Two peas in a pod? A closer look at Travers and Macfarlanes
6 June 2014 | By Natalie Stanton
7 April 2014
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9 June 2014
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24 March 2014
Is there any difference between Travers and Macfarlanes?
Travers Smith and Macfarlanes. Macfarlanes and Travers Smith. The two City firms are often thrown haphazardly into the same bucket labelled ’private equity strengths, conservative management approach and international outlook’.
It’s fair to say that the two firms do have their similarities. Both are historically known as serious corporate and finance powerhouses, each with its own loyal client-base. They have also managed to resist the lure of international flag-planting, preferring to pour their resources into their City offerings. Travers has a tiny base in Paris, but Macfarlanes remains a single-site London outfit.
Macfarlanes is the bigger of the two firms by revenue - in 2012/13 reporting a turnover of £114.2m to Travers’ £86.2m. It is also the largest by headcount. At the end of that financial year, on a full-time equivalent basis the firm had 255.7 qualified lawyers on board - of which 70.4 were partners.
For Travers, 64 of its 231 lawyers were members of the partnership. As a proportion these figures even out with a spooky similarity - Macfarlanes’ partners constitute 27.5 per cent of its total, to Travers’ 27 per cent.
But a quick glance at the firms’ in-bound partner traffic in recent years reveals a great deal about the two firms’ increasingly divergent strategies.
Firstly, the statistics demonstrate Travers’ dedication to organic growth. Over the past three financial years, the firm has remarkably made only one lateral hire - US securities specialist Charles Casassa from Clifford Chance. He joined in 2011 to bulk up the firm’s finance practice and provide multi-jurisdictional capacity for its private equity clients (February 2011).
Macfarlanes, on the other hand, has been on a lateral hiring binge of late, increasingly diversifying its practice. In both 2011/12 and 2012/13 the firm bought in two lateral partners. And over the course of 2013/14, this figure bounced up to six - half of whom joined its burgeoning commercial real estate group, which has been ear-marked for particular growth since 2011. Two partners joined private client, and one went into the firm’s commercial practice.
The pair’s approach to internal partner promotions is just as telling. If Macfarlanes is broadening its services to more than just corporate at the top end of its practice, it is also showing renewed commitment to securing its future pipeline of young talent in this area. Of the firm’s 34 new partners promoted since 2007, a total of seven were into its corporate practice - more than any other group within the firm. Of these, five were made up since 2012, as the corporate practice creaked back into action following the economic downturn.
Between 2008 and 2011 the firm instead turned to counter-cyclical practices such as debt finance and litigation. In fact, the firm’s finance team secured the second-highest number of new partner promos in the last eight years, scoring six in total. Bundled together, corporate and finance contributed to 38 per cent of the firm’s total partner promotions since 2007.
Since that year, the firm has also made up new partners into other practices: construction and pensions picked up one new partner apiece, litigation and tax both won three, while construction, property and private client and construction welcomed a combined total of 11.
Travers, on the other hand, opted to consistently throw its weight behind its corporate and finance practices regardless of the external economic climate. Together, promotions into the two groups comprised 49 per cent of the firm’s 39 promos since 2007.
Between 2008 and 2010, the firm stepped away from its banking practice, opting instead to focus on corporate finance and corporate recovery. However, from 2011 to 2013 it has made up clutch of new partners into its corporate and banking groups every year. The only anomaly is 2014, when the firm promoted only one lawyer specialising in both banking and corporate recovery.
Notably, the firm’s tax group gained four new partners during the period, while a re-focus on pensions ensured that three were promoted into that group. Private equity secured an additional two. The only practices on a slightly different slant were litigation, which won three partners, and IP, environment and employment which took two each.
The figures demonstrate the different approaches taken by the two firms over the past eight years. The larger firm has deliberately kept its foot on the corporate and finance throttle, while seriously bulking up other areas such as commercial real estate and private client - both at the top and bottom ends of its partnership.
Travers in contrast has been sticking to its knitting, orienting its single lateral hire and partner promotions heavily towards supporting its corporate and financial services client base.
Two peas in a pod? In some ways, yes. But in others Travers and Macfarlanes are more like chalk and cheese.