Business at Dresdner Kleinwort Benson (DKB) is only just regaining some semblance of normality after two of the most frenetic months it has experienced in recent years.
In April, the investment bank’s German parent company Dresdner pulled out of merger negotiations with longtime rival Deutsche after secret talks between the two financial giants were revealed in March.
It was in fact DKB that caused the talks to founder, as neither party could agree on whether the investment bank should be sold off or integrated into the merged entity. If the parties had cleared this hurdle, the deal would have created one of the the largest banks in the world.
While fears over hundreds of job losses at DKB loomed during the talks, the shock waves of the merger that never happened can still be felt at the City investment bank.
Simon Leifer, director, head of global markets legal department at DKB, says: “As you probably know, the merger was called off and there has been fallout since. We are still waiting for things to settle down.”
As a consequence of the talks, a number of people resigned from the investment bank including Sharon Reed, chief operating officer for global markets at DKB, who Leifer reported to.
However, this is the only hiccup in the global markets division, which is one of four units within the investment bank.
The other three divisions consist of global equity, which is headed by Isobel Black; global finance, led by Bryan Curel; and the group legal unit which is led by Stephen Lowe. The global markets division also houses a structured products function which is headed by Gillian Hogarth.
Leifer says that a total of 25 lawyers are housed in the investment bank, six of which are based in the global markets unit.
The directors of each of the units report to divisional heads in the London office rather than the head office in Frankfurt.
However, Leifer says: “We have quite a bit of contact with the legal department in Germany and we tend to talk to certain lawyers when the branch in London is affected.”
For example, the investment bank kept in touch with the Frankfurt office at the time of the Deutsche/Dresdner talks.
Leifer says: “There was a certain degree of contact but the merger didn’t really go that far down the road before it came off the rails.”
While Leifer says these firms have been used by the global markets in-house team for a number of years, the division does not have an official panel of firms.
He says: “It is something we have discussed and mooted. It is not something we have decided on so far but we might do it in the future.”
He says using a set panel of firms is full of pros and cons. On the advantages of employing a panel, Leifer says: “The reason we would do it is for efficiency reasons. Sometimes it is better to have a smaller number of firms working at a better rate.”
But he adds: “This may well work across the bank but I am not sure that it would benefit individual divisions across the firm.”
Leifer says that Clifford Chance, Allen & Overy, Linklaters and Simmons & Simmons are probably the main firms it uses.
But he says: “It is a case of horses for courses. We would consider other people if we found someone that was particularly good in a certain area.”
However he says: “What you would worry about in that situation is if a person leaves or if they have got so much work on they are not doing your work justice.”
The division alleviates any of these potential problems by keeping a high degree of work in-house. Leifer says: “If we are doing complex, structured work we use lawyers such as Clifford Chance or Simmons & Simmons just because we would need to double the size of the department.
“So we tend to do a lot of work ourselves and use outside lawyers when we need them.”
In terms of international coverage, Leifer says the global markets division outsources work to its UK firms if they have offices in different jurisdictions, as well as working with local firms.
He says: “We would talk to our firms in London for guidance on which firms to use around the world and whether they are any good.”
Leifer is a keen advocate of globalisation and views Clifford Chance’s US and German mergers as positive moves.
He says: “I think the mergers should be a good thing because they obviously expand its network when it comes to US law issues and it means it will have a greater strength in depth of lawyers.”
He admits, however, that expansion into different jurisdictions does not necessarily mean the firm will be used by the division.
He says: “It just depends. We will not necessarily use the foreign offices of Clifford Chance in all jurisdictions. It may not have an office in a particular area for a start.”
Director, head of global legal department
Dresdner Kleinwort Benson
|Organisation||Dresdner Kleinwort Benson|
|DAX 30 ranking||12|
|Market capitalisation||euro22.6bn (£12.6bn)|
|Employees||3,500 in the UK, 50,000 worldwide|
|Head of legal||Simon Leifer, director, head of global markets legal department|
|Reporting to||Chief operating officer for global markets (post vacant)|
|Main location for lawyers||London|
|Main law firms||Clifford Chance, Allen & Overy, Linklaters & Alliance and Freshfields|