Movers and Shakers
20 December 1999
With a staggering amount of mergers and an increasingly competitive marketplace, 1999 proved to be a busy year for partners on the move. Abigail Townsend looks at the major changes that took place
There was a time when partners left firms for one of two reasons - they were either kicked out or they died. The year 1999 has shown that those days are long gone.
There has been a frenzy of activity in legal recruitment this year. David Temporal, principal of legal consultancy Altman Weil, believes that there is a whole host of reasons behind the moves, including mergers and the growing influence of US firms.
But above all, Temporal believes that the moves are indicative of the changing legal world and a need for firms to restructure in an increasingly competitive market.
He says: "The inexorable rise of competition is impacting on firms today right across the market. No longer can they carry the average partner."
Davies Arnold Cooper provides an example of this. The firm got off to a bad start after deciding in February to realign its core practice areas to focus solely on banking, property and litigation.
The immediate effect was that 90 lawyers and staff were made redundant. The exodus of partners continued throughout the year. Former head of corporate Michael Cover joined Mishcon de Reya in August and his replacement, Charles Wander, announced his departure shortly after.
Pinsent Curtis also suffered heavy partner losses while trying to restructure itself as a national, rather than a regional, player.
Nine partners left the firm in 1999, although it hired another five during the year. The firm now hopes, following the elections of national and regional managing partners, the exodus has been stemmed, at least for the time being.
Some firms - even those without obvious restructuring plans - must have considered fitting swing-doors on their offices this year.
Dibb Lupton Alsop started 1999 by waving goodbye to its Manchester head of insolvency Peter Manning and head of reinsurance Susan Dingle. But the firm also made some high level appointments and ended 1999 by hiring Liberal Democrat Lord Tim Clement-Jones as head of its government policy unit in Brussels.
Simmons & Simmons suffered heavy losses this year. After the departures of nine partners, it took the drastic step of changing its partnership agreement to include gardening leave for the first time in the firm's history. Capital markets partner Colin Mercer was the first to be put on gardening leave. He is being paid to stay away from the office while he waits to join US firm Brown & Wood in May 2000.
The influence of the US firms has played a massive part in this turbulent year. Yet only 18 months ago, many US firms were not viewed as a viable option for a change of address.
Temporal believes the change is due to the amount of money offered by US firms is just too tempting.
He says: "Money is a big factor. The US firms are willing to pay big bucks for the right people. They are almost trying to build up practices through lateral hires."
Mercer was the second partner poached by Brown & Wood from Simmons in as many months. He joined his former capital markets partner and co-founder of Simmons securities practice John Russell.
Chicago practice Mayer Brown & Platt's London office had a good year. Masons partners Nigel Weiss and Steven James left, taking their assistants with them, for the US firm in March. The departures forced the construction specialist firm to restructure its projects and asset department.
Mayer Brown & Platt also lured corporate finance partner David Levin away from Pinsent Curtis later on in the year.
The US firm has no qualms about its aggressive hiring programme and admits it intends to double the size of the London base by summer 2000.
The latest US firm to cause havoc is Buchanan Ingersoll. In October it announced that six partners from Beachcroft Wansbroughs, including head of projects Barry Francis, and seven assistants would be leaving for Buchanans' new London office.
But in a unique development, Beachcrofts and Buchanans have agreed on a sharing scheme, where the departing partners will work for both firms. Other such agreements are worth looking out for in the new year.
But the tables were turned on the US firms when Sean Pierce left Weil Gotshal & Manges' London office, which he helped found, for Freshfields. He told The Lawyer he had doubts whether the Weil Gotshal model could work.
The accountants have also been trying to build up their legal arms, though without the same degree of success as the US firms.
Northern practice and Arthur Andersen associate Garretts has suffered some of the heaviest partner losses this year. In May, its senior partner, two department heads and one partner deserted the firm, with three of them going to northern rival Addleshaw Booth & Co.
Although Garretts hit back with several lateral hires - notably Addleshaws litigation specialist Deborah Bould and employment and Browne Jacobson pensions partner Kevin Milton - its founding head of corporate development left to join Dibbs.
Arthur Andersen also suffered a blow when Newcastle-based Dickinson Dees snapped up an entire senior financial planning team. The loss of the five-strong team forced Arthur Andersen to review its regional management structure.
And Andersens' habit of losing partners was not restricted to the UK. In Australia Andersen Legal lost four partners in a matter of months, including founding managing partner Philip Kapp. The partners were vocal in their dissatisfaction with the accountants' method of practising law and made a beeline back to the law firms.
But ZMB senior consultant Yvonne Smyth points out that complacency toward accountancy firms would be extremely foolish.
She says: "The accountants are key players on the scene now and they are numerically very ambitious. They are going to appoint in volume and they intend to grow significantly."
Indeed KLegal, the legal arm of top five accountancy firm KPMG, has had a successful year. In October, it raided bitter rival Arnheim Tite & Lewis for three senior lawyers amid threats that it plans to poach partners from law firms.
Merger-mania has also caused a raft of partner moves. After Clifford Chance announced it was merging with Rogers & Wells, six partners declared that they were leaving.
Wilde Sapte has a series of partners waiting to leave in February when its merger with Denton Hall is completed.
The negative aspects of the merger are already being felt in Asia. Earlier this month, Wilde Sapte's Hong Kong office imploded after one partner, three associates, and one consultant left for Brown & Wood. The remaining partner and three assistants left for Kennedys.
In 1999 there were also the usual shock departures of heavyweights, the most notable being Phillip Capper, one of the country's leading construction lawyers. He left Masons for Lovell White Durrant in October.
The year was also memorable for the first magic circle poaching when Linklaters & Alliance competition and regulatory partner Chris Bright left for Clifford Chance. Temporal believes the move, which caused shock at the time, is a symbol of the way things are going.
He says: "Institutional loyalty has diminished, so partners are beginning to recognise the need to move. They realise there is a major re-structuring going on and they are gravitating towards that."
For a variety of reasons 1999 has been one of the busiest years for partner moves. And while everyone takes stock of this hive of activity, it is worth remembering that without doubt, 2000 will surpass it.
Hitting the £1m mark
Above all 1999 will be remembered as the year of the £1m partner.
At the start of the year an advert appeared in The Lawyer, placed by an un-named US firm, offering a staggering £1m-plus remuneration package to partners willing to join its London office.
As well as sending a message that the US firms meant business, it was the beginning of the on-going battle to not only hire but retain the best partners.
Faced with such tempting packages, firms now have a duty to make sure the remuneration packages they are offering match up.
And for those considering a career move, the firm in question is understood to be McDermott Will & Emery.
In-house teams also witnessed a great deal of movement.
Communications giant Cable & Wireless lost two lawyers towards the end of the year. General counsel Elizabeth Wall joined data network company Equant. She was followed shortly after by legal adviser Bruce Macmillan who joined ONdigital.
Deutsche Bank's global general counsel Peter Brooks left for his old firm Clifford Chance, where he was known as the Prince of Darkness, amid rumours he was unhappy with the merger with Bankers Trust.
Investment bank JP Morgan's in-house legal department also suffered three high-profile departures over the summer months.
Perhaps the biggest shake-up of the year happened when Bradford & Bingley Building Society slashed its 26-strong legal team by 15 and Woolwich Bank made four lawyers and 16 support staff redundant.
A number of private practice lawyers moved in-house as well. The most high profile was Mayer Brown & Platt's senior partner of the London office Jeff Gordon, who left to become head of legal at GEC in August. A month later Clyde & Co partner David Bartlett joined him as legal counsel.