New European chief flexes muscles and cracks whip to stimulate business
It might be stretching it to say that Shearman & Sterling’s new European managing partner Creighton Condon is bullish about his firm’s prospects for rebuilding in Europe.
But less than a month since being sent by Shearman senior partner Rohan Weerasinghe on a corporate practice rescue bid, he is at least in a positive mood when The Lawyer meets him for lunch.
“We’re looking to build up corporate globally with a special focus on M&A,” Condon confirms. “We will continue to invest.”
Maybe it was the unseasonal British spring sun. Or perhaps Condon was relieved at having finally secured a visa despite the UK Government’s recent tightening of entry requirements for overseas partners.
Certainly, Condon – like many of his rivals – sees the current legal market turbulence as an opportunity for picking up some corporate talent.
And conceivably, Condon is relishing the prospect of kicking the UK and European ends of Shearman into some semblance of order.
Condon’s role stretches further than rebuilding a corporate group decimated in recent years by a string of departures, the most recent heavyweight to depart being Peter King, who joined Weil Gotshal & Manges in July last year.
“My role is to ensure we capitalise on the opportunities that arise and help increase the level of work from around our European network,” says Condon.
The new European head – one of Shearman’s top New York M&A partners – has already racked up the air miles since making his move from the US on 1 April.
Last week, Condon jetted off to Paris for the second time in less than a month. In an interview with The Lawyer last week for next month’s Transatlantic Elite, Weerasinghe admitted that the return to France in such a short space of time is part and parcel of Condon’s new role as Shearman’s European enforcer.
“Whip-cracking is part of the managing partner’s role,” Weerasinghe admits. In other words, Condon will now be demanding progress and regularly checking-up on whether those targets have been met.
Shearman’s recent history demands some radical action. In February the firm reported a 14.2 per cent drop in its UK revenue for the 2008 financial year, from $132.6m (£90.96m) at the end of 2007 to $113.8m (£78.07m) at the end of 2008.
Over the same period global revenue dipped by almost 5 per cent, from $921m (£631.81m) in 2007 to $876m (£600.94m) during the last financial year.
Falling revenue and profits are to be expected in the current downturn, but the string of exits Shearman has had to grapple with are more serious.
In October 2008 Munich tax partner Thomas Fox jumped ship for Latham & Watkins just a month after fellow tax partner Gottfried Breuninger and M&A partner Astrid Krüger, who were both based in Berlin, left for Allen & Overy (A&O).
The latter pair joined former global corporate head Rolf Koerfer, who departed for A&O in Düsseldorf in January 2008, while the 30-strong Mannheim office set itself up as an independent firm in April.
The firm has also been forced to jump on the layoffs bandwagon, firing 78 support staff in the US and UK this March.
Weerasinghe says that this latter problem at least is not about to extend to the firm’s associates.
“There have been no associate layoffs at the firm,” Weerasinghe asserts. “We’ve not had layoffs [of lawyers]. But what we have done is to continue with our regular semi-annual reviews and we, like our New York peers, are making sure they are rigorous. In fact, probably more rigorous than in the past.”
‘More rigorous than in the past’ may become a theme for Shearman’s European network if Condon begins weilding his whip with relish.
But in the meantime it would only be fair to report that the firm has hit a run of form, being one of the biggest beneficiaries of the deals that have resulted from the financial crisis.
Its headline deal is still Merrill Lynch’s sale to Bank of America, in which Shearman advised longstanding client Merrill. Shearman also advised on the related litigation, as well as on the disputes involving Merrill’s subprime losses.
“We’re also one of the outside legal providers for Bank of America, particularly for M&A, leveraged finance and investment grade debt,” says Weerasinghe. “So we’ve maintained our presence on the new platform.”
Other deals include a number of sovereign wealth investments from Shearman’s undeniably successful Middle East practice, such as the $2.65bn (£1.82bn) investment into Daimler and the £3.25bn (£2.23bn) investment into Barclays by the Abu Dhabi Investment Authority.
The signs are that Shearman has a solid platform. Now it’s down to Condon to make it gel.