The Leader Column

It is a momentous vote this Friday at Clifford Chance. As we report in our front page story, the partners are about to decide on a substantial group of securities litigators from San Francisco’s Brobeck Phleger & Harrison. The whole thing is at a very delicate stage, and because the entire exercise is still subject to a partnership vote, Clifford Chance is understandably reticent on the issue.
What is more, sources close to the process have indicated that not everyone in the Brobeck group has yet decided which way to jump. Indeed, California gossips are currently touting Latham & Watkins as coming in with a late bid – a rumour that merely serves to illustrate the febrile atmosphere on the West Coast at the moment.
Of course, Clifford Chance just relishes the dramatic gesture. This looks like being the biggest acquisition of lateral partners since it raided Wessing back in 1996 – a move that gave the firm critical mass outside Frankfurt. It is not an entirely comfortable precedent, mind; telecoms partner Thomas Heymann, who led the Wessing group into Clifford Chance, exited for Willkie Farr & Gallagher four years later following the Pünder merger, when he found himself constantly conflicted out of mandates.
Both sides have plenty to gain. In one swoop, Clifford Chance Rogers & Wells (CCR&W) could finally net a chunky West Coast presence. And from the Brobeck group’s point of view, CCR&W must be an exciting prospect. In the wake of the M&A slump, litigation is flavour of the month with US law firms again, and that’s CCR&W’s trump card. Antitrust star Kevin Arquit gets a lot of the attention (not to say a lot of the equity), but the practice is by no means centred on him. The New York litigation practice regularly rakes in $12m (£8.2m) a month alone, and up to a third of the practice is securities litigation. US managing partner Jim Benedict has a fantastically strong relationship with Merrill Lynch, which he is currently advising on the ongoing IPO defence work. In fact, the firm is thought to bill Merrill Lynch anywhere between $15m (£10.3m) and $25m (£17.1m) a year, depending on the climate. Small wonder Brobeck’s securities litigators think they’ll find a welcome at CCR&W.
And with average profits at Brobeck plummeting by nearly half to $660,000 (£453,000), it’s not altogether surprising that, according to a source close to the group, CCR&W is perceived to provide a more stable environment. But CCR&W as safe as houses? Tell that to the 20-odd partners who were de-equitised last year.