It happened to Freshfields Bruckhaus Deringer on Citibank; it happened to Lovells on Bank of America; and it even happened to Herbert Smith in the aftermath of Hammersmith & Fulham. But nowadays, suing your own clients is not generally accepted to be a top move.
So with the leading City firms increasingly conflicted out of actions against investment banks, there are obvious opportunities. Enter Richards Butler, with a bold strategy that explicitly targets this market.
Some 16 per cent of Richards Butler’s client base comprises of banks and financial institutions, but you’d hardly describe it as a bank-led practice. The Co-Op pension fund dispute with Merrill Lynch Investment Managers, where Richards Butler advised the fund, is a classic example of the sort of work it is now gunning for.
Discussions on the firm’s repositioning have been underway ever since the partner retreat last November, but you get the feeling that there weren’t too many rows about it internally. There’s been broad buy-in from the partnership, although the fact that managing partner Roger Parker is a litigator by background no doubt helped it along.
So why such internal enthusiasm? Richards Butler already has a massive litigation practice, with £55m in fees, so it’s not as if it’s an entirely risky proposition. A good chunk comes from shipping disputes and arbitration, but general commercial litigation now represents £21m in revenues. By the way, that total of £55m would put it in the top-10 litigation practices by turnover, according to The Lawyer 100.
If anything, Richards Butler’s approach is a conscious homage to Herbert Smith. Only Herbert Smith has ever been able to build a standalone brand name for litigation, despite Lovells’ and Freshfields’ best efforts. The Herbert Smith brand has not been dependent on volume either – Herbert Smith was fifth last year in The Lawyer 100’s rundown of litigation departments, with £81m – 36 per cent of the firm’s total turnover. Compare this with Lovells’ £160m in litigation, which represents 49 per cent of total turnover. Herbert Smith now regularly turns down work which impacts on its investment bank client base, however obliquely.
So you can expect to see Richards Butler going after referrals, either from the top 10, or indeed from the bar, which will bring a new dimension to the concept of client care. It also has the advantage of positioning the firm very nicely for referrals from the States. Now, here’s a model US litigators really can understand.