IN 1999 you wouldn’t have got good odds on Neville Eisenberg transforming his firm into the City’s hottest ticket. Here was an introverted 37-year-old lawyer with little management experience taking over a dowdy London Bridge property firm whose star appeared to be fading. “We were just losing momentum,” Eisenberg declares. “Firms were doubling their size every five years and we were nowhere near that. SJ Berwin, Nabarros… even Stephenson Harwood was still hanging in there. Other firms were much more dynamic – firms like Taylor Joynson Garrett at the time, Bird & Bird even.”
The figures were comfortable, but hardly inspiring. In April 2001, at the end of Eisenberg’s first full year as managing partner, Berwin Leighton was turning over £58.7m with an average profit of £346,000. Five years later the story is very different. On Eisenberg’s watch, the firm has increased turnover by 40.4 per cent – helped by the Paisner merger, which delivered £28.7m to the top line. Meanwhile, net profit has shot up by 114 per cent. This has been achieved on a mere 12.8 per cent increase in partner numbers. Yet, in a way, Eisenberg never had a particularly grand vision – a three-pronged firm of corporate, real estate and finance. He distilled the Berwin Leighton Paisner (BLP) strategy into the most simple of forms: sort out costs, get more work in. And don’t be shy to talk about it afterwards.
“It’s just about leverage, margin, profitability, “ says Eisenberg. “We’ve been helped because the economic downturn hit the magic circle more than it hit us, and price competition has helped us get market share from them and helped us recruit. The vision was to become the most respected firm in London. The aim was to exceed client expectations and provide the best place to work.”
But how do you measure respect? “People stopped asking us those questions when The Lawyer gave us the award for Law Firm of the Year,” Eisenberg retorts.
In some ways, BLP’s rise parallels that of DLA Piper Rudnick Gray Cary. Eisenberg has watched DLA Piper’s progress closely. “What DLA has done is demonstrate passion to their client relationships,” he says. “In that area we might be getting close because we’re getting better at building those strong client relationships. We’ve learnt from DLA’s success in that.”
Like DLA Piper, BLP is now competing in an entirely different sphere from that in 1999. “We feel competitive pressures from all over the market,” admits Eisenberg, but he argues that those pressures are good for his business. “We compete much more with the top 10 firms than five years ago and the confidence within the firm has changed – that was one of the biggest problems five years ago. [BLP and DLA Piper] are both hard to classify. DLA is managed very strongly from the centre, which they may need in a firm that size. But in this firm partners are more involved.”
Well, yes and no. Eisenberg certainly managed to start a bottom-up review two years ago, which he claims energised the firm. The initiative, dubbed Project Leo, involved no fewer than 150 groups and a total of 500 people. “There were just two rules,” he says. “If a group was set up it had to involve someone from elsewhere in the firm. And secondly, they had to do a written report.”
Eisenberg was canny in throwing the issues out for discussion to the whole firm. But BLP sources say that, in reality, Eisenberg, along with corporate head John Bennett and finance head Simon Allan, who are his close allies, is firmly in control. In his own way, Eisenberg has as tight a grip on BLP as Nigel Knowles has on DLA Piper. Real estate head Robert MacGregor echoes a number of his colleagues when he says: “Neville’s got an enormously clear vision as to where the firm needs to go, but gives the impression that it’s a collective experience, so he gets buy-in.”
The reason he has negotiated the internal politics so well, say BLP partners, is because he is so committed to the firm. “He lives and breathes it,” says one colleague. “But he’s quite shy. You can’t imagine him schmoozing too much. In many ways he’s a lot like Sir Terry Leahy at Tesco – not clubbable, but evangelical, about what he believes in.”
You certainly get the feeling that Eisenberg has been an assiduous student – not only of management theory, but of other firms’ management styles. He has some trenchant offthe- record comments on some firms, but is generous in his assessment of others, praising Herbert Smith (“impressive”) and individuals at Clifford Chance, such as senior partner Stuart Popham and London managing partner and corporate head Peter Charlton (“a straight talker – you know where you stand”).
“What I’ve seen of Linklaters, I rate,” he adds. “It’s not the style of management that would work here, but it’s very impressive. I also like Allen & Overy‘s style – very open, and they seem to have taken the mantle of the law firm that tries to define best practice. Nobody asked them to do that, not many people may listen, but it’s quite a nice thing to do.”
For all Eisenberg’s success so far, there is one issue he is going to have to deal with before it blows up in his face. During his tenure the revenue may have shot up, but the size of the partnership has barely changed – this despite the firm’s statistics that it has promoted 31 lawyers to the partnership in the last three years and has hired 33 laterals. That’s what some would call a revolving door.
The shape of the equity has also changed, towards merit-based compensation. As the MacGregor example (lured from Clifford Chance with a total package of £1.3m) shows, Eisenberg has not been afraid to throw big money at laterals. Eisenberg’s argument in partnership meetings is that all big-name laterals should be self-financing. “It’s a meritocracy but it’s not a star culture,” he says. “Stars thrive but stars don’t wield power.”
Although the total partnership has grown by 12 per cent, the equity partnership has not grown at all. In 2002 the newly merged BLP had 66 equity partners out of a total of 125. Now it has 65 equity partners out of a total of 141 on a dramatically increased net income. No wonder Eisenberg has had the flexibility to pay out big money.
But what does it mean for non-partners? Two recruiters claim that BLP finds it very, very difficult to fill slots at the associate level. “BLP always used to play on the idea that there were better partnership prospects,” says one recruitment consultant familiar with the firm. “But that’s not the case now.”
So has Eisenberg made BLP an attractive option for partners, but not for assistants? There was no clearer admission that the firm had an associate recruitment problem than when it took the decision to bring in veteran recruiter Jonathan Brenner to focus precisely on that. HR head Geoff Griffin insists that there is no real problem in recruiting associates, however. “We’ve recruited a large number of associates in the last 12 months, but inevitably, if you’re bringing in lateral hire partners, you need to staff up with associates.”
At the same time, BLP is also in consultation with its lawyers about career paths – a subject identified by Eisenberg as one to address after Project Leo. Sources within the firm say that one of the most likely options is to create a role of legal director to give recognition to senior assistants who for whatever reason are unlikely to make partner. “We’ve developed a much deeper understanding of the reality of the need to provide people with alternative careers,” insists Eisenberg.
Yet you sense that even Eisenberg himself hasn’t quite worked out what’s going to happen next. This financial year has been going well, but what happens when profit growth finally stalls?
“You don’t have to think back too far to remember when profits weren’t good,” Eisenberg says. “Partners don’t take high profits for granted yet. This is something we’ve planned and worked hard to achieve.”
But in his more candid moments, even Eisenberg has been surprised at BLP’s transformation. “I wouldn’t have predicted we’d make so much progress so quickly,” he admits.
40.4 per cent increase in turnover 2001-2005
114 per cent increase in net profit
24.3 per cent increase in PEP
12.8 per cent increase in partner headcount
NEW HOME-GROWN PARTNERS
MAY 01-APR 02: 13
MAY 02-APR 03: 1
MAY 03-APR 04: 6
MAY 04-APR 05: 9
MAY 05: 2
Total = 31 new home-grown partners
MAY 01-APR 02: 2
MAY 02-APR 03: 5
MAY 03-APR 04: 11
MAY 04-APR 05: 10
MAY 05: 5
Total = 33 new lateral hire partners
REVENUE AT BLP 2001-05
PEP AT BLP 2001-05
NET PROFIT AT BLP 2002-05