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So Allen & Overy (A&O) has become the latest magic circle firm to feel the wrath of local Italian lawyers.
The firm’s biggest Italian corporate rainmaker Roberto Casati this week announced his move, along with four assistants, to Cleary Gottlieb Steen & Hamilton’s Milan office.
While it is a huge move, the news itself is hardly surprising. For one thing, the Italian market has been gossiping about Casati’s ‘will he, won’t he?’ move for months and months.
The Lawyer reported way back in January that he was considering going to Cleary.
But A&O partners might also have had a nagging suspicion that a similar fate to that which befell their magic circle counterparts was waiting just around the corner. The evidence is simply mountainous.
First there was the infamous bust-up between Clifford Chance and Grimaldi. Last year, Freshfields Bruckhaus Deringer split from founding Milan partners Paolo Colucci and Giovanni Lega, and earlier this year Linklaters parted ways with long-time partner Gianni Origoni Grippo & Partners (which is now incidentally set for a tie-up with Clifford Chance’s former Italian tax ally).
A&O must have known the writing was on the wall.
Sources say the tension within A&O’s Milan office – and in particular within the corporate department – has been bubbling away for some time. Indeed, the cracks were probably forming before the firm restructured its Italian practice last August. In the restructure, Rome-based partner Massimiliano Danusso and European managing partner Stephen Denyer jointly took on the role of managing partner, a move which effectively sidelined Casati.
Casati’s loss will undoubtedly have a major impact on turnover in the Milan office. As one source said: “There’s a crisis, there’s no Casati.” Casati was the biggest corporate Italian rainmaker, with a dream client list that included Fiat, Enel, Prudential US, Lehman in Italy and Deutsche Bank.
It is estimated that Casati’s contribution to corporate turnover in Italy was a staggering 60 per cent.
But A&O may also be breathing a sigh of relief. While it will obviously miss Casati’s revenue (what firm wouldn’t), closing the door on a potential political power struggle is no bad thing.
Instead the firm will no doubt be pinning its hopes on Casati’s former corporate colleague Paolo Esposito. Esposito is understood to have been the next biggest biller behind Casati, and he has his own fair share of decent clients.
If Esposito has been affected by internal tensions, A&O may offer him a carrot to stay – perhaps the head of corporate role, a position currently held by Paolo Cerina, a younger and infinitely less powerful partner. Although A&O denies there will be any change in this role.
And what about Cleary? Is it a case of fools rush in where the magic circle dared to tread? Or does the US firm stand a better chance of maintaining equilibrium in Italy?
The common opinion on Casati is that he is motivated by power, not money. Based on A&O’s top of equity of £1.05m for last year, Casati will, at the top of Cleary’s 14-year lockstep, take home just over £1m.
Any concern about power struggles with US capital markets partner Michael Volkovitsch, who is joining Casati to make up numbers, should be allayed by the fact that he is a relatively junior partner and seems unlikely to challenge Casati’s authority.
But Cleary is not only very conservative, but very much run on a consensus basis. It will be very interesting to monitor just how smoothly the Italian integration goes.