'It will act as a catalyst' – partners cite Brexit factor as Kirkland's Paris play turns heads
Partners warn clock is ticking on 'old London model' as Brexit turns attention to other European centres
October 31, 2018 at 12:03 PM
4 minute read
The recent news that Kirkland & Ellis is set to launch in Paris with the hire of two Linklaters partners has marked the latest example of the US firm's much-heralded decisiveness when it comes to recruitment.
During the past year, the firm been picking off some of the top private equity talent on both sides of the Atlantic – including Freshfields Bruckhaus Deringer heavyweight David Higgins and Latham & Watkins practice leader Jennifer Perkins – but the move into Paris is particularly notable given that outside of London, Kirkland has to date had just one continental European base: its 15-partner Munich office, which opened in 2004.
Private equity partners say the attraction of key European financial centres such as Paris is only likely to increase as the impact of Brexit takes hold.
White & Case global and EMEA private equity head Ian Bagshaw says: "It will happen more because of Brexit. Firms will be looking to do private equity on a more local basis rather than doing it from London. The old London model is becoming less relevant as time goes on."
Weil Gotshal & Manges Paris corporate partner David Aknin agrees that Brexit could raise questions about whether firms have the requisite coverage across Europe. "London has been the financial centre of Europe until now – the question is: is this old model of working from only London still sustainable? If Brexit happens, the answer will be no," he argues.
The Linklaters partner duo joining Kirkland – Vincent Ponsonnaille and Laurent Victor-Michel – will launch the new office after the US firm receives approval from the Paris Bar Association, joining a market that already boasts a line-up of international firms with well-established private equity practices, including Latham & Watkins, Linklaters, Clifford Chance, Willkie Farr & Gallagher, White & Case and Weil.
The arrival of more international entrants is also likely to have a knock-on effect for domestic firms reliant on referral work from international allies. "Domestic firms tend to have relationships with US firms that don't have a presence in Paris, because they get work from them sent to be done locally," says Aknin. "But if the US firms move there, this could all change – everyone is going to have to adjust to the new perimeter."
Kirkland is well versed in plucking top talent from rival firms to build its brand, and partners expect it to take the same approach in the French capital – potentially putting leading French firms such as Bredin Prat, Gide, AyacheSalama and De Pardieu Brocas Maffei at risk.
Bagshaw says: "There probably will be some firms in trouble – Kirkland aren't going to settle with just two partners. They will want more corporate partners coming in. But it's not that big a market, so they will have to take talent from other French firms."
As Brexit moves ever closer, and London's status as Europe's financial centre faces growing uncertainty, all eyes will now be on Paris to see which international firms will make the move next – and who else Kirkland will snap up for its new base.
"Outside of London the private equity market is much smaller, so it shakes it up more when something like this happens," says Bagshaw. "It will act as a catalyst for firms to reassess their position in the market, to think where their strengths lie, and for people to re-evaluate whether they're in the right place."
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