"This is an unsettling time for everyone,” runs the Allen & Overy (under)statement. You can say that again. What’s going on in the magic circle at the moment feels savage, but that may just be because of its contrast with the top-of-the-world confidence found at the same firms two years ago.
Smaller firms, which have had to fight for less insitutionalised business, and whose profits do not have as far to fall, may be able to adapt better.
Most partners’ survival instincts are pretty well honed, but this period of turbulence is going to test their political endurance to the utmost. As we report today, A&O is letting go of five of its 12 leveraged finance partners and 31 of its 108 banking associates (see story).
The symbolism is enormous. A&O was one of the first firms to adopt leveraged finance as a distinct specialisation, and famously raided Norton Rose in January 2002 for a four-partner team to augment its market position, taking Norton Rose out of the market in the process. The leveraged finance group’s success made it almost a firm within a firm, with a distinct profile and culture. It’s fascinating that redeployment does not seem to have been a serious option.
Meanwhile, partnership politics at Linklaters has claimed former emerging markets head Nick Eastwell (see story), who by all accounts was on the slopes last week when the story broke. His long-term absence from the firm will clearly be felt if the extraordinary tributes by his colleagues on TheLawyer.com are anything to go by. His exit will also be a lightning rod for the debate around Linklaters’ internal shake-up.
Furthermore, Eastwell’s departure means that the ancien régime at Linklaters is now dead – if you exclude David Cheyne, that is, who has embraced Simon Davies’s New World. Tony Angel’s lieutenant Giles White has gone, leaving two frontrunners. The first is Marc Harvey, a litigator, the second Zili Shao, a man with the awesome internal reputation of having survived the Cultural Revolution, and to whom a spot of partnership restructuring is probably a walk in the park.