Keeping a close eye on market growth

Robert Lindsay watches as Charles Allen-Jones, Linklaters & Paines' head man, ticks off his aims for the firm's future in its global targets

“We don't talk about threats,” said Charles Allen-Jones, the new senior partner at Linklaters & Paines, “We prefer to talk about developments in the market which we have to meet.”

Allen-Jones moved into the office of his predecessor James Wyness only three weeks ago. But he knows he must keep a close eye on these developments in the market.

His post as head of Linklaters is, he says firmly, his last “serious” job. He has spent the past 32 of his 57 years in the firm and must be devoted to it. Unlike many of his fellow partners, most of whom are Oxbridge graduates, he never went to university, but began his legal career by becoming articled to the clerk at Uxbridge magistrates.

There can be few men as steeped in Linklaters' traditional gentlemanly culture as Allen-Jones. But things have moved fast in the legal world in the 10 years.

Getting out his fountain pen, he carefully writes out his firm's categories of legal work, ticking the areas in which Linklaters is among the world leaders. On one side of the paper is what he calls the “mainstream” work: transactions specific to the firm's largely blue chip clients like BP, British Airways, British Aerospace and RTZ.

Under this heading “corporate”, the department which Allen-Jones led from 1985, gets a tick. As a subdivision of corporate comes competition (tick), employee benefits (tick), pensions (tick), employment (no tick). Then tax, property and intellectual property are ticked. Litigation and trusts are left unticked.

On the right-hand side are “global products”, the financial transactions that are specific to the financial product rather than to the client involved. On this side capital markets, projects, investment funds and financial markets regulation all get a tick. Banking and derivatives do not.

What are the changes in the market that his firm must meet? Under mainstream work he writes “rapid inter nationalisation” and beneath global products comes “internationalisation and growth of markets”.

He is talking about the liberalisation of stock exchanges, the rapid industrial growth of South East Asia, the opening up and growth of stock, bond and derivative markets all over the world, and the growth of capitalism in former Communist countries.

Linklaters already faces the threat from US law and US lawyers in these international transactions. It has recruited some US lawyers, but a merger with a US firm has been ruled out.

In 1990 Allen-Jones told The Lawyer: “We have never gone in for mergers or bought teams. It does mean that short-cuts to growth are not available, but it produces a much stronger firm in the long run.” His belief holds true.

Western Europe is another of his target markets. He is keen for his firm to get a slice of the burgeoning corporate legal work in Spain and Italy. But whether he will do this by opening offices, he does not say. Six years ago he said he preferred to rely on an open network of friendly law firms on the Continent. Whether he can stay reliant on it is something he will have to consider.

There is another challenge that he largely pooh-poohs. That is the threat from accountants and multidisciplinary practices.

“Firms like Garrett & Co,” he said. “We just don't see them because they don't have the clients we have.”

Not yet, the accountants might add, not quite yet.