Aknin’s shock departure opens can of worms at Linklaters Paris

Paris private equity star’s move to Weil should serve as a wake-up call, says Dearbail Jordan

Linklaters Paris” />Just when things seem to be going right, along comes a big, fat fly to land in your ointment.

The departure of Linklaters’ Paris private equity star David Aknin to Weil Gotshal & Manges (The Lawyer, 3 November) has been an almighty jolt for the magic circle firm, arriving just as management appeared to reach the end of a wide-sweeping internal restructure.

The French legal market itself was shocked by Aknin’s decision. As one partner said: “It’s started a feeding frenzy in Paris; it’s opened up a Pandora’s box.”

A number of US firms are kicking themselves for not grabbing Aknin. And those US firms that approached him (there were a few), only to be politely rebuffed by the lawyer, must be wondering what more they could have done to entice him.

The fact that Aknin, always thought to be the epitome of a Linklaters partner, could make the leap has certainly given some US firms hope that other embedded Parisian private equity stars could be tempted away.

Ashurst Morris Crisp’s Thomas Forschbach, Willkie Farr & Gallagher’s Daniel Payan and niche practice NomoS’s Monique Sentilles-Dupont may find themselves the subject of many an enquiring phonecall.

But for Linklaters, the prising open of its own Pandora’s box by the Aknin exit could threaten to unleash its own swirling mass of demons.

Aside from the symbolism of Aknin’s move – younger generation, rising star, making a name in a highly competitive market – the pressing question is how the departure could impact on Linklaters’ growing private equity effort in London.

No one can deny that private equity partner Graham White has made huge strides in building a practice that, prior to his arrival, had been a gaping hole in the firm’s skill set.

Before September 2001, when White, formerly with SJ Berwin (he also practised for years at Dickson Minto), along with senior associate and longtime colleague Raymond McKeeve, joined Linklaters, the magic circle firm had only concentrated on downstream work.

This consisted mainly of acting on fund formations for the likes of BC Partners. But with White et al, deals for Guy Hand’s fund Terra Firma Capital Partners and for CVC on the hard-fought fight for the purchase of Kwik-Fit have materialised.

More recently, Candover, normally a mainstay client of Clifford Chance and Ashursts, instructed Linklaters on the acquisition of a major share in Anglo-Dutch bank Insinger de Beaufort.

But the fact that the London private equity group is still quite young may negate any negative aftershocks brought about by Aknin’s departure.

At present, it is just two partners (including Aedamar Comiskey) and is highly leveraged with around 10 associates. No doubt the private equity group could bulk up on people: with the backing of Linklaters’ head
of corporate and political heavyweight David Cheyne, resources are not a problem.

White, however, seems to be taking a cautious approach to growth, preferring instead to concentrate on gaining market share – indeed, his marketing prowess is fast gaining mythical status in the City.

Since White has ostensibly concentrated on his domestic private equity contacts as the practice continues in build-out mode, the cross-jurisdictional deals have not as yet been prevalent.

Although, having said that, Linklaters London and Paris did work together on the Kwik-Fit deal, for example. And although White and Aknin do share some clients, such 
as Montagu Private Equity, these relationships are very much locally based for each partner.

There is, however, a flip side. As one lawyer said: “If you don’t have the local name, you won’t get the work.”
This could raise concerns for Linklaters, since France has been literally bulging with private equity work over the past 18 months or so.

Law firms thrived last year. According to French legal magazine Decideurs Juridiques, Ashursts’ Paris office, for example, recorded a monumental 50 per cent jump in revenues to £21.3m.

In 2002 Linklaters saw total billings rise by an enviable 15.8 per cent to £47m, helped, no doubt, by its private equity practice.

Bear in mind that e5.8bn (£4.07bn) of equity investment was sunk into French businesses. A large part of this came from the e4.9bn (£3.44bn) purchase of Legrand by KKR and Wendel Investissement – a transaction that sent team leader Aknin’s name into the stratosphere.

It is also understood that Aknin alone billed £5m, 10.6 per cent of Linklaters Paris’s total turnover for the last financial year. This was more than even Thierry Vassogne, the firm’s prolific but mercurial corporate
rainmaker, who according to sources notched up £4.5m.

For the first nine months of 2003, Aknin has been rated third by mergermarket in terms of the number of deals he was worked on during the period.

Undoubtedly, Aknin, in financial terms as well as marketing clout, is a loss: his client list alone reads like a dream and includes PIA, Permira, Apax and Candover.

However one can’t help thinking that London’s private equity group will continue to rise above this – there are three other private equity partners in Paris that White and his group can work with when hopefully more cross-jurisdictional work comes through the door.

But for Linklaters’ Paris office the impact is greater. The departure of Aknin, a well-liked partner within the firm’s London and Paris offices, follows Roberto Cristofolini, a capital markets partner who left for Latham & Watkins earlier this year.

In late 2002, finance partner Eryl Besse went to Debevoise & Plimpton, joining former Linklaters capital markets partner Pierre Clermontel in the process, who joined the US firm in 2000. Losing four partners in three years, with Aknin as the icing on the cake, is a worrying trend.

If there are intrinsic problems within Linklaters’ Paris office, the firm’s overall management must resolve them. Yes, the firm is a juggernaut and can ride out departures of Aknin’s stature, but too many hits in a market as incestuous as Paris could be highly damaging.