US firms embrace Eastern promise
12 May 2008
Allure of Russia and Ukraine proves catching
Bryan Cave and Squire Sanders
Allure of Russia and Ukraine proves catching
The appeal of the East seems to be contagious. Last week two US firms, Bryan Cave and Squire Sanders & Dempsey, outlined strategic moves into Russia and Ukraine.
Bryan Cave has capitalised on its successful Russian client base by establishing a formal Russia, CIS and Ukraine group to be managed out of the firm's London office.
Meanwhile, Squire Sanders has re-established its standalone office in Kiev, snaring local firm Silecky's managing partner Peter Teluk and a team of seven associates.
So what is the attraction for these US firms? And how does it fit into the wider strategy of each firm in its US network?
Bryan Cave London managing partner Anthony Fiducia regards the success of the new department in London as a crucial part of the firm's success.
"At the moment it's much more about drawing on the expertise we have in Europe to build this work," admits Fiducia. "But ultimately our experience here will be used to help our US client base, who want to invest and do deals in these regions. That's our goal."
Bryan Cave's team in London is headed by litigation and arbitration partner Nick Cherryman and counsel Richard Stewart. Both have been focusing on disputes out of Russia.
The firm has won some lucrative mandates, including advising Russian aluminium company Rusal on its multijurisdictional dispute with state-owned aluminium producer TadAZ.
While Bryan Cave's seven-strong team shows promising progress, the firm does have to contend with competition from fellow US players, including Cleary Gottlieb Steen & Hamilton and White & Case, both of which have successful on-the-ground capital markets and M&A capabilities.
"This is the first step for the firm and there's still a long way to go," admits Fiducia. "But the potential is certainly there and we're expecting this area of our European network to have an excellent impact on the US offices."
Squire Sanders' European focus has seen the firm launch offices in Hungary, Moscow, Poland and now Kiev.
The firm has an interesting history in the region, having launched an office in Ukraine's capital for the first time in 1992.
Local lawyer Helen Kryshtalowych ran Squire Sanders' original office before the firm disbanded it in 2004 in a move that saw its lawyers transfer to local firm Silecky, while Kryshtalowych remained a partner at Squire Sanders.
In this week's issue (page 10), Squire Sanders international practice partner Mark Cusick freely admits that the move to shut down its Ukraine office in 2004 was a mistake in light of the current profitability in emerging markets.
"It was important for us to concentrate on other jurisdictions such as Russia and Poland," says Cusick. "The markets have changed and we've seen an increase in M&A and investment from private equity houses in energy and telecommunications in the Ukraine, so it's important to have our own office."
With Squire Sanders' 36 global offices, a network in Europe seems worlds apart from maintaining a successful firm in the US. With the firm having 11 European offices compared with 15 in the US, the focus for Squire Sanders is not necessarily US-based.
"Not all lawyers will benefit from having colleagues in various offices in the world," says Cusick. "But for the Ukraine, having strength in energy is crucial, and this fits well with our energy practice in Houston, for example. Our focus on Europe has been really successful and this only strengthens the rest of the network."
As Western markets continue to be unpredictable and insecure, many firms are looking to ramp up in the emerging markets that have fared well during the past year.
"If you want to build a global firm you have to invest properly in other regions," says Fiducia. "The emphasis doesn't have to be on the US alone. We're taking opportunities that arise in other regions that will feed into what we do in the US and build our presence in Europe."
Mayer brown flags up infrastructure as the one to watch
Litigation has been the focus of US firms since last summer, with firms reorganising partners and associates so they can benefit from the influx of litigation that market volatility has created.
Mayer Brown, however, is adopting a refreshingly optimistic perspective on the year ahead by highlighting the growth area of domestic infrastructure as a driving force for 2008.
The Chicago-headquartered firm is banking on its infrastructure capabilities to see it through the credit crunch, with more investors, including private equity houses, turning to US domestic infrastructure deals for more secure investment opportunities.
"Infrastructure deals in the US are still relatively new because of the special local authorities that own these assets rather than the federal government," says Mayer Brown M&A partner John Schmidt. "But a few key deals have changed this in recent years, and we're now seeing more interest from different types of entities, including private equity."
In 2005 a Mayer Brown team led by partners Schmidt and Jo Seliga advised the City of Chicago on Cintra Concessions' and Macquarie's $1.83bn (£936.29m) infrastructure bid for the Chicago Skyway - a toll bridge connecting the Indiana toll road to downtown Chicago. Milbank Tweed Hadley & McCloy advised Cintra Concessions and Macquarie on the deal.
At present the Mayer Brown global infrastructure team consists of six partners and 12 associates.
"This is a very strong growth area for the firm and we aim to double our total number of lawyers within the next year," says Schmidt. "We're seeing private equity interest in infrastructure deals, and this is bound to have an effect on the market."
With big-ticket private equity deals no longer dominating the US market, private equity houses are expressing an increasing interest in infrastructure. Private equity houses First Reserve and Carlyle Group are just two that have been actively seeking out opportunities in the market.
In 2006 Carlyle was among the bidders involved in the $563m (£288.05m) Chicago Garages infrastructure deal.
"While it's still a relatively new area for the US, it's developing fast and we're seeing private equity take a real interest in how the infrastructure market opens up," says Schmidt.
If you're happy and you know it…
If you're happy and you know it…
When you think of a top New York law firm dead set against international expansion (at least officially), most people would say "Wachtell". But there are others.
US litigation powerhouse Boies Schiller & Flexner is one. While fellow US litigator Quinn Emanuel Urquhart Oliver & Hedges launched in the UK last month (22 April), Boies Schiller has no such plans to set up shop across the pond.
Last Thursday (8 May) I popped in to Boies Schiller to find out why not.
"We've experienced tremendous growth in the past 10 years," says partner and trial litigation specialist Mike Brille. "The firm's already well positioned in the international market."
Much of that positioning comes through the international arbitration team led by co-founding partner Jonathan Schiller, which has certainly pulled in some heavyweight cases of late.
One recent highlight was representing hat and shoe retailer Genesco on its successful specific performance case against Finish Line, which compelled the Indianapolis-based company to go through with its agreed merger agreement.
Off the back of a string of cases such as this, Boies Schiller has grown from a two-office firm in 1997 to a 12-office, 200-lawyer giant 10 years later. It's a national litigation powerhouse, and is happy to stay that way.
• Posted: 9 May