May the best man win

When any client walks out the door in favour of a rival lawyer it is going to be disappointing.

The decision by Mukhtar Ablyazov to ditch his lawyers at Stephenson Harwood (SH) in favour of Addleshaw Goddard was a bitter pill for SH to swallow (see story).

Not only is the client understood to have accounted for more than a fifth of SH’s £100m turnover in the last financial year, but it is also the second time this has happened. Russian oligarch Boris Berezovksy had formerly instructed the firm in his $2bn case against Chelsea FC owner Roman Abramovich before switching to Addleshaws. Reasons for his switch are unknown, as are Ablyazov’s, but one lawyer claimed: “It was felt they weren’t being ferocious enough.”

But another lawyer added: “There’s always a risk when you’re working for individual clients that they’ll walk out on a whim. It probably has nothing to do with ferocity and much more to do with personalities.”

The case is shaping up to be one of the biggest legal battles to spin out of the global economic collapse.

Ablyazov is the ousted chairman of BTA Bank who is accused of defrauding it to the tune of £2.4bn. He fled Kazakhstan in 2009 as the bank was nationalised and, in July this year, he was granted asylum status in the UK.

The Lawyer listed the case against him as one of the biggest of 2011 (3 January 2011) with five tranches of proceedings taking up the expensive time of 50 leading lawyers, with 22 partners and 32 barristers, including eight QCs, among them. That partner headcount included five partners from SH: Roland Foord, Alan Bercow, Louis Flannery, Stuart Firth and Richard Gwynne.

It is alleged that Ablyazov conspired to siphon money out of the bank through fake loans and share sales, leaving it in financial crisis. Royal Bank of Scotland, Barclays and HSBC were among the banks that last year agreed to write off a combined $6.8bn. None of these banks have launched separate claima against Ablyazov as yet.   

Addleshaws head of dispute resolution Richard Leedham will not reveal how the firm came to be advising Ablyazov, only going so far to say that “he came to us highly recommended”.  The challenge for the firm now is to make sure it can handle the mountains of work it has on its books.

At the end of the 2010-11 financial year the firm’s dispute resolution practice contributed £46.6m of Addleshaws’ £161.9m turnover. 

Nationally the practice has 37 partners with 17 of those sitting in London. Five of those partners will be selected to join Leedham’s team advising Ablyazov. Confirmed so far are: Ian Hargreaves, Jon Tweedale and Jamie Harrison. Meanwhile, a further two partners – John Kelleher and Mark Hastings – are caught up fighting the Berezovsky claim.

Leedham is insistent that the firm has the firepower to commit to the Ablyazov matter. “We feel we have the capacity and we’re recruiting,” he says. “Its all part of an onward upward trajectory for Addleshaws’ market share.”

He also points out that just 18 months ago, following the departure of litigation chief Simon Twigden and partners Pietro Marino and Michael Green, there were concerns about the future of the dispute resolution team.

Any concerns there might have been should now be laid to rest, he says, with Addleshaws stacking up its client list for cases that are expected to run and run.