Impressive City financials belie negative impression of high-level switches. By Andrew Pugh
The departure of Paul Hastings European projects head Jonathan Simpson – the third high-profile partner defection from the firm’s London office since October – is no cause for alarm, according to London chief Phil Feder.
Simpson left Paul Hastings last week to join fellow US outfit Hunton & Williams’ City-based energy and infrastructure team.
The Lawyer can also reveal that London asset finance head Keith Wilson left the firm late last year to join London commercial boutique Ingram Winter Green as a consultant.
In October employment chief Christopher Walters returned to his former firm Covington & Burling, taking special counsel Chris Bracebridge and associate Helena Laughrin with him.
The exits are particularly surprising in the context of the firm’s City office’s performance in recent years. Sources claim that at least some of the moves can be traced to Paul Hastings failing to deliver on its promise of establishing a credible corporate practice in London.
“The corporate practice is recognised as a critical piece of the jigsaw. That’s the big challenge in London, and ultimately it’s leading to a lack of progress,” one former partner tells The Lawyer. “They’ve got a strong finance team, but the corporate team’s struggling.”
One firm insider agrees. “I honestly don’t know why we haven’t been able to recruit in corporate,” the source admits. “It’s bemusing. We’ve tried to bring people in.”
Another former Paul Hastings lawyer believes the firm is struggling with its reputation in the market. “It has a reputation for hiring and firing people, and that’s a hard reputation to shake,” the lawyer says. “It’s a fiercely competitive place and that’s impacting on morale within the office. It’s not a happy place at the moment.”
These are claims that Feder denies vehemently, arguing that the ’hire and fire’ claims “couldn’t be further from the truth”.
“We’re on an upward spiral,” insists Feder. “Partners have left for their own personal reasons and we wish them all the best. The British market’s pretty fluid and people move around.”
He also says that movement has gone both ways, pointing to hires such as that of Morrison & Foerster counsel Suzanne Horne, who was brought in to replace Walters as employment head.
“There’s no point denying the fact that we’d like to grow corporate, and we’re in the process of actively recruiting,” says Feder. “We’re close with several people right now and we’re hopeful of making an announcement within the next year.”
In the 2009 calendar year the firm saw a massive 44 per cent hike in London turnover, with revenue rising from $27m (£16.8m) to $39m. Much of that growth was down to the arrival of 19 lawyers, including seven partners, from Cadwalader Wickersham & Taft – an audacious move that was considered a massive coup for Paul Hastings.
While the firm will not be releasing its financial figures until next month, there will be no repeat performance in 2010. Feder says turnover will either be flat or up only slightly.
In defence of the corporate practice, Feder can also point to several transactions the firm has worked on in the past year, including advising Jacobs Engineering Group in its $900m acquisition of Oslo-listed Aker Solutions, a deal involving 15 lawyers in London.
Yet some still have doubts about the direction of the practice.
“I always think of Paul Hastings as one of the great followers of fashion,” says the London managing partner of a US rival. “It’s just that it’s always two or three years behind the market.
“Back in 2006 they were all about chasing private equity in London, but like a lot of US firms they found it very difficult to bring people in. If you don’t come to the UK with a strong focus it can make things very difficult, and it seems Paul Hastings want to be in everything.”
Simpson, meanwhile, becomes the eighth partner to join Hunton’s energy and infrastructure practice in the past year – and the sixth from Paul Hastings. The energy and transactions team now accounts for roughly 20 per cent, or £123m, of Hunton’s $615m turnover.
Managing partner Wally Martinez told The Lawyer: “There are lots of people knocking on the door. They know this practice is really at the core of the firm.”