Can Scott attain Herbies’ Gold standard?
11 January 2010 | By Luke McLeod-Roberts
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When incoming Herbert Smith senior partner Jonathan Scott was an undergraduate at St Catharine’s College, Cambridge, he was known for his affability and thoughtfulness rather than his rowdiness.
“He was an intelligent, thoughtful, friendly guy, always interested in what you were doing,” recalls a lawyer and fellow St Catharine’s alumnus, who adds: “He wasn’t a linchpin of the drinking society.”
Thirty years later Scott is poised to succeed Herbert Smith senior partner David Gold after a career built entirely at the City firm.
The traditional ambassadorial duties associated with the senior partner role mean that a first in drinking might arguably not have gone amiss; but it is probably fair to say that strong social skills and the ability to listen are probably just as, if not more, germane.
“It’s essential to be seen as fair and evenhanded and to not have favourites,” says Lovells senior partner John Young on the necessary qualities required to be a senior partner. “You need to make sure that the owners of the business are properly looked after.
“In an unofficial way you tend to be a repository of a lot of secrets - for example, if partners are going through a tough time. So you tend to be a shoulder to lean on.”
But Herbert Smith has only recently created the managing partner role, with incumbent David Willis having done his best to carve out a niche while serving under Gold’s limelight. It is fair to say, then, that the respective duties are yet to be established.
“You need social skills to be a good senior partner,” says Clifford Chance senior partner Stuart Popham. “Otherwise you want contrasting capabilities to play off each other’s strengths.”
Scott may have won the support of the majority of the partnership, and he and Willis are thought to get on well, but with a list of challenges facing the firm that go to the heart of its very identity, one consultant thinks a bit of friction could be to their - and the firm’s - benefit.
“Provided they communicate and exchange ideas, I think it can be healthy,” argues the consultant.
Herbert Smith is the eighth-largest firm in the UK and last year recorded a turnover of £444m. At £845,000 the average profit per equity partner (PEP) figure was down on 2008’s, falling below the £1m level, but among the largest 25 firms only Allen & Overy, Freshfields Bruckhaus Deringer, Linklaters and Slaughter and May were more profitable.
In terms of the complexity of work and the nature of its clients, Herbert Smith is a direct competitor to this elite group. In recent months it advised Credit Suisse and UBS on Barratt Developments’ rights issue and JJB Sports on a capital injection. The firm provided corporate advice to French energy giant EDF on the acquisition of British Energy and the sale of a 20 per cent stake to Centrica. New panel appointments include joining the UBS and Treasury rosters.
Pushing the firm’s international focus was one of Gold’s ambitions, and in this respect his report card was mixed. Last year he oversaw the launch of a Madrid office with a group of Linklaters hires and the previous year secured a Saudi association, but was unable to persuade alliance firms Gleiss Lutz and Stibbe to agree to a merger. Germany’s Gleiss Lutz was not keen and for Herbert Smith joining with Benelux firm Stibbe alone would have been insufficient.
The US is another big question mark. While Herbert Smith and Lovells are roughly neck-and-neck in terms of revenues, the signing of the merger between Lovells and US firm Hogan & Hartson will alter this.
Herbert Smith’s strong litigation reputation and profitability would allow it to make headway on the US front if it wanted to. Scott’s experience abroad (he set up the Brussels office in 1989 and remained there until 1994) will add weight to any global pretensions. But he and Willis will have to be united to make a case to what fundamentally is a conservative partnership. The firm’s executive is broadly internationalist in its outlook, but this may change when the roles occupied by Sonya Leydecker, Jason Fox and Michael Walter as respective heads of litigation, finance and corporate are put up for grabs in elections later this year.
According to one source close to the firm, “around 20 per cent of the firm wants to give up international and become a Slaughter and May”. This is in reference to the latter’s unique international strategy.
Herbert Smith is heavily undergirded by its top-brass reputation in litigation, which last year accounted for over a third of total turnover and a similar proportion of its total partners. But what is seemingly an asset is also a weight around its neck.
As the consultant puts it: “It’s always been quite schizophrenic regarding litigation, switching between being proud and playing it down. I don’t see why you couldn’t credibly say, ‘We’re very good at litigation and fundamentally a strong corporate and finance firm’. Why not play to your strengths?”
Gold could hardly be accused of emphasising litigation to the detriment of other practice areas: one of his goals as senior partner was to increase revenues from finance as a proportion of total income. Nevertheless, having one of the City’s most impressive - and feared - litigators at the head of the firm may have had an impact on the way the firm was perceived externally. In contrast, Scott’s competition specialism and links to the corporate practice may reconfigure this.
The former Cambridge alumnus agrees that his friend Scott may not be radical, but he does not see this as a disadvantage.
“I don’t see him as a trailblazing kind of guy,” he says, “but I do see that David Willis and the firm are keen to move on and do things, albeit in a Herbert Smith type of way.”
Jonathan Scott’s CV
1988: Competition partner
1989-94: Head of Brussels office
1997-2000: Graduate recruitment partner
1996-2007: Head of the EU/competition practice
2010: Senior partner