Vultures circle Dentons’ star competition clients
8 December 2003
9 July 2014
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24 July 2014
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25 June 2014
You can bet that the phones have been ringing off the hook at the Premier League since Dentons’ two biggest competition stars announced that they were quitting the firm.
The Premier League is a trophy client for Dentons, but it is a trophy that many a law firm would like to have in its cabinet.
Once rival competition lawyers heard that the firm’s head of competition Polly Weitzman was going to Ofcom and rated junior partner Suyong Kim was off to Wilmer Cutler & Pickering, the office of the Premier League’s chief executive Richard Scudamore must have been besieged.
Whatever Dentons claims, the firm’s rivals perceive the loss of this high-profile pair as a body blow.
Consequently, virtually every competition practice in the City is running the slide-rule over Dentons’ choice client list.
The two real pearls are the Premier League, a client of Weitzman’s, and the MasterCard investigation, which was part of Kim’s financial services practice.
The football organisation is a great client because it is always in trouble with the regulators. Aside from its high profile, it has historically been something of a cash cow for Dentons. The firm’s new head of competition Jonathon Tatten won’t comment on how much money it brings in, but other sources close to the firm estimate that it is a seven-figure sum annually.
MasterCard, which the Office of Fair Trading has been investigating for more than three years, is no less high-profile. MasterCard is a private stock company owned by thousands of banks that issue MasterCard credit cards. Eight of the UK’s biggest retail banks that use MasterCard are under investigation over fees and Kim was advising the banks.
As The Lawyer reveals this week, MasterCard has dumped Dentons and is using Lovells. Dentons must now fight like fury to keep hold of the Premier League or risk unleashing a feeding frenzy as rival competition lawyers scent blood and pillage the rest of the firm’s top-notch clients.
It looks like the Premier League is still in the balance. On the bright side, the Premier League and Weitzman’s other clients, which included British Gas and Transco, can’t exactly move with her, given that she is going to a regulator.
Tatten is also working alongside her for the Premier League and has been for several months, so there will be some continuity.
Sources within the firm say they have had quiet indications from Scudamore that the Premier League will stay with Dentons. However, other City firms, including some with very highly-rated practices, are talking to Scudamore. Dentons is not out of the woods yet.
Kim’s clients, the biggest of which is Liberty Media, are a different kettle of fish. There is some expectation that she will take a number of them to Wilmer Cutler.
However, the MasterCard banks did not consider the US firm, despite its London office having a growing reputation in financial services. One source said this was because Wilmer Cutler does not yet have sufficient resources in London to support a major competition investigation. Although highly-rated, Kim was a relatively junior partner and if it were simply a dogfight between Wilmer Cutler and Dentons, the City firm would have a fighting chance.
The real problem for Dentons is that there are other players in town. To loose Kim and Weitzman at the same time is a public relations disaster. The rot really set in when Dentons’ head of competition David Aitman went to Freshfields two years ago, but the latest defections mean that the firm has just three full-time competition lawyers in London, including Tatten.
Tatten, who was once the managing partner of Denton Hall, has only been practising competition law since 2000. Trained as a litigator, he is highly-rated by those who know him for cartels work, but he has little experience in or inclination for merger clearance work.
Merger clearance is certainly less glamorous than cartels work, but a strong practice in this area is absolutely crucial to the corporate department. To attract the type of big M&A deals Dentons would like more of, you need a strong merger clearance team.
The two remaining partners in the group, who will handle primarily merger work, are very junior and have virtually no profile outside of Dentons. Despite this, Tatten says that he does not intend to waste time scouring the market for a lateral hire, he wants to give the two partners Gillian Sprout and Sam Szlezinger a chance to shine. In one respect, this is both creditable and sensible. It would be virtually impossible for Dentons’ decimated competition practice to attract a high-calibre lateral, particularly given that the firm’s average profit per equity partner is just £325,000. And the practice has succeeded in the past with home grown talent. The question is, will clients be as patient or trusting as Tatten? Sadly, in a dog-eat-dog world, you might be inclined to think they won’t.
With Weitzman and Kim still there, the flagship competition practice is the firm’s most profitable department. And despite the fact that it is relatively small, it contributes significantly to the firm’s bottom line. Dentons’ strength is in three core areas: energy, financial services and technology, media and telecoms – all of which are highly regulated so clients need top-notch competition advice. It is the Doomsday scenario, but if clients start going elsewhere for competition advice, there is a danger that Dentons could lose them altogether.
Dentons likes to boast that when your lawyers go off to high-profile public sector posts – such as the general counsel’s job at Ofcom, or, in the case of employment partner Denise Kingsmill, to the former Monopolies and Mergers Commission – it is something of an honour. The problem is, honour just doesn’t pay the bills.