Top firms retain FTSE stranglehold amid tough times
2 June 2008
In the past three months several of the FTSE100's biggest names have fallen victim to takeovers, leaving City firms to wave goodbye to some of their most prized clients.
But, as the new quarterly Hemscott rankings show, it will take something more dramatic to shift the top legal advisers to the UK's largest companies.
Slaughter and May lost two FTSE100 clients to acquisitions, with life company Resolution and Reuters?both?being swallowed up by rivals.
But it gained paper and packaging business Bunzl, a longstanding client that was recently admitted to the list, and the firm remained at the top of the rankings with 25 of the top 100 companies on its books.
Meanwhile, the demise of Scottish & Newcastle, bought by a consortium of Heineken and Carlsberg, caused both Linklaters and Freshfields?Bruckhaus Deringer?to?lose?an important client.
But?second-placed Linklaters closed the gap on Slaughters by adding two new clients in the last quarter and now has 21 of the UK's largest companies on its roster.
In an increasingly volatile market, firms that can attract new FTSE100 custom have a distinct advantage.
Linklaters, for example, has benefited from seeing one longstanding client make it onto the list in the form of Tate & Lyle.
It has also reaped the reward of its three-year relationship with mining giant Kazakhmys, which floated on the London Stock Exchange last year and recently made the top 100.
Linklaters?head?of corporate David Barnes said the key to the firm's success was its ability to cater for established FTSE players and relative newcomers alike.
"What we're attempting to do with our international coverage is service those large clients but also pick up some of the clients who are coming to London as a financial centre - like Kazakhmys. We're very interested in representing them," he said.
The firm's roster of clients includes BP, Vodafone, Royal Bank of Scotland and another miner that has enjoyed a busy year, Rio Tinto, which is advised by Richard Godden and James Inglis.
The top FTSE advisers have changed little in 20 years, according to Barnes. "Who's advising the biggest number of companies? It would be Slaughters and Linklaters. Freshfields has come up over the last 20 years and Herbert Smith has had a good run," he said.
Freshfields head of corporate Mark Rawlinson can recall when the firm was the "new kid on the block" in the 1980s. Now it is stalking the top two. "We'll continue to close that gap," he promised.
The firm counts Rolls-Royce, Wolseley and Xtrata among its clients. Its FTSE showing has also been boosted by the return of corporate rainmaker Barry O'Brien, who has been sworn?back?into?the partnership after a two-year break while the Solicitors Disciplinary?Tribunal investigated his role in the attempted takeover of Marks?&?Spencer?by entrepreneur Philip Green.
O'Brien is the relationship partner for medical technology company Smith & Nephew, Freshfields' only new FTSE100 entrant this quarter; he also works with Tesco and HSBC.
Meanwhile, Slaughters looks unassailable at the top of the table. It represents a quarter of the FTSE100, including Diageo, GlaxoSmithKline, Cadbury and British Airways. Its key partners are Nigel Williams, who represents the acquisitive BHP Billiton, William Underhill, who acts for Prudential and Thomas Cook, and Martin Hattrell, who is relationship partner for private equity firm 3i Group.
New head of corporate Frances Murphy has every reason to be confident. "We're pleased to be top of the list. We've been fortunate in having a strong corporate client base throughout our history and we make great efforts to maintain that."
FTSE100 firms by number of clientsRank Rank Firm No of clients No of clients Q2* Q1** Q2* Q1** FTSE250 firms by number of clientsRank Rank Firm No of clients No of clients Q2* Q1** Q2* Q1**