What do recent departures from Ashurst's real estate practice mean for the firm? Friederike Heine reports

Partner departures are nothing new at Ashurst these days, with lockstep reviews and very active performance management as well as voluntary departures contributing to some 24 partner exits from the firm since the start of the 2010-11 financial year.

But while the firm has been losing partners across the board, the recent spate of departures with ties to the firm's real estate practice have led competitors to question whether the firm's commitment to the property sector is beginning to wane.

Ashurst still has 12 partners in its London real estate practice, but high-profile exits emerging in recent weeks include former London real estate head Simon Cookson and head of non-contentious construction Marc Hanson, who quit to join DLA Piper and Berwin Leighton Paisner (BLP) respectively.

In addition, head of European real estate David Evans and fellow partner Samantha Lake Coghlan are leaving for Goodwin Procter's London base, while former litigation head Michael Madden, who specialised in property work, has joined Winston & Strawn.

It's easy to see why rivals – as well as some within the firm – are wondering what's happening in the practice which, until recently, was widely regarded as a low-key but highly effective team.

The significant drop in real estate activity and pressure on transactional fees, combined with Ashurst's current efforts to boost profits per equity partner (PEP), means some, but by no means all, of those leaving have been affected by a reshuffle of the equity earlier this year. In total, 17 Ashurst partners were moved down the lockstep, with some suggesting that real estate was particularly badly hit.

As one partner explains: "Charlie and Simon decided that the practice was too top-heavy and that it needed to be more highly leveraged. We want to make clients happy by doing a whole range of less profitable work for them, but that work needs to be staffed at the junior level."

Rivals suggest Ashurst is simply going where many City firms have already gone – downsizing property in a bid to keep up PEP across the board. To date, Ashurst has, alongside the likes of Hogan Lovells, Clifford Chance, BLP and Herbert Smith, remained one of the few big City firms to have maintained the perception of being committed to the real estate sector.

The firm was still building up its practice as recently as 2009, when it brought in highly regarded former Linklaters partner Ann Minogue, who has taken over the management of Ashurst's construction practice in the wake of Hanson's departure.

In contrast, Ashurst's management now concedes that it has reshaped the practice with the intention of increasing leverage in order to make the group more profitable. However, it also insists that property remains an area of focus for the firm.

Senior partner Charlie Geffen (pictured) states: "We are very ambitious in real estate and consider ourselves one of the best in the City. [Following the departures] we are in the right place and will now work on strengthening our position."

Certainly Ashurst has an impressive roster of clients within the practice, with Westfield, British Land, Stanhope, London and Continental Railways (LCR) and Tesco among the practice's core client base. Westfield, in particular, has been a lucrative client for the firm, which has advised the group from planning through to construction and leasing on the development of both the White City and Stratford shopping malls.

The recent completion of Stratford led some to question whether the departures from the group were linked with the end of the project; however, relationship partner Hugh Lumby has since been instructed on the Australian company's £1bn expansion plans for the White City shopping centre. The firm is also hoping to use its forthcoming merger with Australia's Blake Dawson to the advantage of both real estate practices.

However, with Ashurst more committed than ever to boosting PEP and improving its global position, as demonstrated by the Blakes tie-up, those within the firm suggest further cuts at partner level are likely, both in real estate and other practice areas. As one partner concludes: "It's quite simple – if you are not leveraging enough money, you will be pushed out."