Focus: Ashurst: Six sense

Charlie Geffen

 Last week (9 November) The Lawyer revealed that Ashurst is targeting six US firms for referrals. Indeed, the firm has gone so far as to draw up a shortlist, presumably to help partners ­remember who is – and is not – in favour.

Although the firm is keen to stress that this is a non-exclusive list, there is no doubt its purpose is to ­concentrate Ashurst’s efforts on a select group in the hope of improving ­referrals from the US. As such it is a statement of intent towards a market in which the silver circle firm has long struggled strategically.

The catalyst for this new approach was the launch in February of Ashurst’s first US office. The firm hired a team of 11 structured finance partners from its long-time ally, the now-defunct US boutique McKee Nelson (, 24 ­February).

That opportunistic move gave Ashurst an instant base in the US. It also immediately transformed the firm into a potential competitor to the host of US outfits with which it had spent the past decade or longer building relationships. For Ashurst partners closest to the core of its strategy – notably senior partner Charlie Geffen – it was obvious that action was needed.

Rekindling the relationships

Some of Ashurst’s most lucrative client relationships appeared ­threatened by its decision to open in the US. The dealflow from the likes of ­distressed investor and private ­equity house Cerberus Group – historically one of Ashurst’s most lucrative clients – could not be allowed to dry up.

Indeed, Cerberus was Ashurst’s ­second most profitable client during the 2007-08 financial year after RBS. Under the careful guidance of ­restructuring partner Giles ­Boothman, Ashurst and Cerberus’s US relationship firm Schulte Roth & Zabel had formed a close bond, ­advising the group together on a ­number of deals. In 2007, for example, Ashurst advised as UK counsel ­alongside Schulte on Cerberus’s joint venture with Goldman Sachs ­Mortgage Company to take control of Transamerica European Trailers.

“Giles did a fantastic job with ­Cerberus in Europe and the US by focusing heavily on its relationship with Schulte,” says a source close to Ashurst. “It’s a close relationship that Ashurst sees as vital.”

Much like Boothman’s Cerberus relationship, Geffen’s links with ­private equity house Apollo benefited from Ashurst’s developing relationship with Akin Gump Strauss Hauer & Feld on the finance side and Wachtell Lipton Rosen & Katz for the big-ticket private equity deals.

It was essential for Ashurst’s US team to work with its US legal partners rather than be in competition with them. Indeed, Geffen sought to reassure its US partners when the McKee hires were finalised, insisting that the new team would be focused purely on structured finance.

But where did that narrow focus leave the UK firm in terms of the rest of the US market? Enter Ashurst’s dual-strategy proposal. In May this year Ashurst’s US liaison partners Ed Sparrow and Madrid-based Jesus Almoguera drafted an internal report outlining six key referral firms. Working independently from its new US offices in New York and Washington DC, the strategy was designed to keep existing relationships secure and help to pursue new ones.

Ever since its failed merger talks with Fried Frank Harris Shriver & Jacobson almost a decade ago, the US had taken a back seat in Ashurst’s ambitions. Instead the UK firm maintained links through the role of a US liaison partner, performed by ­Boothman from 2003 and latterly corporate partner Duncan Stiles, who is now at Stephenson Harwood.

Sparrow’s report criticised this scattergun US strategy, however, pointing out that it encouraged ­partners to forge links with any ­number of US firms.

“It was unwieldy and unstructured,” admits one former partner. “This report was about making it work for the firm. I think the six that have now been highlighted will in time make a big difference.”

The valuable Cerberus connection with Schulte was among those ­highlighted, reaffirming Boothman’s efforts at establishing links with Shulte partners Marc Weingarten and Andre Weiss.
“We don’t compete with Ashurst at all,” confirms one Schulte insider. “They have a small commoditised structured finance practice in the US. We turn to them for a completely ­different type of work.”

Elsewhere, Geffen’s private equity links with Ropes & Gray and Akin will be nurtured as part of the dual strategy. Of course, there will always be the occasional curve ball to throw any strategy off its neatly planned stride. Ropes’ ­position changed last month when the Boston-headquartered firm hired banking and finance partners ­Maurice Allen and Mike Goetz from Freshfields Bruckhaus Deringer to launch in the City. Despite this, both firms still see a relevance for Ropes’ inclusion on its referral list.

“There will be plenty of opportunities for us to work with Ashurst and our other UK relationship firms,” says one Ropes partner. “We can’t be all things to all people right away. They have resources in Europe that will be of great use to us.”

Open to all

Despite Ashurst’s logical approach to maintaining core US relationships, its management is at pains to underline that this is in no way exclusive.

“To be honest we’re intrigued this has caused so much interest. It’s very fluid,” insists Geffen. “We don’t see it as a strategic thing, just about being a little more organised.”

How is that for true British ­understatement?

Ashurst also downplays the ­suggestion that it has any specific strategic aims related to its shortlist. But its identification of litigation shop Quinn Emanuel Urquhart ­Oliver & Hedges – a relationship that gives the UK firm an entrée to the top level of US litigation – as a core firm suggests otherwise.

Ashurst called in Quinn Emanuel London head Richard East to act as ­litigation counsel to the bondholders on the ongoing restructuring of ­subprime mortgage lender Cattles (Ashurst partners David Kershaw and Simon Baskerville are leading a team acting as global restructuring counsel to the company).

“It’s a great start for us in London,” says one Quinn Emanuel London partner. “There’s yet to be deals referred back, but we’re confident it makes sense for us to get close to Ashurst.”

Sparrow’s relationship with East is well-established – the pair have worked alongside each other for the past four years advising Harbour ­Litigation Funding as case ­consultants reviewing cases for funding. The pair also referred work to each other ­during East’s days at Kirkland & Ellis, before he joined Quinn Emanuel to launch its City office in 2008.

Back at Ashurst Geffen once more stresses that the six firms are not exclusive – indeed the report ­highlights a list of additional ­’mutual client’ firms that include Wachtell, a firm that shares Ashurst clients ­Apollo and Rusal. Ashurst does not want to turn its back on such ­powerful US players.

“This list will change over time; firms may be added and some taken away,” says one former partner. “The point is keeping it simple. Focusing Ashurst partners on a specific set of firms will stop the firm spending too much time trying to be close to everyone. These are the ones they think will make the US work for them.”

Ashurst’s bold hire of the McKee team forced it to reevaluate its approach to the US. Now, years on from its attempts at a transformative merger, the firm is arguably ­taking a more mature approach to the US.

If it delivers, that really could change the gameplan.


Six quality firms, each with a different path to becoming an Ashurst ‘best friend’.

Ashurst senior partner Charlie Geffen and London-based Paul Weiss Rifkind Wharton & Garrison partner David Lakhdir once shared private equity clients such as Oak Hill Capital Partners and General Atlantic. But the relationship soured in 2003 when Ashurst attempted to merge with Fried Frank Harris Shriver & Jacobson.

“They wanted to get married and we gave them our blessing,” says one London-based Paul Weiss partner. “It meant the firm moved on. Really we work with a number of different firms.”

Paul Weiss started to value other firm relationships over Ashurst. The US firm has worked with Macfarlanes, Slaughter and May and SJ Berwin in recent years.

So in February this year Geffen met with Lakhdir and fellow Paul Weiss partner David Bergman in the hope of reestablishing a more frequent working relationship with the firm.

Like Paul Weiss, Davis Polk & Wardwell has a healthy referral relationship with Slaughters. Again, Geffen is Ashurst’s key link to the firm, primarily through Davis Polk London corporate partner Jack McCarthy.

McCarthy teamed up with Ashurst partners Paul Gadd and Nigel Stacey to advise Nabisco on its 2000 £1.26bn leveraged buyout of United Biscuits. But more referrals between the two firms have been few and far between.

“Frankly, we turn to Slaughter and May a lot more,” says one Davis Polk insider. “Having said that, you need to be able to deal with conflicts, so communicating with other firms and keeping them on board is very useful.”

Unlike Davis Polk and Paul Weiss, Quinn Emanuel Urquhart Oliver & Hedges is a fledgling relationship for Ashurst. Although new it is showing great promise. Quinn Emanuel London head Richard East was drafted in by Ashurst partner David Kershaw as litigation counsel on the ongoing restructuring of subprime mortgage lender Cattles. Kershaw and his team are advising the bondholders on the deal.

Ropes & Gray’s need for European counsel drove private equity partners Newcomb Stillwell and Al Rose to Ashurst. Establishing ties in the late 1990s and throughout this decade, Geffen, Stillwell and Rose teamed up to advise some of Ropes’ key clients, Bain Capital and TPG.

The US firm’s London launch last month puts a question mark over a continued long-term bond between the two, but both firms insist Ropes’ fledging London office will still need to turn to trusted UK advisers, at least for the moment.

“We won’t have everything we need for a long time,” admits one Ropes partner. “We have just three partners and we won’t have any capabilities in the rest of Europe. I imagine we’ll still work very closely with Ashurst.”

Ashurst restructuring partner Giles Boothman developed ties with Schulte Roth & Zabel during his tenure as US liaison partner from 2004 until 2007. As relationship partner for private equity house Cerberus, building links with Schulte partners Marc Weingatern and Andre Weiss has been valuable. Indeed, it is not just the Cerberus relationship that has benefited – Weiss and Ashurst partner Anthony Clare worked together advising Castle Harlan on its $260m (£156.08m) fund formation in 2003.

Akin Gump Strauss Hauer & Feld gave Ashurst a valuable entrée to private equity work with Apollo Capital in the US. Akin’s relationship with Apollo quickly led Ashurst to Wachtell Lipton Rosen & Katz – one of the private equity group’s main US advisers. In 2006 Wachtell’s Cohen turned to Ashurst Frankfurt-based partner Stephen Kock to advise Apollo on European aspects of its $3.8bn acquisition of General Electric’s industrial materials business.

Yet Wachtell is absent from Ashurst’s six referral firms. Akin sources suggest the relationship focuses more on global litigation via Ashurst partner Ed Sparrow and Akin Washington DC partner John Dowd, while ties with Wachtell focus on Apollo and Rusal.

“It’s not exclusive and clearly we know firms like Wachtell very well,” says Geffen. “I can’t stress enough that this a flexible network and keeping close to firms that we have mutual clients with like Wachtell is vital.”