You might think that the magic circle firms are full of lofty, magisterial types with their eyes on a grand strategic vision. Not a bit of it. The further up the ladder you go, the more worked up (not to say paranoid) you can become.
So it’s interesting to see that there’s an amusing little spat developing between those two giants of the banking world, Allen & Overy and Clifford Chance. It all centres on the key market of acquisition finance, and in particular the jumbo end. Those massive working capital facilities are a thing of the past; financing is now definitely event-driven and there is more to play for. The jumbo deals may be bigger, but there’s fewer of them around, and so the competition between A&O and Clifford Chance is therefore greater than ever.
A&O was quick to spot the potential PR benefit. It started hijacking the publicity while Clifford Chance was content to slumber. Banking head David Morley has been sending out a very simple message for the last year – that A&O leads the field in jumbo acquisition financing. And it was a message he was more than happy to repeat in The Lawyer’s profile of him a few weeks ago.
So what’s this? A press statement from Clifford Chance, finally stung into a response. “Clifford Chance advises on the majority of jumbo financings in the European syndicated loans market,” it begins, and then goes on to say: “Since Clifford Chance’s lead role in the structuring of the financing of Olivetti SpA and Tencost SpA’s euro60.4bn (£35.18bn) hostile takeover of Telecom Italia, it has been involved in virtually all the jumbo financings in the European syndicated loans market for both the arranging banks and borrowers.” A&O meanwhile is strangely quiet on the matter, although one observer close to the firm asserts: “I believe those claims, and so do my friends the pixies.”
The problem for an impartial observer is that measuring firms’ market shares of the European syndicated loans market is anecdotal. There is no central source of information, so the lists kept by the firms themselves are not necessarily a complete reflection of the market. Until there is an authoritative source, the needling will continue, and both A&O and Clifford Chance will continue to put their own spin on things.
How about this: you’re both really, really, really good, and bankers love you equally. Now go and tidy your rooms.