Allen & Overy (A&O) has recalled its entire Canary Wharf-based corporate team after what one source called a “failed experiment” in building corporate relationships with Canary Wharf’s investment banks.
Eight corporate partners and around 40 other staff are vacating a floor at Canary Wharf and returning to New Change. In their place, the firm’s entire London-based projects group, comprising around 80 lawyers, is relocating to Canary Wharf. Litigation staff are also returning to New Change.
It is understood that the move was prompted by disaffection among Canary Wharf’s corporate lawyers over being separated from New Change and their failure to effectively target investment banking clients.
A&O opened in Canary Wharf in 2003 to be near the estate’s banks and, as a defensive play, to keep Clifford Chance from marketing to its financial clients. Institutions resident on the estate include Barclays Capital, Citibank, Credit Suisse First Boston, HSBC, Morgan Stanley and Lehman Brothers.
One A&O source said: “Since opening there, we’ve begun to realise what can and can’t be done in Canary Wharf. Mere geographical presence isn’t enough. You need the right contacts going on. The corporate people just couldn’t make it work.”
The move follows a difficult period for the corporate group. As exclusively revealed by The Lawyer (25 October 2004), the firm’s banking partners last year issued an ultimatum to the corporate group to get its house in order after corporate had recorded a net loss of some £10m in the previous financial year.
However, sources at the firm say the corporate group’s performance has improved significantly in the intervening period after securing a number of high-profile mandates.