Slaughter and May

UK 200 RESULTS 2010

Slaughter and May remains an enigma in the City. The firm does not reveal its financial results, but with the corporate engine room stuttering of late, The Lawyer estimates that revenue fell by around 13 per cent during 2009-10.

Slaughters’ previous year’s performance was helped in no small part by its work for HM Treasury, ­primarily due to corporate big-hitter Charles Randell. That flow slowed somewhat in 2009-10, although Slaughters did win a role for the ­Treasury on its ­agreement to subscribe to £25.5bn of RBS shares, emphasising the fact that that particular well had not run completely dry.

The early part of Slaughters’ financial year was ­dominated by restructurings, with the finance arm outperforming other departments. Dispute ­resolution also had a good year, while competition performed well. M&A activity, still the firm’s strongest suit, remained thin on the ground.

Nevertheless, Slaughters did win roles on its fair share of big-ticket transactions. Among the most lucrative was a mandate for Cadbury on its ­ultimately unsuccessful defence of a hostile takeover bid from Kraft. M&A head Steve Cooke, who led the defence, remained as busy as any City partner. Other major pieces of work included advising BA on its tie-up with Iberia, while the year-end brought a role for ­Prudential on its ­cancelled £14.5bn rights issue and attempted ­purchase of AIG in Asia.

While Slaughters is still largely UK-focused, the Asian side of the business has become more important of late. Turnover was up for the Hong Kong office, while the firm continued to bed down in its Beijing base. The importance of Asia was confirmed in this year’s partner promotions round, which saw the firm make up one City and one Hong Kong corporate ­partner.

Another sign of a changing landscape at this ­traditional firm was the news last year that it was in talks to outsource some low-level legal work.

Strengths
Slaughters’ traditional strength has always been M&A. Last year, however, the multidisciplinary training of the firm’s lawyers began to pay off as some of the juiciest mandates came from the finance side, with restructurings and capital raisings propping up performance.

Weaknesses
While lack of diversity in terms of both geography and practice area has not proved a big hindrance in the past, that could be about to change. The firm can only keep achieving for so long without a healthy M&A market to back it up. The closure of the Paris office last year – a long time in the offing – shows that the firm’s toe-in-the-water international strategy might have become anachronistic.

UK 200 RESULTS 2009

Slaughter and May does not disclose its financial figures. But insiders at the elite City firm were prepared to say it had its best-ever year in 2008-09.

Quite an achievement considering that Slaughters is essentially a large corporate boutique. M&A is its lifeblood, although the firm’s partners are, famously, generalists who will advise on anything their large listed clients require.

A major sources of revenue in 2008-09 was the UK Government. A Freedom of Information request submitted by The Lawyer found that Slaughters pocketed £22m from the Treasury between November 2007 and March 2009.

Corporate stalwart Charles Randell leads the relationship and was called it for some of the most important Government interventions since the war, advising on the near-nationalisation of parts of the banking sector.

Elsewhere the firm made up for the lack of large deals by providing behind-the-scenes advice on the recession for its biggest clients. Less lucrative than M&A, but as Slaughters acts for around a quarter of the FTSE100, it was a vital source of income.

In what was perhaps the most surprising office opening of the year, Slaughters launched in Beijing at the end of 2008. However, that did not signal a move away from its London focus – like Slaughters’ other overseas offices in Brussels and Hong Kong, the single-partner Beijing branch will mainly service the ‘best friends’ network of exclusive alliance firms.

It is notoriously difficult to make partner at Slaughters, but once there the rewards are great. The firm operates the most traditional of locksteps. All partners are given a share of the equity, with the average profit share at £2.25m – the highest in the UK 200 table. Partners start on 1,000 equity points, moving up automatically by 100 points a year until they reach the plateau level of 2,000 points.