Old dogs, new tricks? Why BLP corporate is hiring CIty veterans

Berwin Leighton Paisner (BLP) corporate head John Bennett has form when it comes to lateral hires. More than 20 years ago he was one of two partners at legacy firm Berwin Leighton to interview a young South African lawyer who was looking to move his life over to London.

Bennett hired the lawyer - one Neville Eisenberg, who has gone on to lead BLP for the past 12 transformational years - making one of the most significant decisions ever made at the firm. Still, Bennett insists that no one had any inkling of Eisenberg’s qualities at the time.

“It was a long, long time ago, when Neville was in shorts and I was just out of shorts,” he jokes.

Two of Bennett’s most recent hires, however, have not had the luxury of a low-key beginning at BLP. Linklaters former global corporate head David Barnes and Allen & Overy (A&O) ­corporate heavyweight Alan Paul, who had both retired from their ­respective firms, joined BLP earlier this year. Both were already big names and both have been out of shorts for quite some time.

BLP has been aching to break into the top tier of the corporate market for more than 10 years. But is hiring two magic circle retirees really going to do the trick?

Spreading the magic

BLP has made a point of taking on ex-magic circle lawyers of late.

“Over the past few years they’ve hired at least three corporate ­partners, three finance partners and one real estate partner from the magic circle, as well as a number of associates,” observes one legal ­consultant.

The firm has done pretty well out of this strategy, raising its standing in real estate, tax and finance. Nonetheless, when BLP hired Barnes and Paul, eyebrows were raised, with a correspondingly cynical snap analysis by many rivals and market watchers.

“When people leave firms like A&O for firms like BLP, I wonder if that’s more a public statement than something that will generate work,” muses one corporate chief at a UK-headquartered firm. “Paul, for instance, is a well-known figure in the corporate world but he’s very senior and I’m a bit sceptical.”

“A lot of firms have tried taking partners in their twilight years to build a corporate practice - usually they’re US firms,” says another City firm corporate head. “But apart from Maurice Allen at Ropes & Gray, I can’t think of many others that have been successful doing it. BLP is a good firm but it won’t transform its practice by hiring these two guys. You transform your practice by hiring good junior lawyers over a number of years.”

Corporate ambitions

All this is not to say that BLP’s corporate practice needs transforming. In 2011 the group pulled in £71m and climbed to 13th place in The Lawyer UK 200 Annual Report’s top 15 table of corporate practices, up from 17th in 2008, when it made £59.5m. The firm is winning new clients such as Church & Dwight and Vitol, and retains its trophy clients such as Tesco and Balfour Beatty. But BLP has so far failed to fulfil its lofty aspirations of becoming the practice of choice outside of the magic circle, along with the likes of Ashurst and Herbert Smith.

“For 10 years BLP has been trying to build up its corporate practice but it’s one area, unlike finance and real estate, where they’ve not managed to get people from the top firms straightaway,” says one source familiar with the firm.

Indeed, BLP’s search for a corporate rainmaker is well-documented. In Barnes and Paul, the firm has come at the problem from a different angle, finding two magic circle lawyers who were open to moving to a firm outside the top five by virtue of the fact that they could not have stayed on much longer doing the same role at their old firms.
That said, even though Barnes and Paul had already retired from their respective firms, there was still ­competition to attract their talents: Latham & Watkins is understood to have made a serious offer to Paul, while Barnes mulled consultancy jobs before plumping for BLP, which he has joined as a partner. Both are understood to have been brought into the firm on £800,000 packages, with Paul joining as a special counsel.

“[The hires] are part of our long-term strategy,” stresses Bennett, who adds that their timing - within months of each other - was a ­coincidence.

“We’re trying to move the centre of gravity of the business and we wanted to accelerate that growth,” he says. “Both Alan and David bring different things to the party. David has deep experience in China, and spent several years in Hong Kong; Alan [has represented] some of the largest ­Indian and US corporations and has more experience working with financial sponsors.”

Bennett adds that, as with most partners at the firm, Barnes and Paul will be player-managers, leading on some deals but also giving younger partners the benefit of their experience and lending their gravitas to client meetings. But many doubt how much heavy lifting, in terms of deals, the pair will do. Also, how much they will be able to leverage the relationships they built at their old firms, which are adept at making sure clients remain institutional, is questionable.

On the plus side, the pair would not be seen as a block on the promotions ladder to BLP’s younger partners and associates, although the firm’s large guaranteed salary packages have generated murmurs internally before. If Barnes and Paul were not seen to be earning their keep, it could lead to more discontent.

“It could be a lose-lose situation,” says a law firm strategist, ­”because you might end up with the ­situation where Barnes and Paul aren’t bringing in bigger mandates and people at the firm think ’these guys aren’t so hot, why are they on so much money?’.”

“As a general strategy, hiring people from the magic circle, current or former, is of course a very good idea,” says Jonathan Bowden, managing director of recruitment consultancy Magic Circle Lawyer. “I certainly don’t think the risk is on the hiring firms such as BLP, more so on the laterals for delivering the performance levels they project and sometimes promise. It’s important that everybody is realistic through the courtship to ensure shared ­success.”

Branding issues

But more to the point, hiring Barnes and Paul still does not address BLP’s corporate brand awareness problem. According to one magic circle corporate partner: “M&A as a platform is all about the brand and the quality of the associates you can hire. Senior partner hires are only one piece of the puzzle and I think BLP will still struggle in terms of its brand.”

Equally, BLP wants to increase its market share at a time when others are desperately clinging on to theirs.

“No one is letting any deals go at the moment,” points out one corporate City partner. “People are fighting pretty hard for every corporate deal they can get. BLP’s traditional ground would be to undercut us on price, but we’re fighting tooth and nail at the moment. While we’re still probably a bit more expensive than BLP, we can be pretty aggressive for the deals we want.”

Bearing this in mind, it is easy to see why some are cynical about the hires. The City’s ­corporate elite have watched many ­pretenders to the throne try to crack the market and fail in the past: Wragge & Co and McGrigors are just two ­examples given by one corporate partner. A few US firms have made headway but only by cutting bigger cheques than the rest of the ­competition.

But if one firm deserves the benefit of the doubt when it comes to making lateral hires work, it is BLP. No one ­really expects Barnes and Paul to transform BLP’s corporate practice, but then that is not the point. Their hires are about something more subtle than that: about building on the firm’s nascent web of contacts.

“I’m not cynical about the hires,” says a source familiar with the firm. “I just look at BLP, which has had form on this sort of thing for some time. The firm’s profitability is good and it’s tightly run; Neville won’t ­tolerate coasters.

“[Barnes and Paul] are hungry people with 10 years left in their ­careers. BLP won’t have made the same mistake that some US firms have made: the hires have been pretty surgical.”

Besides, as the source puts it: “If you only did things that you were certain to succeed, you’d end up doing nothing. BLP has improved its brand too much over the past few years to be sniffy.”

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In brief: Alan Paul

Alan Paul had been a partner at Allen & Overy (A&O) since 1985 and announced his retirement from the firm in November 2011, halfway through his second four-year term as a board member.

Paul was seconded to the UK Takeover Panel in the 1980s and at A&O looked after the relationship with Macquarie, among others.

“I decided to leave A&O last year and spoke with a number of firms,” says Paul. “But I got to know Berwin Leighton Paisner [BLP] and I think it’s a firm with great ambitions that’s seeing results. Also, I like the people here.

“I could have stayed at A&O, but you have to change what you do as you get into your 60s, which I’m not that far off. I wanted to develop a different way of working for the longer term and decided to do that at BLP.”

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In brief: David Barnes

David Barnes had been at Linklaters for 36 years, 26 of them as partner.

He was made up in 1985 and that year moved to Hong Kong, where he remained until 1991. Barnes led the firm’s global corporate department between 2005 and 2010; his clients included BT, HSBC and Sainsbury’s. Barnes unsuccessfully ran for senior partner in 2011 before announcing his retirement later the same year, although he admits he never intended to “fully retire”.

“I was attracted to Berwin Leighton Paisner [BLP] and its strategy, and thought it was somewhere I could make a contribution,” Barnes says. “I’ve only ever worked for one firm but it’s not been as big a transition as I thought it might be.

“It’s a changed market and the world is a very different place. There’s an opportunity for BLP to win a bigger proportion of work in corporate. We won’t get a huge share increase overnight but if we listen to clients we’ll get there. Other firms have done it.”