One way of analysing a firm's strategy is to look at its partner promotions, and this year, although I'm sure both firms view their banking departments with equal importance, Clifford Chance and Allen & Overy (A&O) are showing different attitudes towards growth.
While last year Clifford Chance made just four lateral hires in banking (in London, Paris and New York), A&O has been more prone to cherry-picking the stars. In Spain, Inigo Gomez-Jordana joined A&O from Clifford Chance, in the US David Frauman and Ken Coleman left Cadwalader Wickersham & Taft, Hong Kong gained David Kidd and Grant Fuzi and in the UK there is, of course, the forthcoming four-partner acquisition finance team from Norton Rose.
The difference in strategy is also reflected in partner promotions. This year, A&O promoted 11 partners, the same number as last year. And while on its own this doesn't indicate much, when pitted against the rise at Clifford Chance it becomes more significant. Last year, Clifford Chance promoted seven partners in banking and finance and this year it promoted 13.
Clifford Chance's current strategy for its banking department is organic growth, especially on the Continent, where it sees this as the best way to build a bilingual team of local law lawyers. But putting emphasis on 'home-grown' represents a slight shift for Clifford Chance, which in the past has brought in a number of high-profile partners both in London and abroad.
In a slight role reversal, A&O has also departed from its traditional standpoint and is picking off the talented partners of its second-tier competitors.
Looking at the main areas of investment, Germany is top of the list, with Clifford Chance appointing two banking partners there and A&O promoting three. Reading between the lines, A&O's focus on Germany is an attempt to bring it on a par with Clifford Chance, which, while currently winning the battle for prominence, is continuing to make heavy investment to make sure it retains its position.
Last year, A&O didn't make up any finance partners in Germany, and although in part that can be put down to its late arrival in Frankfurt, it is worth noting that it has made up for it this year.
Clifford Chance's current lead in Germany is obvious when looking at the two biggest deals in Germany last year. The firm advised the arrangers on both Messer Griesheim and Cognis, while A&O just had a smaller role on Messer when it was brought in by the banks to advise on the mezzanine debt.
Looking at the list of partners made up in London, Clifford Chance's are particularly high profile this year. Stephen Lucas was the senior associate working alongside Alan Inglis on Cognis. Charles Cochrane was senior associate under Malcolm Sweeting on Messer Griesheim and Philip Hertz was poached back from Cadwalader where he had followed Andrew Wilkinson. However, equally high profile at A&O are Randal Weeks, who is working alongside David Morley on the Marconi restructuring, and Philip Bowden, who was senior associate on the BT property securitisation.
Both firms claim that making up partners has more to do with the candidate than the market, but common sense says that the decisions must also reflect a perception of the market. The two firms differ in that Clifford Chance has gone for a broader selection, which includes making up banking partners in Luxembourg, Warsaw, Washington and Munich. A&O on the other hand has stuck to the major financial centres.
Taking a quick look at London's third finance firm Linklaters, the strategy is slightly different. This year it has made up four banking partners; two in London but none in Germany.
More overtly than Clifford Chance or A&O, Linklaters claims to appoint partners according to demand and geographical spread, which makes it even more significant that it has ignored Frankfurt. Since Linklaters merged with Oppenhoff & Rädler, the firm has developed a good finance practice in Frankfurt, so why is it ignoring it now? With A&O preparing to tough it out with Clifford Chance, does it really make sense?