Hill Dickinson celebrates Maersk’s Liverpool relocation” />Maersk Line, the shipping company and division of the AP Moller-Maersk Group, announced last week that it will shift its UK headquarters from London to Liverpool later this year.
Those who make the move will join existing employees at offices in the Plaza in Liverpool’s new commercial district, where rents are substantially lower than in the City.
This is good news for Hill Dickinson, which has a 16-strong local marine team and is located just a stone’s throw from the new Maersk base. As well as advising on the Mersey Docks and Harbour Board, Hill Dickinson’s CV includes assisting Maersk on dry shipping matters and ongoing work for its other divisions, Norfolk Line and Svitzer Wijsmuller.
So it is a fair bet that the firm will receive more work now that Maersk has opened up next door. But will the recession see an increasing number of organisations move to the regions, with an upturn in work for firms based there?
Hill Dickinson’s head of the North West marine team John Hulmes thinks this could be the case. “[Maersk Line’s move] gives us an opportunity,” he says.
“It’s likely that they’ll be relocating to the building next door to us, [but] until they arrive we don’t know which parts of the business will relocate and which will not. It’s still very early days.”
Addleshaw Goddard property head Michael Reevey believes that the quality of office accommodation has improved in the regions, with developments such as St Paul’s Square in Liverpool and Spinningfields in Manchester offering the kind of office space worthy of a large international conglomerate. However, he is sceptical that the recession will result in many clients upping sticks in favour of the regions.
“Even if, long-term, it’s going to save money, moving in the short term is very expensive,” he says. “The business disruption is considerable and a lot of office leases are 15 years or more. Most large-scale regional developments are custom-made. It’s unusual to find speculative office buildings and, with the current shortage of liquidity, it’s even less likely.”
The other issue is that, when clients such as Maersk Line do make the move to the regions, they are still likely to retain City advisers for high-end finance work. Watson Farley & Williams (WFW), which advises Maersk divisions on ship finance, is unfazed by the news of its client’s move.
“I wouldn’t have thought Maersk Line’s move would have an impact. Generally speaking, our concern is when people move out of the UK, rather than within the UK,” said one WFW shipping partner.
National firms are arguably well placed to deal with this kind of scenario, with one foot in the City-based finance camp and another in the cheaper regions.
Michael Clavell-Bate, head of Eversheds’ Manchester office, says: “Two weeks ago I got a call from a general counsel in the US of a global manufacturing business. He wanted to talk to me about a major arbitration. Although he values the personal relationship with firms in London, he couldn’t sanction paying $1,500 [£1,033] per hour for a partner. Could we do it? I said yes.”
Clearly there are major differences between charge-out rates in London and those in Liverpool, but pinning them down is difficult due to the multiple discounts involved.
On the basis of the business plans that he sees daily, one City recruiter said that in London headline partner rates are around £400-£700 per hour for
upper mid-market and top-tier firms.
Clavell-Bate says: “During the next six months managing costs is going to be key. It’s not just a blip – people in all sectors are waking up to the question of, ‘Why have we wasted so much money?’”
Liverpool has gained an image boost with Maersk Line’s relocation north, reinstating the city’s position as an international maritime centre. But if Hill Dickinson can establish itself in ship finance work, then the boost will be more than just symbolic.