Transatlantic dream sours as Audley & co walk out on Faegre
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Five years ago US firm Faegre & Benson tied the knot with London firm Hobson Audley in order to grow its capabilities in the UK's capital, but now the honeymoon period is definitely over. Four former Hobson Audley partners have walked out of the door in the past month.
As The Lawyer revealed last week (10 March), Fox Williams seduced real estate partner Simon Smith and corporate partner Paul Taylor, while Charles Russell enticed corporate finance partner Edward Hoare from Faegre.
The trio of losses follows Max Audley, co-founder of Hobson Audley, being charmed by Olswang in February. The defections leave only five Hobson Audley partners at Faegre.
But what has led to almost half of Hobson Audley's partnership falling out with Faegre? The most obvious reason is that the original merger deal has expired. It locked in the Hobson Audley partners for a five-year period.
"It meant that once 1 February hit it was easier for partners to move on," says one former partner. "So many leaving at the same time is the result of recruiters not being able to touch us until now. So there's been an accumulation of offers and the headhunters were out in force."
Faegre's explanation for the desertions, however, is that the firm's new strategy simply did not suit all the London partners.
US partner Andrew Humphrey, Faegre's London office liaison partner and a management committee member, says the strategy was to bring London in line with the rest of the firm. This means getting the London partners to bring in work from large international corporates, such as current clients global technology business Electronic Data Systems or "growing sophisticated companies with international aspirations" such as asset manager Dawnay Day Group.
So, it is about looking at the bigger picture; not simply focusing on the job, but working on the relationship with the client, to get a company coming back for more.
Some may think that any lawyer's strategy would be to have a relationship with their client but, according to Humphrey, it was not for some Hobson Audley partners.
He says: "There were some AIM partners that were solely focusing on the AIM deal, as opposed to developing relationships with the companies."
This could be construed as a thinly veiled attack on Audley, who built the firm's reputation on the back of a flourishing AIM practice. In the latest Hemscott AIM advisers guide, Faegre had eight AIM-listed clients, while Audley's new firm Olswang had 24. Despite numerous calls Audley was unavailable to comment on the reasons for his departure from the firm he founded 25 years ago.
This divergence in strategy appeared to have slipped under Faegre's radar in 2003 when it merged with Hobson Audley, despite both parties pointing out at the time that they had worked together for six years prior to consummation.
The US firm's chairman Phil Garon said the two firms had similar cultures and values. But it appears that they only learnt characteristics about each other that could not be seen beforehand once they moved in together.
Humphrey concedes this point. "The first few years of our merger strategy was to introduce our lawyers to each other and the clients to each other and allow the synergies to form naturally," he explains. "A year-and-a-half ago it was realised a more intentional strategy was needed instead."
Those left in the London office will target the mid-market businesses in London as Faegre is "mindful" that it is no Linklaters and should not punch above its weight.
Humphrey says this strategy has added advantages: "Bringing in real work and real expertise at the right size and level of business will mean our US clients will be more comfortable using the London office."
But for the departing Smith, there was little integration. He says he could not draw on the clients in other practices as the departments were isolated. He says he wants more of a "collegiate atmosphere", which he believes he can get from Fox Williams.
Humphrey dismisses this issue, saying that the push for the London office to build client relationships will solve the problem.
At the time of the Faegre-Hobson merger, Faegre claimed it would give its newly acquired London office the autonomy and flexibility it needed to thrive. It seems that strategy is well and truly over.