Linklaters’ banking practice thrives” />Mass lateral hiring is an unusual approach for magic circle firms, but Linklaters’ banking department it was a necessity.
From a 100-lawyer, 16-partner practice at the beginning of the decade, Linklaters’ banking team has now grown to 430 lawyers and 26 partners. Much of its rise has been textbook stuff: focus on key lender clients, work on the relationships and the panel appointments, use secondments and have a lot of patience. But there is also no doubt that Linklaters’ current high profile in the banking sector – especially on the leveraged finance side – has come about by an aggressive lateral hiring strategy, much of it with a Wilde Sapte flavour (see box).
Linklaters’ strategy of cherrypicking at the salaried end of the partnership scale was deliberate. It simply did not have a bench of lawyers with experience in key areas such as leveraged finance. Furthermore, hiring more junior partners proved less expensive than a recruitment strategy aimed at established stars – always a major consideration.
Linklaters sources say global head of banking John Tucker had a lot of internal persuading to do. “To convince someone of the prospect of success isn’t easy,” admits Tucker, who took over as head of banking in 1999. “That has represented a lot of commitment. It’s most difficult where the financial rewards are long delayed – though it wasn’t the case with us. There are other initiatives where you have to hold your nerve – but the financial benefit came on quickly.”
It depends how you define quickly. Back in 2002, and three years into the project, Linklaters was still only one firm of many jostling for that third-place position behind market leaders Allen & Overy (A&O) and Clifford Chance. It was regarded in the same tier as Ashurst, Denton Wilde Sapte and White & Case, to name but three. And then there was a run of bad luck: when partner Gideon Moore arrived from Dibb Lupton Alsop he was conflicted out of his first seven mandates from Chase (now JPMorganChase) – his major banking relationship.
Nick Syson, who spent 18 months in Singapore with Linklaters after leaving Wilde Sapte, returned to London in the autumn of 2001. He would become central to Linklaters’ push into the leveraged finance market and is disarmingly frank about the mountain he and Moore had to climb.
“I started with a nil client base,” he says. “It’s entirely down to the [global] platform and you need to have people who’ve operated without a platform to make the most of it. People from smaller firms coming through, if they’ve traded up, tend to have stronger hunting instincts.”
Syson’s and Moore’s nascent leveraged team went all-out for visible lender work. (Much of the internal buy-in was secured by overall finance head Giles White, who was politically close to managing partner Tony Angel.) “It’s possible to have a strong banking practice that largely operates to support departments,” says Tucker. “[But] you can have a standalone practice that’s generating its own work with banks and corporate and financial sponsor clients.”
Over the past few years, Linklaters’ banking practice has upped the percentage of work for lenders. Around two-thirds of the £65m-odd London business is now derived from banks, with the rest coming from sponsors or corporates.
It is Syson’s assiduous and successful courting of Barclays Capital (BarCap) that has attracted the most attention. Not only is he close to the powerful head of transaction management Paul Sims, but a contact of his from his Wilde Sapte days, Lorna Curry (now general counsel for European corporate finance at GE Capital), got him his first break. In March 2002 BarCap was doing a French take-private, Labeyrie, which Syson was able to refer to Nathalie Hobbs in the Paris office. Since then Linklaters has acted on a string of deals for the bank.
The first was Wolters Kluwer in October 2002, which led to others, including Inmarsat in October 2003 – a landmark deal on ongoing intercreditor issues between senior debt and high yield. They were followed by deals such as the complex Petroplus saga in 2005 and United Biscuits – the largest European secondary buyout of 2006.
It’s textbook stuff again, but secondments have been crucial. A&O and Clifford Chance have embedded programmes with their major bank clients. White & Case is the only other firm with banking ambitions that has a similar approach.
Linklaters seems to have had more success than many of its competitors at leveraging its secondments, and it has an active programme with other institutions, notably Citibank and JPMorgan Chase. Royal Bank of Scotland is more of a weak spot for the firm; it has not broken the A&O/Ashurst/ Clifford Chance stranglehold and does not have such a well-developed programme with the bank, despite head of restructuring Robert Elliott’s strong relationship at board level.
Linklaters declines to comment on the number of lawyers currently on secondment at its clients, but Tucker admits: “The reason Barclays is referred to by people is because it was one of the early successes. The secondment programme was a critical part of establishing the panel.
“A lot of people are reluctant about seconding lawyers, but we don’t think of it as an opportunity cost – there’s a benefit to the client and the upside of when they come back. We’ve had to fight for that issue internally.”
Linklaters may have done well in London, but it still has a long way to go before it can hope to catch up to A&O or Clifford Chance on synchronised international coverage. Sorting out a credible transatlantic offering is at the top of the agenda. Expect some movement there soon.
How Linklaters grew its banking department
The growth of Linklaters’ leveraged buyout practice has been entirely predicated on lateral recruitment. Nick Syson was a mid-level partner at Wilde Sapte when he joined the firm in 2000. Gideon Moore had left Clifford Chance as a senior associate, joined Dibb Lupton Allsop as a partner in 1995 and then jumped to Linklaters in 1999. Stephen Lucas was still a Clifford Chance salaried partner and was just about to make equity when he left for Linklaters in 2004, while Adam Freeman had been a partner for just three years at Lovells when he joined in 2005. (Bruce Bell, who also handles restructuring, made partner in 2005, having come across as an associate from Wilde Sapte in 2000.) In May this year Linklaters will take on Freshfields Bruckhaus Deringer banking partner David Ereira, who previously worked at Wilde Sapte with Linklaters restructuring head Robert Elliott.