Those chic Parisian boutiques keep making bread, but international firms are finding the French market has passed its best
Some think it demonstrates a peculiarly French trait. Others attribute it to market conditions. Everyone else blames international firms. But the fact remains – the past year has continued a long trend in Paris of lawyers leaving established firms to set up boutiques.
The list of those who have decided to go it alone in the past 12 months includes acknowledged stars of the Paris market and up-and-coming youngsters from French and international firms. Darrois Villey Maillot Brochier, Gide Loyrette Nouel, Hogan Lovells and Sullivan & Cromwell all bade farewell to partners.
Same old new idea
Boutiques are hardly new in Paris, as several lawyers point out.
“I’m not surprised at this trend and it’s quite a good thing,” says Bredin Prat corporate partner Patrick Dziewolski. “It means we have entrepreneurial lawyers who believe in the future of the profession.”
Indeed, both Bredin Prat and Darrois began life as corporate boutiques. The former has moved beyond that stage now but Darrois still focuses on transactional advisory work and associated litigation. Its hire this year of a tax team, led by Jones Day partner Vincent Agulhon, was designed to complement those practice areas.
One of the boutiques launched this year saw three young partners from Darrois, including the son of founder Philippe Villey, break away to set up Villey Girard Grolleau (VGG). Daniel Villey says recreating the sort of firm his father founded was one of the drivers for the trio.
“This was the result of long reflection – at some point you have to jump,” he adds.
Market conditions also played a role.
“It’s the result of our reflection on the way we want to work with clients and our vision of the market,” Villey says. “We believe, especially in the financial crisis we’ve been living through in recent years, that clients want a strong personal relationship with their lawyers. We thought it’s probably easier to deliver that kind of service if you’re a smaller team.”
That need to get closer to clients was also a driver for three corporate partners at Gide – Antoine Bonnasse, Youssef Djehane and Jean-Emmanuel Skovron – who, together with former colleague Antoine Gosset-Grainville, established BDGS Associés in the spring.
Djehane says the team had been watching the market for a while, and noticed two trends. The first was the difficulty some French firms have had in securing a smooth succession; the second was the impact of the financial crisis on international firms in Paris in particular.
That said, although Gide has suffered a number of other partner losses in the past couple of years, Djehane adds that these issues did not really affect the team at the larger firm. However, the partners felt the time was right to launch a corporate boutique with a decent-sized team.
“It’s to fill a gap in the market where there are possibilities to grasp some profitable legal services,” he explains. “What was happening in our market was a window of opportunity to set up something that would quickly show efficiency.”
He says the sort of work the firm is doing is the same as the team was doing at Gide. This is a common refrain from lawyers who have gone for the boutique model. Most feel they are able to keep going on the same sort of transactions or cases they ran at their previous firms – very often with the same firms on the other side – with no discernible difference in the way they are working.
“I’m selling the same kind of services but the platform changes everything in the mind of the client,” argues Jean-Georges Betto of Betto Seraglini. Betto left Hogan Lovells, where he was an arbitration partner, in late 2012 to establish the boutique alongside White & Case of counsel Christophe Seraglini.
While seeking to establish a firm that has a proper “institutional” model, Betto is also determined to maintain its “boutique spirit”.
“You have to choose – either you have a boutique or you’re a full-service firm,” he says. “Clients come to us because they have a big strategic issue that is litigation or arbitration. The boutique that has the best chance is the one that’s learned from US or British firms with regard to performance and marketing.”
Setting up the right model is crucial to the ultimate success of any firm, and each of the new boutiques has its own idea about the right method for that. The founders of BDGS spent a long time drawing up a business plan before launching, including carrying out what Djehane says was a “deep” and “analytic” study of the market.
Fellow BDGS partner Max Baird-Smith adds: “We looked carefully at what we could do in the French market; we planned carefully. I doubt anyone put the same amount of work into preparation as we did.”
Planning is also a critical factor for the partners at Lacourte Raquin Tatar. The firm was founded in 1993 by Thierry Lacourte and Jean-Claude Balas, who were joined in 2011 by former Gide managing partner Jean-Jacques Raquin. This year the team was expanded further, with the addition of three more Gide partners – Serge Tatar, Nicolas Jüllich and Renaud Rossa – prompting a rebrand.
Raquin says succession planning is an important part of Lacourte Raquin’s strategy.
“We’re not sure we’ll want to expand very much, but we want to be a real Paris firm – we want our young partners and young associates to stay,” he says, adding that this is a long-term plan. “We’re realistic enough to know that we won’t become from day one the equivalent of Bredin Prat or Darrois.”
Tatar says for his part it was important “in a pretty difficult legal market to have the ability to make sure the firm is moving in the right direction”.
He adds: “The consistency of the firm and the ability of the partners to get on well is an important quality we want to keep, because we all know that one of the characteristics of French firms is their ability to split.”
Paris in the autumn
Another major factor for many of the new French boutiques is the sense that international firms are getting cold feet about the local market. US firm Nixon Peabody pulled out of Paris this year, and while some – such as Osborne Clarke or Pinsent Masons – are launching and growing in France, the talk is all of Anglo-Saxon downsizing. At the same time, lawyers say clients are fed up with paying top-dollar and not getting quality advice.
Dziewolski argues that clients do not want to buy a “process”, although he acknowledges that for larger deals, like many Bredin Prat aims to work on, having the ability to deliver this as well as pure strategic and transactional advice is necessary.
“We try to keep the boutique spirit in the sense that we want to deliver high-value advice. We want to share the adventure of the deal with the client,” Dziewolski adds.
Indeed, those lawyers who have launched boutiques or joined existing ones this year say their clients have all followed.
“We focus on M&A transactions and M&A litigation and the truth is that the clients absolutely accept that – it doesn’t seem to be an issue at all,” Villey says, adding with satisfaction: “It proves that at least we didn’t make a mistake.”
There are some areas where boutiques find the going harder. One is international work. Although Djehane says BDGS has been successful domestically he admits that international clients have been slower to knock on the firm’s door. BDGS is planning to address this by strengthening its network of international relationship firms to demonstrate to clients that it has the necessary global reach and contacts.
“A big law firm in the States that doesn’t know us personally is probably reluctant to take a gamble on a firm that launched six months ago – that’s something we’re hoping will come as our brand develops,” says Baird-Smith.
More firms, but no more M&A
Boutiques that have launched or expanded this year will find themselves competing with others launched in the past few years, and those still to come. Everyone expects the trend to continue, especially as there is little sign of a real pick-up in activity. There have been a handful of big deals with a real French component, and certainly corporate activity has picked up a bit in the US, but nobody is holding their breath over a surge in M&A. This will continue to have an impact on the Paris legal scene.
“Being a partner in a big network is now middle-management, nothing more,” says Betto. “This might be the reason why someone would consider joining a firm where he’s mastering his future.”
VGG partner Pascale Girard says both the very large and very small firms will remain a feature of the market.
“You’ll still need huge firms and you’ll still have boutiques,” she says, noting that issues such as succession will continue to plague some older outfits. “It’s always difficult to grow and a lot of the problems you see in law firms come from growth.”
Tatar notes that the market “is still moving”, but believes clients are on the hunt for long-term relationships and that will benefit boutiques that have hung on to the clients they had in their former firms. However, he sees no issue with this, remarking that building relationships is not that difficult.
“Law isn’t rocket science,” he concludes.
Key figures: France
Annual inflation: 0.9%
Life expectancy at birth: 82
Source: World Bank, National Institute of Statistics and Economic Studies