & Case is doing a lot better right now than anyone expected and there is no sign yet – beyond another patented Bagshaw flounce – that its momentum is spent. Global Elite status is nearly there and yes, disbelieving reader, you can put that in your pipe and smoke it. LB

nathalie.tidman@legalease.co.uk

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Striking numbers abound in this year’s Global London table, if you are into that kind of thing. The three pace-setting US brands in London – Latham & Watkins, Kirkland & Ellis and White & Case – are all generating in the $300m region in the Square Mile, last year saw the first $10m lateral and my back-of-the-envelope scribbling indicates that the top 50 US firms are comfortably pulling in over $5bn in the UK.

The market is increasingly now defined by this trio, predictably so in the case of Latham, though City lawyers are still trying to get their heads around the idea of Kirkland and White & Case as mounting a frontal challenge. A few years ago, I’d have been equally sceptical, particularly in the latter’s case, but if there is a glaring hole in the game plan of these two outfits, they are hiding it well. With all three making ground in mainstream transactional work through 2017 and securing significant hires – the idea that certain kinds of M&A will remain the preserve of City advisers over the next three years looks fanciful.

And as we go to press Kirkland was expected to soon confirm that it has become the second global law firm after Latham to crack $3bn, with another hike in partner profits that will give it further ammunition for London. Kirkland’s average partner profits are currently on course to pass the $4.5m mark, which suggests plateau earnings of more than $12m. And one arbitrator in London at another firm is reputed to have been recently paid considerably north of that figure. The equation of elite law is shifting and faster than many veteran partners can keep up.

The equation of elite law is shifting and faster than many veteran partners can keep up.

Aside from the select group mounting a broad challenge, there are obviously high quality brands like Quinn Emanuel Urquhart & Sullivan and Simpson Thacher & Bartlett that have forged highly productive operations with lean teams in defined areas.

It is a more mixed picture over the top 50 and there is plenty of drift and inertia across the group – yes, Shearman & Sterling, we are looking at you. Many of the more generalist attempts to create US-owned practices continue to lack momentum.

But the overall direction of travel is clear – US firms are making more inroads and have so far proved remarkably sanguine about the Brexit shadow looming over London. It was another robust year of lateral recruitment, even during a period in which the largest US-born firms are now very active promoters of their own UK partners.

The upbeat assessment by US law firms may well be linked to the fact that areas and clients currently driving their growth – white collar, funds, arbitration, leverage finance – are less impacted by Brexit. Yet chairing a client debate this month, there was certainly a much more downbeat tone on the implications for the City and UK investment of leaving the EU. But Brexit aside, US firms in London are now a one-way-bet.

alex.novarese@legalease.co.uk

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To mark the launch of our 2018 Global London report, we ask senior figures at leading US firms in London for a progress update

Keeping talent happy

‘Until a few years ago it was very hard to get a UK partner to leave their firm. Today we see the pendulum swinging: it went from extreme loyalty to far less. The focus for US firms has to be on how to keep people. Historically, Proskauer has done that really well.’
Mary Kuusisto, London office head, Proskauer Rose

Beat that

‘If you look at what’s happened in London over the last ten years, US firms have made some substantial inroads into the market, not just in terms of attracting talent but also clients. It’s amazing how quickly financial institutions have accepted English law advice from US firms. If you compare it with New York, English firms have failed to make equivalent progress.’
Ronan O’Sullivan, London office chair, Paul Hastings

Better than expected

‘The connection between us and a very strong Asian business in the real estate space really drove our business last year in a market that was otherwise patchy. Corporate was great – a very busy year. We were not sure how the year was going to look post a Brexit-impacted 2016, so that was maybe something of a surprise. In mid-market PE and M&A it was very active right from the start of the year. Clients just got on with it.’
Jeremy Clay, partner and member of management committee, Mayer Brown

Coming together

‘We have made some investment in London over the last few years and our results this year have shown that investment is paying off. This really was a cross-office and cross-practice effort. All the groups in the office were busy this year.’
Matthew Dening, London managing partner, Sidley Austin

Youth culture

‘It is no longer true that Magic Circle firms are the only incubators of exceptional talent in the City. If you look back ten years, when very few US firms had trainee programmes, it could have been the case. But now the leading US firms have their own trainee programmes, and the people we see coming through are among the best and most talented young lawyers in the market.’
Julian Stait, London co-managing partner, Milbank, Tweed, Hadley & McCloy

This is not America

‘We had a good year. We are coming off an incredibly busy Q3 and Q4, and it looks like the busiest Q1 in a long time. We don’t see ourselves as just a US firm: we are an international business and one in which London is the largest office. We look very much at the global environment and how the global industry develops. Ours is a global offering based on collaboration.’
Tamara Box, managing partner – Europe and Middle East, Reed Smith

Fine fettle

‘For the first time ever, US firms ranked above all the Magic Circle firms for UK M&A by value. We also hired Richard Youle and Katja Butler into our private equity practice. This has been a transformative move for the London PE market as well as for Skadden.

There is uncertainty in many of the world’s key markets, but many of our clients have remained active and there are still lots of opportunities for investors. Clients are perhaps more cautious, but in slower conditions clients often require more sophisticated legal services and this is a situation that plays to our strengths.’
Pranav Trivedi, London office head, Skadden, Arps, Slate, Meagher & Flom

Pole position

‘We’re now being awarded panel appointments which historically went to UK firms, including the Magic Circle. Where entities want a global player which has got everything covered post-Brexit, and with our top-tier English and US law capability and experience, we are perfectly positioned to help.’
Ingrid York, capital markets partner, White & Case

Force awakened

‘This has been our best year so far, including a standout year for our transactional PE and finance practices. We advised on 34 PE-backed deals totalling over £30bn in value in 2017 with notable mandates acting for Baring Private Equity Asia (on its disposal of Weetabix), several deals for Bain Capital and deals for the likes of CCMP Capital Advisors, TPG Capital, TSG Consumer Partners and Exponent. No-one in the Magic Circle thinks the US firms are not a force to be reckoned with.’
Will Rosen, co-managing partner London, Ropes & Gray

Stiff competition

‘2017 was a terrific year for our competition practice. We’ve been lucky enough to work on many of the most complex, challenging and high-profile transactional and behavioural matters reviewed by the European and US agencies. In response to client demand, we are strengthening and growing our London competition practice with a view to creating a top-tier practice comparable to our market-leading practices in Brussels and Washington DC.’
Nicholas Levy, competition partner, Cleary Gottlieb Steen & Hamilton

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London headcount: 80 lawyers, 27 partners

London head: Justin Stock (pictured)

Office speciality: Technology, life sciences, litigation

Representative work: Advised SoftBank on virtual reality company Improbable’s $502m fundraising; advised Apollo Global Management and The Vistria Group on $1.1bn acquisition of Apollo Education Group; advised Tata Steel and Bambino on a series of litigation matters.

For a major US shop that built its reputation with Silicon Valley’s globe-trotting tech giants, Cooley’s UK entrance was belated. After much persuasion of its sceptical US partnership by energetic chief executive Joe Conroy, a substantive launch finally arrived in 2015, with a 55-lawyer team assembled from Morrison & Foerster (MoFo) and Edwards Wildman Palmer.

Since its launch, Cooley has achieved sustained income growth in the City. While the Palo Alto-bred law firm joined the $1bn club after growing its top line 10% to $1.07bn for its 2017 year, its London arm grew by an eye-catching 22% to $57.5m. Global profits per equity partner jumped 6% to $2.08m last year. Cooley’s reputation as one of the fastest growing US firms of the 2010s now seems assured.

‘We definitely can’t complain,’ says London managing partner Justin Stock. While US-generated clients accounted for 25% of London revenue last year, the UK outpost has some significant client relationships, including Tata Steel. Comments Stock: ‘We work with a high number of international clients. The revenue is not necessarily huge, but it is keeping them with Cooley and those relationships can lead to much bigger things.’ He points to the contribution by London lawyers in the US-led $24bn initial public offering of Snapchat parent Snap last year, one of the largest tech floats of the decade.

Brisk revenue growth in London comes despite a quiet period for senior recruitment, with only one partner added in 2017, product liability litigator Rod Freeman from Hogan Lovells in May.

‘We work with a high number of international clients. Keeping them with Cooley can lead to much bigger things.’
Justin Stock, Cooley

‘Rod’s arrival is transformational for the office,’ says London-based litigation vice-chair Laurence Harris. ‘It is not just that he’s an amazing practitioner and brought a large amount of work with him, but also he’s absolutely concentrated in the tech space. Many companies on the West Coast are his clients and he has brought those relationships.’

Overall, the London practice maintains a balance between transactional and disputes: 13 of its partners work on litigation and 12 in corporate (Cooley has considerably bulked up its contentious practice in the US in the last 15 years).

It is conceded that Cooley remains some way from getting its City arm where it aims, with the ultimate objective of securing marquee Europe work from iconic US clients such as Google and Facebook.

Notes Stock: ‘We want to build a practice in London that competes for high-growth companies, life science companies, tech companies and any sophisticated clients of that sort in both transactional and contentious work.’

Meanwhile, the firm is still hoping to widen its European coverage with a launch in continental Europe before Brexit’s March 2019 deadline – Frankfurt and Brussels being the two most frequently tipped locations.

Such ambitions will demand a change of pace. The office, which still only accounts for just over 5% of global turnover, increased its lawyer headcount by only one to 80 last year. With two partners leaving in April 2017, partner headcount was down at the beginning of 2018 until the February recruitment of M&A partner Michal Berkner from Skadden, Arps, Slate, Meagher & Flom.

Stock concedes that recruitment is slower than hoped: ‘I would love to surpass 150 within the next two years but those things take time and we want to make sure we hire the right people.’

Some also argue that integration between the former MoFo corporate hands and ex-Edwards Wildman litigators remains a work-in-progress, reflecting the gulf in culture between the two legacy practices and client bases. Yet these all sound like mere growing pains for a firm that even competitors frame as a quality operator with a crystal-sharp market position. As tech transactions partner Chris Coulter concludes: ‘Having clear messages about what the firm stands for and does is one of the benefits of being at Cooley.’

marco.cillario@legalease.co.uk

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London headcount: 116 lawyers, 22 partners

Fee-earner headcount change since 2012: +81%

London heads: Suhrud Mehta and Julian Stait

Office speciality: Finance, restructuring, capital markets, litigation

Representative work: Defended Visa on a claim brought by Sainsbury’s on interchange fees and acted for the defendants in $1bn competition Libor case; advised on the $3.7bn restructuring of offshore drilling services contractor Ocean Rig; advised the lenders on Bridgepoint Capital’s acquisition of vehicle rental firm Zenith Group.

Traditionally a reluctant globalist, Milbank, Tweed, Hadley & McCloy’s 39-year-old London arm turned heads in recent months by announcing six laterals in the space of a few days in early 2018.

The spree came off the back of a robust 2017 for the office, which grew its top line 9% to $125m without adding a single partner. That performance saw London outperform a 7% firm-wide revenue hike as the Wall Street shop’s income hit $916.54m.

In January this year Milbank brought in a 15-lawyer financial restructuring team from Cadwalader, Wickersham & Taft led by well-regarded former Linklaters partner Yushan Ng. A team of that size would typically account for around $20m of annual business and also includes ex-Linklaters lawyers Jacqueline Ingram and Karen McMaster as well as former Simpson Thacher & Bartlett lawyer Sinjini Saha. Headline clients include Oaktree Capital, Centerbridge, GSO, Apollo and Avenue Capital, a credible spread of the fêted sponsor clients that all law firms are trying to cultivate.

The much-tipped team had historically focused on sponsors investing in financial restructuring situations but has been intent on broadening its coverage into more related transactional work. ‘As our client base and range of services have grown, we needed more support from a top-tier practice,’ says Ng. ‘Milbank is a very credible firm in a number of areas.’

Still in January, Milbank tapped Shearman & Sterling for its well-liked head of European capital markets, the high-yield specialist Apostolos Gkoutzinis, who moved across along with fellow partner Rebecca Marques and a team of associates. Put together, the hires increased the firm’s London lawyer headcount 30% to 150, including 28 partners. A contrast certainly to a flat 2017 in terms of headcount growth.

Yet the London management strikes a cautious tone. ‘These hires had been on our radar for some time but it was in many ways a coincidence they happened almost at the same time,’ says London co-managing partner Julian Stait.

While the election of Scott Edelman to global chair in 2013 had made the firm a little more open to international expansion, such shifts are gradual at Milbank. Operating a modified lockstep, in 2017 it maintained a tight equity at 145 – plus 14 non-equity partners – out of 690 lawyers, and boasts the profitability typical of successful New York firms. Profit per equity partner grew by 11% to $3.46m last year, underlining its position among the top 15 Manhattan firms.

With a rock-solid Wall Street pedigree and strong finance reputation, few doubt the firm has the scope to be a more effective operator in the City… if it wants. Partners also speak warmly of a light-touch management, with the two London heads among the highest City billers – as a veteran litigator with strong TMT slant to his practice, Stait is cited as one of the most successful US laterals since his move from DLA Piper in 2009. Currently, its London office is reported to be achieving profitability comparable to its US heartlands.

The question for Milbank remains much as it did in the 2000s, when it failed to build on the recruitment of Freshfields Bruckhaus Deringer playmaker Tim Emmerson: is the firm ready to commit to long-term expansion? In the words of one former partner: ‘They are trying to build the London practice, but they don’t want to reduce profitability, that’s the issue.’

Before this year’s hiring spree, the City operations had been adding two partners per year on average since 2009. While the firm initially focused on its calling-card practices in projects and deal finance, its restructuring and capital markets teams have certainly been reinforced in recent years. Revenue, likewise, looks certain to receive a substantial boost this year thanks to Ng’s team.

With a rock-solid Wall Street pedigree and strong finance reputation, few doubt the firm has the scope to be a more effective operator in the City… if it wants.

Meanwhile, inroads have been made in litigation following the hire of Stait and Tom Canning from DLA in 2009/10 and Charles Evans from Norton Rose Fulbright in 2013. The firm recently acted on some high-profile cases in London representing clients such as Visa and Rabobank.

But establishing a credible corporate presence has proven harder going. Emmerson quit for Sullivan & Cromwell in 2007 and, while the arrival of Linklaters’ Mark Stamp in 2012 ushered in a seasoned deal hand, the firm has not made a major hire in corporate for years. It currently counts just two M&A partners in London.

London co-managing partner Suhrud Mehta says that growing the firm’s corporate capability is on the agenda but remains cagey on timeframe. Mehta comments: ‘If we find top-of-the-market people this year, we’ll do it this year, if we find them in ten years, we’ll do it in ten years – it’s not entirely within our control when to make it happen.’

Yet the reality is that in an ultra-competitive market there are easier US brands to sell to top M&A partners considering a move in the Square Mile. There will be many who question if Milbank’s conservative stance can remain sustainable in a market in which a group of aggressive US entrants have reset expectations on growth and ambition. As one former partner points out, an office which was the size of Latham & Watkins in the early 2000s is now dwarfed by many US rivals. Milbank will, of course, remain a highly profitable, successful law firm. But the debate simmering inside its London office about the extent of its ambition is far from resolved.

marco.cillario@legalease.co.uk

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