In a world where the global brand is king, you can still count on resistance in the oddest places. The big international law firms still can’t crack Italy.
Three years ago, Clifford Chance was destabilised after Grimaldi’s team left. Freshfields had its own set of defections when a team left to form Lega Colucci. Then Linklaters‘ relationship with Gianni Origoni came to an abrupt end. And now it’s Allen & Overy‘s (A&O) turn to have a miserable time with the schismatics in Milan.
In just 12 months the magic circle firm has seen the loss of veteran corporate star Roberto Casati to Cleary, has seen most of the Turin office walking out to open an independent boutique and has gone through a tricky management reshuffle.
Most observers of the febrile Italian scene knew it wasn’t going to end there. There had been plenty of speculation ever since Casati left as to when the next walkout was going to happen. A&O is now left with a seriously bruised finance capability in the fourth-biggest economy in Europe.
This is bad news on a practice level, because when A&O merged with Brosio & Casati it got a ready-made high-end lender practice. The Medicis may have invented banking, but some lawyers suspect that the opaque Italian financing market still has a whiff of the Florentine Middle Ages. Italian finance work is attractive for international firms because it’s just so darn lucrative. The absurdly arcane tax regime means that sophisticated legal input is required and commoditisation is a whole universe away. A&O needs to repair its business fast or it will lose ground to Chiomenti and a newly confident Clifford Chance.
But Arosio’s departure is a worry for A&O for another reason. Normally it’s the older partners who tend to quit over cultural issues. Italian rainmakers work in an unashamedly nepotistic world and prize their individual contacts. The mechanistic organisations of global law firms just don’t appeal to them. So those older partners embrace the traditional Italian model of tightly-held equity, huge leverage and massive profits, while their associates get paid a pittance. By contrast, in international firms the partners don’t enjoy the same riches, but younger lawyers are relatively well paid and are treated better.
For an up-and-coming lawyer like Arosio to reject the international model breaks all the rules. But then, breaking the rules in Italy is an art form.