Global 100: Goodwin – No guts, no glory

The Zoom call with Gemma Roberts, private equity partner and recently-appointed co-chair of Goodwin’s London office, has not got off to the most auspicious of starts. First Roberts has a tech malfunction and then the interview is disrupted by the world’s loudest weekly fire alarm test. ‘Learning points for our next call will be to make a computer work and to not have it at 11am on a Wednesday,’ Roberts quips. The irony of the situation is not lost, given the firm’s reputation for advising on matters with a strong technology bent.

Looking at Goodwin both internationally and in London, there appears little cause for alarm. Globally, the firm has increased revenue 12% since 2020 to $1.49bn and a striking 72% over the last five years, making it the third-fastest growing global firm by revenue after Kirkland & Ellis and Covington, which have bolstered turnover 110% and 78% respectively since 2016. In that context, the London office comfortably eclipses the firm at large, bringing in $99.1m, marking a 33% surge since 2020. The London office now generates nearly 7% of firm-wide revenue, no mean feat given this office is just 11 years old.

A trawl through the Legal Business archives reveals a stark transformation since our first forays into covering Goodwin, which a decade ago amounted to talk of a possible merger with SJ Berwin and US ‘best friend’ relationships with that former firm or Travers Smith. As the market irrevocably pivoted towards a more international outlook, with the focus on law as a business rather than a profession, it is clear that Goodwin has benefited hugely from being the right firm in the right place at the right time.

Starting from its Boston homeland, the firm has built itself around clearly defined sector groups since 2005, before systematically seeking to replicate that blueprint on the West Coast, and then turning its attention to Hong Kong and Europe.

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Rob Insolia, Goodwin’s statesman-like chair, is clear on the drivers of success. ‘Our strategy is two-fold – to be very deep into five industries: life sciences; technology; real estate; private equity and financial institutions – and to really be at the vortex of the connection between technology and those other industries. Both of those are predicated on collaboration and connectivity.’

Tech and life sciences partner David Mardle echoes the view of many fellow-partners on the firm’s structure. ‘The thing I’ve found so empowering is that it’s managed by business unit. We have a common way of looking at the world and we’re all immersed in tech or life sciences and that creates collaboration and common spiritedness. I have total trust in these people. I’ve been here more than two and a half years and no matter what I need, I’ll find, whether that’s an emerging growth company or a piece of litigation for a huge pharma company. Everyone’s got the business context and understands the ecosystem.’

‘The market is getting bigger, not smaller. It’s about finding the right people, plugging them into the right opportunities and watching them go.’
David Mardle, Goodwin

Even on the thorny issue of market share, Mardle is philosophical. ‘We certainly have some great competitors but I wouldn’t say they cause us grief! Latham, Cooley, Orrick and Taylor Wessing all have great teams that are doing great things but we genuinely don’t see them in terms of trying to steal clients from them. Sure, they’ve got some clients I’d like to have, but I’ll go and find my own. Maybe I’m just getting old, but it’s a collaborative space and it’s as strong and as healthy and as happy as I’ve known it. There’s plenty of room for us all. The market is getting bigger, not smaller. It’s not like we’re having to worry about market share. It’s just about finding the right people, plugging them into the right opportunities and then watching them go.’

It has not hurt that the sectors Goodwin has bet on have followed an upward trajectory over the last few years. Says Insolia: ‘If you look at technology, life sciences and private equity, they are clearly hugely up in levels of activity and a lot of firms have seen that. While the growth of financial institutions may not have been the same since the great financial crisis, certainly the disruption being caused in financial institutions is huge, and even the disruption that technology is having in real estate. All five sectors we focus on have been growing substantially. We see that in the UK, Germany, France, Luxembourg, Asia and, of course, in the US. That’s going to continue.’

Perhaps even more striking than this stellar financial run is the sustained headcount growth over the last financial year. Indeed, this is the most notable feature of a firm that remains largely under the radar among its peer group, even taking into account the usual, potentially disingenuous, remarks from peers interviewed for this piece.

The firm has since January 2020 enlisted 96 lateral partners across its offices in a timeframe dominated by the pandemic and enforced remote working. The hires, particularly in London, are nevertheless succeeding in raising the firm’s profile in the market. ‘I get the feeling Goodwin is a high-energy firm, it seems to be hiring lots of people, going for it. Good for them – it shakes it all up and makes things energetic,’ notes one corporate partner at a rival US firm.

‘Goodwin has hired some high-profile people, no doubt, so there’s definitely a push. I don’t see the partners a lot but the firm’s obviously throwing some money at it,’ another peer agrees, although this is tempered with a healthy dose of scepticism. ‘In the biggest and most sophisticated deals, it takes a lot to catch up with the likes of Latham and Kirkland and other big US firms in the UK.’

Another rival corporate partner is more scathing: ‘They’ve hired some people who are serial movers, which usually means something’s serially not right.’

The reference is of course to the five-partner Sidley team that Goodwin picked up a little over a year ago, led by Erik Dahl and Christian Iwasko, who were co-leader of Sidley’s private equity practice and co-head of the European corporate and private equity group respectively.

Love it or hate it

For many, the private equity hires appear an odd fit, but there is a feeling that there is method behind building a tech and life sciences practice and using that to become acquainted with private equity clients beyond that narrower practice area.

Whatever misgivings critics have about the team’s upward mobility and – reading between the lines – certain Marmite personalities, Iwasko’s hire has nevertheless provided early validation and kudos, with his key client from his Kirkland days, TowerBrook, proving loyal and following him to Goodwin.

A team including fellow Kirkland alumnus Carl Bradshaw, Dahl and Iwasko, along with London real estate partners, secured Goodwin’s first deal for the client in March when a new real estate lending platform called Précis Capital Partners was established. The relationship has also spawned Goodwin’s inaugural US deal to advise TowerBrook’s Fund V on its acquisition of ECP-PF Holdings. Led by New York based partners Stuart Rosenthal and Michael Miller and associate Simone Greenspan, the deal shows Iwasko is not one to guard his clients closely: he is prepared to share the love.

The former Sidley team is also credited with being invaluable in clinching UK mandates for high-rollers like TA Associates, as evidenced by an agreement with Genstar Capital to merge portfolio companies Compusoft and 2020 Technologies.

Iwasko, a ball of energy on Zoom, espouses the joys of his move to Goodwin. He talks 19 to the dozen about what attracted him. ‘This is a place that celebrates lawyers in their 30s and 40s. It’s not run by old white guys in their 60s. The executive committee is full of people in their early 40s. It’s very like Kirkland in the 2000s in that it identifies young stars in their associate years, like Gemma Roberts. There are dozens of high-quality Gemma-type folks that the firm wraps its arms around and makes a huge success. That was always the ethos of our team and I really love that.’

‘The real work starts on day two, settling new partners in and helping them deliver on their growth. There’s a lot of innovation and excitement in that.’
Gemma Roberts, Goodwin

The praise extends to the senior ranks. ‘Then you meet management, AJ Weidhaas, Mike Kendall, John LeClaire who are running private equity, or chair Rob Insolia or managing partner Mark Bettencourt. Often in law firms the people who rise to management don’t necessarily know anything about running a business. Law firms are weird in that they don’t have proper management typically. Then you meet these people and they have such an incredible strategy and ambition.’

Iwasko is also bullish on Goodwin’s private equity credentials. ‘People talk about there being only five seats at the table when all’s said and done. How many law firms will really be serious in private equity? Kirkland and Latham have got their spots at the table. The firms that will succeed are the ones that have the ambition to build up significantly. Goodwin’s ambition is infinite. Based on the position we’ve already achieved, I think we have established ourselves with a seat at the table.’

Gemma Roberts’ elevation to co-chair of the London office joining Paul Lyons, succeeding Samantha Lake Coghlan, bears testament to a rare valuing of young stars that matches the start-up culture of youth and entrepreneurialism among the firm’s clients.

Roberts is effusive about the firm and its commitment to codifying a successful strategy. After a busy year, advising on matters including a detailed carve-out for one of her telecoms clients, GTT Communications, she is alive to the challenges of integrating large numbers of new partners.

‘There is a positivity here that means everyone continues to focus on integration. Part of the process is bringing people in but the real work starts on day two, settling them in and helping them deliver on their growth. It’s about making sure the new partners are meeting everybody and that we are thinking: “Who do I know that you might not know and how can we bring you together?” There’s a lot of innovation and excitement in that.’

Whatever rivals say, Goodwin does have a track record of pulling off successful team hires, with the 2019 addition of the team that included tech and life sciences partner Mardle from Taylor Wessing repeatedly cited as a particular coup.

Mardle’s personality is understated but there is little doubt that what drew him to Goodwin continues to excite him, especially the ability to double the size of the UK tech and life sciences practice to 45 people, even as the pandemic raged. He is unfazed by the challenge of integration. ‘It’s been a challenging environment where we’ve hired people when it wasn’t possible to meet. We’ve had to do it on Zoom. The UK practice has doubled headcount in tech and life sciences and that was all done remotely, yet we have not had leavers, we’ve not had poor integration, it’s been strong. That’s been helped by the fact we’ve been very busy. It’s much easier to integrate people when they are immediately involved in client-facing activity. They have a great incentive!’

Getting the measure

Mardle nevertheless recognises the challenges facing all businesses in migrating from completely remote working to a hybrid setup requiring in-person contact. ‘We’ve all learned this way of behaving, how are we going to adjust back? In some ways it’s harder because there are more choices now. My confidence stems from how well we did it and how well we continue to do it. My team and the people I work with have got the bit between their teeth and believe that they’re building something really good. There is an aspiration to be the best at what we do and people have been hired on that express prospectus. There must be whole other dimensions to some of our colleagues that we don’t know because we’ve never met them before. You can never quite predict someone’s height!’

‘The biggest challenge Goodwin has is that it just doesn’t really have any M&A substance in the UK. As with all new entrants to new markets where the money is in capital markets and M&A, it’s really competitive to hire people.’ This observation from an M&A partner at a US firm is put to real estate partner James Spence, a Linklaters contemporary of Matthew Elliott, who joined Goodwin in 2013 after real estate became perceived as a corporate support function at the Magic Circle firm. He believes the assertion that Goodwin lacks M&A clout is incorrect.

‘The Priory mental healthcare clinic deal that we did this time last year was the second largest UK real estate deal of the year. The year before that, we did the BMI hospital acquisition for the same client that was the largest UK real estate deal of the year. M&A is at the core of what we’re doing here and we’re doing some really interesting deals across every one of our sectors.’

‘The UK is a hotbed for creating the next Moderna, but we’re losing many of these companies to the US because we don’t have the lab space and flexible working space to allow them to grow and stay in the UK.’
James Spence, Goodwin

Spence enjoys the value given to real estate as one of Goodwin’s five pillars and that the market has evolved to allow innovation and dynamism to infiltrate this traditionally old school practice area, namely in PropSci and Proptech – where real estate converges with life sciences and technology respectively.

On Proptech, Spence notes: ‘Real estate has been more traditional but with the pandemic, the use of smart technology to allow us to use buildings, sell, lease, buildings, it’s all exponentially escalating. Tech start-ups are creating new products, from facial recognition systems, mapping for design and working out how people use real estate through swiping their key card and the data you can harvest from that. It’s a complex area but all of our traditional real estate clients are grappling with it because they don’t want to miss out on these technological advances.’

And on PropSci he is even more bullish: ‘All the life sciences start-ups in the space in the UK have brilliant access to capital, highly educated personnel, phenomenal hospital and academic institutions. The UK is a hotbed for creating the next Moderna, but we’re losing many of these companies to the US because we don’t have the lab space and flexible working space to allow them to grow and stay in the UK. It’s hugely important to our economy that we build this, otherwise we’re going to lose some of the best and brightest companies to the US where they have a ton of these flexible lab spaces, especially on the West Coast. It’s the next phase of the economy.’

Some question whether the addition of capital markets specialist Ariel White-Tsimikalis from Bryan Cave Leighton Paisner will move the dial on the public markets front, given her relatively junior level, but Mardle defends the hire.

‘The big unknowns are as ever the public markets. I find it very difficult to predict those. London is definitely coming on stream in the tech scene in particular. Our clients are coming through, they’re looking at London as a possible IPO market. That’s the natural next chapter and we are certainly positioning ourselves in that way, with the recent hire of Ariel.’

Of course, criticisms of the strategy may well prove accurate down the line, but for now Goodwin’s star is in the ascendant, galvanised in no small part by the pandemic. The firm has had the guts to be brave in a time of crisis, increasing its chances of basking in glory.

As Mardle concludes, there appears no immediate threat to that position. ‘While you obviously wouldn’t wish the pandemic, it has been incredibly helpful in terms of market expansion. On a very simplistic level, if anyone wanted to know why biotech mattered, it’s certainly brought it to people’s attention! Consequently a lot of money has gone into it. On the tech side, it’s coincided with a lot of people working from home. Things that the tech world was already moving towards, like Zoom, suddenly became mainstream. You put all those things together and you’ve got a very big market in front of us and a group of people whose skillsets are aligned to it.’ LB

nathalie.tidman@legalease.co.uk

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