Two tales emerged last week that under different circumstances could have been told together. First, the story of Sidley. As our unmissable long read sets out, Sidley has occupied a solid but monochromatic position in the City, despite its bold beginnings in the nineties when it was the first US firm to hire UK lawyers. Since then it has kept strictly to its structured finance comfort zone. In taking an expensive six-partner private equity team from Kirkland last month it is finally pepping up its position in London – although as our senior writer Dearbail Jordan explores, there are risks to this, not least around transparency. When The Lawyer revealed the Kirkland team’s pay packets, it led to some consternation among Sidley lawyers, who operate under a closed compensation system. And building corporate in London is notoriously difficult for US firms; everything rides on the integration of these expensive new hires.
The second tale is of Ashurst, which was in merger discussions with Sidley in 2013. The talks foundered partly because key decision-makers at Ashurst decided they couldn’t deal with a US merger at the same time as integrating Blake Dawson and they didn’t want to scare the horses down under.
Big mistake. Ashurst, which at the time of its Australian merger was pretty much the leading corporate firm outside the magic circle, wanted to hang onto its culture. In not wanting to go too fast and jeopardise existing arrangements, the Aussie deal seemed the prudent choice, and at that point Ashurst was in the driving seat of the negotiations and able to dictate terms. But the Blakes deal has not delivered spectacular growth or increased global influence to Ashurst. Furthermore, the appointment last week of Australian finance partner Paul Jenkins as managing partner underlines the extent to which the old Ashurst has had to surrender its influence. For Jenkins to get the job over, say, the widely respected UK-based corporate head Simon Beddow is telling. The firm’s corporate brand has faded in favour of international project finance and infrastructure. So are Ashurst partners actually working from a better platform? Has that culture and positioning that they wanted to hang on to actually been maintained?
Here’s the alternative history. Ashurst and Sidley do the deal in 2014. Ashurst partners submit to a closed compensation structure and largely US management. Sidley gets to be a bit less beige. A few UK partners leave and the process isn’t easy, but a transatlantic corporate and finance brand emerges. Let’s face it: Ashurst and Sidley could have done with a little less stressing over culture, and a bit more attention to strategy.
