Kobre & Kim, Quinn Emanuel target London as financial litigation hotspot
17 May 2010 | By Andrew Pugh
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US litigation outfits see UK capital as fertile ground for growth.
The apparent certainty that the regulation of the financial services sector, both in the UK and internationally, will be tightened up considerably over the coming months has led to an anticipated rise in litigation - a trend that two US firms in particular are keen to take advantage of.
US litigation firms Kobre & Kim and Quinn Emanuel Urquhart & Sullivan have ramped up investment in the City over recent weeks with a series of hires. Trial specialist Kobre & Kim has remained largely under the radar since opening its London office last summer, but that all changed three weeks ago when it announced the arrival of Serle Court silk James Corbett QC.
While this was an impressive acquisition in itself, it was quickly followed by the capture of former Fladgate partner and aviation group head Simon Cullingworth last week. The Lawyer can reveal that today (17 May) there will be another addition to the team in the form of Enterprise Chambers barrister Tim Prudhoe. Kobre & Kim has also vowed to bring in another barrister and a solicitor by the end of the summer. With the way things are going, few would doubt it realising its ambition.
The firm has grown quickly since Michael Kim and Steven Kobre, both former assistant US attorneys in New York, opened its first office in New York seven years ago. It opened a Washington DC office in 2006, followed by one in Miami two years later. A new Hong Kong office will open in August.
Kim, who worked at Davis Polk & Wardwell before becoming an assistant US attorney, puts the firm’s growth down to its niche offering and conflicts-free approach, allowing it to litigate against major banks and accounting firms. Among its clients are leading hedge funds, private equity firms, banks and industrial borrowers.
The firm is also keen to emphasise that it is a firm of trial lawyers, not litigators, and adopts an “aggressive, trial-orientated strategy”.
“From the beginning we tried not to be a generalist firm,” says Kim. “We focus on heavy-duty financial services litigation, in which we have to be completely conflict-free. It’s a very different business model from other firms’, which try to build up stables of repeat clients.”
A significant amount of the firm’s work involves major cross-border litigation, often against major banks, work most large firms are unable to handle due to conflicts, according to Kim.
“[These cases] couldn’t be handled by a large firm unless they went through a complicated process of referrals,” he says.
The firm also represents managing directors and executive officers at investment banks, private equity firms and blue-chip companies including ABN Amro, AIG, KPMG and Novartis.
“We keep ourselves almost completely free of conflicts by endeavouring not to have too many institutional clients,” continues Kim. “The downside is we always have to go out and generate new cases, but at the moment we have more work than we can handle.”
The firm now has approximately 100 staff, including around 70 lawyers and analysts.
“I think we’re unique in that we have a strong team of financial analysts,” says Kim, “because we focus on very specific, and often slightly esoteric, financial products such as collateral debt obligations and different types of futures and trading products.”
So why is the firm so keen to expand in London?
“There are a couple of different reasons,” Kim says. “We’d been working out of London on a couple of US government enforcement cases. That’s something we continue to do and that’s why two of the partners here are American. Also, we always want to develop the financial services litigation practice and, outside of the New York market, we felt the [market] that was most exciting was London, especially in terms of complex financial litigation. There’s also an increasing amount of overseas litigation that takes place in London.”
Corbett says he was attracted to the firm because it “is very much a firm of trial lawyers rather than traditional litigators and does things case by case; it’s not a copy of the English bar, but it resonated strongly with the way I’ve always practised”.
Kobre & Kim is not the only US litigation firm expanding in London. Last week US litigation powerhouse Quinn Emanuel brought in disputes partner Alex Gerbi from Olswang. The hire signalled a continuation of the firm’s strategy of building up the UK litigation practice by hiring rising star litigators in the City.
In February the firm unveiled its 2009 financial results, posting a 5 per cent fall in revenue, from $441.8m (£296.86m) to $420m and a 6 per cent drop in average profit per equity partner (PEP). That latter drop, however, resulted in the PEP still remaining above $3m at $3.1m, some considerable way above Olswang’s.
After the announcement founding partner John Quinn spelled out the firm’s ambition to grow its London office in 2010, admitting that it was not a big enough presence in the City. Quinn did not rule out a doubling or even tripling of the team in London, an office that has recently been involved in a number of high-profile cases involving companies such as Re Sigma Financial Corp, UBS AG and UBS Securities and HSH Nordbank.
And it is not just in London where Quinn is keen to expand. The 400-lawyer firm, which has been shortlisted for Litigation Team of the Year and International Law Firm of the Year at this year’s Lawyer Awards, opened its first European office in Germany earlier this year with a five-lawyer team from Allen & Overy, which included patent litigation partner Marcus Grosch.
But despite setting up Hong Kong and Germany respectively, it is clear that for Kobre & Kim and Quinn Emanuel London is where they expect to see the most action in 2010.