Large-scale, purely North East commercial work is thin on the ground. There are relatively few North East-based companies operating at the highest commercial level nationally or internationally that consistently generate significant levels of acquisitive work.
The largest and best known companies in the region are probably Go-Ahead and Arriva, both advised by Dickinson Dees. For historical reasons the firm has a disproportionate amount of the regional commercial work sewn up, and when advising these clients is more likely to face London opposition rather than local.
But when it comes to work outside the North East, Dickinson Dees' minimal offices strategy – it had just one until it opened the Teesside office – plays into Eversheds' hands. With a network of offices in the UK and abroad, each with particular strengths and expertise, there's always going to be a type of deal that, out of the Newcastle firms, only Eversheds can realistically accomplish.
The Newcastle Airport deal is a good example of this. Eversheds could call on the experience of its Birmingham office, which had done a similar deal for East Midlands Airport. It could also draw on local and national experience in local government work that is invaluable for procurement issues.
Ward Hadaway is the bright young upstart of the three largest firms in the North East, growing rapidly over the past few years with a succession of mergers. Its aborted merger with Watson Burton does not seem to have affected it too much and it has had particular commercial success in the technology sector with a string of lucrative flotations such as Bede for £55m, Comeleon for £20.9m and Zytronic for £15m. The downturn in the technology market may have some effect, but the firm has a broad enough base of expertise. Commercial partner Martin Hulls and litigation partner Ian Collinson have solid commercial reputations and are able to compensate for any potential fall-off in technology work.
The economy in the North East is known for its strength in the public sector, which accounts for more than 50 per cent of the gross domestic product. The two biggest industries are health and higher education, and local authorities play a huge part in the area's economic well-being. Eversheds in particular has been able to capitalise on this. Earlier this year it completed seven public-private partnership (PPP) deals in eight weeks, with a value of around £350m. And with the Government's unflagging commitment to PPPs, this looks set to be a growth sector for lawyers in the region.
Watson Burton and Robert Muckle both target themselves very effectively at the mid-range commercial work and the owner-managed companies, focusing much more on the commercial core rather than medical negligence or insurance.
Robert Muckle is consistently commended for the breadth and quality of its corporate work and Watson Burton has a particularly strong construction litigation practice headed by Rob Langley. Since the merger talks with Ward Hadaway were aborted, Watson Burton seems to have a new-found confidence and belief in its strength and has been recruiting heavily across all departments.
And Robert Muckle, despite losing three or four key partners during the past year, has always been able to bring in big guns to plug the gaps, more often than not from outside the region, as seen with the recent hiring of Paul Johnson from Pinsent Curtis (now Pinsent Curtis Biddle) in Leeds.
|Top ten deals|
|The sale of 49 per cent of Newcastle Airport to Copenhagen Airport
In August 2000, the seven local authorities that own Newcastle Airport were advised to enter into a public private partnership (PPP) by PricewaterhouseCoopers. The legal work for the sale was put out to tender and won by Eversheds, which, although it had acted for the authorities before, had never acted for the airport.
"We were able to point to our experience," says Newcastle senior partner Michael Spriggs. "We'd done a very similar deal for Birmingham Airport in 1998 and have acted for various airports around the country. We knew our way round the deal backwards." Other bidders in the process included major rival Dickinson Dees.
By Spriggs' own admission, it is the type of deal which five years ago would have automatically gone down to London. It is the firm's national capability that kept the work in the region. Although the competition may disagree, this is an indicator for the way that top level corporate work in the region may be going. None of the other firms have the depth or breadth to really challenge Eversheds on this type of large-scale international work – at one stage it had 20 lawyers working on the deal.
Once the sale was tabled, 30 expressions of interest were received and two bidders were shortlisted for the 49 per cent stake. One was a consortium comprising Alterra Partners, Singapore Changi Airport Enterprise and the Unique Zurich Airport Group, but the other, Copenhagen Airport, was the eventual winner. "The 49 per cent stake was sold for £200m, so you could say that the airport is a £400m-plus company," says Spriggs.
Eversheds' London and Copenhagen offices were also involved in the deal and the firm provided a data room in the London office. This gave interested parties a place to research the airport and the terms of the deal. The Newcastle office also advised the setting up of the PPP between the seven local authorities who own the remaining 51 per cent and the new equity holders.
Corporate partner Andrew Davison led the Eversheds team advising Newcastle Airport. Copenhagen Airport was advised by Linklaters.
The successful defence of Go-Ahead
The successful bid for Connex franchise
The Moorgate office development for Stockbroker Cazenove
The internal buyout of Motherwell Bridge
Bede's flotation on AIM
The joint venture between the Girls School Association, the Headmasters' And Headmistresses' Conference And Bell Media
The transfer of Northern Sinfonia/ Folkworks' assets to North Music Trust
The Atlantic ec's reverse takeover by AIM-listed company Atlantic Global
Tenon's acquisition of Jennings Johnson