Realty bites

Which firms are kings of the castle in terms of their real estate portfolios? Julia Cahill and Emma Vere-Jones reveal the findings of The Lawyer's real estate survey

The real estate survey by The Lawyer offers an unprecedented snapshot of how the UK's leading real estate practices are shaping their businesses. Twenty firms were quizzed on issues ranging from client wins to new specialisms (see questions, right). After ploughing through reams of marketing spin in their responses and losing count of the number of references made to 'strength in depth', (a quality that should go without saying if you make our list), si• very different practices stood out from the rest.
Eversheds' group is already vast and a major driver in the firm's overall business, earning 22 per cent of revenue. But the potential for growth by muscling in on a greater chunk of individual clients' work and for raising the game in terms of profitability is phenomenal. So, too, is the opportunity to make real estate a key strand of the firm's international strategy. The practice is taking up all of these challenges and is not afraid to say that it is in the market for laterals, particularly in London. The goal is to differentiate the service from competitors in quality and consistency rather than on price. If property-allied services and international work were included, Eversheds' practice would already outstrip our next star practice.
Clifford Chance might be an obvious choice, but is still worthy of praise. It applies its 'follow the asset' ethos rigorously, keeping deals where real estate is the asset almost entirely within its own profit centre, with the result that average revenue per real estate partner is creeping up on the firmwide average. Other practices with a different structure comment with envy on the fact that Clifford Chance's real estate finance experts are partners within the real estate group.
Nabarro Nathanson was one of the most frequently recurrring names when firms were asked to identify their real estate competitors. Fees per real estate partner exceed the firmwide average, while client gains are plentiful and of a particularly high quality. They fall across the range of property companies, investors and occupiers, and include such names as Aberdeen Asset Management, Grosvenor, Quintain Estates and Development and Morley. Indeed, Nabarros' ability to keep on adding to its impressive client list seems limitless. The department's responses to our questions on new specialisms and how it differentiates its practice from competitors also stood out. It is committed to finding ways to deliver quality with ever more efficiency on the more straightforward work, as well as targeting the wider range of structured property transactions where you would expect to see a practice of such calibre.
Denton Wilde Sapte's real estate practice remains a gem, bringing in 15 per cent of total turnover. There were some solid client wins, although the impact of Mark Menhennet's forthcoming departure on the department's targeted growth in property finance has yet to be felt. But what really caught our eye was the £1.3m fees per real estate partner figure, compared with the firm average of £873,000.
• You may be surprised to learn that Herbert Smith's real estate partners also billed above the firmwide average. The firm's response to our question on new specialisms was particularly impressive, showing clear strategic thinking, which is taking the practice into new markets. Herbert Smith is not trying to be all things to all property clients; rather, it is targeting complex transactions where it can add value for the client and make a tidy profit, such as airport and rail developments and tax-driven structured acquisitions. The loss of Gerald Bland to Wragge & Co was a blow, but the department's strategy is working. Let us hope that it gets the three new partners it says it wants over the next three to four years. It clearly deserves them.
• At £18m Lawrence Graham's practice has the smallest billing of our stars, but accounted for a massive 36 per cent of overall firm revenue. The practice said it wanted to grow its institutional client base and promptly went and hired someone to help do it. The property partners have their eye on the major transactions, but not to the detriment of the wider range of its property clients' needs. The strength of the practice guarantees Lawrence Graham's appeal to a marriage suitor with less property prowess.