Going up in the world
6 March 2006
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Clifford Chance's Peter Charlton is the man credited with handling the biggest logistical exercise in the history of the world's largest law firm. Some claim. As London managing partner of the magic circle firm, he oversaw the move of more than 2,500 staff from Aldersgate Street to Canary Wharf. Now Charlton has a different challenge on his hands. Last summer he swapped the London managing partner role for that of global corporate chief.
Charlton says leading the global corporate practice brings different challenges from those he handled when running the London office. "That's what attracted me to the job," he enthuses.
Charlton succeeded managing partner elect David Childs as global head of corporate following a contested election against Italian chief Nick Wrigley last June. Following soundings among the partnership, Charlton's name was the only one to emerge. But a week before the deadline, Wrigley declared his intention to stand - effectively pitting the London and Continental Europe constituencies against one another.
Charlton, who has a sizeable following (notably in London), plays down the level of support he received during last summer's election. "One of the things I've learnt about Clifford Chance elections is that that you can't be sure of success," he says modestly.
As revealed by The Lawyer (13 June 2005), Charlton's election manifesto underlined the corporate group's target of increasing revenue by at least 10 per cent every year. It focused on building synergies between Asia and the rest of the firm's global network, as well as growth in the Middle East. Since taking the helm, Charlton has added the US to his list of "growth hotspots".
Clifford Chance's original intention was to be a top 10 corporate firm in the US. Although Charlton argues that the firm is now in a reasonably good position in New York, he concedes that it must be realistic. Clifford Chance has now "toned down" its expressions of ambition in the US, he says.
In his manifesto, Charlton ended with a plea to partners to talk more to each other. Indeed, he is leading by example and has spent considerable time travelling between offices to meet partners so as to get them working more closely with each other.
Clifford Chance's global corporate turnover has hovered around 27 per cent of the firm's total in recent years. But Charlton wants this to increase to 30 per cent by 2009. "Three per cent doesn't sound like much, but in the context of Clifford Chance it's an additional £30m of revenue," he points out.
It is undeniable that the corporate group had a storming 2005. According to Thomson Financial, Clifford Chance claimed first place in the global rankings for M&A league tables for the first time last year after advising on 444 announced deals worth $490bn (£280.72bn). The firm's success was helped by a return to the top of the European league tables for 2005 with 286 deals, cracking the e300bn (£205.34bn) barrier and bumping Linklaters from the top spot.
But according to Mergermarket, Clifford Chance's European edge over Linklaters was reversed in the UK market as it slipped to third spot and under the e100bn (£68.45bn) mark with 104 deals, whereas Linklaters handled 110 transactions worth e122bn (£83.51bn).
"It's not as if we've fallen off the cliff. We're still in the top three. That's not the sign of an unsuccessful practice," argues Charlton.
But M&A league tables are just one way of measuring a corporate department's success. Examining a firm's client list is equally important.
While Clifford Chance's London corporate practice is known for its stellar private equity practice, the firm has not made the same inroads into the FTSE100 as its rivals.
According to research conducted by Hemscott, Clifford Chance has four FTSE100 clients. In stark contrast, Slaughter and May and Linklaters have 32 and 20 FTSE100 clients respectively.
"It's clear we haven't got the FTSE100 client base that some of the other big City firms have," concedes one Clifford Chance insider.
But a rather bullish Charlton insists that the corporate group acts for at least half of the FTSE100, even if the firm might not be listed as the companies' primary corporate adviser. "The FTSE100 is not just what it's all about - it's wider than that," he claims.
It is undoubtedly more difficult to pick up listed companies as clients because many of their relationships date back years. Clifford Chance has therefore focused on strengthening its relationships with investment banks and building relationships outside the UK with clients such as Axa, Carrefour, Deutsche Telekom and Siemens.
And to be fair, this strategy is paying off. In recent months Clifford Chance has advised on several big-ticket cross-border M&A deals, including advising Endesa, which is currently the target of two separate takeover bids, and Copenhagen-listed TDC on the $12bn (£6.87bn) recommended takeover by a private equity consortium - the largest private equity deal announced in Europe this year.
Meanwhile, last summer the corporate group advised BPB on its defence against a hostile, but ultimately recommended, £3.9bn takeover bid from Saint-Gobain and Denmark's Moller-Maersk on its E2.3bn (£1.57bn) takeover of Koninklijke P&O Nedlloyd.
Charlton and his predecessor Childs have a close working relationship, and it is no coincidence that their policies are quite similar. As one partner puts it: "Peter's a very energetic guy. He's reinvigorated the role."
Charlton's handling of the move to Canary Wharf highlighted his ability to rise to any task, no matter how big. With the upturn in the M&A market, who would bet against him achieving his goal?