Allen & Overy (A&O) is set to reap £18m of fees through advising recovering telecoms giant Marconi – £2m more than the original estimated billings of all the law firms involved in the restructuring

As revealed in The Lawyer (2 September 2002), A&O, Clifford Chance (acting for the 27-strong syndicate of banks) and the bondholders' lawyers Bingham McCutchen were together expected to bill around £16m.
It was understood that all advisers on Marconi's £4bn debt restructuring were billing £500,000 a week, giving lawyers an estimated final tally of £16m, based on the then completion date of 31 January. Although that date has now moved to 15 March according to the company's most recent financial restructuring update in December, A&O is now expected to grab the lion's share of the fees.
Clifford Chance and Bingham McCutchen should also gain from Marconi's long and often controversial financial turnaround, albeit nowhere near the level of A&O.
Gordon Stewart, a banking partner and head of restructuring at A&O, who has been heavily involved in the Marconi deal, declined to comment on the figure, but did say: “The Marconi restructuring, which in various forms has been going on for over 18 months, has been a massive case, legally extremely complex by any standards, and has required a multidisciplinary, multijurisdictional team of over 200 A&O lawyers.”
While Marconi has a “lock-box” of cash, originally containing £866m and expected to hold £582m by the end of February, this is being used for exceptional costs and it is not expected that law firms will be paid of out these funds.
Marconi, which is understood to have been making regular payments to legal advisers, is expected to pay all the law firms' fees from its existing operating cash.
The company's massive debt-for-equity swap is now nearing its end, as the scheme of arrangement, containing details of the restructure, is due to be presented at the Companies Court this month.
The scheme will then be required to be signed by Marconi's creditors before a final check by the court.
Marconi was unavailable for comment.