US firm Cleary Gottlieb Steen & Hamilton is not one for hiring and firing. So while the departure of two partners and the arrival of another hardly represents the beginning of a revolving door policy at its London office, in the context of the firm’s history the moves are significant.
While Ash Qureshi’s departure to become a client at Renaissance Capital will have hurt Cleary’s City capital markets team, it is competition partner Shaun Goodman’s move to Howrey that might mark a more significant shift for the US firm’s London strategy.
His departure leaves Cleary with no full-time competition partners in the City. Nick Levy and Romano Subiotto QC both divide their time between London and Brussels but there are no immediate plans to build up the UK practice in and of itself.
“We want to grow it, but we don’t want to do it overnight,” says Levy. “While we’d like to grow the antitrust capability in London, the absence of a partner hasn’t in the least been a problem before and it won’t be in the future.”
But to some the suggestion that Cleary sees a standalone London competition practice as part of its future is little more than bluster.
“I don’t think there’s much future for competition for Cleary in London,” says a partner at a rival US firm. “You need to recognise that the magic circle has a hold on most of the M&A market. Cleary only has three M&A partners in London so competition work has to come from elsewhere.”
That elsewhere could be litigation. The capture of former Simmons & Simmons finance litigation head Jonathan Kelly has been viewed by the market as a shrewd move for the firm’s City practice. His arrival follows last year’s relocation of fellow litigation partner Jonathan Blackman from New York to London.
“It increases our capability to do antitrust litigation,” says Levy, in a view echoed by Blackman, who adds: “The plan is to have him [Kelly] work with US competition litigators in Brussels to enhance that practice. Jonathan has a different skill set, but he can take on some of Shaun’s work.”
The change in direction comes from a perception that the UK is at the centre of a growth in follow-on damage litigation – “it’s a real boom area,” according to one City partner – and according to Blackman, it is work that “can be done by specialist litigators”. So is Cleary giving up on UK competition?
The firm was one of the first to plant its flag on European soil, with the Brussels office celebrating its half century this year. Along with that of Freshfields Bruckhaus Deringer, its competition practice is at the head of the field when it comes to EU work, listing multinational behemoths such as Coca-Cola, American Express and Google among its clients.
But therein lies the problem for its London offering. With the firm attracting such big names, the opportunity to build its base of UK plc clients has been allowed to slide by.
A Cleary insider says: “We’ve had our fair share of pretty interesting UK work, but over the past few years there’s been a change in complexion. There’s a lot less merger work.”
And whether through design or otherwise, the firm has never managed to establish a toe-hold in the regulated industries sector. Cleary partners suggest that it is an intentional ploy, but it has served to create a vicious circle.
“It’s like A&O going to Australia,” says a competition partner at a magic circle firm. “You have to gain experience to entice clients to use you for the next job and that’s difficult for a new entrant. In regulatory work you have to be close to the regulators, to make clients confident that you know these people.”
Despite boasting 50 years’ of experience on the other side of the Channel, it seems that such confidence never seeped through to the City.
It is a different story over in Italy, where hugely respected competition partner Mario Siragusa has helped develop relationships with the likes of Telecom Italia and Sky Italia. Over the years, these have yielded regulatory mandates in both Brussels and Italy.
Like Levy and Subiotto, Siragusa spends half his time in Brussels but, unlike in London, the Roman office is home to two other competition partners and has a strong stable of Italian clients.
Notwithstanding the ’business as usual’ noises coming from the firm, Cleary’s foray into the UK competition market has not been an unqualified success. But the question remains, with the Brussels practice as strong as ever, whether a London presence
The partner at the rival US firm believes it is. “It helps credibility,” he explains. “The UK’s Office of Fair Trading is one of the more mature industry regulators and if you’re looking to advise on cross-border matters that’s going to affect it.”
Cleary is at pains to point out that there has been no change in its London strategy, with Blackman dismissing as “pure coincidence” the timing of Goodman’s departure and Kelly’s arrival.
But a competition partner at another US firm thinks the emphasis has shifted firmly back to mainland Europe.
“They were always stronger in the EU,” he says. “They would’ve been in London to try to pick up some London competition work, but their real strength was based
The imminent arrival of Kelly to farm the litigation boom means London is still calling for Cleary – it just might not be shouting quite as loudly.