27 February 2006
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First things first. It is undeniable that Linklaters' corporate practice is having a great year. But who deserves the credit for this recent success? Is it down to the leadership of David Barnes, the global head of corporate, or his predecessor David Cheyne? Or has Linklaters simply got lucky?
There is no denying that Barnes, who succeeded Cheyne in May 2005, has inherited a department that is in an unusually strong position. Linklaters' astonishing return to form in 2004-05 was entirely down to the corporate group, the revenue of which jumped 12 per cent to £322m. And this year the magic circle firm's global revenue has kept pace with that increase, seeing another 10 per cent hike at the half-year stage.
The corporate department's recent deal highlights include advising Gazprom on the $13.09bn (£7.48bn) acquisition of Sibneft, the largest M&A deal in Russian history; successfully defending Gold Fields against an $8bn (£4.56bn) hostile takeover by Harmony; and advising Allied Domecq on the bid by Pernod Ricard and Fortune Brands.
Cheyne, who was in the role for five years before passing the mantle to Barnes, is one of the most high-profile corporate partners in the City and the man who is responsible for reshaping Linklaters' corporate practice into a leaner and meaner operation.
In constrast, Barnes, whose client list boasts BT, Sainsbury's, HSBC and Hong Kong-based conglomerate Jardine Matheson, has a considerably lower profile, both inside and outside the firm. And unlike Cheyne, whose leadership style is viewed by many as aggressive, Barnes is more focused on building consensus inside and outside London. "Cheyne's a very dynamic and inspirational character. Barnes is more methodical," says one Linklaters partner.
Barnes, however, argues that his leadership style is not that dissimilar to Cheyne's. "Although our practices have developed around different people, I have a great working relationship with David," adds Barnes.
Barnes has hardly brought about a revolution in Linklaters' corporate practice since taking the helm. As one former Linklaters partner puts it: "David has just kept the ship at sea."
Other than shuffling a few partners around, the changes introduced by Barnes are principally administrative. But to be fair, by the time Barnes took over from Cheyne the controversial restructuring of the corporate practice was all but complete. Under Cheyne's leadership, the relentless focus on performance saw the number of partners and associates in the London corporate practice drop as a result of a number of managed exits.
Towards the end of Cheyne's leadership the firm shifted London-based corporate partners between the four mainstream corporate groups. According to Barnes, this was done "to ensure that each group has a good mix of partners and clients".
But there are also historical reasons for the shake-up. For instance, the move saw partner Charlie Jacobs move up to the fourth floor, which houses the corporate groups that are now headed by Jeremy Parr and Derek McMenamin. Linklaters' decision to move Jacobs, who is popular with the firm's younger lawyers and trainees, is a result of the unfortunate nickname these groups once attracted. Each was branded the 'group of death' because no trainees wanted to qualify into them. (Barnes laughs nervously at this suggestion and declines to comment further.)
Another hallmark of Cheyne's leadership was his cohort of junior partners, such as Jacobs, Iain Fenn and Clodagh Hayes. Cheyne, who is himself considered a maverick within the firm, encouraged junior partners to do their own thing.
"Cheyne has always been good at sharing clients with junior partners," says one Linklaters partner, who claims that this simply does not happen at other firms. For instance, Cheyne shares the Vodafone and BP relationships with Fenn and Lee Taylor respectively.
Barnes adheres to Cheyne's approach of grooming junior partners and then sharing client relationships with them. However, he lacks his predecessor's band of arch loyalists and is considerably more clubbable. "Everyone loves Barnes," reveals one Linklaters insider. "He has no enemies, so if Barnes asks you to do something, you'll do it."
Barnes' biggest task now is to replicate the corporate group's reputation in the City to Linklaters' overseas offices. "Although the UK market is tremendously important, I want Linklaters to take advantage of the current market conditions to knit its international network together," he emphasises.
In addition to the opportunities in New York and China, Barnes is also focused on rebuilding Linklaters' presence in the Netherlands and Italy following the split from its alliance partners.
Barnes says he supports Linklaters' strategy of building its own New York practice. The firm has just four corporate partners in New York at the moment, but Barnes hopes this will increase to between eight and 10 over the next four years through a combination of lateral hires and internal promotions. He sees no need to break the lockstep, arguing that, with its current level of profitability, the firm will be able to attract decent lateral hires.
Barnes is also eager to re-enter the Italian market following Linklaters' split with Gianni Origoni Grippo & Partners. He declined to comment on the firm's talks with Milan-based M&A boutique Giliberti Pappalettera Triscornia e Associati (The Lawyer, 16 January). However, he does admit that, if necessary, Linklaters would be prepared to merge with a domestic Italian firm.
Meanwhile, under Barnes' leadership, the firm has continued to rebuild its Dutch practice with the appointments of corporate partners Pieter Riemer and Peter Goes from Allen & Overy and Nauta Dutilh respectively.
Thanks to Cheyne's radical restructure of Linklaters' London corporate practice, the group is once again enjoying its place in the sun. Barnes must now focus on exporting this success to the firm's overseas offices. So he might have to start a revolution after all. n