Shopping around

Partner Colin Kearney dicusses McGuinness Finch’s decision to throw in its lot with Osborne Clarke. But what will they all do without Selfridges?

Colin Kearney is first among equals. Although he may be appearing as the figurehead of McGuinness Finch to discuss the firm’s decision to merge with Osborne Clarke, he is not the senior partner, because the firm does not have a senior partner. Decisions are made by sitting all the partners around a table.

In contrast, new merger partner Osborne Clarke has one of the strongest characters in the legal world as its managing partner, the ever flamboyant Leslie Perrin, who in the words of Kearney, “is a very convincing character”.

Anyone who has met Perrin will bear witness to his bombastic but charming personal style, so it will be interesting to see how the niche property firm with only seven partners fits in under his leadership.

But Kearney says that his fellow partners agreed to the merger under Perrin’s insistence that their working life would not change. “It’s important that our business doesn’t change from our point of view,” he says. “We’ve always said that we wanted to be a niche property firm and quality of life is very important to us.”

But so was finding a corporate capability, which was becoming increasingly important in a property market that is becoming ever-more sophisticated. The firm currently has one corporate lawyer and so last year went out to find likeminded buddies who could add to that capability.

Unfortunately, Simon Janion of EJ Legal, who was approached by the partners as a matchmaker, told them what they did not want to hear – that the firm was not going to be able to tempt over a team of corporate lawyers. “We found it impossible with what [pay] corporate lawyers are on now to persuade them to come over to the West End,” admits Kearney, who expresses regret at having to watch clients such as property company Grantchester move over to firms like Clifford Chance to handle flotations or the creation of limited partnerships.

More fool those corporate lawyers, as the offices are in a lovely little square just off Oxford Street, a couple of minutes walk away from both Selfridges and Soho. Just think of the fun they have missed out on. But McGuinness will soon be moving out of those buildings, and on 1 June will relocate to Osborne Clarke’s offices near the Old Bailey – not so good for shopping and not so pretty.

You would expect one of the best-regarded niche property firms in London to find itself a nice building. Halfway up the stairs you come across a headless mannequin wearing a bizarre-looking evening dress decorated with nail-like spikes. The dress features again in a black-and-white photograph that hangs over the boardroom.

The dress was made by a young designer that McGuinness agreed to sponsor for two years after one champagne too many at a client’s party. I do not dare ask if any of the partners had ever worn any of her designs, which seem to be a little on the avant-garde side. Perhaps that is why the firm is merging with Osborne Clarke – maybe Perrin is flamboyant enough to get away with it.

Anyway, back to business. Osborne Clarke is not the only firm to have been attracted to McGuinness’ extremely successful practice – Kearney expects turnover to reach around £3.5m for this financial year. McGrigor Donald and Nabarro Nathanson have both approached the firm in the past but were turned down fairly quickly.

“We’ve had approaches from other firms over the years, but there are some firms that we definitely wouldn’t merge with, and those approaches didn’t get off the ground,” confirms Kearney. So why has the firm finally said yes?

Cynics might claim that the decision to merge may have something to do with the recent loss of partners. Planning partner Moira Fraser moved to Fladgate Fielder in January, Melville Rodrigues left for Rowe & Maw in December, Oliver Emanuel joined Clifford Chance last June, while in 1999 both founding partners, Keir McGuinness and Stephen Finch, left. Ironically, Kearney says that Rodrigues left because he wanted a corporate capability.

Kearney argues that the firm previously had too many partners and that it needed to examine its gearing. The departures brought the partnership down to the right level and more assistants were taken on. Turnover, says Kearney, has not gone down.

He says the reason why the firm has decided to give up its all-important autonomy now, is because Osborne Clarke seemed to share an ethos with the firm. “They haven’t got a big City feel about them,” says Kearney. “From everyone’s point of view that was important. All the partners, apart from Henry Minto and myself, came from big City firms and so were concerned about going back to the City. The concern was that we’d become part of a big machine and the quality of life issue is as important as anything for the firm.” The McGuinness team will now come under the leadership of Simon Speirs, who heads Osborne Clarke’s real estate and construction department.

Now then, in my book the quality of life issue is inversely proportional to how long you spend in the office. But Kearney says that the firm still works ridiculous hours. What makes his lifestyle different is that he and his fellow partners choose that life – Kearney himself billed around 2,000 hours last year. He says that profits per partner are just below those of the mid-tier firms.

Anyway, Perrin has convinced the firm’s members that nothing will change for them and Kearney says that Osborne Clarke’s London office is small enough for the firm not to be swallowed up. Perhaps I’m imagining it, but Kearney does not seem to have that big City firm player aura about him. While not particularly chummy, at the same time he does not have that aura peculiar to City big shots – slightly aloof with a hint of pomposity. Partners at rival property firms who have worked with Kearney or his colleagues say that the firm has a reputation for working together with the opposing side to get the deal done. What a novel idea.

Kaz Stepien of rival niche property practice Stepien Lake Gilbert & Paling is sceptical as to why McGuinness is making the move into the Osborne Clarke fold. “They say the merger is because of a lack of corporate capability. I can sympathise up to a point, but we’ve never found a lack of corporate capability a problem simply because our clients know that we don’t have a corporate capability, just as we don’t have a litigation capability,” he says.

Perhaps it is the prospect of an economic slowdown that has led McGuinness to seek the shelter of a larger firm. Kearney says he is not really concerned about recession – the firm’s speciality is development work, and the firm’s clients, which include Tesco, Innogy and Invensys, will always be looking for opportunities. The last recession did not affect the firm greatly, Kearney says, and the boom arrived quicker at the doors of McGuinness than those of other firms.

Some of the clients did not fare as well in the last recession, such as Speyhawk, which broke up. Kearney says this resulted in more clients for the firm.

While the deal with Osborne Clarke was struck on the condition that the whole team moved, salaried partner Steven Pearce has not yet decided whether he wants to buy into the dream. Kearney says there will also have to be some rationalisation of support staff, “as always in these things”.

Although Kearney says that his firm has been talking to Osborne Clarke for quite a long time, he admits under pressure that the first contact was in December and that the final decision was made only about a fortnight ago. So, sort of a long friendship followed by a whirlwind marriage. At first Minto and Kearney were leading the merger talks and then about three months ago they reported back to all the partners to decide whether the firm should continue down that particular path.

Whatever Kearney said, it convinced those around the table to do a U-turn on previous firm policy and throw its cards in with those of Osborne Clarke and say goodbye to a name that has held a strong place in the property market for 16 years.
Colin Kearney
McGuinness Finch