Making Mayer add up – can the Anglo-US challenger make the equation work out?
"Maher's departure forced the US to take a closer look at the firm's remaining corporate clients in London, and it looked pretty grim. The City office had to redefine itself and change its client focus, which inevitably resulted in departures..."
April 19, 2012 at 07:03 PM
6 minute read
After another bout of partner turnover, Friederike Heine assesses Mayer Brown's progress in the City
A decade since the union between Chicago's Mayer Brown & Platt and London mid-tier Rowe & Maw, the question remains: when is the firm's European practice going to start really adding up? On paper the union of a proud US parent and a solid City practice in need of scale and a bit more grit always made sense – for what that's worth. But Mayer Brown has been through more than its fair share of turbulence since its 2002 union, to the extent that even the firm's supporters would be hard pushed to say it has yet delivered on that promise.
That familiar turbulence was in evidence again with a renewed run of senior departures since the summer. This kicked off in October with the departure of high-profile litigator Clare Canning, who left to become the global general counsel of accounting giant Ernst & Young. Her contemporaries Simon Willis and Matthew Lawson, who joined Mayer Brown alongside Canning from Barlow Lyde & Gilbert in 2007, also quit this year to join the London arm of Orrick Herrington & Sutcliffe.
And the departures of leveraged finance partners Lee Cullinane and Jackie Evans for White & Case at the end of 2010 were also contentious; Mayer Brown's London management had invested time and resources into the pair, hired respectively from Clifford Chance and Allen & Overy in 2009, to the irritation of some of Mayer Brown's younger partners. One former partner comments: "Bringing in partners on large guarantees in a difficult economic climate is a huge risk and in this case it backfired. It also created some resentment within the junior partner ranks."
Aside from these high-profile exits, the firm has seen a steady trickle of partners leaving London since the end of last year, with co-head of capital markets Stephanie Bates also joining Orrick and litigation partner Andrew Legg joining the London arm of Eversheds. James Dodsworth, a commercial real estate lawyer cited as one of Mayer Brown's young stars, left the firm for White & Case, while real estate head Peter Sugden left to become managing partner of Katten Muchin Rosenman's London office. This reflects a wider slimming of the firm. Though Mayer Brown made 30 lateral hires across 2011, its partnership overall shrank by 4% – or 22 partners – to 585 over the year.
It should be stressed that Mayer Brown remains one of the largest US-backed practices yet built in London with revenues of around £100m, but growth at the 90-partner office has been hard to come by since the banking crisis of 2008. The feeling remains that attempts to secure opportunistic hires since 2009 haven't delivered sufficiently to shed Mayer Brown's reputation as a go-steady practice and push the firm into the genuine global challenger ranks.
Setting this aside, the firm's London management is confident that the high partner turnover – only some of which, the firm asserts, is unwanted – marks a new beginning. "During the recession there has inevitably been some attrition, as with our competitors," says executive partner Jeremy Clay (pictured). "In addition we have sought to align our capabilities in practice areas like corporate with the global requirements of our clients and with those sectors that we are focusing on across the globe such as funds, energy and insurance."
Indeed, the firm has made investments in its real estate, corporate insurance and life sciences practices in recent months, bringing in partners from firms including CMS Cameron McKenna and Nabarro. Notably, BP senior regulatory lawyer Mark Compton joined the firm's London financial services regulation & enforcement group as a partner earlier this year.
The firm has also moved to rebuild its depleted corporate practice following the messy departure of corporate heavyweight Paul Maher in 2009 and the subsequent root-and-branch restructuring of the practice, which resulted in its corporate partnership shrinking by approximately 40% from its boom-time peak. Mayer Brown has high hopes for insurance specialist Colin Scagell and corporate partner Bernt Bohr, who joined the firm in 2011 respectively from Debevoise & Plimpton and Allen & Overy. "Maher's departure forced the US to take a closer look at the firm's remaining corporate clients in London, and it looked pretty grim," concedes one partner. "The London office had to redefine itself and change its client focus, which inevitably resulted in departures."
In some areas, the firm's investments already seem to be paying off. Aside from being appointed to a number of panels over the last year including Nomura, Barclays, Bank of America Merrill Lynch, Aviva and Axa Insurance, Mayer Brown has also advised on some headline mandates in both energy and real estate.
In September the firm took a lead role for Genel on its $4.2bn (£2.7bn) merger with Vallares, former BP chief executive Tony Hayward's investment vehicle. Its real estate team has advised on some noteworthy deals including JP Morgan's £495m acquisition of Lehman Brothers' former London headquarters, with Mayer Brown advising the acquirer. But despite its recent successes, partners within the firm admit it is still prone to poor cross-selling within the office and needs to target more mid-market work from key clients in order to keep the whole team busy and not just a handful of star players.
It is not hard to see the logic of trying to achieve a clearer identity – the firm built a good name in areas such as capital markets, construction, litigation and professional negligence but it remains a broad practice – perhaps too broad to make much headway in the competitive City market.
But achieving focus – the holy grail of management consultants – is notoriously far easier to promise than deliver. With a (fairly promising) proposed union with Simmons & Simmons abandoned in 2010, Mayer Brown must find its own way.
"London management needs to take decisive steps in order to steady the ship and give partners new direction," says one partner. "There are real pockets of excellence in the office but we need to make sure that the whole firm is better than just the sum of its parts."
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