BLP drafts in MacGregor to lead high-end property drive
8 November 2004
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After spending months denying that the firm was searching for a new figurehead for its property team (one of the worst kept secrets in the legal market), BLP has made an abrupt about-turn and now claims to have always been upfront about wanting to make a significant lateral hire into the team.
MacGregor’s appointment is sure to restore some of the industry’s esteem for a firm whose reputation was damaged by this rare PR bungle. And as one of Clifford Chance’s key lawyers involved in the mammoth Canary Wharf deal, his appointment is also likely to alleviate the growing concerns within the industry that BLP was shifting its focus away from property.
For BLP, the appointment is a cunning strategic decision. It allows the firm to reaffirm its commitment to real estate while also bolstering its corporate and finance practices (which have been a focus for the firm over the last three or four years) by strengthening the real estate support functions available to the two practice groups with a rated transactional lawyer.
On the other hand, MacGregor’s decision to move from a magic circle giant to a mid-sized firm is sure to cause more confusion, although this will be tempered by the public knowledge that BLP offered him a three-year deal worth £800,000 to secure his services. The move can probably be explained by a desire to branch out into a leadership role and develop a practice group of his
own, combined with the apparent unhappy state of Clifford Chance’s real estate practice.
BLP managing partner Neville Eisenberg says the firm encouraged MacGregor to move by reassuring him that his role as head of real estate would be largely client-facing, enabling him to "lead by example", with only a small proportion of time spent on management and administration matters.
"This is not a heavy management role; we’ll deal with that in other ways," claims Neville.
But just how the firm plans to deal with the management and administration side of things is still unclear. Until Clifford Chance releases MacGregor from his current stint of gardening leave and allows him to join officially BLP, there is no way to verify these claims.
It is likely that deputy head of real estate Claire Milton, who stoically stood in and led the real estate team when Philip Bretherton stood down from the role in March 2003 to concentrate on client work, will also continue with some external management duties.
Offering others in the property team the opportunity to participate in the management of the group could ease some of the potential problems that can arise when an outsider is brought in to lead a team. This should assist MacGregor greatly because, unlike many lateral hires, he is moving without any of his team from his previous firm.
As such, MacGregor appears to have been chosen as much for his leadership skills as his experience of dealing with premium real estate transactions. And Eisenberg is clear that this is where the firm’s priorities for the real estate practice lie.
"We’re looking to add to the real estate practice in terms of more high-end, complex finance and corporate-driven real estate transactions and increase the firm’s market share at the high end," says Eisenberg.
This is an area that BLP has not yet cracked, but it is considered crucial for the firm’s future success. This is because M&A and finance-related property matters, such as real estate fund management, are undoubtedly a booming and highly lucrative area within the legal market.
BLP also believes that increasing its depth of penetration in top-level real estate will also enable the firm to achieve a competitive edge by offering a one-stop shop of consistent legal advice on all real estate matters, from the largest corporate-led transactions to simple lease agreements.
While Eisenberg claims that he does not want the firm’s developing interest in high-end matters to "dilute" its core focus on traditional real estate development, it does follow the firm’s widely publicised three-pillar strategy of developing more equality between the firm’s finance, corporate and real estate practice groups.
This strategy appears to have been successful in that corporate and real estate now share 40 partners apiece, while finance trails only slightly with 35 partners.
However, the strategy has, perhaps, had a negative impact on staff and partner retention in the property department. Staff dissatisfaction with the refocusing has probably contributed to a spate of departures, with partners Daniel Lipman, Rachel Phillips, Terry Fleet and Steven Williams all quitting in recent months.
So the question is: will bolstering the corporate and finance support side of the real estate practice have a more detrimental impact in terms of staff morale, or will the benefits offered to the firm’s clients outweigh any potential problems?