Linklaters' hire of Chris Howard reopens debate over Freshfields' banking ambitions

Despite both being 400-plus partner law firms, there is something about senior transfers between old rivals Freshfields Bruckhaus Deringer and Linklaters that get feelings running high. And that goes double when the departures come from Freshfields' banking practice, a team that seems perennially uneasy at Fleet Street.

So news last week of Chris Howard's departure for Linklaters' finance team sparked familiar tensions, leaving Freshfields feeling bruised and baffled. One disgruntled partner comments: "Linklaters seems to view our partnership as fertile hunting ground…"

There is plenty of history here. Disappointed at his lack of promotion as a Linklaters senior associate, Howard in 2004 joined Freshfields directly as a partner. And Howard's latest transfer was driven by David Ereira, the highly-regarded banking partner who quit Freshfields in 2007 along with fellow partner Brian Gray.

The transfer of Ereira and Gray was particularly charged in that it came in the wake of Freshfields' partnership restructuring, a process that many believed reaffirmed the dominance of corporate over its banking counterpart.

True, Freshfields' banking practice has seen other departures over the years, including the high profile exit of Maurice Allen and Mike Goetz in 2009, but that was viewed as an unambiguous cultural misfire and as such of little strategic import.

In contrast, the loss of the well-regarded Howard is a gift to those who argue banking will always be second fiddle at Freshfields. And it is apparent that tension between banking and corporate played some part in the move. For one, the firm's conflicts-checking system is cited by some as being excessively biased in favour of corporate, effectively blocking finance from taking on some key mandates.

Freshfields, however, strongly refutes claims that the departure will damage the practice, citing the strong institutionalisation of its banking relationships. There is plenty of truth to that, and critics should also note that this supposedly underweight team was one of the most responsive and effective operators in the restructuring market in the wake of the credit crunch and banking crisis. Those that snipe about Freshfields not having an army of banking lawyers should also remember that it is hard to question the firm's reluctance to enter the commoditised areas of finance.

Yet there is a case to be made that Freshfields could do with a few more seasoned operators in banking, and the firm indicates that it is interested in lateral recruitment. Perhaps the biggest immediate challenge for the firm if it does decide to go to market is convincing the right calibre of candidates that it is a place for ambitious banking lawyers to go in the wake of Howard's departure.

Obviously, the view looks rather more upbeat at Linklaters, which is bringing in a highly-regarded and user-friendly lawyer with strong client skills (Howard has established links to Royal Bank of Scotland, Lloyds, BNP Paribas and HSBC).

Not only does Howard bring significant muscle to the firm's restructuring practice, he will also help to expand its leveraged finance and debt capital markets practices. Indeed, Linklaters bills the move as providing additional firepower to the private equity practice overseen by Richard Youle and Ian Bagshaw, which some had claimed had felt in need of more support from banking.

Howard also seems an appropriate fit for Linklaters' banking team in general. One of the ironies of Linklaters' development over recent years is that a firm regarded to have one of the most conservative and restrictive partnership cultures has successfully expanded in finance precisely by building an extremely broad church.

With many of the firm's leading banking names like Ereira, Nick Syson and global head of banking Robert Elliott having been hired laterally – a considerable chunk of senior lawyers having come from Wilde Sapte – Linklaters has been adept at incorporating talent in banking, in many cases looking outside of what would be considered a traditional Silk Street figure.

Perhaps one reason that losing finance partners particularly rankles Freshfields is that this is one area in which the firm's much-lauded culture has sometimes struggled to attract, integrate and retain the kind of lawyers it wants.