Are Manches' family ties to blame for property exodus?

After seven partner departures in twelve months, Emma Vere-Jones asks: can the firm recover?

It would be easy to assume that the first point on Louis Manches' list of New Years resolutions might read something like this: hire more property partners. After all, the head of property at Manches has suffered the defection of seven property partners in the past 12 months. The department at the moment can't be unlike the inside of David Beckham's head – a little empty.

And it's not as though Louis is going to be able to pick himself up a couple of partners in the new year sales – although rumour has it that there may be some Linklaters lawyers going at bargain prices. But Louis Manches needs to find some top-quality partners because a number of last year's departures were some of the department's top billers. The floodgates opened with the departure of Nigel Brown in February. One source said that Brown, who now heads Richards Butler's development projects unit, was one of the department's biggest earners.

Also understood to have made an impact was the departure of Peter Sugden to Mayer Brown Rowe & Maw. Sugden's clients included Green Property, Quintain Estates & Developments and Nestle, although Manches is understood to still be acting for Quintain.

Other departees are Oxford property partner Philip Horn, who has since set up his own practice with his brother. Derek Collinson also left for Howard Kennedy, Nick Brent went to Druces & Atlee, and newly made up partner Claire Hindley took up an in-house role while on secondment. Property litigator Paul Marco is to join the London arm of Halliwell Landau sometime early this year.

But if the department is to feel financial pain because of the departures, it didn't happen in the last financial year. For 2002 – Manches year end is 31 December – the property and construction teams combined brought in 36 per cent of the firm's overall turnover, somewhere around the £8.5m mark. Of this, real estate brought in around 27 per cent and construction about 9 per cent. This was slightly ahead of the team's budget, so despite the internal upheavals, work was obviously still getting done.

No doubt the department's fees were bolstered by a number of deals for new client Argos, which, The Lawyer believes, turned out to be 2002's most active retailer for the firm.

Other good generators of income for the department included long-term client WHSmith and property company Burford. US investor JE Robert Com-panies is understood to have produced one of the department's key deals for last year – a major joint venture with Grovesnor Estate.

With most of the departees not leaving the firm until the latter months of the year, it will be up to those coming on board to see if they can pull in the same kind of figures over the course of the next 12 months.

In the wake of the departures, Manches has poached Nabarro Nathanson partner Gerard Tomnay, whose clients include Abbey Life, Deloitte Consulting, HSBC, Daewoo Cars, GE Capital, Digiplex and Serco. The firm also made up senior associate Sloan Kelly, who joined from South East firm ASB Law around 15 months previously.

It'll need to find more than these two to fill the hole left by the departures – and Louis Manches says one new hire is in the pipeline. However, with the market “being rather strange” at the moment (in the words of Louis Manches), the firm may be hesitant to hire too many more at this stage. With one, or maybe two, new hires, Louis Manches says the team is pretty comfortable as it is.

While dealing with all these comings and goings, one important question remains unanswered: why did all those people go? A number of ex-Manches sources say that most of the departures were related to the leadership style of the department head himself and the overall management style of the firm. “Even within the management board itself, the power was held by three of four key players and they had something of a stranglehold on the equity,” the source said.

Those key players are understood to be Louis Manches, the son of the firm's founder, his sister Jane Simpson, and her ex-husband Alasdair Simpson, the firm's senior partner.

Another former partner said: “It's that group, and latterly more Alasdair Simpson, that had been very demanding. Alasdair is an old fashioned senior partner. Very good in some ways, but he didn't give enough scope for people to come through. That's my criticism.”

“It's still run as a family business,” said another. But one man's meat is another man's murder. Many partners still at the firm are great proponents of both the management style and the firm's 'family culture'. In some respects, last year's departures could be viewed as timely.

Louis Manches said he expects activity levels in the market generally to be sluggish this year, in which casehe'll no doubt be hesitant to bring on more partners without the work for them to do. It is more than likely that the firm will bide its time. Those still in the department will have their work cut out to generate enough work to fill the holes left by the likes of Brown and Sugden.