How do you solve a problem like the Berwin Leighton Paisner (BLP) finance team?
That is the question facing new finance head Adam Dann. The former projects and infrastructure partner has just been handed finance chief Matthew Kellett’s crown and with it the job of straightening out the troubled team.
But does Dann have the answers? Granted he hasn’t been long in the top job, having been named as Kellett’s successor last week (27 February 2014). However, catching this disintegrated finance team and pinning it down will be no easy task.
Morale is said to be plummeting, 18 partners have left the firm in recent months (4 November 2013) and the finance team’s sub groups are increasingly dispersed.
In this team, money talks less than in projects, infrastructure and real estate. But it is suffering from a lack of core finance partners.
“(Dann’s appointment) is a bit surprising because he’s not what you’d consider straight finance,” says a source, “but that might have been a sensible move given the drive in that team just to start over.”
“The team is feeling increasingly dispersed,” says another source. “The new leader needs to be someone who can draw them all together and give some confidence that the group is going to start going in the right direction.”
There is no doubt that BLP has experienced heavy losses from core areas. At the beginning of the year restructuring head Ben Larkin left for Jones Day (10 February 2014). That followed a 2013 dominated by finance exits.
Asset finance partner Lisa Marks joined Stephenson Harwood in July (9 July 2013), private equity heavyweight Raymond McKeeve abandoned ship also for Jones Day (20 August 2013) and corporate finance partner Michael Weir left for the same firm two months later (8 October 2013). By the end of 2013, 11 finance partners had made for the door.
However it was the exit of former RBS restructuring head and finance chief Kellett that proved a tipping point. Following Kellett’s exit in stepped former Clifford Chance managing partner and Jomati founder Tony Williams to lead an independent review into the department (30 October 2013).
According to sources Williams was greeted by a siloed department suffering some serious exit wounds. The firm’s strategy of lateral hiring between 2010 and 2012 saw it bring in no fewer than 11 partners in 2010-11, 16 in 2011-12 and 13 by August 2012 (6 August 2012). But according to one source “integration was very tricky” as there was “no structure”, resulting in exits and a lack of communication.
A source says, “I think there wasn’t enough effort put in by the whole firm to make the laterals work all the time. People should have been tasked with integration”.
“The asset finance practice has been a real clique,” says another source. “That has been part of the culture problem, there were a number of cliques and no one knew which one they belonged to.”
Sources also point to clashes within the banking and finance team between former structured finance head Tamara Box, brought in from legacy Lovells and securitisation partner Paul Severs (8 May 2006). The high-profile Severs, who was hired on a £1m guarantee (27 November 2006) is now a high-profile banking and capital markets partner at BLP. Issues are said to have emerged between the two and Box left a big hole with her exit for Reed Smith in 2011 (21 December 2011).
“They brought in Tamara as head of the group and they brought Paul Severs in and he also thought that he was head of that group,” says a source.
Severs’ group, also home to former Clifford Chance partner Lucy Oddy, was affected by a depletion in heavy-hitting banking clients following the end of the high-profile ‘Project Isabelle’ deal. BLP scored a place on RBS’ landmark ‘Project Isabelle’ agreement to sell off £80bn of toxic UK commercial real estate loans, with Severs leading the £1.36bn deal to sell of the bank’s 25 per cent stake to Blackstone (30 June 2013). Its end marked a turning point for the group.
“Ever since Project Isabelle ended a heap of people haven’t had enough work to do,” says a source.
The exit of finance partner Trevor Wood to Mayer Brown in October 2013 (24 October 2013) signalled the first loss from the team on that deal. He joined up with partner and former Lloyds Banking Group director Richard Todd, who moved to Mayer Brown earlier in the same month (7 October 2013).
The departures of insolvency head Ben Larkin (10 February 2014) and Kellett spelled further issues for that client relationship as well as the firm’s links to key banking clients such as Lloyds.
That has put the thorny issues of sector focus and sub-group divisions at the centre of the recent department review. Sources say the idea of merging asset finance and banking was mooted but ultimately rejected at the beginning of 2014.
Asset finance head Russell Clifford would have thrown his weight against that concept according to sources and the partner will have had a big recent win for the firm on his side. He was the lead partner on the firm’s recent appointment to the Bank of Tokyo-Mitsubishi (BTMU) (19 November 2013).
That was not the only shift on the cards however. Rumours swirled at the end of 2013 about the concept of brining several key finance areas under real estate.
“It’s often been said that’s what real estate would like,” says a source.
While partners have been told that asset finance will remain separate, reshuffling key finance roles could be first on the agenda for new finance head Dann. But that appointment has not been an easy road either.
By the end of 2014, two out of three potential candidates for the new finance job had left the firm, Larkin for Jones Day in February and real estate finance head Laurence Rogers for DLA Piper along with two other partners last week (28 February 2014).
That left former legacy Dewey Ballantine partner Dann, who joined BLP in 2006 (28 May 2008). Billed by sources as a softer choice than the “ambitious” and “aggressive” Rogers, Dann is said to be a popular choice due to his internal contacts.
“He’s been involved in a number of internal administrative things like partner appraisals and people like him,” says a source. “He’s a very measured, fair sort of person.”
Dann is said to be tasked with generating more work for the team from the oil and gas market, where he has a strong reputation. The partner spent four years as the legal manager of UK oil company Hardy Oil & Gas. The sector has long been on BLP’s agenda as a target for the finance group.
However, numerous sources say the road ahead will be a tough one, particularly because the group is increasingly dispersed across other practice areas, particualrly Dann’s team.
“The people in project finance have been really dispersed,” says a source. “[Partner] Tessa Kimber is now in real estate. The project finance group is an odd one because Tessa is a real estate lawyer by training and so a lot of the work she does is not true project finance and then you’ve got Dann who is an oil and gas lawyer and definitely not a finance lawyer.”
A BLP spokesperson said: ”we are working through the recommendations from the review” and implied the firm could have appointments to announce shortly.
How do you solve a problem like BLP finance? It looks like the answer might not involve very much pure finance.