Partners in Paris are moving around like never before. Joanne Harris scrutinises the French capital’s recruitment market
During the past 10 months the French lateral recruitment market has been busy like never before. More than 80 partners have moved firms and a significant number of senior associates and of counsel have also been hired as partners by rivals.
The hiring spree began in late 2010 and has not let up. The vast majority of laterals have been made by UK or US firms from other UK or US firms, although a handful of medium-sized independent domestic practices have also joined in.
Although early 2011 saw a trend towards corporate hires, as the year has progressed partners across a full range of practice areas have chosen to move firms. Employment, tax, finance and IP have all seen their share of laterals.
French lawyers remain surprised by the consistent level of activity.
“It’s always a wonder that the legal market in Paris remains so active even in times of crisis,” says Allen & Overy (A&O) Paris managing partner Jean-Claude Rivalland.
Hubert Segain, a member of the executive committee at Herbert Smith in Paris, puts the activity down to market conditions, pointing out that uncertainty breeds instability.
“In the past couple of years the market has been pretty nervous,” he says. “Firms have been quite aggressive in trying to poach partners who have a business.”
Indeed, Herbert Smith has found itself the target of some of this activity. In May, A&O announced that it was hiring the firm’s respected French litigation head Denis Chemla, who had just become Herbert Smith’s disputes head for Continental Europe, the Middle East and Africa. Chemla, along with fellow litigation partner Erwan Poisson, is set to join A&O in November, while arbitration partner Michael Young will follow suit early next year.
Rivalland explains that the hires are part of a refocusing strategy at A&O. Two years ago, he says, the firm decided it needed to focus more on domestic work in France.
“After 10 years in Paris, having established the firm as a recognised international player we wanted to be a recognised domestic player; the port of call not only for international companies but also for French groups,” he says.
Initially, A&O had focused on the core areas of banking and M&A, building up a strong profile in these practice groups, and had not identified dispute resolution as a priority. Rivalland thinks that to attract more local work the firm needed to demonstrate its commitment to contentious work as well. Despite the Herbert Smith team having not yet joined, he says the proportion of domestic instructions is growing and feedback from clients has been positive. A&O plans to continue the strategy by adding partners in complementary areas, such as tax and private equity, and is “open to opportunities”.
At Herbert Smith, Segain and fellow executive committee member Frédéric Grillier admit the departure of Chemla and his colleagues is a loss, but they remain optimistic, reporting the “busiest year ever” for the Paris office and asserting their intention to recruit replacement partners in both litigation and corporate.
“We’ve moved from 35 lawyers in 2002 to close to 110 today. We’ve gone through a continuous period of growth in the past five years,” says Grillier.
Hogan Lovells co-managing partner in France, James Vaudoyer, is similarly bullish. Since the May 2010 merger between Lovells and Hogan & Hartson the combined Paris office has lost seven partners. Notable among these was the departure of Pascal de Moidrey and Alexis Terray to Paul Hastings, which has had a significant impact on the firm’s corporate practice. Hogan Lovells is now recruiting for M&A partners as well as a tax partner.
“On top of that we feel we’re close to having a critical size in Paris, save for the corporate group which isn’t as strong as we need,” Vaudoyer comments.
When it comes to Hogan Lovells’ recent departures, Vaudoyer says the merger has contributed, as Hogan Lovells has integrated its partnership and remuneration systems. One issue he and others identify for Paris is the fact that partners in UK firms generally retire earlier than their counterparts in US or French firms. This, he says, has been an issue for Hogan Lovells, as the retirement age for Lovells was lower than that at Hogan & Hartson.
“The profession’s tended to follow the pattern we’ve seen in the leading consulting firms of this world, where partners are expected to retire early,” Vaudoyer explains. “In the case of a merger all sorts of compromises have to be made and that’s one of them – the system is now much more flexible.”
Firms such as Herbert Smith and Hogan Lovells, seeking to replace partners they have lost, are likely to help keep recruitment levels up in coming months.
But established firms in France say moves to new arrivals in Paris could also continue.
Four international firms have set up new Paris offices this year: McDermott Will & Emery and Foley Hoag from the US, Canada’s Heenan Blaikie and UK outfit Olswang. Each firm reports a good start to their venture.
“We’ve been extremely lucky,” says Stéphan Alamowitch, who moved from Dechert in January to head Olswang’s Paris office. “We’ve been able to bill transactions and make the break-even point even earlier than expected – four months. We’re lucky – I’m not saying it’s our talent.”
Alamowitch believes the key to Olswang’s success in Paris has been the referrals coming in from the UK and also from US best friend Cooley. He also thinks it has chosen the right strategy, launching with a corporate and finance capability rather than its UK speciality area of IP and technology law.
“At the beginning their strategy was to find someone in Paris with the same speciality as them,” says Alamowitch. “This was a mistake. Our work was to convince them that to open an office in Paris you have to first have the core: M&A, finance and tax.”
Olswang is now recruiting for partners that will help integrate Olswang’s UK expertise with the foundations established in Paris.
“The strategy globally is to be a top-tier TMT firm so we want to focus on media companies in France,” says Alamowitch. “That doesn’t prevent us from having a strategy for the office. Here, we have to be in synch with the French economy.”
The strategies employed by Foley Hoag and Heenan Blaikie, however, see the Paris offices focusing on the firms’ core areas.
For Heenan Blaikie this means energy and infrastructure, while Foley Hoag is concentrating on litigation.
“It’s been a very interesting project, very challenging,” Heenan Blaikie’s French managing partner Jean-François Mercadier says. “Creating a new firm from scratch in Paris is really a big project.”
Like Alamowitch, Mercadier reports that referrals from the firm’s other offices have helped give Paris a reasonably good start. Instructions have come in from a variety of areas, including for Canadian clients and for work such as an oil and gas project in Kazakhstan. Heenan Blaikie is also using Paris as a base to exploit opportunities in Africa, but this has been a little slow, Mercadier admits.
“We’ve been probably more busy in France and Europe than in Africa,” he says. “We thought it would be the reverse, but the market in Africa is quite slow and the natural resources and mining world has been difficult given the recent decreases in value in natural resources in the market.”
But he is hopeful that things will pick up. “After nine months we’re convinced we’re in the right market in terms of geographical presence,” Mercadier adds. “Given the state of the economy it’s been a little more difficult than we thought but we’re optimistic and continue a development plan.”
That plan includes adding public law and tax capabilities to be able to do more infrastructure projects, particularly in Africa.
Sticking to the knitting
In contrast, Foley Hoag’s new Paris partners say expansion beyond contentious work is absolutely not on the cards.
“The idea of opening this Paris office wasn’t to set up a full-practice office,” explains partner Bruno Leurent. “It was to develop the strong activities of Foley Hoag’s international litigation and arbitration practice. For this practice they felt they needed a presence in Europe – in Paris.”
Leurent and fellow partner Thomas Bevilacqua, who joined Foley Hoag from Winston & Strawn in June, acknowledge it is early days yet for the office. However, the pair believe they have made a good start, with existing work keeping them busy while new instructions are starting to pick up.
Integration with the US is important for the firm. Bevilacqua points to a recent bid for an International Centre for Settlement of Investment Disputes arbitration that was done jointly with Foley Hoag’s Boston office as an example of the way the practice is intended to develop.
“The idea always has been not to do a free-standing Paris office,” says Bevilacqua. “We see a number of US partners in Paris on a fairly regular basis.”
In a way, Leurent and Bevilacqua see the Foley Hoag venture as fitting in more with that other Parisian trend – boutiques.
“Some would say that what we’ve done is the future, breaking away from mammoth structures and opening niche practices,” Bevilacqua adds. “At least in Paris it seems that smaller is better at the moment.”
Many would agree with him, such as Lars Lewis. The English lawyer led a breakaway from Reed Smith in February 2010 to establish a niche, independent firm focusing on shipping law.
“It seemed to us that clients had a choice between the Paris office of a large London firm or US firm or a smaller French cabinet,” says Lewis. “It seemed there was a need for an independent, internationally minded firm in our area. Also, it enables us to avoid confusion and accept instructions from all law firms rather than being tied to one.”
Lewis says the first 18 months for his firm, Lewis & Co, have been more successful than he had hoped, with a variety of work for clients all around the world. The move has also brought benefits for the lawyers as individuals.
“Increasingly, we felt that being part of a larger organisation was a limiting factor,” Lewis says. “As firms become bigger there’s more administration, and we find it enjoyable spending our days looking after cases and clients rather than administration.”
Getting closer to clients is a common reason given by those in Paris who have set up boutiques, although the first months are hard work. Bernard-Olivier Becker, one of the six founding partners of Solferino & Associés, thinks the business development efforts made by the team of former Bredin Prat associates have paid off.
“It took a few months but now we’re busy,” Becker reports. “We now know that we’re capable of doing something. We’re busy all day. At some point, unless we start to work all night, we’ll need more people.”
A similar start is reported by A&O’s former head of corporate Nicolas Bichot, who set up corporate boutique Bichot & Associés in January. Bichot says the firm has closed eight transactions and also worked on two unsuccessful auctions.
Bichot believes the firm’s quality and price offering is persuasive in the current market.
“If you know the client and the client knows you, you can work on any kind of deal,” he says. “We still need to convince people that they should try us, but that’s marketing.”
Although he says the firm has not yet found itself unable to work on a transaction, like bigger firms Bichot has been turning to recruitment. Since its launch the firm has brought two associates on board, fewer than hoped.
“We’ve seen a lot of people,” Bichot says. “To be honest, you don’t attract the same kind of candidates as international firms. We’re recruiting at a lower level in terms of salaries. The thing is to convince the young bright students who speak English and have a dual legal and commercial track that they’ll learn more quickly in a firm such as ours. A lot think that in three years they can resell experience with an international firm more easily than at Bichot. We say that in the long run you’ll receive better training and be much more exposed to the files with us.”
Those running boutiques are confident that the model is one for the future, and many in international firms agree that there is a place for them in the crowded Paris market. Whether there is room for the large number of US and UK firms is more debatable and several lawyers express doubt over the survival of all the players in Paris.
Nevertheless, more arrivals are expected, and this will keep the flow of recruitment going as newcomers try to find teams who will bring business with them.
“Firms that want to open in Paris have understood that there’s no way you can make inroads with only secondments of English and American lawyers. Youneed to have reputable French lawyers operating your practice,” Herbert Smith’s Grillier points out.
New arrivals are likely to find recruiting the right people difficult. Alamowitch says Olswang would have set up in Paris earlier, but was unable to find a team with which to do it.
The next big thing, predict many, will be the arrival of firms from Asia. That would really shake up Paris and give partners looking to make a move a unique opportunity.