20 YEARS OF THE LAWYER: 1997

Assistant salaries spiral as City consensus unravels

Competition between the top City law firms moved into a new era in 1997. Whisper not the word ‘cartel’, but the cosy consensus between the top eight City law firms began to splinter in 1997 with the onset of a newly-qualified salary battle.

Until 1997 the club of managing partners from Allen & Overy (A&O), Clifford Chance, Freshfields, Herbert Smith, ­Linklaters, Lovells, Norton Rose and Slaughter and May met regularly and were known to have commissioned surveys on going salary rates. Astonishingly it meant that salaries for newly-qualifieds at all the top firms remained similar for three years, at between £27,000 and £28,000.

As the 1 May deadline for new pay levels approached, rumours
circulated that some of the top five were upping newly-qualified salaries by as much as £10,000 to compete with US firms in London.

The Lawyer reported that Herbert Smith sent a memo to final-year trainees, asking them to question friends in other City firms about their pay. HR heads were reduced to ­ringing recruitment consultants desperate to find out “what the hell is happening with this year’s market”, as one recruiter commented.

The lack of transparency in the market – something that the major firms had hitherto relied upon to keep their costs low – suddenly became a frustration.

In the month before the May deadline, the information vacuum generated wild rumours.

A&O was said to be paying up to £37,000, but actually paid £30,500 – an increase of £2,500. Clifford Chance was rumoured to be offering £35,000, but paid £30,000, rising to £31,500 after six months.

Cadwalader: an aggressive opening

The Lawyer, 28 October 1997:
A few days after Clifford Chance suspended its partner Andrew Wilkinson because he was about to join the US firm ­Cadwalader Wickersham and Taft, a man sidled into the foyer of ­Bastion House office block on London Wall, the US firm’s ­temporary home.

“‘I’ve got a client who would like to see around the offices,’ the mysterious character told the security guard. ‘There’s a grand in it for you.’ The man, who Cadwalader assumes must have been a private detective, returned three times and was caught on the office’s security cameras.

“At one stage it is believed he may have slipped past the guard into the offices. Who had hired him and what was he looking for?

“At the time Wilkinson was in the midst of a bitter legal battle with Clifford Chance over whether the firm was able to hold him on gardening leave for 12 months.

“The case was within a whisker of reaching the courts. Clifford Chance has denied it hired a private eye. And although Cadwalader caught the man on film, it is not interested in endeavouring to ­identify him. So it will probably never be known who hired him.

Wilkinson resigned in June. In August the Clifford Chance ­management introduced a stringent new partnership agreement, giving it the power to suspend resigning partners for a full 12 months. Wilkinson instructed ­Herbert Smith to fight the issue.

Finally, one of Wilkinson’s clients stepped in and brokered a deal.

Five at FFW: what happened next

Ten years ago legal consultancy Graham Gill & Young made the unusual move of publishing a half-page advert in The Lawyer listing new recruits to the IP, IT and telecoms teams of Field
Fisher Waterhouse (FFW).

“For a firm which was hardly known for its IP work a few years ago, Field Fisher Waterhouse is now earning a reputation as one of the most exciting, young and entrepreneurial teams in the City,” ran the piece. Below it were photos of the five newbies it had poached from City firms, niche IP firms and in-house.

Barbara Cookson was one of them. She started her career at Dechert in 1989, at a time when US firms were starting to have an influence on the way domestic firms worked.

“There was a lot of advertising going on; The Lawyer was ­instrumental in this,” she says now.

Another way in which the US was influential was in terms of the evolution of the IT legal practice area.

While Cookson moved to Nabarro in 2000 and is now at Filemot Technology Law, Michael Chissick has remained at FFW ever since. He is the only one of the five recruits to have done so and now runs the IT, outsourcing and e-commerce departments. He did his training at Herbert Smith, qualifying in 1988.

Everybody was “doing big ­government privatisation work”, he said, adding: “If you’d told me then that I would have 30 lawyers working for me in a big City law firm I would have told you that you were mad. It was more luck than having this massive vision. You would never have known that companies would be outsourcing all their technology.

“We had Amstrad and Acorn. Not Silicon Valley.”
Their colleague Barry Fishley joined FFW in 1996, specialising in telecoms at a time when there were a lot of new entrants in the sector and outsourcing was ­developing as a standalone sector.

Since then the industry has consolidated significantly. He left in 2000 to join Weil Gotshal, where he is now a partner, advising financial institutions and private equity houses on areas including outsourcing and data protection.
FFW continues its IT/IP focus, but nowadays prefers to badge itself as a full-service firm.

Age is no barrier to partnership

When she completed her training in 1995, Julia Briano (then called Julia Willis) was unaware that she would make a tiny piece of history two years later.

In October 1997 The Lawyer reported that Cheltenham-based commercial firm Bretherton Price Elgoods (now known as BPE) made Briano its second female partner, joining a team of eight men and one woman. A personal injury specialist, she was just 26.

“I became partner at a time when the firm was growing quite considerably,” Briano says now. “BPE was quite keen to promote women to achieve equality and it was also keen to keep its homegrown lawyers.”

During the last decade firms have begun to recognise the importance of allowing a work-life balance, she adds.

“This has made it easier for women to become solicitors,” she says. “It’s now possible to have children and return to work.”

When accountants attack
Coopers & Lybrand announced its intention to launch its own legal practice, headed by Stephenson Harwood partners Mark Lewis and Christopher Tite. The firm would be known as Tite & Lewis.

But many City observers were still sceptical as to whether the accountants could seriously penetrate the legal market. After three and a half years of existence, The Lawyer noted, Garretts (tied to Arthur Andersen) had managed to assemble 100 lawyers, while Price Waterhouse’s Arnheim & Co, which had been up and running for a year, had recruited 15.

The merger in 1998 of Price Waterhouse and Coopers & Lybrand to create PricewaterhouseCoopers would bring Arnheim & Co and Tite & Lewis together – but not for long. In 2000 Tite & Lewis jumped ship to Ernst & Young (E&Y).
In 2004 E&Y’s UK practice was wound down after four years and £22m in costs.

Irvine: not Mr Popularity
Within two months of assuming the role of Lord Chancellor,
Lord Irvine of Lairg hijacked a House of Lords debate on civil court fees with an attack on fat-cat barristers, who he said regarded an income of £500,000 a bad year. Lawyers fees, said Irvine, were more of a deterrent to litigants than court fees.

Given that Irvine (pictured, third from right) was one of the first silks to secure a £1m brief fee, his outburst was greeted with incredulity within the legal profession – although it generated good tabloid headlines.

Another Law Society fiasco
The Solicitors Indemnity Fund (SIF) admitted to a shortfall of ­nearly £500m. It prompted the Law Society to launch an ­investigation into the matter. The crisis spawned years of debate and eventual abolition of the fund.

The first lawyer to declare a unilateral declaration of ­independence on SIF was London sole practitioner Wendy Gray, who took out insurance from the private sector in protest.

Cameron McKenna is born
The merger between Cameron Markby Hewitt and McKenna & Co nearly included Denton Hall. Indeed, it was Denton Hall’s Jonathan Tatten who had the original idea.

But with Dentons dropping out of the negotiations in October 1996, the end result at the beginning of 1997 was Cameron McKenna.

Mishcon, poetry and Diana
Mishcon de Reya became the first, and almost certainly the last, firm to have a poet in residence, when it selected Lavinia Greenlaw from 60 entrants.

That year Greenlaw won the Forward Prize (the poetry world’s equivalent of the Booker) for the title poem of her collection A World Where News Travelled Slowly.

But the firm was most in the limelight that year for its work advising the Diana Princess of Wales Memorial Fund.

He’s gorgeous, apparently
Tim Penny, a barrister from 11 Stone Buildings, was nominated by Cosmopolitan as one of the ‘most gorgeous men in Britain’.

He told the women’s magazine: “Lookswise I’m not too picky. For me a woman has to be fun and have an alive mind.”
(Called this year by The Lawyer for comment, Penny inexplicably refused to speak, but the 11 Stone Buildings website reveals his involvement in “jazz and cabaret bands”.)

When accountants attack
Coopers & Lybrand announced its intention to launch its own legal practice, headed by Stephenson Harwood partners Mark Lewis and Christopher Tite. The firm would be known as Tite & Lewis.

But many City observers were still sceptical as to whether the accountants could seriously penetrate the legal market. After three and a half years of existence, The Lawyer noted, Garretts (tied to Arthur Andersen) had managed to assemble 100 lawyers, while Price Waterhouse’s Arnheim & Co, which had been up and running for a year, had recruited 15.

The merger in 1998 of Price Waterhouse and Coopers & Lybrand to create PricewaterhouseCoopers would bring Arnheim & Co and Tite & Lewis together – but not for long. In 2000 Tite & Lewis jumped ship to Ernst & Young (E&Y).

In 2004 E&Y’s UK practice was wound down after four years and £22m in costs.

Mergers of the year
– Speechly Bircham and Baileys Shaw & Gillett
– Hobson Audley and Faegre & Benson
– Eversheds and Wilkinson Maughan
– Dundas & Wilson and Dorman Jeffrey
– Berrymans and Lace Mawer
– Coudert and Debenham & Co
– Field Fisher Waterhouse and Allison & Humphreys
– Manches and Morrell Peel & Gamlen
– 22 Old Buildings and Byrom Chambers

The CWS scandal
When entrepreneur Andrew Regan made a bid for the Cooperative Wholesale Society (CWS), Travers Smith ended up in the firing line.

Although Travers said in a statement issued by its PR firm Grandfield that CWS’s accusations were a “sideshow and a distraction”, CWS later accused Travers of adding “serious insult to injury”. Graham Melmoth, chief executive of CWS, faxed a handwritten note to Travers senior partner Alan Keat, saying: “One of your senior partners had sensitive and highly confidential CWS board minutes on his files. How then did he satisfy himself that the documents had come from a legitimate source or by legitimate means? The conduct of your firm in this debacle is neither a sideshow nor a distraction. If you believe this to be so, you are making a serious error of professional judgement.”

Keat replied: “We regret that we were recipients of documents confidential to CWS and accept that our conduct did not accord with the standards which we set ourselves. I offer my personal and the firm’s unreserved apology to you.”
The CWS executives David Chambers and Alan Green, who supplied Regan with the documents, were summarily dismissed.

A litigator gets cross
David Gold lost patience with old-fashioned business practices at the bar in 1997, saying: “We don’t want to deal with someone who thinks he’s Chancellor of the Exchequer on a bad day”.

In 2005 Gold (pictured), by now senior partner at Herbert Smith, launched the firm’s first in-house chambers.
That same year Gold’s colleague Lawrence Collins, a litigation partner, took silk. He is now on the bench.

Eversheds man paints over yellow lines
Eversheds partner Robin Ellison was reported to police by his local council for criminal damage after he was allegedly spotted painting over double yellow lines outside his Hampstead home.

The incident happened during a legal tussle between Camden Council and Ellison over ownership of the land, which the council wanted to use as an access point for six units of affordable ­housing. A council employee claimed she saw a man fitting ­Ellison’s description, wearing jeans and a woolly jumper, brushing black paint over the double yellow lines at dawn.

Another doomed alliance
Simmons & Simmons and Fried Frank launch a securities alliance, with a Fried Frank partner stationed in London – a response to the fact that the larger City firms were hiring US securities lawyers.

Tony Blair,
11 KBW

A fledgling employment barrister, Tony Blair was called to the bar in 1976 and in 1981 was one of nine junior tenants who ­followed Derry Irvine QC to form 11 King’s Bench Walk (11KBW).

He stayed for two years before winning his constituency at Sedgefield in 1983.

He had a close working relationship with Irvine, who was the legal adviser to the Labour Party and who would become his first Lord Chancellor.

Blair made his name as shadow employment ­secretary under Neil Kinnock, during which time he changed Labour Party policy on trade union ‘closed shops’, and then as home secretary under John Smith, when he coined the New Labour phrase ‘tough on crime, tough on the causes of crime’.

Legal landmarks during his 10-year term of office included the incorporation of the European Convention on Human Rights into UK law (although he would later express reservations on the act in practise); civil partnerships for gay men and lesbians; the national minimum wage; various anti-discrimination acts; constitutional reform in Scotland and Wales; tough anti-terrorism and identity card legislation; and the creation of a Ministry of Justice.

THE LAWYER AWARDS 1997

Law Firm of the Year:
Wragge & Co

International Law Firm:
Clifford Chance

Chambers:
11 Stone Buildings

Public Sector Team:
Wandsworth Borough Council

In-house Team:
BT