English law firms competence have been swelling their wings to far-flung corners of a world, yet few of them can means to omit New York, both as a heading financial and business capital, and as gateway to a world’s largest authorised marketplace value hundreds of billions of dollars.
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As a miscarry in a world’s largest economy accelerates, firms are being lured to New York for a raft of reasons: sepulchral MA and collateral markets; a abounding word sector; transatlantic regulatory and white-collar rapist investigations; and US immigration recommendation for British SMEs.
But New York is not for a faint-hearted. The UK firms of all sizes, possibly sorcery round or boutique, that have determined a participation in a US’s largest city, strive for clients and lawyers opposite deep-pocketed Wall Street firms such as Cravath, Swaine Moore; Skadden, Arps, Slate, Meagher Flom; Davis Polk; and Sullivan Cromwell.
‘The New York authorised marketplace is arguably a many rival authorised marketplace in a world,’ says Linklaters’ US co-managing partner Conrado Tenaglia, who adds that a pivotal to success is anticipating a ‘unique offered proposition’.
Niche market
Clyde Co, that non-stop a New York bureau in 2006, has positioned itself as a one-stop emporium for word and reinsurance advice. New York handling partner Michael Knoerzer says: ‘The organization was referring millions of dollars of work a year to US firms, and clients were seeking “why do we have to have dual law firms, given can’t we have one law organization to hoop word matters?”.’
Its New York bureau has now grown to series 45 attorneys, including 10 partners.
Knoerzer says opportunities for a top-50 organization arose following a financial predicament of 2007/08, that saw a series of US firms overlay or revoke their activities.
Among Clyde Co’s new recruits are word specialists Paul Koepff from O’Melveny Myers and John Woods from a now left New York organization Thacher Proffitt Wood. Knoerzer, who has some-more than 20 years’ knowledge in word and reinsurance lawsuit and arbitration, hails from word and appetite organization LeBoeuf, Lamb, Greene MacRae, that went on to combine with Dewey Ballantine to form Dewey LeBoeuf, a Manhattan-based organization that filed for failure in Jun 2012.
‘We have been means to offer a home to many lawyers who are peaceful to come here given they are looking for a organization where word is not a second-class citizen,’ Knoerzer says.
It is not usually a concentration on word that is behind a success of Clyde Co’s incursion into New York, where normal profit-per-partner during some of a top-tier firms is reportedly $3m or more.
‘No one joins Clyde Co carrying to scapegoat possibly a operation or peculiarity of their use or a remuneration for that practice,’ Knoerzer says. The organization employs 125 lawyers in a US, in locations including San Francisco and New Jersey, and is adding an bureau in Newport Beach, Southern California. The firm’s tellurian revenues grew by 9% to £365m and boost by 11% for a year finale 30 Apr 2014.
Clyde Co does not tell a internal relapse of results, yet Knoerzer says: ‘The New York bureau has been essential given it non-stop and meaningfully so. For a final 5 years a US has been a fastest-growing partial of Clyde Co, and it has always been profitable.’
Watson, Farley Williams was among a progressing English law firms to set adult in New York. Opening in 1990, a bureau has a concentration on shipping finance, that relies on an general network of 110 lawyers, and nautical lawsuit and arbitration. Over a past year, Watson, Farley Williams has seen fast enlargement in commodities, negotiating and drafting sales and squeeze contracts for clients such as Japan-based general merchant Sojitz Corporation of America.
Real estate is another fast-growing practice, that has some-more than doubled in distance given a commencement of a year. The organization now has dual dedicated genuine estate partners and 5 associates, with a comparison associate shortly to join. Work is mostly inbound to a US, with clients trimming from New York-based developers to multinational companies investing in genuine estate on a corner try basis, says handling partner Dan Rodgers.
But in a US distance matters. ‘One of a categorical hurdles we have is that we are comparatively small,’ says Rodgers. Watson, Farley Williams has 26 attorneys in New York, compared with 100 or some-more during a larger, UK-based general law firms in a city. ‘Our use areas are focused and we are unequivocally good within those areas – we can contest with anybody – yet with exchange that have a broader operation it becomes formidable for us to contest with incomparable firms,’ he says.
The organization wants to boost a headcount (to 30 by year end), yet this again comes behind to money, and reputation. A first-year income for associates during a largest firms routinely start during $160,000, augmenting yearly by $10,000 or more; bonuses for associates operation from $10,000 to $60,000, shaped on experience. Bonuses are paid during Christmas, that is partial proceed by English firms’ financial year.
‘It is unequivocally formidable for us to contest with heading firms in New York in terms of salaries and bonuses,’ Rodgers says. ‘We also confront a genius among youth lawyers who find themselves captivated to what they would consider of as big-name firms here in New York. If they are deliberation an offer from us and White Case, they competence be taken with a allure of observant “I worked for White Case”.’
In numbers
166,317
Attorneys proprietor and active in New York State
1,268,011
Attorneys in a US
76,000
New York State Bar Association membership (oldest and largest intentional bar organization in a US)
400,000
American Bar Association members
60%
Average marketplace share for intentional state bars
54%
Average marketplace share for internal bars with over 2,000 members
62%
Average marketplace share for internal bars with reduction than 2,000 members
Source: American Bar Association, 3013 data
But in a marketplace where associates can be approaching to check 2,500 hours a year or more, a organization does have something opposite to offer new recruits.
‘What we are charity is rarely competitive, in partial given a hours we design from a associates are not a same as what is approaching during these hulk law firms,’ says Neil Quartaro, an profession during a firm.
Rodgers adds: ‘I wouldn’t call us a lifestyle organization by any widen of a imagination, yet we are picturesque and we don’t wish to have people usually ghosting around in a bureau late during night watchful for some partner who competence call during midnight.’
Another English organization assured it has found a singular offered indicate in New York is boutique immigration use Laura Devine Solicitors. Anastasia Tonello, handling partner of a firm’s US arm, Laura Devine Attorneys LLC, says: ‘Our genuine niche is assisting tiny to medium-sized British businesses enter a US market. That is where we compute ourselves from a competitors.’
The firm, that works closely with a New York bureau of UK Trade Investment (UKTI), advises sold and corporate clients in sectors such as technology, party and conform on all aspects of immigration to a UK and a US. The US organisation comprises 7 lawyers, including 4 solicitors, and recently suggested Lisson Gallery on an O-1 visa (for people who possess unusual ability in a arts) for a gallery’s general executive who is substantiating a new space for a London-based gallery in New York.
Notwithstanding a firm’s success, it too has to work tough to find English solicitors peaceful to dedicate to a career in New York. ‘Everyone wants to work in New York for 6 months, yet it’s tough to find people who are peaceful to dedicate for longer,’
Tonello, a dual-qualified English barrister and New York attorney, says. This is partly given of concerns about gripping adult to date with CPD requirements. The costs compared with relocation are also a factor, generally given ex-pats tend to design to live in costly Manhattan, even yet in London they competence be staying in a city’s outdoor zones.
For UK-based general firms a pivotal offered indicate is also their tellurian reach.
‘English law firms have a incomparable general network, on average, than likewise situated US counterparts,’ Rodgers says. London-based Watson, Farley Williams has 12 offices outward a UK, including in Germany, Greece and Italy.
But if we take a largest UK firms, typically they have between 45% and 65% of lawyers outward a UK, according to a new TheCityUK report, compared with many US law firms among a tip 100 that have reduction than a entertain of their lawyers outward a country. US firms Skadden and Latham Watkins have 15 and 21 offices outward a US, respectively; by comparison, Clifford Chance has a network of 36 offices in 26 countries.
Magic circle
So how have a UK-based general law firms fared in New York and, by a city, a US domestic market, estimated to be value $240bn-$270bn?
Adam Siegel, Freshfields Bruckhaus Deringer US informal handling partner, says: ‘The principal plea is removing clients, who consider of Freshfields as a organization that can assistance in places such as Europe, Asia or a Middle East, to realize and know that we can now assistance them with US authorised issues as well.
‘We also know that a proceed we compute ourselves is in a cross-border context. We tell intensity US clients: “I know that we have never used us before in a US, yet for a multi-jurisdictional square of work, given don’t we give us a try?”.’
The sorcery round organization has been in New York given 1972, nonetheless it did not start charity US law recommendation until 1998. Over a past five-and-a-half years Freshfields has focused on building a US lawsuit practice, that launched in Jan 2009 with 3 partners, including Siegel, and now has 67 attorneys, including 11 partners, in New York and Washington DC.
In this area, Freshfields has achieved ‘significant’ enlargement by representing financial institutions and companies in regulatory and white-collar rapist investigations, where immeasurable probes such as Libor and Forex have enabled a organization to muster a multi-jurisdictional regulatory capabilities.
‘What we have attempted to do in a US is grow in ways that element a strengths of a organization in other tools of a world,’ Siegel says. ‘We recognize that, when a customer has an design or a problem, they don’t consider of it as geographically limited.’
The organization is beefing adult a 20-attorney New York-based corporate use in a identical fashion, and has already had ‘a conspicuous 2014’, representing clients on cross-border MA exchange totalling $60bn. Mandates have enclosed advising US-listed engineering association Foster Wheeler on a $3.2bn partnership with a UK’s Amec.
International arbitration
London is a many chosen and widely used chair of arbitration, lucky by 30% of arbitrators, compared with 6% for New York, according to a latest general settlement consult undertaken by Queen Mary University of London. Furthermore, English is a ruling law in 40% of all tellurian corporate arbitrations, while New York state law accounts for usually 17%. To tighten this gap, a New York International Arbitration Centre (NYIAC) non-stop in Jul final year.
NYIAC is an eccentric non-profit organisation, shaped with a support of a largest law firms in New York, including DLA Piper, Latham Watkins, Sullivan Cromwell and White Case. The New York State Bar Association’s brawl fortitude and general sections also corroborated a NYIAC.
‘There are dual primary widespread bodies of law in a general context: English law and New York law,’ says Neil Quartaro, secretary and vice-chair for committees in a general territory of a NYSBA. ‘A series of English-law jurisdictions have well-regarded and timeless settlement centres such as SIAC in Singapore and HKIAC in Hong Kong, and a London [Court of International] Arbitration has been good regarded for some time. So NYIAC is an bid to emanate a allied venue here in New York.’
The state-of-the art centre located during 150 East 42nd Street in Manhattan provides a venue for settlement and involvement sessions conducted by eccentric entities. However, distinct a general settlement centres in Hong Kong, Singapore and London, NYIAC does not discharge arbitrations, designate arbitrators or have a possess rules.
‘NYIAC comes out of a broader bid to boost a lure of New York law in general transactions,’ Quartaro says. For example, in Jun a New York State Supreme Court Commercial Division, that handles formidable blurb disputes, introduced an ‘accelerated adjudication’ routine that shortens a customary find and pre-trial routine to 9 months from a date of a filing of a ask for legal intervention.
Likewise, Linklaters is offered itself to US clients as a organization with tellurian reach. Tenaglia says: ‘While we positively hoop a share of domestic work and see it as a flourishing area, we trust that one of a vital strengths is to be ideally matched to ancillary clients in both inbound and outbound cross-border mandates involving US entities.’ Linklaters recently represented Citi and Santander in a investiture of a multi-bank securitisation programme, Trade MAPS, and in a $1bn initial emanate underneath a programme.
Linklaters has been in New York given 1972 and employs 120 lawyers. The New York bureau works with a firm’s tellurian US organisation to advise corporate and financial institutions on antitrust, collateral markets, structured products and derivatives, among other services.
‘Tax has been a vital enlargement area for a US operation and one we’ve recently invested heavily in by a appointment of 3 partners,’ Tenaglia notes. These are conduct of US and tellurian taxation Gordon Warnke from Dewey LeBoeuf, and David Brockway and Jasper Howard from Boston-based Bingham McCutchen.
For Evan Cohen, Americas informal handling partner during Clifford Chance, there is usually one plea ahead, and that is distance – or a miss of it. ‘We are a small underweight; we usually need to be bigger,’ he says. The organization has 250 lawyers in a US; 200 in New York and 50 in Washington DC.
The devise is eventually to grow to 350-400 lawyers to compare a distance of Clifford Chance’s categorical New York rivals, among that are Simpson Thacher Bartlett and Latham Watkins. The Americas contributes 11%, or £152m, of Clifford Chance’s sum income of £1.36bn in a 2013/14 financial year, yet a aim is for it to enhance a share to 20%-25%.
Clifford Chance suffered several departures after a 2000 partnership with Manhattan organization Rogers Wells. ‘It took a while to bed down yet we have had many years of success and enlargement and we see that continuing,’ Cohen says. ‘The work we are doing is unequivocally high quality, and we are removing paid for it.’ Revenue per counsel was $1m in a US in 2013/14.
Clifford Chance recently combined to a New York corporate and MA organisation with 5 partners from Dewey LeBeouf, and 3 litigators to a white collar, regulatory coercion and supervision investigations practice. The organization is representing a Royal Bank of Scotland in a ongoing Libor review and ‘one of a categorical players’ in a $6.2bn ‘London Whale’ trade scandal.
In further to a solid workflow for a top-tier item financial organisation in a US, Clifford Chance has capitalised on a bustling MA marketplace over a past 12-18 months. Recent mandates have enclosed advising US wire TV broadcaster AMC Networks on a $1bn merger of Chellomedia; and Pernod Ricard USA on a squeeze of California booze code Kenwood and associated resources from F. Korbel Bros.
The US financial services regulatory group, meanwhile, ‘has left by a roof’, Cohen says. The organisation is led by partner Nick O’Neill, who recently eliminated from a firm’s London bureau to New York, and provides US-based clients with comparative, non-contentious recommendation on banking and investment services regulations in a EU and a US.
But for Scott Smith, a New York-based partner who leads a MA and private equity use of US organization Covington Burling, a problem stays that sorcery round firms ‘have a many worse time huge a New York marketplace for US deals.’
In common with Chicago-based Kirkland Ellis, Washington DC-based Covington is a relations visitor to New York after it joined in 1999 with New York organization Howard, Smith Levin. But, Smith says: ‘We are a US organization and we don’t have a same onslaught they have. On immeasurable US corporate matters, US firms’ New York practices are precocious and there are a lot of players. US companies do not take UK law firms to their boards, they take US law firms.’
Covington’s 140 attorneys in New York specialise in lawsuit and corporate matters. The firm’s New York collateral markets use – and in sold equity collateral markets – has been flourishing over a final 12 months, with a organization advising on 10 US IPOs given January. Among them are life sciences companies uniQure, shaped in Amsterdam, and US Kite Pharma, that reportedly lifted $128m on Nasdaq.
Some disagree that sorcery round firms’ enlargement in a US has also been hampered by their despotic lockstep system, whereby partners are paid on length of use rather than on sold value, and this is noticed as an anachronistic British tradition that is out of sync with a US’s some-more meritocratic system.
But Cohen, who records that chosen New York firms such as Cravath, Swaine Moore and Sullivan Cromwell also use ‘a organisation sorcery circle-type lockstep’, disagrees, adding that a complement fosters collegiality among partners. ‘Firms that used to have lockstep and changed divided from it have regretted it,’ he says, referring to Dewey LeBeouf, among others. With liabilities of some-more than $300m, a broke organization is accepted to have overpaid for partners.
Clifford Chance stays married to a despotic lockstep. Average distinction per partner in 2013/14 was adult by 16% to £1.14m. ‘We can't compensate a many income in New York, yet we can attract a lot of good people during that turn of compensation,’ Cohen says.
Some disagree that this normal prerogative complement for partners helps general firms attract US clients. ‘I mostly tell clients that we are one tellurian lockstep firm,’ says Siegel. ‘It is an huge advantage in terms of a ability to explain ourselves. It is something clients unequivocally understand. It works to their advantage given each partner’s inducement is to make each client, wherever they are globally, as happy as they can.
‘Clients find it unequivocally comforting to know that those partners are pity economically in a same way. That means that each partner is aligned in terms of providing a same turn of opening to a client.’
Going native
Winning in New York is also about going native. Cohen, an American, like a immeasurable infancy of partners and lawyers in a New York offices of UK-origin firms, says: ‘The plan is to be competitive, desirous and to grow and be successful in a US, with US lawyers doing US work for US clients. Some of those clients apparently take us overseas, so we do feed a lot of work into other offices around a network, that is a advantage of a tellurian brand. The plan is not usually to be a satellite bureau of a London organization and collect adult a phone when London calls.’
Knoerzer says: ‘The proceed of Clyde Co has been to give a US operations a wider embodiment than other London firms have done.’ For example, a firm’s US government house comprises 5 partners: 3 from a US, including Knoerzer, and dual from a UK.
‘Together we make decisions consensually, yet a concentration is what a 3 American handling partners trust is a best proceed of how American lawyers would wish to see things done.’
Marialuisa Taddia is a freelance journalist
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