Who’s the real deal?

Slaughter and May has retained its corporate crown, with more FTSE100 clients than any of the magic circle firms.

Slaughters advises almost a third of the FTSE100, with 30 clients, compared with Linklaters, which placed second with 20, according to research conducted by Hemscott Group.

While Allen & Overy (A&O) and Freshfields Bruckhaus Deringer made it into the top five, Clifford Chance languished in ninth place.

A survey of 2,400 listed companies, including those on AIM, revealed that Slaughters narrowly beat Ashurst, with the former having the highest number of clients across the entire stock market. The fierce competition between the two firms resulted in Ashurst taking first place from Slaughters for the first time earlier this year, but the latest figures show that Slaughters came out on top, with 118 stock market clients compared with Ashurst’s 116.

Linklaters ranks fifth in the charts based on the volume of stock market clients, but the clients it does have really pack a punch. Despite servicing 24 fewer FTSE100 clients than Slaughters, the market capitalisation of its stock exchange clients is more than £549bn. Clients such as Anglo American, BP, BT, Rio Tinto and Vodafone puts Linklaters more than £203bn ahead of Slaughters when ranking clients by total market capitalisation. David Cheyne is the lead partner for Vodafone, BP and Anglo-American, new corporate head David Barnes is the lead partner for BT, while Richard Godden looks after Rio Tinto. Likewise, the gap between Linklaters and Slaughters has increased by £77bn since Hemscott published its last set of figures in May.

Slaughters kingpin Nigel Boardman has responsibility for eight of the firm’s 30 FTSE100 clients, including Marks & Spencer and Royal Dutch Shell. David Johnson, Martin Hattrell, Frances Murphy, Chris Saul and Stephen Cooke also represent FTSE100 companies.

Boardman says the firm’s recent client wins, such as Cable & Wireless and Land Securities Group, have helped elevate the firm to its pole position.

“The vast majority of our clients are fully listed and not AIM-listed,” he says. “We’ve focused on serving UK-listed companies, and that’s exactly what our clients want from us.”

Ashurst corporate partner Adrian Clark says the firm has a similar strategy, which has seen it win out against the magic circle firms.

“Our focus has been to maintain relationships with our corporate clients,” he explains. “This isn’t down to a one-off deal – it’s consistent. We consistently have more stock market clients than any of the magic circle firms, so it shows that our strategy works.”

Even though Slaughters’ client list has been the envy of its City rivals, the M&A powerhouse’s stranglehold over the FTSE100 could ultimately suffer from the current takeover fever.

In recent months, Slaughters’ clients have been on the opposite sides of no fewer than four big-ticket public M&A deals.

As reported on www.thelawyer.com (3 October), Slaughters scooped a mandate to advise on the £7bn tie-up between pharmaceutical groups Boots and Alliance UniChem. Both companies have historically retained Slaughters.

But in this case the firm opted for the Boots instruction. Slaughters’ decision to turn down the Alliance UniChem mandate gifted A&O with the magic circle firm’s first-ever M&A transaction for the company.

Admittedly, this is a rare occurrence. But it does raise the question: can there be too much of a good thing?

Meanwhile, Clifford Chance performed comparatively poorly on both of the Hemscott charts. Although the firm has developed a reputation for its strong M&A practice for investment banks such as Morgan Stanley and Merrill Lynch, as well as its robust private equity practice, Clifford Chance has not secured work for as many of the FTSE100 as magic circle rivals Linklaters, Freshfields or A&O. Indeed, A&O, Clifford Chance’s strongest competitor for the banks’ M&A work, scooped 17 FTSE100 clients compared with Clifford Chance’s five.

A spokeswoman for Clifford Chance said: “The firm has acted for more than 50 FTSE100 clients during the past year.”

However, it is worth making a note about the research. Hemscott’s client lists are sent to the law firms and then checked with the clients. A score point of one is awarded to a firm that has secured a sole advisory role and half a point if the client has a number of legal advisers.

That said, Hemscott’s research does offer a reliable reflection of the corporate legal market. While Slaughters has scooped the cream of the available corporate work during the past six months, with panel appointments on Cable & Wireless, Reuters and Shell, firms such as Clifford Chance will be aiming to make headway during the second half of the financial year.

Indeed, the need for international firms on panels such as Shell’s has created more work for firms such as Linklaters and Freshfields – and there is no doubt that Clifford Chance hopes to follow in these footsteps.

Total number of stock market clients
Rank Law Firm No of clients
1 Slaughter and May 118
2 Ashurst 116
3= Eversheds 106
3= Norton Rose 106
5 Linklaters 94
6 Pinsent Masons 82
7 DLA Piper Rudnick Gray Cary 77
8 Freshfields Bruckhaus Deringer 65
9 Herbert Smith 59
10= Allen & Overy 50
10= Berwin Leighton Paisner 50
10= Hammonds 50
Source: Hemscott Group

Law firms by number of FTSE100 clients
Rank Law Firm No of clients
1 Slaughter and May 30
2 Linklaters 20
3 Freshfields Bruckhaus Deringer 19
4 Allen & Overy 17
5 Herbert Smith 10
6 Ashurst 9
7= Addleshaw Goddard 6
7= Berwin Leighton Paisner 6
9= Clifford Chance 5
9= Eversheds 5
Source: Hemscott Group

Total market capital of FTSE100 clients
Rank Law Firm Market cap (£bn)
1 Linklaters 549.60
2 Slaughter and May 346.36
3 Freshfields Bruckhaus Deringer 162.60
4 Allen & Overy 128.13
5 Norton Rose 106.83
6 Herbert Smith 71.95
7 Lovells 51.53
8= Cravath Swaine & Moore 50.77
8= De Brauw Blackstone Westbroek 50.77
10 Dundas & Wilson 50.73
Source: Hemscott Group

Total market capital of stock market clients
Rank Law Firm Client market cap (£bn)
1 Linklaters 582.09
2 Slaughter and May 398.88
3 Freshfields Bruckhaus Deringer 197.69
4 Norton Rose 141.52
5 Allen & Overy 139.70
6 Clifford Chance 93.92
7 Herbert Smith 93.73
8 Ashurst 83.06
9 Lovells 62.10
10 Dundas & Wilson 53.23
Source: Hemscott Group