Equity capital markets have a habit of throwing up some unlikely contenders. Look at little 12-partner Memery Crystal, romping home so memorably in The Lawyer IPO Survey: AIM. Or Linklaters & Alliance beating Clifford Chance hands down in the main list survey. Or Brobeck Hale and Dorr, the only US firm to creep into the league tables.
Well, maybe not Brobeck Hale and Dorr. The firm is a UK partnership, formed out of a joint venture between two US firms on the West and East Coasts, Brobeck Phleger & Harrison and Hale and Dorr. It has acted on eight influential technology initial public offerings (IPOs) since August 1999, providing US and UK legal advice. More often than not, the firm has been the sole adviser on them all. The practice is also balanced between issuers and investment banks.
This is, in the simplest terms, a firm that’s doing well when it comes to UK equity capital markets. It has a total of 76 lawyers in the UK, 10 of whom are partners. And not only is it doing well, but it’s also cutting a swathe through its fellow US firms in the UK and working alongside some of the biggest City players in the process.
Linklaters puts much of its big year in UK corporate finance down to the IPO of Freeserve in August 1999. The flotation was completed before the introduction of either Chapter 25 or techMARK. So it meant lengthy discussions between issuer, investment banks, legal advisers and the London Stock Exchange (LSE) just to get the thing listed. The deal gave Linklaters a name for both complicated IPOs and technology work. And who was working alongside them as adviser to long-term client Credit Suisse First Boston? Brobeck Hale and Dorr. Like Linklaters, it has watched its corporate finance practice grow from then onwards.
Because, in equity capital markets, reputation is the key. If issuers, come direct to a firm it will be through word of mouth, colleague recommendations or simply market awareness. So you need a reputation in the companies’ sector. The other way to win work is through the corporate finance houses. This boils down to relationships between lawyers and bankers. Get those and you get the work.
The other Brobeck IPOs are QXL.com (again floated before Chapter 25 and techMARK), Parthus Technology, Arc International, Eyretel, Autonomy Corporation, Interactive Investor International (iii) and Bookham Technology. The latter is not only notable because of its ongoing success, but it also led to Brobeck becoming the first US firm to strike out from the sanctity of the Square Mile.
Taking the partners from Morgan Cole who worked on the deal, including Joe Pillman, the firm opened in Oxford, in the heart of the UK’s own burgeoning Silicon Fen. When Bookham recently underwent a secondary offering, Morgan Cole was no longer involved – Brobeck did the UK and US work. So although considerably smaller than the London office (five lawyers and three partners to the City’s 51, seven of whom are partners), it has already proved its worth. The firm plans to increase itd Oxford number to 25 over the next few months.
In the midst of a US invasion, Brobeck is actually managing to do something different – namely, to stand out from the rest. Keeping to its 1990 opening remit, it focused solely on acting as a full-service firm, but only for the technology industry. It has also dared to put its head above the parapets and venture out of the City; insiders say Cambridge is already on the firm’s shortlist of where to open next, carrying on the trend of establishing presences in high-tech university cities. It has also made clear its intentions to tackle Germany. But it won’t be doing it through IPO capital Frankfurt. Instead, it is following the technology cluster to Munich.
Of course, whether this will last only time can tell. After all, the love affair with technology has cooled and the unsexy traditional sectors of manufacturing and industry are creeping back in. Oxford may be the flavour of the month, but there is suspiciously little client action from the university town except from the ubiquitous Bookham. Indeed, reports for the frontline say that Pillman is flavour of the month, and the fear is that, like most things, this will fade. Nor indeed is equity capital markets the basis for any corporate practice – it will always remain the precursor to the far more lucrative follow-on M&A work. But for the moment, Brobeck seems content successfully walking its own path.