What happens when your client merges or gets taken over? It’s a question that will be on the minds of Freshfields Bruckhaus Deringer and Linklaters after a week that saw two of the rivals’ longstanding mining clients agree on a £50bn-plus merger.
Freshfields’ Julian Makin is leading for established client Xstrata, while Glencore has turned to a Linklaters team headed by Charlie Jacobs, as it has on numerous occasions. But both of the magic circle firms may be wondering whether the deal is the last time they act for the companies on a major transaction.
The question is who the combined Glencore Xstrata International, as it would be called, will choose as its general counsel. The race is between Glencore legal chief Richard Marshall and his Xstrata counterpart Benny Levene, both of whom are senior figures.
If Levene wins, Freshfields could snatch the role as corporate adviser on deals when the merged entity starts transacting. If it’s Marshall, Linklaters may be in luck.
It is likely that both firms will get some work, even if not on deals.
“I just don’t know how it’s going to work out at the moment,” said a senior Xstrata insider. “Almost certainly they’ll both continue to advise [in some areas].”
There are precedents: Kraft left Slaughter and May off its UK roster when it took over Cadbury, which had hired Slaughters for the 2010 sale. Clifford Chance, similarly, is not on GDF Suez’ panel despite acting for International Power on its £17.1bn tie-up with the French energy giant last year.
Meanwhile, Clifford Chance’s corporate role is in the balance now LCH.Clearnet, a client since 1888, has been bought by Freshfields client the London Stock Exchange.
It is understood that LCH.Clearnet will retain its in-house legal function, a good sign for Clifford Chance, but it has not yet appointed a replacement for group general counsel Iona Levine, who will be leaving in June.
That appointment will be key, just as it was when Freshfields won key BP mandates off Linklaters thanks to then-London corporate head Mark Rawlinson’s closeness with recently installed GC Rupert Bondy. It’s all about people, after all.