Clifford Chance is understood to be losing four private equity associates to join partners at firms including Latham & Watkins and Simpson Thacher & Bartlett, underlining the vulnerability of magic circle firms to headhunters acting for US firms in London.
Sources say the departure of four of the firm’s private equity associates in London is symptomatic of unrest within a team following a string of high-profile partner departures in recent years.
At Latham, one associate will join former Clifford Chance partner David Walker, a key Carlyle contact, as well as Tom Evans, Nick Benson and Kem Ihenacho, who joins the firm later this year (24 February 2014).
However, Clifford Chance has pledged to restock the gaps, taking on two associates to replace those leaving with another four expected to join in coming months. There are currently 18 associates in the group.
It graduated two newly-qualified (NQ) lawyers into its group in its last retention round, when it kept on 40 of its 53 trainees (11 August 2014). Two NQs from Clifford Chance have joined White & Case’s private equity team (31 July 2014) and another is understood to be moving to Simpson Thacher.
There is no doubt the private equity group is a strong team with good clients, say sources, pointing to Equistone, CVC, Kohlberg Kravis Roberts (KKR) and Carlyle. But the recent flux within the group and rapid change in leadership points to a firm battling a tricky mixture of unease and succession planning.
“Obviously when people move it creates turmoil and that has been the case at Clifford Chance,” says a source, adding: “But it’s a fantastic firm which has always done great work.”
“I think there’s understandable unrest,” says another source. “The shape has changed so quickly with a lot of partners going and associates are suddenly thinking maybe this is not the place that’s going to give them the best experience.”
But another source points to the strength in the client roster available to associates. Partner Brendan Moylan’s KKR work on the South Staffordshire Water and Cambridge Water acquisition points to his importance as a key client contact.
Partner Amy Mahon is also a key link to clients like Carlyle and Equistone as well as Macquarie, where she spent a stint on secondment until 2008.
Spencer Baylin and CVC relationship partner David Pearson are also picked out as important partners in the group.
However sources say there is a nervousness in the team over the exits of key client contacts such as Walker and KKR partner Signy and not enough was done by former partners to solidify private equity relationships.
“I think what was needed was a focus on succession five years ago or maybe even eight to 10 years ago,” says one source, though others disagree, pointing to the firm’s retention of clients like Carlyle, which is still handing the firm work (5 March 2014).
But succession certainly seems key to new corporate chief Guy Norman’s plans for the future. A part of his strategy when taking up the role was to ask corporate partners for five client targets with clear sector focuses (14 August 2014). Norman’s appointment is evidence of further flux within the team, which sources say both helps and creates issues for the private equity group.
Clifford Chance’s corporate leadership has changed dramatically over the past year, following former corporate chief Matthew Layton’s election to managing partner last year (27 November 2013). Dealmaker Norman replaced Layton in the role of corporate head (27 November 2013).
Head of London corporate Simon Tinkler also stood down soon after Norman’s announcement at the end of last year to be replaced by Mark Poulton last month (18 July 2014).
Last month partner Jonny Myers was named new private equity co-head last month alongside Oliver Felsenstein.
Layton’s election to firm leader is a sign of his respected status in the firm but does take him away from fee-earning and client Permira, which sources say was wedded to him.
However the quick-fire management changes point to quick action being taken in the firm to re-align the department and plan for the future.
”When partners and associates leave it’s hard but there will certainly be people to step into their shoes,” says a source.