Glass half full

Geoff Moore, managing partner of Ireland’s Arthur Cox, is looking at life with his glass very much half full, and he is not alone. ‘Notwithstanding the awfulness going on around the world – two full-blown wars, geopolitical tensions, election uncertainty, and more – the underlying domestic economy in Ireland is actually performing very strongly,’ says Moore. ‘Things have remained robust.’

Indeed, if anyone was looking for two words to sum up the general mood in Dublin right now they could do a lot worse than ‘cautiously optimistic’. The outside world might be increasingly complex and unstable but in Dublin, the music is still playing, and Ireland’s law firm leaders are still dancing. When Legal Business suggests to Matheson managing partner Michael Jackson that cautious optimism appears to be a recurring theme he quips: ‘Of course, you’re talking to lawyers, so cautiously optimistic means wildly optimistic.’

Which is not to suggest Dublin’s legal elite is suffering from an attack of complacency. There is no room for that in a market made increasingly more challenging by the new arrivistes and the talent battle to attract a relatively static pool of senior partners. Not to mention the ongoing struggle to keep pace with increasingly demanding clients and tech advances including AI.

‘From an M&A perspective we are having a very busy year, we’re significantly ahead on activity compared to last year with tech and energy infrastructure transactions keeping us particularly busy.’ Stephen Keogh, William Fry

No, nobody could accuse Ireland’s managing partners of having it easy, even if they are allowing themselves a quiet moment of satisfaction. Against this backdrop, LB checked in with partners at some of Ireland’s leading firms to find out what has put a smile on their faces and whether it will last.

Deal markets

When LB last took a close look at the Irish market a year ago, Ireland’s M&A market was relatively robust compared with the slightly undercooked market in London and beyond. This resilience, in pretty challenging macro conditions, suggested it wouldn’t take much improvement in market conditions for Ireland’s M&A lawyers to be set for a pretty bumper year. It’s fair to say that this has proved to be the case.

A Mergermarket report published in early September 2024 put Irish year-to-date M&A activity at €19.1bn across 214 deals, more than double the volume for the whole of 2023 and the strongest year-to-date activity since 2013.

The highest value transaction of the year has been Intel’s sale of a 49% stake in Irish joint venture Fab 34 (a high-volume chip manufacturing plant in Ireland) to American PE shop Apollo. An Eversheds Sutherland team led by US tax partner Robert S. Chase II, M&A lawyer William S. Dudzinsky and Dublin managing partner Alan Connell advised Intel on the deal.

Also enjoying success on the M&A front has been William Fry. The firm’s head of corporate/M&A Stephen Keogh, who is due to become managing partner of William Fry next month (November 2024), says: ‘From an M&A perspective we are having a very busy year, we’re significantly ahead on activity compared to last year with tech and energy infrastructure transactions keeping us particularly busy.’

Firms with the most Legal 500 Rankings in Ireland

Keogh points to a string of mandates to prove his point, including advising on AIB’s €999m buy-back of shares from the Irish government, advising on the sale of UPMC Beacon Hospital and advising Echelon Data Centres on its $850m strategic investment from Starwood Capital Group. The firm also advised on all financing arrangements for the combination between Smurfit Kappa Group and WestRock Company – one of the largest outbound mergers ever executed by an Irish company.

Andrew Tzialli, a corporate partner at Philip Lee, also reports a ‘busy’ year for M&A activity, saying it has been partly underpinned by ‘some of the niches we have in the renewable space, AI, and fintech, all of which are buoyant.’ The firm’s renewables expertise is underlined by its advice to OilGaz on the acquisition of Irish biomethane platform Ormonde Organics as well as its involvement in a series of solar project acquisitions in Ireland.

And it’s a similar story at Arthur Cox, where Moore describes the firm’s role advising SoftBank on its €473m investment in Cubic Telecom for 51% equity as ‘one of the big corporate transactions of the year.’

At Matheson, Jackson points to corporate M&A as one of the standout practice areas for a year that has been ‘strong across the piece’. A particular highlight for the firm was advising data centre delivery provider Winthrop Technologies on the acquisition of a 50.7% stake in the business by PE house Blackstone.

Even newer entrants to the Dublin market, such as DACB, which opened in 2009, have been getting in on the corporate action. Lisa Broderick, partner and practice head of the firm’s Dublin office, says ‘In the last four to five years, the gamechanger has been moving to what we would call a full-service firm.’ This increase has led to more corporate work including a series of service station acquisitions the firm handled for a petroleum company: ‘From a corporate perspective, that was a really big case that also created work for the real estate team, the employment team and the competition team.’

Beyond M&A

Crucially, it hasn’t just been M&A keeping firms busy as David Widger, managing partner at A&L Goodbody, points out: ‘We’ve had plenty of M&A including advising AIG and Corebridge Financial on the €650m sale of Laya Healthcare to AXA. But also, we are advising Metrolink on the planning and environmental impact of the €10bn metro being established from the local airport into town, which is a huge project. On real estate, Citibank are moving to a new Dublin headquarters, that’s a big property deal that we’re on. On the tech regulatory side, we are advising Google on GDPR issues with the DPC, that’s a very big mandate as well.’

Walkers managing partner Jonathan Sheehan meanwhile is particularly happy with the firm’s growth in finance and capital markets. Sheehan points to a couple of factors behind the growth: ‘Collateralised loan obligation (CLO) work continues to grow. Public deal sizes for Euro CLOs typically average €400m – last year we acted on 27, working with the leading UK and US firms in London.’ He says that aviation has also been an important theme in Ireland, with the firm ‘involved in a number of PE transactions in the sector’.

‘We’re acting for EirGrid on a number of its projects to reinforce and extend the grid, which is necessary for the transition towards renewable energy and decarbonisation of our electricity system.’Will Carmody, Mason Hayes & Curran

Moore is particularly proud of the firm’s role advising Paddy Power owner Flutter and building materials company CRH on their decisions to switch their primary listings to New York, moves that saw both companies leave the Irish stock exchange. Will Carmody, managing partner at Mason Hayes & Curran (MHC), meanwhile, is keen to talk up the firm’s work on energy generation projects: ‘We’re acting for SSE on one of the largest offshore wind farms in Ireland, the 800MW Arklow Bank Wind Farm – a very big project. We’re acting for EirGrid, the operator of the Irish electricity network, on a number of its projects to reinforce and extend the grid, which is necessary for the transition towards renewable energy and decarbonisation of our electricity system.’

Firms with the most tier 1 Legal 500 Rankings in Ireland

Disputes

Commercial litigation is another practice area keeping firms busy in Dublin right now. Centre stage is the multibillion-euro insurance claim dispute relating to aircraft stranded in Russia following the Russian invasion of Ukraine. In Dublin, a group of six aircraft lessors are suing insurers over their alleged refusal to provide indemnity for the losses.

Matheson is acting for four of the six lessors with Jackson explaining: ‘It’s a really high-profile case, and for us to be acting for four of the lessors is a great position for us to be in as a firm. Logistically it is a huge operation, and the courts have put in place a very efficient case management system for all participants. It is the largest piece of litigation by value, I believe, ever to be held in the Irish commercial courts.’ MHC is also involved in the case, acting for CDB Aviation in the large-scale litigation, while McCann FitzGerald is also acting for a lessor.

On the other side, a host of firms including DLA Piper, RDJ, Dillon Eustace, Beauchamps, and Flynn O’Driscoll are acting for the defendants. David Carthy, managing partner at DLA Piper, says of his firm’s involvement: ‘We were instructed for Swiss Re and Convex in aircraft litigation cases. For a relatively small team this represents a high-profile and significant presence at the top end of the market.’

Elsewhere, Broderick points to a piece of international arbitration connected to construction that is being worked on by DACB’s commercial litigation team in Dublin and its construction team in Newcastle: ‘There are probably about 20 people working on the case, and they are equally split between the two different jurisdictions. It’s a significant international arbitration. It’s really challenging and rewarding and great to be involved in.’

Victims of their own success

Of course, not every practice area is smoking hot in Dublin right now. Commercial real estate, and office space in particular, is repeatedly singled out by partners as a practice area not firing on every cylinder. James Duggan, managing partner at Flynn O’Driscoll, also mentions that he is seeing some ‘volatility in early-stage companies, particularly in the tech space’.

‘There is some volatility in early-stage companies, particularly in the tech space.’ James Duggan, Flynn O’Driscoll

Perhaps a more pressing issue from the managing partners’ perspective, however, is what one partner refers to as being ‘victims of our own success.’

Put simply, Ireland has undergone a period of incredible growth and transformation and there is a feeling that not everything has kept pace, notably housing and infrastructure. In the words of Addleshaw Goddard real estate partner and head of Ireland Mark Walsh: ‘The housing challenge is huge; it’s going to be a big issue at the next election.’

William Fry managing partner Owen O’Sullivan adds that the government, needs to ‘fund infrastructure and fund it aggressively.’

‘Domestically, our planning situation is a real headache. We need to get that sorted out. Clients are getting tied up in planning for years.’ Mark Walsh, Addleshaw Goddard

Dublin continues to be a magnet for investment from corporates. But there are real worries that these issues could end up leading to business leaders looking elsewhere.

As Eversheds Dublin managing partner Connell says: ‘Housing and infrastructure is a concern, as it is coming up with increasing regularity in conversations in terms of investment decisions. Ireland has a very attractive offering for internationally focused businesses wishing to develop an overseas expansion strategy. However, if we are not in a position to adequately house the employees (and their families) of these companies, that are needed to drive and grow the business in and from Ireland, that will be a barrier to our future growth. If we are to secure further foreign direct investment, Ireland must address the shortage of housing and appropriate infrastructure to remain competitive as an investment location’.

Carthy agrees, adding: ‘It’s a first world problem but it’s a problem nonetheless. We are not seeing anything leading to reductions in investment so far, but the warning signs are there.’

Planning

Another issue that the Irish legal market strongly feels hasn’t kept pace with the changes the country has undergone in recent years is planning. As Ireland’s Minister for Housing Darragh O’Brien explained in a comment piece in the Irish Examiner earlier this year, when the last major planning bill was debated in 1999: ‘Ireland was a different place. The population was just 3.8 million people. You could buy a pint of Guinness for three punts and Tony Cascarino was escorted off the pitch by riot police after a heated end to a European Championship match.’

The current situation is a source of acute frustration to many. As Walsh says: ‘Domestically, our planning situation is a real headache. We need to get that sorted out. Clients are getting tied up in planning for years.’

The concern is taken up by Widger who opines that: ‘There’s just too many important housing, energy and infrastructure projects stuck in the planning process… and it appears to me it’s too easy for objectors to slow down the process.’

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Jackson is confident however that the upcoming Planning and Development Bill should mark a welcome change, stating: ‘The process of putting that legislation together genuinely involved bringing together some of the best legal minds in the country to work out what needed to be done. And I think you can see that in the type of legislation that it is. Sometimes it gets criticised because it’s lots of little things, but, actually, it’s those little things that were often the stones in the shoe causing the discomfort. The proof will be in the in the pudding. We’ll wait and see. But I am hopeful that the approach taken will help streamline the system in a positive way.’

The War for Talent

On 23 June 2016, when 52% of the UK voted to withdraw from the EU, a train was set in motion that led to a number of international firms, including DLA Piper, Simmons & Simmons, Dentons, Bird & Bird and Addleshaw Goddard, deciding that Dublin, with its system of common law, access to the EU and highly skilled English-speaking workforce, would be a good location for an office.

Of course, they weren’t the first international firms to set up shop in Dublin. Firms including DAC Beachcroft, Dechert, Kennedys and Eversheds Sutherland had already made the move long before David Cameron’s referendum.

The post-Brexit scramble, however, was something new and it sent shockwaves through the Dublin market. As our analysis of Legal 500 rankings makes clear though, so far the status quo remains relatively intact, with Ireland’s Big Six in particular showing impressive durability. What is unquestionable though, is that the sudden influx of international firms and international money has meant a dramatic ratcheting up in the war for talent.

As Broderick puts it: ‘The new entrants to the Irish market, although welcome, are really disruptors in the context of throwing very big figures around and dislodging a lot of people from the Big Six. I think that’s having a disruptive effect.’

Keogh confirms that it is very much a pressing issue, although he is able to look at the matter with perspective: ‘The war for talent remains particularly acute. While the international firms have certainly had an impact on pay scales, at least we’re not seeing the sorts of salaries that are recently being offered to NQs by US firms in London.’ The average salary for an NQ at a top firm in Dublin is around €80,000 according to a firm Legal Business spoke with.

However, there is no doubt that the arrival of international firms has changed the game, simply as a result of supply and demand. As Sheehan comments: ‘More firms is a positive for the legal market, but recruitment and retention is a challenge. No matter how many firms come, in Dublin there is still a relatively static pool of experienced partners and senior lawyers, particularly in the more specialist areas.’

Firms with the most leading partners in Ireland

So, what might tempt lawyers to move? Money undoubtedly talks. But as Carmody points out: ‘The top five or six firms in Ireland are pretty comparable essentially in what they’re offering the best talent.’

He believes that attracting and retaining talent is all about the quality of work and clients, stating: ‘If you’re doing challenging and rewarding work for the industry-leading clients and being remunerated in a way that recognises that contribution – that’s going to attract, retain and motivate the best lawyers.’

While it is fair to say that what was a torrent of new entrants is at best a trickle these days, the threat hasn’t entirely disappeared. In late September, reputation management leader Schillings announced a Dublin launch, and long-time international operators are still managing to bring partners in from the Big Six.

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Eversheds Sutherland for example persuaded Big Six partner David Kirton to join its Dublin office in October. Connell says that part of the appeal for Kirton was the firm’s combination of broad international presence and local depth in the market. Eversheds Sutherland has a more than 50-year history in Ireland – starting out as O’Donnell Sweeney in 1967 and joining the Eversheds network in 2006.

‘You do hear of people moving to the DLAs or Dentons of this world, because it is an opportunity to go work with a truly international firm. But I think the reality is that when they go to those international firms, a lot of partners find they’re still doing Irish work.’ Lisa Broderick, DACB

Broderick though warns that partners moving just on the promise of international work might find that the grass is not always greener: ‘You do hear of people moving to the DLAs or Dentons of this world, because it is an opportunity to go work with a truly international firm. But I think the reality is that when they go to those international firms, a lot of partners find they’re still doing Irish work. You see names moving, and then two or three years later, you see them moving to another place.’

A crack in the glacier?

So, what’s next? For all the disruption that has accompanied the international firms’ entry into the market, the Big Six have remained just that: big, six and at the top of the market.

As Widger puts it: ‘There are more players in the market, but we find our main competitors are still the full-service, independent law firms.’ Jackson is on the same page, stating: ‘By and large, the market has not been as disrupted by the arrival of new firms as people were predicting.’

Dublin has not proved the easiest nut to crack according to local partners. Especially for firms with full-service ambitions. As Sheehan explains: ‘Trying to be full-service as a new entrant is very tough. International firms who do better are typically focused on a particular area, have a particular strength or specific client base. A new entrant planning a full-service offering will struggle to scale quickly enough unless perhaps they can merge with a domestic firm.’

‘If you look at other mature jurisdictions, history would suggest that there’s room for a handful of independent national champions in each jurisdiction, and no more than a handful.’ Geoff Moore, Arthur Cox

One firm which did merge was Addleshaw Goddard. The firm combined with Irish firm Eugene F Collins in 2022 to launch its Dublin office. Walsh, who was previously managing partner at Eugene F Collins, believes that the international brand has been helpful, saying: ‘A lot of clients have been using us for bigger stuff because we are part of Addleshaw Goddard now.’

Opinions are mixed as to whether the Big Six can continue to enjoy their current level of success going forward. Moore is unconvinced: ‘If you look at other mature jurisdictions, certainly in Western Europe, history would suggest that there’s room for a handful of independent national champions in each jurisdiction, and no more than a handful. We would certainly see ourselves as one of those in Ireland.’

Widger makes a similar point: ‘Personally, I think there will be a smaller number of independent firms being very successful at the top end of the market in the future. When we look at what has happened in other European jurisdictions, history shows it typically results in three or four dominant players with others losing a bit of ground.’

At DLA, Carthy, for his part, is convinced that the market is ripe for disruption, saying: ‘The Irish legal market is evolving. How the leading Irish brands are adapting is less clear. And one of the reasons why is that they’ve been so successful with their historic model. Some of these firms have wrapped history and legacy around themselves so tight that they can’t effectively sell the future.’

Giving the example of Paris, Amsterdam and many US cities he states that: ‘There is enough room for two or three generalist, large, domestic law firms, but currently there are a large number of contenders pursuing this strategy. I think evolution and change will happen more rapidly than the market perceives… It’s slow on the surface, but once the glacier starts to crack it can become very fast.’

Jackson, however, is not completely persuaded that the Irish market is fated to follow the precedents set elsewhere. He concludes: ‘The Irish market is quite different to a lot of others in that our domestic market is very small and has been well-served for a long time. It’s a different market to a Spain or a Germany, where there is a huge domestic market also to play for. Will it follow the same path as other markets? It’s hard to say it won’t at all, but there are factors that suggest Ireland has been – and will continue to be – a slightly different market to some others.’

Is a changing of the guard happening under everyone’s noses or is Ireland set to buck the trend and make its own way? The only certainty is that things are never dull in Dublin.