Will Bingham's new focus spark conflicts?
28 July 2003
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22 October 2013
So, Bingham McCutchen has finally got its woman.
After serving a nine-month notice period, Sarah Coucher, Denton Wilde Sapte's former head of acquisition finance, was welcomed into Bingham's swanky new offices at Gresham Street three weeks ago as its latest lateral hire.
This is actually a bit of a misnomer, since it makes Bingham sound like it takes partners on all the time in London.
In fact, the firm's City office has not made a lateral hire since it grabbed highly-rated restructuring partner James Roome out of the clutches of Cadwalader Wickersham & Taft in 1999 nearly four years ago.
Considering Bingham's ultra-conservative approach to recruitment, it becomes obvious that when the firm decides it needs a new partner, it has a very clear, defined strategy in mind when it makes the lateral leap.
Coucher's appointment is no different. She is recognised for her background in workouts, making her an ideal addition to both Roome and the highly-rated Barry Russell. But crucially for Bingham, Coucher is also an acquisition finance expert.
Her key relationships rest with the Royal Bank of Scotland (RBS), Bank of Scotland and HSBC. These have a strong slant towards her restructuring expertise. In the past, however, Coucher has also acted on leveraged buyouts (LBOs) with RBS and it is in finance that Bingham hopes to broaden its practice.
After all, it must be pretty maddening to be working on a restructuring and to then be offered a big dollop of financing work - be it in bonds, mezzanine or senior debt - and not have the back-up to be able to accept it.
Funnily enough, it was a banking relationship - with Bank of Boston (now Fleet Boston) - that originally prompted the move into London 30 years ago. The reputation the office now has for bondholder restructuring work has
presented numerous client relationships and contacts it has been unable to expand on for want of a broader offering.
Bingham's approach makes perfect sense - if only life were that easy. If you have a practice that is skewed towards either bondholders or banks, then acting against your traditional client base uncovers a hoard of conflicts.
At the end of the day, banks and bondholders are not only battling with the debtor on a restructuring, they are fighting with each other to recover as much money as they can.
Also, bondholders are not known for their patience when it comes to dealing with senior
lenders, which are often further up the recovery ladder than they are.
Other firms have tried to bridge the gap. Remember all the hoopla when, two years ago, Allen & Overy (A&O) took bondholder expert David Frauman from Cadwalader?
There was plenty of speculation then about where Frauman would slot into a firm with such a strong reliance on banking clients. However, as head of A&O's US law business restructuring group, Frauman has worked on some impressive deals, such as Marconi and Swissair, for the debtor.
On the other side of the fence is Cadwalader, which like Bingham is strong on bondholders but had been lacking on banking.
The addition of Stephen Mostyn-Williams, with a strong background in high-profile LBOs, boded well for the firm.
Unfortunately, Mostyn-Williams joined at a time when LBO work was cratering, and although he has been resourceful in refocusing Cadwalader's banking practice towards real estate-based financing, mortgage-backed securitisations being a good example, we have yet to see whether banks and bond clients clash at the firm.
The irony for Bingham is that its solid standing as a bondholder practice could also count against it. Over the past 18 months there has rarely been a restructuring that has gone by without some involvement from Roome and Russell.
Such a great reputation could be dangerous, in that it could, in the minds of the banks, pigeon-hole the office; although on the upside (and there are a few), the firm could, and no doubt will, attempt to turn this around to its advantage.
Banks will be aware of the firm's capabilities by being on the other side of the table from the firm on deals, so the introductions have already been made.
It is worth bearing in mind that while Roome and Russell are tough negotiators, they are not tarred with the same aggressive brush as some of their competitors, which no doubt will work in their favour when banks think of them.
Also, Russell's expertise is very much akin to Coucher's, in that he, too, has a background in acquisition finance, so both will be working closely on the London office's strategy.
Characteristically, Bing-ham hasn't made this hire lightly. It hopes that Coucher will be able to leverage off its banking practice in the US as well as her own contacts here. But if those coveted instructions on new financings don't materialise, it knows that she has the firm's restructuring practice and her own experience in this field to fall back on.