The corporate adventure
16 July 2001
8 February 2013
28 February 2013
6 December 2013
22 April 2013
25 November 2013
In recent years the London Stock Exchange (LSE) has been continually buoyed by a seemingly endless series of flotations as the dotcom era took hold. For the legal profession, that signified big bucks and lots of business for law firms' corporate departments.
In the Midlands, it has been the same as in the City. But as a number of profit warnings continue to nag away at business confidence, especially in the technology, media and telecommunications (TMT) sector, corporate departments are looking to new avenues of work.
DLA, for example, believes that corporate venturing is the way forward, and says that this year stands to be the busiest on record, as more and more small and medium-sized local businesses look to allegiances with national conglomerates.
Corporate partner John Jackson says that with flotations ruled out for 90 per cent of the region's businesses, corporate venturing is becoming increasingly popular. "The beauty of corporate venturing is that both parties see themselves as being on the same side, hoping to be future winners," he says. "If we're in a bear market, then those that are able to spread their risks are likely to be more successful." DLA now boasts a 40-strong corporate department, with the Birmingham office posting a 20 per cent rise in turnover.
However, it remains in the shadow of Birmingham's powerhouse, Wragge & Co, the largest single-site corporate practice outside London, with an 80-strong team. Its client base is also impressive, with 42 FTSE 100 companies, including Marconi, TRW and HJ Heinz on its books.
"I use them because of the quality of their work - they do high-quality work, no doubt about that," says Heinz head of legal Dan Vogus. "They work well not only with our in-house team, but also the businesspeople in our company."
However, even the region's top firms - DLA, Eversheds, Hammond Suddards Edge, Pinsent Curtis Biddle and Wragges - continue to lose out to the City on the biggest transactions. According to a report by lobbying group Birmingham Forward, Wragges handled the largest amount of corporate deals in Birmingham between 1993 and 1999, with a total value of £4.7bn. That is less than a third of the value scooped by Slaughter and May, which acted on regional deals worth more than £17bn.
All the leading firms are recruiting: Eversheds recently picked up corporate partner David Tilly from Browne Jacobson for its Nottingham office, while Hammonds last year relocated three of its top corporate partners to Birmingham, including Leeds high-flier Noel Hutton.
Head of commercial at Nottingham-based Browne Jacobson Rob Metcalf says: "As far as numbers are concerned, we're about right in Nottingham, but in the next few months there's going to be a shift of balance between the other offices." That, she says, is likely to include a number of lateral hires.
Despite the seemingly endless recruitment drive, the market is steady rather than spectacular. Gateley Wareing is still pushing through seven to eight deals a month, but according to corporate partner Andrew Madden: "There's generally quite a lot of uncertainty. Manufacturing businesses are struggling because of the strength of the pound, and a lot of the bigger firms are affected by the US. It's inevitably hit business."
This is a view supported by another regional firm, Lee Crowder. Corporate partner Graham Muth has seen business remain steady, but admits that firms are being very cautious. "We're still busy, but find that deals are taking longer to complete because people are more wary about paying over the odds."
|Deals round-up 2000-2001|
The management of Rank Hovis McDougall (RHM), the European food-manufacturing business of Tomkins, was sold to Doughty Hanson & Co for £1.4bn in July 2000. The transaction is one of the largest leveraged acquisitions to be completed in Europe. Wragge & Co acted for RHM (corporate partners Andy Lawton Smith, Maurice Dwyer and Richard Haywood). Lovells advised Doughty Hanson (corporate partner Alan Murray-Jones). Slaughter and May advised Tomkins (corporate partner Nigel Boardman).