Set for a fight
26 June 2000
One Essex Court has long been revered as the country's leading set of commercial chambers. Its tenants are among the most highly-rated and highly-paid barristers currently at the bar, but they are leaving at an alarming rate. Matheu Swallow investigates
One Essex Court has for so long symbolised all that is progressive about the commercial bar. Externally, it was the set that pioneered the unusual concept of delivering a quality service to solicitors; internally, it has led the way in practice management, with Paul Shrubsall and Robert Ralphs almost single-handedly reforming the image of the fusty, old-fashioned senior clerk.
But having enjoyed nearly a decade of charmed existence, One Essex Court is now suffering a rash of defections by its tenants. Last week, it lost its fifth tenant in as many months. With chambers income so closely tied to individuals, The Lawyer can reveal that One Essex Court may have to weather a drop in income of as much as £2.5m - out of a total income of some £20m. While it's hardly facing meltdown, the shutters have gone up. For the first time, senior clerk Paul Shrubsall - one of the savviest publicists at the bar - is "unavailable for comment".
So, why is the leading light of the commercial bar losing tenants when the larger commercial sets are expanding rapidly? Indeed, Shrubsall's remark, "It won't be long before you see the first 100-strong commercial set", is understood to have caused unrest in some quarters of One Essex Court. While Shrubsall did not specify One Essex Court as the set most likely to hit that figure first, his intentions were clear. But there have been questions at the bar as to whether the set's growth has been indiscriminate and lacking in focus.
"I have always felt it is too departmentalised," says a clerk at another set. "It has an IP section and an insolvency section but there is no thread to chambers."
This is in stark contrast to the other "magic circle" sets which specialise in a small number of core practice areas. Essex Court has an established reputation in arbitration, shipping and insurance; Brick Court in public and European law; and Fountain Court in banking, but the perception of One Essex is of a general commercial chambers.
A quick look at the set's recruitment policy bears this out. In 1997/1998, One Essex added tax capability with the acquisition of Michael Conlon, Allen & Overy's former head of VAT and indirect tax, and Malcolm Gammie from Linklaters. Then, in November 1998, the set added another new area of specialisation, aviation, taking on two recruits from the now dissolved 5 Bell Yard.
All of these practitioners are well respected. But there is a downside to this hiring strategy. While the star silks in the set, such as Tony Grabiner, Liz Gloster, Christopher Carr and Geoffrey Hobbs, are never likely to be short of work, a departmentalised chambers creates limited opportunities for barristers cross-selling their services.
Jeffrey Gruder QC certainly seems to be at odds with this staffing policy. He told The Lawyer (21 February 2000) that One Essex lacked senior practitioners in his own specialisms of shipping, commodities and international arbitration, and that his move to Essex Court Chambers was a strategic one.
On one level, all this movement simply means that barristers are beginning to behave more like solicitors. "What I've found triggers a move almost more than anything else is personal contact," comments Suzanne Cosgrave, chambers director at Wilberforce Chambers. "Strategy is important but it's a very personal decision. If we were a solicitors firm you could probably examine it [strategy] more rationally. It seems so much more complex at the bar because of personalities."
It is certainly true that chambers have a very different infrastructure to law firms. But the way the bar operates is changing rapidly. Chambers are branding themselves as corporate entities, and talk of partnership and even incorporation are no longer taboo subjects.
One Essex has been at the forefront of this change; indeed Shrubsall once compared the chambers to US law firms. "US firms are partnerships but they don't share profits. They operate a complete meritocracy, which is what a set of chambers is." (The Lawyer, 6 December 1999.)
But partnership demands cohesion and a common goal - something that is not necessarily shared by all the tenants at One Essex Court, according to several sources familiar with the set. One reason is the management style and structure. Grabiner is a full-time practising barrister, and a very successful one at that, meaning his involvement in the day to day running and strategy of chambers is minimal. Consequently, the responsibility falls to Ralphs and Shrubsall, who have been criticised by several barristers for adopting a centralised approach bordering on the autocratic.
But there are other distinguishing factors that mark out One Essex from its closest rivals. One is chambers contributions. Most sets operate a policy whereby each tenant contributes a percentage of their earnings, generally between 15 and 20 per cent, to pay for their room, administration costs and other expenses such as business development and marketing. This means that the more you earn the more you pay, so the senior practitioners in chambers are basically paying for the up-keep of the more junior tenants.
However, One Essex is understood to operate a capping system so there is a maximum level of contribution, meaning the youngsters pay relatively more.
But perhaps the most significant is cost. "Grabiner charges a fortune. I have always understood that they charge at the top end of the market," says Christopher Style, Linklaters' head of litigation and arbitration.
Traditionally, the set has relied heavily on the big City firms for the bulk of its work which meant that cost was not a major issue. Both Slaughter and May and Freshfields continue to instruct One Essex on a regular basis.
As Freshfields litigation partner Neil Golding says, if he is choosing between Lords Grabiner and Goldsmith the decision is made on the grounds of suitability and availability, not cost.
But One Essex's heavy reliance on a limited source of firms for their instructions means the litigation strategies of the big City firms, which have made clear their intentions to restrict outsourcing to the bar, are likely to have had a bigger impact than on the other leading commercial sets.
And it is not only the litigation strategies of the big firms that have affected the bar. Another problem is that many corporates, concerned at the cost of instructing the City firms, have moved to instructing regional firms for much of their litigation work.
"We have worked very hard for work from the likes of Clifford Chance and Freshfields and continue to do so," says David Grief, Essex Court's senior clerk.
"But over the past 10 years a changing market has meant that plc's increasingly use firms in the provinces. So I have also put considerable effort into marketing chambers to the regions, to firms such as Addleshaw Booth & Co and Eversheds."
In contrast, One Essex Court's work centres on the larger City firms. Another problem, according to a source familiar with the set, is that given One Essex Court's immersion in complex, high-level advisory work, it can be difficult to provide its juniors with genuine advocacy experience.
While One Essex Court is one of many chambers undergoing change, its very prominence means that many barristers are scrutinising its development.
Robert Ralphs and Paul Shrubsall - strategic thinkers both - may have work on their hands.
Gone, but not forgotten
Jeffrey Gruder QC
Moved to: Essex Court Chambers (February 2000)
Estimated earnings: £500,000+
Gruder returned to his former home in February this year (The Lawyer, 21 February). Until Michael Rollason's departure two weeks ago, Gruder's defection is believed to have been the only senior lateral movement between "magic circle" chambers since he left Essex Court seven years ago. Gruder says that One Essex lacks senior practitioners in his core areas of expertise, particularly shipping, international arbitration and commodities. He is a highly rated silk who has appeared in many leading cases, including Standard Chartered Bank and Pakistan National Shipping litigation that went to the Court of Appeal in March. Gruder is secretary of the Commercial Bar Association (COMBAR), a member of the London Court of International Arbitration and a panel member of the Lloyd's Arbitration Scheme.
Terence Mowschenson QC
Moved to: Wilberforce Chambers (February 2000)
Estimated earnings: £400,000
Mowschenson jumped ship with Michael Bloch QC a week after Gruder announced that he was on his way out. Mowschenson is known for his arbitration work and his experience of banking, corporate insolvency and commercial work. The recruitment of two such leading players was seen as a major boost to Edward Nugee QC's Wilberforce set which is fast gaining a reputation as an aggressive player at the top end of the recruitment market. The set has grown by nearly 50 per cent since 1997.
Michael Bloch QC
Moved to: Wilberforce Chambers (February 2000)
Estimated earnings: £400,000-£500,000
Bloch is a highly-rated silk specialising in a full range of corporate and commercial matters, including banking, commodity arbitration, conflicts, regulatory/financial services and competition law. High-profile disputes in which he has appeared include Virgin Atlantic Airways v British Airways; Co-operative Wholesale Society v Green; Hyde Park Residence v Yelland; United Biscuits v Asda Stores. In the past year, Bloch has also been involved in several substantial arbitrations against foreign governments and others in relation to power supply contracts and syndicated loans.
Moved to: Brick Court Chambers (June 2000)
Estimated earnings: £350,000-400,000
After Gruder, Rollason is believed to be only the second person in the last 10 years to swap allegiances within the magic circle. However, his move was even more surprising because, unlike Gruder, it does not fit with the popular theory used to explain much of the movement at the bar: polarisation. Rollason is a commercial insolvency and company law specialist, fields in which his new set, Brick Court Chambers, is not recognised as a serious player.
However, Brick Court Chambers has been recruiting widely, taking on Littleton's senior clerk Deborah Anderson to accommodate further planned expansion. Rollason follows Linklaters partner and solicitor-advocate Andrew Henshaw to the commercial chambers.
Steven Gee QC
Moved to: 4 Field Court Chambers (April 1999)
Estimated earnings: £500,000-£750,000
Gee left One Essex Court last year to head up 4 Field Court. His new set is best known for the shipping expertise of Geoffrey Brice QC, who Gee replaced as head of chambers. Gee is renowned as a punchy, pugnacious advocate, who is both forceful and combative in court, a style that is not to everybody's taste. He is an assistant recorder, the author of the leading practitioners text book on Mareva injunctions and has a highly-rated commercial practice.