Looking in on the 30-floor office from Canary Wharf’s wintry Jubilee Park, the news seems simply administrative: Clifford Chance is streamlining its internal alphabet soup of departments and has merged so-called corporate groups ’30A’, ’30B’ and ’30C’, which specialise in M&A and private equity, into one group.
But organisational change is never quite so simple. On the magic circle firm’s 19th and 20th floors – home to the three merged corporate groups of some 120-odd lawyers – there is a whiff of nervousness in the air.
Lawyers’ concerns include the loss of positive departmental culture, an adverse effect on recruitment for the more ‘popular’ merged department and a perceived attack on ‘work-life balance’ by getting pulled in to firefight on new deals from new partners.
Associates, many of whom are by nature a conservative breed, have generally adopted an approach of ‘wait and see’, but one corporate assistant tells The Lawyer he worries that, due to the merger, “there’ll never be downtime”.
As with all decisions on reorganisations, partner-level politics plays a role, but in all modern law firms the greater challenge lies in people management and in establishing the firm’s brand internally, not just to the outside world.
Learning the alphabet
“The division between the A, B and C groups was quite historical,” explains global head of corporate Peter Charlton, formerly of group 30B.
There certainly is plenty of overlap between the groups. Group C was primarily a private equity and investment banking team, weighing in with private equity names such as Permira, CVC Capital Partners, Carlyle Group, Duke Street Capital, Warburg Pincus, Terra Firma and Macquarie, as well as the usual banking suspects.
The ‘general corporate’ A and B groups had wider ambits, advising a cross-section of FTSE100 companies and banks as well as handling some private equity work. Private equity giant Kohlberg Kravis Roberts (KKR), for example, was run out of 30B by partner Daniel Kossoff, while 30A worked with Macquarie and Warburg Pincus.
The merger between the three groups was announced officially by the new co-heads of the merged corporate practice, partners Adam Signy and Matthew Layton. Signy was formerly in 30C and close to private equity house Candover, while Layton was also in 30C and key to the relationship with Permira.
“Welcome to 30D,” began their jovial email of 11 December 2007. “While on the surface it may seem to many of you to be business as usual, we firmly believe that the new group will enable us all to take full advantage of the many opportunities to develop and enhance our highly successful practice.”
However, the christening of the new merged group to create a sense of internal identity has posed a problem. Indeed, Signy and Layton invited suggestions for a more suitable acronym after they admitted that people “objected, quite rightly” to 30D. In the absence of suitable suggestions, they said, 30D would follow the trendsetting banking team that had recently renamed itself from 50X to ‘Finance X’, and become Corporate D.
The corporate practices’ merger is the latest in a series of profound organisational shake-ups across the firm that took place throughout the year.
The asset finance (50M) and project finance (50C) teams merged in October 2007 to form ‘Finance A’. (With a nod to banking, ‘Finance Y’ was considered but scrapped after people asked, “why?”.)
Before that, in early 2007, the securitisation team (50S), the smaller trusts group (50T) and the securities practice (50D) merged more than 180 fee-earners under the ‘capital markets’ banner (after unfounded speculation that it would be renamed ’50STD’).
As well as simplifying the archaic and confusing letter codes, however, there are sound business reasons to merge such departments, and on paper it sounds pretty straightforward: the mergers are intended to remove artificial divisions between practice groups that are irrelevant to clients and the outside world. They will also reduce administrative duplication between the departments, aim to give associates exposure to a wider range of work and to increase and distribute evenly utilisation across the bigger practice group.
“The clients aren’t interested in the distinctions between the product groups,” agrees David Bickerton, head of the merged capital markets group. At the time of the practice group merger last year, he told The Lawyer that the aim was not to change anything, but to slice up deals more effectively between fee-earners.
Geoffrey White, co-head of the merged assets and projects teams ‘Finance A’, says that even though their merger had only happened in October, the utilisation of fee-earners had already “rocketed”. He attributes it to the increase in efficiencies in work allocation, although clients pushing to wrap up deals before the year-end may also have been a cause.
Inside the tower
The provisionally entitled Corporate 30D has shaken up its floorplans by physically moving many of 30A, B and C’s lawyers from one office or floor to another. “We mixed up some [partners and fee-earners] and there’ll be some more,” confirms Signy.
The new seating arrangements are structured by specialisations that ignore the historical billing code divisions between the groups. This makes sense, as a lot of the work that the groups handled was very similar and a number of associates were already working across departments.
Nevertheless, cultural differences between the departments exist and reputations are made with trainees and qualifiers based on the type of work, the personalities of team members and any number of factors that are impossible to quantify. For example, one Clifford Chance assistant claims that 30B does not have the top reputation and that 30C, which handles investment banking and a lot of private equity work, is perceived, rightly or wrongly, as a more “glamorous” place to work.
The qualification figures over the last two years do not dispel the perception. A total of seven trainees were taken on by the ‘glamorous’ 30C as newly-qualifieds (NQs). Departments 30A and 30B, however, took on only three and two trainees respectively and both received no applications from trainees wishing to qualify for two out of four intakes.
A similar story exists in Clifford Chance’s 25th floor securitisation department (50S), which merged into capital markets. 50S had suffered historically from serious difficulties in internal recruitment due to its reputation for delivering relentless and punishing workloads. Asset finance (50M), which merged into Finance A, was similarly disreputable and no secret was made about the fact that many trainees and NQs gave these departments a wide berth and a large number of antipodean and other lateral hires were drafted in to make up the numbers.
The departments that 50S and 50M merged with had fewer such problems and arguably enjoyed better reputations.
It seems that one of the subtexts to these mergers could have been to improve the recruitment prospects of the departments suffering on that front.
Each of the programmes were implemented differently. In capital markets no physical relocation took place between the three departments on the 25th and 26th floors. At Clifford Chance’s skyscraper offices this is significant, as every floor operates as an almost self-contained entity and contact between floors outside of lunchtime is often minimal.
Correspondingly, only around five to 10 lawyers, out of approximately 50, from the ‘popular’ former 50D group are now handling some work for the former 50S department, although the reverse is happening to a far lesser extent. A division between the departments is, therefore, clearly still present both along geographical lines and on the basis of the type of work being done.
After initial trepidation, associates have generally reacted positively to the opportunities that were opened up in gathering valuable experience in the securitisation practice and most fee-earners in both teams still do the same type of work as before.
“Generally it’s been positive,” says one assistant. “I don’t think people have ended up doing stuff they didn’t want to do in the past.”
And the office Christmas party was twice as large, which may be seen as a distinct bonus. ties inherent in the merger: “The worst thing would have been to force [lawyers from one group] to do stuff [for the other group] they didn’t want to do,” he says. “You have to soft-pedal the change.”
Shaken and stirred
Finance A took the same approach that Corporate 30D has now followed by mixing up partners, associates and everyone between the projects and assets teams across two floors.
This was by far the most radical shake-up, no doubt linked to the fact that asset and project finance have become price-sensitive areas of business, forcing management to think of creative ways of maintaining margins.
Associates welcome the increased social network of the larger department and some appreciate the opportunities for gaining wider experience, but may feel it is too early to tell whether the merger will make a real difference to their lives, for better or for worse.
One fear is that such a change can be brutal in terms of shaking up a department’s culture. This can be exacerbated by the negative perceptions of culture and workload of one of the departments. “Projects had a really good culture,” says one assistant, adding: “I don’t think that anyone’s looking for change.”
Some are also apprehensive about doing work with people on transactions that they may not have signed up for when they first joined.
Another assistant, formerly in asset finance, says: “From the people I know, projects lawyers don’t want to do asset finance work, but asset finance lawyers want to do projects work. Asset finance [lawyers] are very happy [with the merger].” Another assistant, formerly in projects, corroborates: “I wouldn’t look forward to doing [assets work].”
Their concern is unsurprising. Projects work tends to be more episodic, says White. He says you find people “frantic” for longer periods, but after closing they can experience a lull, after which they again go at “full steam”. Asset finance deals, by contrast, are much shorter, albeit similarly intense. A projects lawyer enjoying a lull between deals could therefore get drafted in to help on a short-term assets transaction.
This would go some way towards explaining the recent increase in utilisation across the joint department.
When viewed from above, distributing the workload between fee-earners certainly seems fair. But overworked fee-earners enjoy and need downtime between deals, which now risks being eaten up by more partners roving for spare capacity during crunch times.
There is no doubt that uniting the three M&A and private equity teams was right in managerial terms.
But at the end of the day, firms are little more than collections of people bound together by culture.
With transactional lawyers’ attrition rates high and the roots binding them to firms delicate, it is partners’ responsibility to prevent those roots from dying.
And, like keen gardeners, they should be aware that by tampering with the cultural climate and environmental variables that made a workplace flourish, you can all too easily also make it fail.
• HOURS POWER
Allocating work to fee-earners is a challenge, particularly in departments with more than 100 hungry – or overfed – mouths to feed.
Some Clifford Chance departments use an online ‘busy-o-gram’ form. Others use smiley faces on a whiteboard, with an unhappy face denoting: “I have capacity.” The capital markets group sees work allocation partners Stewart Dunlop and Andrew Forryan touring offices on Monday mornings with a clipboard to poll levels of busyness.
Finance A sees fee-earners meeting their supervising partner once a week to inform them of their workload. A table is then compiled of those who have ‘capacity’ and the work is dished out.
Corporate 30D is introducing a unified system across its merged departments, which is still not finalised.
In a firm where much is determined centrally, it is interesting that Clifford Chance does not have a unified allocation policy.
More seriously, perhaps, there is no central system on how downtime between deals is integrated – days off in lieu after weeks of extreme workloads are generally awarded only at the discretion of individual partners.
In short, safeguarding work-life balance is, to a certain extent, down to the luck of the draw of which department and which partner you work for.
General corporate group, 30A
Former head: Neil Harvey
Big guns: Jonathan Beastall, Kathy Honeywood, David Pudge
Major clients: Accenture, Aviva, BPB, Deutsche Bank, Dubai World, eBay, Emerson, French Connection, Fuji Photo, General Electric, GKN, Graham Packaging, HJ Heinz, Honda, HSBC, InBev, Inchcape, John Menzies, Macquarie Bank, Morgan Stanley, Multiplex, NTT DoCoMo, Office Depot, Rebus Group, Siemens, Volvo, Warburg Pincus, Whitehead Mann Group, Xchanging
Qualifiers in two years: Three
General corporate group, 30B
Former head: Daniel Kossoff
Big guns: Mark Carroll, Peter Charlton, Keith Hyman, Mark Poulton
Major clients: Ashmore, Barclays, British Energy, Canary Wharf Group, Coca-Cola, EADS, Energis, Hearst, Inmarsat, International Power, Kolberg Kravis Roberts, Man Group, Manpower, MF Global, Phillip Morris, Siemens, Wembley
Qualifiers in two years: Two
Private equity and investment banking group, 30C
Former head: James Baird
Big guns: Matthew Layton, Adam Signy, Jonny Myers, Guy Norman, David Pearson, Simon Tinkler
Major clients (private equity): Carlyle, CVC, Duke Street, Macquarie, Permira, Terra Firma, Warburg Pincus
Major clients (banking): Barclays, Barclays Capital, Deutsche Bank, JPMorgan, Morgan Stanley, UBS
Major clients (corporate): BPB, LCH Clearnet, Meggitt, Melrose
Qualifiers in last two years: Seven