Ah, those poor, poor magic circle partners. The possibility of their average profits falling be-low £700,000, all those conflicts being scrutinised and – oh, horror! – the prospect of being appraised by assistants.
Added to this, there’s that fine line to walk between commoditisation and premium billing. Nowhere is this clearer than in banking, where stories of undercutting on auctions are legion, but where the rewards are potentially huge. After all, Clifford Chance handled the original Marconi loan agreement for a few grand and ended up with more than £10m in the bank for the workout. Nice.
So here comes Linklaters, with its box-fresh new product aimed at the syndications desks in banks. Without wishing to bore you senseless with the details, it’s an online questionnaire, which when filled out will generate a term sheet, as if by magic. It’s called, erm, Term Sheet Generator, which I suppose has the virtue of doing what it says on the tin.
Before A&O and CC scoff too much, let’s just remember those dealrooms, shall we? This was intranet-based technology which allowed firm and client to communicate… look sorry, it’s too tedious for words. All you need to know is that three years ago they were tremendously fashionable and sucked up an insane amount of A&O’s and CC’s cash. They died a death and are mostly now used for ‘internal’ purposes.
Given that the LMA standard loan agreement is already out there – and there’s another one due on leveraged financing later this year – it’s not as if there are no precedents floating about. But Linklaters reckons its new product is already giving its partners airtime with bankers, many with plenty of space in their diaries for chats over coffee.
What’s more significant is how far Linklaters has come in the senior debt market. It has, of course, been helped by the almost complete lack of balls on the part of its competitors. Freshfields has no ambition. Norton Rose is licking its wounds. White & Case is still marginal. Ashursts is solid, but poses little threat in London. Shearman & Sterling is treading water. It’s too early for Cadwalader. Latham & Watkins is too small. DLA is increasingly impressive, but only in the mid-market.
All of which leaves Linklaters as the number three banking firm after A&O and CC – something you wouldn’t have said even a year ago. If you think Linklaters’ new product is about technology, think again. This time it’s all about relationships.