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22 March 2013
Like boy bands, technology practices within law firms seem to have gone out of fashion. And the similarity doesn't end there. As boy band Take That lost its two best performers Gary Barlow and Robbie Williams to solo careers, poor Bird & Bird has been deserted by two star technology heads in under 12 months. Meanwhile, many e-commerce groups seem to be doing a Boyzone, a once chart-topping group that we've heard nothing of for the last six months, although they still won't admit to splitting up.
It is only KLegal, the law firm tied to accountancy giant KPMG, which seems to be bucking the trend and building its technology capability. And why an accountancy-tied firm that has been in existence for just over two years is doing this is a mystery to many.
The technology group at KLegal is very much a manufactured band that has been built purely on lateral hires. In June last year, Bird & Bird e-commerce head Mark Haftke jumped on board. He was swiftly followed in July by Steptoe & Johnson Rakisons head of telecoms Chris Hoyle, who took up the same position at KLegal. In February this year, KLegal poached BT's head of legal Alan Whitfield, and last month the group announced the appointment of Tarlo Lyons partner Michael Sinclair. Another director, the equivalent of a salaried partner, as yet unannounced, will be joining in the next couple of months. And the group plans to keep on expanding beyond this.
Looking at the current climate, this seems odd. Over the past year, Olswang has hired one media and communications partner. But the last hire was back in June. Bird & Bird last increased its general technology capability in May, with the hire of an IP partner to its Paris office. Meanwhile, Herbert Smith is planning to grow its IT and e-commerce group, but only if it finds the right people.
Only KLegal is confident enough to target aggressive expansion. This has a lot to do with its special accountancy-tied status. The technology group at KLegal has unrivalled access to FTSE 350 clients through its link with KPMG. And the majority of the group's work for large corporations comes from KPMG referrals. The group is ultimately aiming for a 70-30 split between its own and KPMG's clients. Although current figures remain undisclosed, this hints at just how much the group is buoyed up by its relationship with the accountancy giant.
The technology department also has a defined direction for expansion. And this necessitates lateral hires. It is incredibly sector-specific, with no corporate capability. Unlike, for example, Slaughter and May or Herbert Smith, which have incorporated their own firms' corporate expertise into their technology groups, KLegal is aiming for the best pure-technology practice. And to get the best pure-technology lawyers, the firm needs to continue recruiting.
Of course, some lawyers grumble that KLegal has only built up a sector-specific technology group because, as a young firm, it does not have the corporate weight of the City top 10. But the multidisciplinary approach that KLegal and KPMG are aiming for negates any need for individual practice areas to provide a one-stop shop.
And it may be this multidisclipinary approach that has attracted some of the country's top technology lawyers to KLegal. Potentially, it allows a larger client base, which after the death of the start-up is what every technology lawyer needs. To a large extent, KLegal does not have to rely on laterals with a following (a sine qua non for most firms) because of the fertile internal referral market within KPMG. But the firm has chosen partners that can bring work with them. Haftke brought Sony, his largest client at Bird & Bird, to the firm, and Sinclair is hoping to bring Volvo. Meanwhile, KLegal is still eaten up by the hope that Whitfield will bring work from BT to the firm. As Westlife said: "Dreams come true."