Analysis: Exodus forces BLP to a crossroads of identity

If Berwin Leighton Paisner is to halt the stream of senior partner departures, it needs to make up its mind about its true focus and channel resources accordingly. By Kate Beioley

Berwin Leighton Paisner’s (BLP) string of high-profile departures came to a head last week with the exit of finance head Matthew Kellett, prompting a review of the firm’s banking team. 

Partners have been running for the exits for several months now, with the firm seeing departures from the corporate and finance teams. But this latest development could signal a deeper identity crisis for the former real-estate heavyweight.

BLP

Partners have been running for the exits for several months now, with the firm seeing departures from the corporate and finance teams. But this latest development could signal a deeper identity crisis for the former real-estate heavyweight.

Sources are divided over BLP’s diagnosis. Some quarters blame heavy spending on lateral hires for too little gain while others accuse the firm of failing to invest enough in star finance and corporate partners.

“What makes BLP tick is two words: real estate,” says a source. “That’s part of the functionality issue at the firm, which is why people aren’t staying there.”

“Neville [Eisenberg, managing partner] had a vision that BLP was going to become less dependent on real estate, but you’ve got to allocate investment and that’s not something they were doing,” the source adds.

Friction has also been caused by guaranteed salaries for high-ranking partners who failed to come up with the goods. The firm hired 40 laterals between 2010 and mid-2012 alone and, while many proved good investments, a redundancy drive in May this year, resulting in 102 legal and secretarial job cuts, signalled troubled waters. 

“It was almost like bums on seats, like work was going to magically appear, and I don’t think the people they recruited had any following or any business,” another source says.

Last year, the BLP staff roster looked very different. BLP was eating up corporate and finance lateral hires and the firm’s popularity was booming. Former Linklaters global corporate head David Barnes took up the reins as global corporate finance head in March and former Lloyds Banking Group director Richard Todd joined the finance team. By April 2012, the firm had recruited its ninth lateral hire since January.

Look ahead to today and the situation has changed. Last month, the finance team lost partners Trevor Wood and Richard Todd to Mayer Brown’s banking and finance team. In July, asset finance partner Lisa Marks moved to Stephenson Harwood while finance partner Andrew Bamber also quit the firm. 

Project finance partner Philippa Chadwick left for Squire Sanders at the end of 2012, but one of the biggest blows to the finance team came at the end of 2011 when structured finance head Tamara Box left for Reed Smith.

According to a source: “Tamara Box was a big loss and she was the start. She had a very good business and would have left a hole.”

Corporate has also suffered a big loss this year with the departure of private equity star Raymond Mc-Keeve in August. He moved to Jones Day, prompting management to defend its corporate offering. 

Other notable departures include corporate finance partner Michael Weir in October and partner Adam Rose in September.

The new banking and finance review launched on the back of Kellett’s exit spells the need for BLP to hammer down its new identity and make some tough decisions over how it operates.

Some expect Eisenberg to bring all departments under the real estate side. “It’s often been said that’s what real estate would like,” says a source.

“BLP is having to really work out what it wants to be and there’s a conflict within the firm because if it’s positioning itself as a real estate practice, competitors can pigeonhole it, which doesn’t help finance or corporate,” says another source.

“The number of finance and corporate exits leads to a conflict because you’re going to end up in a position where BLP probably becomes leaner and is more focused on real estate but, in this day and age, clients aren’t looking for real estate work to be done in London.”

According to some, BLP is suffering the cost of too much too soon, in the form of its lateral hire rampage. A source says: “It’s slightly too easy to build up firms and slightly too easy to knock them down again. [BLP] was over-hyped at its best and over-kicked at its worst.”

Another source says the departures were more to do with panic than poor performance: “I really don’t understand enough of how the last year has come about. I
could never have predicted it.” 

Yet another says: “BLP is having a tough time but it doesn’t deserve it.”

Litigation is certainly on the up, with a new in-house advocacy team bolstering the firm’s offering. According to a source: “Litigators are doing very well and they’ve got a good team there.” 

But the same source adds: “They’ll be wondering what’s going on because they’re doing well in terms of profit but, because of the failings of other departments, litigators who are working very well and billing well will not be remunerated because of the lack of money to go around.”

TIMELINE – key departures

2011

December – Head of structured finance Tamara Box leaves for Reed Smith

2012

Charles Goddard and Linda Adelson leave tax practice to set up Rosetta Tax boutique

October – outsourcing partner Craig Rattray leaves for Olswang

December – project finance partner Philippa Chadwick goes to Squire Sanders

2013

July asset finance partner Lisa Marks moves to Stephenson Harwood

July – Acquisition finance partner Andrew Bamber leaves the firm

August – Private equity partner Raymond McKeeve leaves for Jones Day

September – head of information law Adam Rose leaves for Mischon de Reya

September – Tax partner Liesl Fichardt leaves for Clifford Chance 

October Michael Weir leaves for Jones Day

October – Finance partner Trevor Wood hired by Mayer Brown

October – Finance partner Richard Todd moves to Mayer Brown

October – Corporate partner Robert Salter leaves for DLA Piper