BLP defiant as exits mount
20 August 2013 | By Natalie Stanton
The exit of private equity heavyweight Raymond McKeeve has put the spotlight on Berwin Leighton Paisner’s corporate group. What’s next for the firm?
Private equity rainmaker Raymond McKeeve is the latest high-profile departure from Berwin Leighton Paisner (20 August 2013) – the last of about 27 partners to have had their LLP appointments terminated since November 2012, according to the firm’s filings at Companies House - although the firm says 16 partners have gone in that time.
While these came from all corners of the firm, it is fair to say that the transactional side has had a particularly hard slog.
Departures include outsourcing partner Craig Rattray who left for Oslwang (8 October 2012); finance partner Rob Salter who defected to DLA Piper; head of international structured finance Tamara Box who joined Reed Smith (21 December 2011); and project finance chief Philippa Chadwick who went to Squire Sanders (19 December 2012). Real estate also suffered, losing Angus Ford, John Kelsey and David Johnston to Eversheds (20 April 2012), Simmons & Simmons (13 March 2012) and RPC respectively.
How is McKeeve’s exit going to affect the firm’s private equity offering?
Despite market noises that McKeeve would walk out with a team, BLP corporate head David Collins was defiant: “I certainly hope no one will be going with Raymond McKeeve,” he stresses. “Nothing has come across my desk that leads me to believe there will be other departures. There has been a lot of positive change within the group.”
And how will McKeeve fill the gap left by the private equity supremo? “I don’t think there is a gap,” says Collins. “There are strong individuals in Alan Paul, Catherine Shirley and Michael Weir. We have three very strong private equity partners with good pedigrees.”
He continues: “We see laterals as making an investment in our business. We have a very strong team now, and we intend to invest further. I think we’ve grown and evolved the business through homegrown talent and lateral hires.”
In fact, across the corporate sphere in general the firm has been splashing the cash in recent years. Last year it bought in heavy-hitters including Linklaters’ former global head of corporate David Barnes in February 2012 (27 February 2012) – now the firm’s corporate finance head – and the aforementioned Alan Paul from Allen & Overy (24 April 2012).
Even though Barnes and Paul had already retired from their respective firms, there was still competition to attract their talents: Latham & Watkins is understood to have made a serious offer to Paul, while Barnes mulled consultancy jobs before plumping for BLP, which he has joined as a partner. Both are understood to have been brought into the firm on £800,000 packages, with Paul joining as a special consultant.
One source close to the firm comments: “I think they’ve bought in more than their fair share of trophy folks. They’re under pressure to deliver, and they’re bringing down the profitability of the practice.”
That said, the source adds: “They might not bring in any names as big as Raymond McKeeve going forward.”
Despite the hire of some heavy-hitting partners over the past financial year including Nabarro funds specialist Justin Cornelius (9 July 2012), M&A specialist Kyle Davis from Akin Gump Strauss Hauer & Feld, and Norton Rose corporate partner Julian Stanier, it seems the firm is focusing recruitment at lower levels (3 September 2012).
Collins says the corporate practice was “mildly affected” by the firm’s recent redundancy consultation, with about five corporate roles being cut across corporate finance, restructuring and M&A. In total, the firm axed 102 roles, including 58 legal positions (5 July 2013).
Of the nine new partner promotions in 2012/13, almost half were in the firm’s corporate group – three in London and one in Moscow. The tax practice saw two senior associates made up to partner, while finance, litigation and real estate took one apiece (7 March 2013). It is also understood that the firm is on the market for new junior associates for corporate positions.
Will this focus help bolster the firm’s corporate offering? BLP managing partner Neville Eisenberg told The Lawyer in July: “Our contentious lawyers continue to be busy, but the transactional side is quieter although real estate is doing reasonably well. Growth in finance, capital markets and banking have been softer over the last financial year.”
In fact, a glance back to 2011 demonstrates that corporate work generated about 31 per cent of the firm’s total revenue – 30 per cent in London. However, in both 2011/12 and 2012/13 this dropped to 27.6 per cent globally, and 23.5 per cent in its UK headquarters.
Collins seems to think this approach is paying off. “It’s been a good quarter, but one quarter doesn’t make a year,” he says, adding: “We have a nice broad based platform and we’ve had a good workflow in Q1. If the market remains reasonably active into Autumn and the next two quarters, it’ll be a productive year.”