Creativity and forward thinking make BLP Law Firm of the Year
28 June 2010 | By Luke McLeod-Roberts
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Berwin Leighton Paisner (BLP) is one of those firms that divides market opinion.
Its policy of bringing in high-profile laterals has helped in its bid to act for better-quality clients, but some have questioned whether this is at the expense of internal cohesion.
It has been ambitious on the international front, investing in 70 Russian partners to create the first firm there to practise both international and local law. But the fact that this took place when Russian markets were plummeting, and that Moscow became the latest addition to a hybrid international presence, has provoked questions about whether it has a clear strategy undergirding its international expansion.
With core practices in real estate, corporate and finance, BLP was as badly hit as any of its peers during the recession. Between the 2007-08 and 2008-09 financial years, it posted a fall in turnover of three per cent, a dive in average profit per equity partner (PEP) of 33 per cent and a profit margin slump from 28 to 19 per cent. This year’s results suggest that may have been a blip on an otherwise upward trajectory (see BLP and its peers, page 5).
But it is the firm’s ability to respond creatively - not only to the recession but also to anticipate major changes in the legal market as a whole - that deserves credit and is the reason behind its winning Law Firm of the Year at The Lawyer Awards last week.
Even before the collapse of Lehman Brothers in 2008, and the much-cited chain of events that have triggered downward pressure on fees, BLP launched Lawyers on Demand. This initiative creates a pool of flexible contract lawyers, offered to clients for specific assignments.
Income from Lawyers on Demand grew this year, but it still accounts for a small part of overall income - less than two per cent. In part the scheme is a recognition of the fact that there is a growing contingent of middle-ranking associates who want more work-life balance than is offered by the average City practice.
Supply and demand
Its commercial value, however, lies in the way in which it meets the growing desire for disaggregation of legal services from clients and to the opportunities offered by the Legal Services Act. It allows BLP to engage with new clients and enhance existing relationships. One consultant highlights the firm’s ability to grasp the turn of events, saying that “Lawyers on Demand is where things are going”.
Another development in this area is Managed Legal Services (MLS). BLP says it can take over the entire legal department of major clients and is set to do so with Thames Water in a deal that will generate £5m a year for the firm over five years.
The deal offers secure long-term income to BLP, a high-quality outsourcing option for the client and career progression for in-house lawyers within the BLP structure.
Full-service firms Ashfords and Pannone have been signed up to deal with the commoditised work.
Managing partner Neville Eisenberg says MLS gives the firm “a way of engaging with large buyers of legal services in a different and creative way”. Buyers of legal services in a number of sectors are reportedly interested and are doubtless watching how the Thames Water deal evolves. Expansion will focus on “larger companies and financial institutions” because it is “more appropriate for those with fairly large legal spends”, according to Eisenberg, but he doesn’t rule out dealing with defined areas for a major client, or even working with the public sector.
BLP wouldn’t have been able to offer this service were it not for its policy of creating a full-service practice with all the appropriate corporate service areas and filling it with high-quality partners. That policy has been controversial because of perceived divisions it creates between laterally hired heavy-hitters on better than average remuneration packages and home-grown talent.
However, notwithstanding redundancies last year, a high retention rate for all staff suggests the policy has a strong level of employee buy-in. Some have also questioned the logic of hiring so heavily during a recession (the firm has brought in 15 partners since January 2009). There is usually a bedding down time before hires bring in anticipated volumes of work, but previous experience indicates that BLP is able to identify people who will bring in work for the rest of the firm. Tax partner Michael Wistow, for example, who joined in 2007 from Clifford Chance, has overseen year-on-year double-digit growth in that area and snatched clients from the magic circle firm, including Blackstone and the National Pension Service of Korea.
This brash approach to seizing market opportunities is seen as evidence of the firm’s entrepreneurial culture. One recruiter says of the firm: “It’s entrepreneurial, can-do, business-like, opportunistic. If there were a downside, I’d say [BLP partners have] become a bit overconfident. What makes it different is that it doesn’t have the baggage of history the magic circle has.”
A lot of that entrepreneurial drive is put down to Eisenberg. “There’s a clarity about where he wants to take the firm, and a preparedness to take difficult decisions when necessary and keep pushing up-market,” says the senior consultant.
But what is the clarity of vision that unites small offices in mature markets of Brussels and Paris, a large offering in Moscow and outposts in Abu Dhabi and Singapore, along with a best friend network?
“Our international strategy basically breaks down into two parallel strategies,” explains Eisenberg. “The first one is emerging markets - that’s where we expect growth to be over time. The other is how we deliver capability to our clients - and that’s with preferred firms. They’re not just a list of firms; we manage our relationships very actively.”
And the branded offices in mature markets? “Brussels is pretty much run as part of the London team,” says Eisenberg. “The reason we have a presence there
is because of EU and competition law. In Paris we thought it would be helpful to develop relationships with western European law firms and have somebody on the ground managing and developing those relationships.”
Eisenberg says the firm is not looking to add capability in either jurisdiction.
BLP’s international footprint may be less substantial than other silver circle firms, but fans think it has overtaken competitors such as CMS Cameron McKenna and Simmons & Simmons in brand terms. Nevertheless, even those who praise the progress BLP has made believe its corporate department still lags behind that of firms such as Ashurst, Herbert Smith, Macfarlanes or Travers Smith.
Eisenberg agrees there is room for improvement. “Growing corporate, finance and M&A is a long-term and important strategy for the firm,” he says. “Over the last 18 months it has been a very difficult market into which to do that. We’ve also been putting in place specialist areas such as high-quality tax, employment and competition - you need all these pieces in place.”
The firm’s chief is non-committal when asked what he will do once his current (and fourth) term is over in 2012, saying, “there may be ways I can help at the firm” but that, ultimately, it is a “decision for the partners”.
Given his success over the last decade, it wouldn’t be a surprise if the partners decided on a fifth term.
Lives: North London
Completed articles: 1984
Qualified: 1987 (South Africa); 1991 (UK)
Employment: Joined Berwin Leighton, 1989
Managing partner: 1999-present