20 YEARS OF THE LAWYER: 2001
5 December 2007
Clifford Chance: new management, horrible jobIt was a not a year most of the Clifford Chance management would like to repeat, mostly because of its US saga, which would set the tone for the next four years, with battles on partner compensation and associate morale (which would eventually end with the infamous ‘Paddinggate’ letter in 2002).
First, US managing partner Larry Cranch unexpectedly stepped down a year early to be replaced by global head of litigation Jim Benedict. Then came the first whiff of something even bigger: a proposal to evaluate partner performance was made at a weekend strategy conference in Hammersmith in March.
Some voices in the partnership argued that the system was the first in a process that could ultimately question the firm’s lockstep system, perceived by some to be already under threat following the firm’s mergers with Grimaldi e Associati and Rogers & Wells.
Indeed, the seeds of discontent had already been sown when Clifford Chance finally merged with Italian alliance partner Grimaldi the previous year, and when it was forced to do an off-lockstep deal to accommodate the Italian firm’s more senior partners – something that was seen as contrary to the one-partnership ethos.
That turbulent Hammersmith retreat was to prove pivotal. At that meeting the two candidates for the top job at the firm, European managing partner Peter Cornell and London managing partner Peter Charlton, spoke to the assembled partners.
Cornell, who managed to portray himself as the outsider, despite having been in a senior management position for many years, read the mood of the meeting beautifully, astutely focusing on partnership values. He won.
Charlton, the man who took the decision to raise newly qualified salaries to £50,000 and to move the firm to Canary Wharf, became the unfortunate victim of the backlash against the management. (Still, he did win Partner of the Year at The Lawyer Awards.)
And in May came de-equitisations, with up to 20 US partners forced out of the equity. The soap opera over the US would, however, run for three years; 2001 was just the beginning.
The year of mergers
Pinsent Curtis merged with London niche firm Biddle at the beginning of the year. In Bristol Bond Pearce and Cartwrights announced their intention to merge, with the insurance litigation department spun-out as an independent partnership (28 May).
Berwin Leighton merged with Paisner & Co to become Berwin Leighton Paisner (BLP), a merger that at the time did not set the market alight. It would take BLP chief Neville Eisenberg a few years to get the firm on course.
And then came a couple of merger talks destined to collapse. In July Simmons & Simmons entered merger negotiations with German firm Beiten Burkhardt Mittl & Wegener about the formation of an alliance. In the autumn, however, it pulled off a Dutch merger with Rotterdam-based Nolst Trenité.
There was also Stephenson Harwood’s talks with US firm Holland & Knight, which could have created the largest transatlantic merger since Clifford Chance and Rogers & Wells. It foundered, but Rowe & Maw and Mayer Brown & Platt hammered out a transatlantic deal.
November was the high spot for mergers. KPMG’s associated law firm KLegal entered talks with McGrigor Donald, which would see the formation of a firm with a £50m turnover, propelling KLegal into the UK top 40. Then Radcliffes and Le Brasseur J Tickle created a 61-partner firm.
Also, The Lawyer revealed that Cobbetts was set to merge with Read Hind Stewart in Leeds, while in the South East Laytons announced that it had merged with niche technology practice Lochners (12 November).
One of the busiest firms was the freshly merged Hammond Suddards Edge, which in those days was in ebullient form. It took over niche leasing finance firm Wilde & Partners, sports boutique Townleys and secured French and Italian offices with Hausmann & Associés and Rossotto e Associati respectively.
The Lawyer Awards 2001
Law Firm of the Year: Macfarlanes
Global Law Firm: White & Case
Partner: Peter Charlton, Clifford Chance
Niche Firm: Memery Crystal
Public Sector Team: North Yorkshire Legal Services
Banking In-house Team: Standard Chartered
In-house Lawyer: Stephen Scott, Vodafone
In-house Commerce & Industry: Virgin Group
In-house TMT Team: MTV Networks Europe
Diana Parker, WithersDiana Parker became senior partner at Withers in 1999 – one of the first female leaders of a sizeable UK firm.
In 2001, a year of law firm merger frenzy, she pulled off one of the most intriguing deals of the year, with New York’s Bergman Horowitz & Reynolds. The deal was strictly targeted to serve high-net-worth clients across the Atlantic. In doing so Withers adopted LLP status at the beginning of 2002 – the first UK top 100 firm to do so. Since then dozens of firms have followed Withers’ lead.
Parker had shown an unusual side two years previously, confessing to The Lawyer that, in another life, she would have been “a cartoonist, saxophonist or craftsman”.