the Leader column

The best way of goading a Clifford Chance corporate partner – and indeed, an Allen & Overy (A&O) corporate partner if it comes to that – is this: adopt an ever-so-slightly sorrowful expression, and whisper sympathetically: “Of course, you’re really a finance firm, aren’t you?”

While both A&O and Clifford Chance perform okay on the deal tables, neither trouble Freshfields Bruckhaus Deringer, Linklaters & Alliance or Slaughter and May. But Clifford Chance thinks it has found a way. Realising that it’s not enough to have a practice based on conflict referrals, it has been quietly assembling a group of partners to target US investment banks. Oddly enough, Clifford Chance is being coy about which ones, but let’s have a wild guess, shall we? Shall we assume that this new campaign is not entirely unrelated to the firm’s upcoming Canary Wharf move where Morgan Stanley et al are based?

It’s just a wonder that it took so long for the penny to drop. Freshfields’ example is a textbook case of how a firm can spot an opportunity and then motor. Indeed, Freshfields’ current prominence in M&A is almost entirely due to its canny targeting of US investment banks in the 1980s.

There are, of course, difficulties with Clifford Chance’s initiative. It may give a leg-up in the M&A tables, but advisory work for investment banks, even on the largest public bids, is simply not as profitable as working for the corporates themselves. And there is the question of resources: Clifford Chance has a much smaller corporate team than the rest of the magic circle firms, which explains the firm’s thirst for lateral hires over the past year.

What’s more, Clifford Chance may be wise not to play the US card too strongly, given the paucity of M&A resources on the Rogers & Wells side, despite the much-vaunted Merrill Lynch link. Rather, much of Rogers & Wells’ corporate client base is made up of mid-sized corporates – good for deal flow, useless for connections.

If Clifford Chance has any hope of troubling Slaughters, Freshfields or Linklaters, it needs to win a few more mandates such as the current Lloyds TSB bid – a job which would have gone to Linklaters but for a conflict. There are few greater rivalries in the City than that between Linklaters and Freshfields, and it shows no signs of being disturbed by Clifford Chance’s efforts. As one Linklaters partner says with evident relief: “I’d much prefer Clifford Chance got the Lloyds TSB job rather than Freshfields.” Which is the next best way of goading a Clifford Chance partner.