Linklaters to relegate real estate, litigation

Linklaters is set to forge ahead with a dual push in corporate and finance at the expense of future investment in its real estate and litigation departments. The move is part of a refocusing of the firm's business on a number of core clients.
Linklaters managing partner Tony Angel told The Lawyer: "We're aligning the firm around target clients. We're not going to be a shop where we provide a lot of products. There are target clients and we want to get close to them."
Another source close to Linklaters said: "This is a directional issue. The firm can't expand in every area and you have to be realistic about where it's positioned."
The source added that the firm would shift its focus away from general commercial work and real estate, where there was too much price competition, while litigation would work more closely with the corporate and finance departments as part of the new client initiative.
However, Linklaters' decision to put the brakes on its real estate department is a particular surprise.
Over the past financial year, the firm topped the rest of the magic circle in terms of the contribution that real estate made to its overall turnover. According to The Lawyer 100, Linklaters grossed £50m in real estate last year, which made up 7.9 per cent of its overall revenue of £631m.
In contrast, Clifford Chance derived 7 per cent of its revenue from real estate, Freshfields Bruckhaus Deringer 5 per cent and Allen & Overy 3 per cent.
Over the past couple of years, Linklaters' real estate arm has built up a solid reputation, acting on deals such as BP Pension Fund's sale of the Berkeley Square Estate and on the development of Swiss Re's headquarters.
Litigation generated 14.5 per cent, or £94m, of Linklaters' global turnover during 2001-02, compared with £50m, or 10 per cent of the firm's gross revenues, in the previous year.
One source said that over the past 18 months the relationship between litigation and corporate had widened, but the firm was now hoping to re-establish closer referral links between the two.
Angel said the litigation and real estate departments grew satisfactorily last year; and while the firm was being cautious with its budget this year, it was not planning to cut back on specific areas.