Firms champ at the bit at the prospect of the Deutsche Bank prize. By Gavriel Hollander
Like the dozens of suitors who swarmed around Penelope while Odysseus spent a decade getting lost in the Mediterranean, there are a fair few law firms looking to pick at the bones of White & Case’s London banking clients. The biggest prize is Deutsche Bank, but how successful their overtures are – and to what extent White & Case can fend off the raiders – looks to be in the balance.
As one of the big beasts of the banking world, Deutsche’s legal work procurement is a complicated, sophisticated and subtle process.
It is all about relationships of course, but the key question for both White & Case and its rivals is to what extent these relationships are portable and how quickly things can change.
The defection of Chris Kandel and his highly regarded bank finance team to Latham & Watkins earlier this year has prompted a wave of speculation about whether he will take with him his impressive stable of clients.
Last week, White & Case made its first move to stem the flow with the promotion of five new partners, including Jeremy Duffy in the London bank practice.
Duffy is thought to have the strongest relationship with Deutsche of all those left in the London team, although that connection has also been strengthened with last week’s arrival of bank finance partner Jake Mincemoyer from New York. However, many in the City believe that the firm will struggle to pick up new mandates from its former trophy client, at least in the short term.
“It’s a step in the right direction,” says a former White & Case partner. “I think what they’re doing is regrouping so they can go back to Deutsche and say they have stabilised things. But Deutsche will use the individuals they like and all that will happen is work in the short term will go elsewhere.”
The question now is how will the ever-valuable stream of work be redistributed?
“My feeling is that the big boys will be rubbing their hands together with glee,” says a senior finance partner at a US firm. “Those who’ll benefit straight away are the ones on the panel. They’ll be laughing themselves silly because they can pick up work without doing any extra marketing.”
Those “big boys” include the magic circle and a bevy of US firms attempting to muscle in on parts of the UK bank market. But which firms Deutsche turns to is dependent on what the work involves.
According to one City finance partner, Deutsche is “the biggest client for seven or eight firms in London” and with fewer deals being done it may be that the town just is not big enough anymore.
Being on one of Deutsche’s many panels, the details of which are closely guarded secrets, is certainly a start, but it is by no means the be all and end all.
“Being on the panel is no guarantee of getting work,” confirms a banking partner at a top 10 UK firm with experience of acting for Deutsche. “Most work is driven by personal relationships. The reality is that if they don’t go to their number one team they go to their number two, so there will only be one or two firms that will really see the benefit.”
And those firms are likely to be the aforementioned big boys.
The M&A and finance work is still dominated by the magic circle, with Freshfields Bruckhaus Deringer and Linklaters marginally ahead of the game. Sundeep Kapila and Sean Pierce lead the relationship for Freshfields, while Gideon Moore is understood to be the go-to man at Linklaters.
For high-yield work, the Americans dominate the game. Cravath Swaine & Moore and Latham have traditionally been the biggest players, with Allen & Overy’s new Kevin Muzilla-led team, and Ropes & Gray, with White & Case alumni Jonathan Bloom and Mike Goetz in tow, among the newcomers trying to get in on the act.
Latham’s aggressive hiring suggests it wants to be one of those to take advantage of any changes to Deutsche’s advisory roster. Kandel will not be drawn on his specific relationship with the bank, but he thinks his new firm can offer something different.
“We’re doing something that no one else can offer,” he says.
“We feel we’re the only ones in the market that can do the combination of sophisticated bank loan work and high yield.”
With high-yield guru Richard Trobman already in situ, Kandel’s arrival could mean that Latham provides Deutsche with a one-stop shop.
“Lawyers are like mechanics,” continues Kandel. “You wouldn’t take your car to someone who can fix the right side of your car but not the left. But that’s what lots of firms have been doing.”
Whether or not the analogy holds water is open to debate, as is the idea that a US firm can grab a significant amount of top-tier London bank work from the clutches of the magic circle.
An alternative view says that Deutsche’s list of advisers is so extensive that serious ruptures at one firm cause little more than a ripple further down the line.
“There’s been a history of firms coming and going [from Deutsche’s panels],” says the former White & Case partner. “They have an intelligent approach and have a very sophisticated way of reviewing them. You certainly can’t just sneak up and get work without anyone noticing.”
Sneaking up might not be on the agenda, but Latham wants to be ahead of the pack if Deutsche’s eye does begin to wander.