Mary Heaney talks to the growing number of foreign firms which have set up offices in London and are doing the business
Despite the departure of Japanese firm Hamada & Matsumoto from London last year, foreign law firms with offices in the city claim to have had a busy year.
Says Timothy Brookes of Australian firm Corrs Chambers Westgarth, which has a two-lawyer office in London:
“Things have picked up dramatically since the compulsory exit of sterling from the common currency bands in 1992.”
The office is benefiting from a huge growth in infrastructure and privatisation work in Australia with UK companies frequently involved in this.
But increasing numbers of Continental companies – mainly French and German – are also doing business in Australia, Brookes notes. “A lot of European companies are focusing generally on the Asian Pacific region. They target Australia for an outpost as it is based on European culture,” he says.
As a result, Brookes predicts that the firm will pick up more work from the Continent but discounts having an office on the mainland. “The volume of capital investment is so heavily laden towards the UK,” he says.
Canadian firms are also finding that more work is coming their way from mainland Europe. Says Stikeman Elliott partner Calin Rovinescu, “We find that there is more and more work on the Continent. Previously there was more activity between London and Canada.”
Most of the work concerns mergers and acquisitions and joint ventures. Recently the firm advised a Canadian telecoms company on a paging system in Holland, and a pharmaceutical company which bought a diagnostic company in Switzerland with branches in Germany, France, Italy and the UK.
Although the firm, which is soon to celebrate its 25th anniversary in London, recently opened a Paris office, Rovinescu says that London is still an important place to have an office. “We find that much of the deals negotiation occurs in London and people come there to speak to the bankers.”
His firm uses the six-lawyer London office to do “a certain amount of central European work and privatisation work”. Although the office is involved in a few global equity offers, he says the market is not receptive to Canadian issuers.
European firms are expanding their bases in London. Partner Bruno Boesch of Swiss firm Frioriep Renggli & Partners says he would not be surprised if other Swiss firms opened in London in the next 18 months. Apart from the fact that it is a good profit centre, he says that “for a civil law country, it's an ideal place to get exposure and to gain familiarity with the legal system and the business approach there”.
Up to 20 per cent of the firm's work is generated in London, he says, adding that the office has increased from one to four lawyers
Italian firms are also showing interest in London – Sutti is the latest firm to open in the city. Partner Giovanni Lombardo of five-lawyer office Dobson & Pinci says Italian privatisation work has opened up the Italian market. The London office acts “as a bridge between Milan and the US,” he says.
Lawyers from emerging markets are also represented in London. Indian firm Singhania & Co, one of the largest firms in India, is expanding its London presence. Says Shalini Agarwal: “We are doing a lot of foreign investment collaborative work and 90 per cent of our clients are international.”
The firm is helped by the number of companies looking to invest in India at the moment.
She has also noticed an increasing amount of business from the continent, particularly Germany and France. India is in a state of flux legislatively, she says, adding that securities and capital markets are opening up. “We are concentrating on securities as it is a new area of law.”
She plans to become dual qualified as “it helps bridge the cultural gap. Once we offer dual qualified services, it will be easier to service client needs.”
Few foreign firms in London, other than the Americans, want to offer English services. Calin Rovinescu of Stikeman Elliott, says his firm believes that it “is harder for foreign firms to do this as you need to have the infrastructure and need to commit adequate resources to it”.
According to Timothy Brookes of Corrs Chambers Westgarth, his firm does not regard itself as competing with English law firms by trying to practice English law.
But the Americans are ready for the challenge – newly established firm Perkins Coie is ensuring its lawyers are taking the Qualified Lawyers transfer test.
Perkins Coie is targeting project finance and banking work. Partner Peter O Driscoll says an English law qualification will enable the firm to provide a one stop service to clients in both areas.