The long-established trend of US firms opening offices in London with locally qualified solicitors has seen something of a reversal in recent weeks.
Last week Clyde & Co beefed up its US footprint with the launch of an office in New Jersey. The insurance-focused firm hired two partners from US firm Connell Foley for the launch, including the former chairman of its insurance coverage group Daren McNally.
The launch of Clydes’ new office – its third in the US after New York and San Francisco – came little more than a fortnight after Mishcon de Reya rocked many of its West End rivals by opening an outpost in Manhattan. Mishcon hired a team of litigators from Sheppard Mullin Richter & Hampton for its new office, including fraud specialist Jim McGuire, a former partner at both White & Case and Mayer Brown.
Last week Mishcon managing partner Kevin Gold, fresh from a trip to the US to visit his firm’s office in the iconic MetLife Building on Park Avenue, outlined the rationale behind the New York launch.
“There were basically three steps to the logic,” says Gold. “First, over the past five or six years we’ve sent around $5m [£3.1m] into the New York market in terms of litigation or regulatory referrals, primarily to boutique firms. “Second, it’s likely there will only continue to be an increase in the financial regulation of the world, with obvious connections between London and New York.”
And the third step?
“We met the right guy,” says Gold. The initial contact with McGuire, who as the founding partner of Sheppard Mullin’s New York office knows a thing or two about getting a new operation off the ground, came via Mishcon partner James Lipson. McGuire joined Mishcon along with partners Mark Berube, Tim McCarthy and half-a-dozen associates.
Gold says the new office, which will house a total of 15 staff at the outset, is projecting a minimum first-year revenue of around $8m, although that is based on a budget of zero growth. “To be honest, I’d be upset if it wasn’t closer to $15m,” reveals Gold.
Mishcon is understood to have had a stroke of luck with its New York real estate by picking up the tail end of a lease after the former tenant, a hedge fund, bailed out. The cut-price lease is in the ballpark of $50 per sq ft cheaper than the previous tenant was paying.
Gold says Mishcon has financed its new office with a mixture of retained profit and an increased bank facility, while its US outpost is structured as a separate LLP from the firm’s London office.
Although Mishcon is not looking to replicate its London practice in the US, Gold adds that it is possible the firm will look to broaden its scope beyond the initial fraud and regulatory focus.
“A contentious employment practice would make sense,” admits Gold, “as a high proportion of our work in that area is in the financial services arena and a significant proportion of it involves US clients.”
As for Clydes, the firm’s New Jersey office takes the number of US-qualified lawyers on its books and practising in North America to more than 50.
“New Jersey is not on everyone’s radar screen, which is one of the things that makes it attractive,” reveals Clydes senior partner Michael Payton. “But there are a lot of financial services companies operating there. It’s an excellent place to plant the Clyde & Co flag.”
Like its 20-lawyer office in San Francisco, Clydes’ latest US office will focus on insurance monitoring and coverage. The New York office, which has around 25 lawyers, focuses on litigation and trial work.