Weil Gotshal & Manges‘ London office is to take equity as payment for the first time.
The firm has agreed to accept a split of fees and equity on what is believed to be the second round of funding prior to an IPO, which had previously been shelved.
The firm declined to name the client, but the deal is being headed by Corey Chivers, a US qualified partner based at the firm’s London office.
Weil Gotshal’s New York office has already taken company stakes in lieu of fees in connection with a number of deals, but Mike Francies, managing partner at the firm’s London office, says that it decided at the beginning of the year to take equity.
“We are experimenting and have decided to take a dip in the water. We take the view that it is up to the partners to decide if they want to do this as it is not the firm’s money, it is the partner’s money,” he says.
Although the technology sector is experiencing a downturn since lastminute.com floated in March and its shares dropped by a staggering 44 per cent, Francies says that he is confident about his decision.
“I am not nervous about it because it is such a small part as opposed to being a huge thing,” he says.
“I think it was something that was agreed at the beginning of the year but the option had not presented itself. But it came along, it is not something we have pursued.”
In the US, the firm has taken shares in almost 12 clients, all at pre-IPO stage.
Clifford Chance has also considered taking equity instead of fees, not just from internet start-ups but also from “old economy” clients (The Lawyer, 10 January).