London headcount: 116 lawyers, 22 partners
Fee-earner headcount change since 2012: +81%
London heads: Suhrud Mehta and Julian Stait
Office speciality: Finance, restructuring, capital markets, litigation
Representative work: Defended Visa on a claim brought by Sainsbury’s on interchange fees and acted for the defendants in $1bn competition Libor case; advised on the $3.7bn restructuring of offshore drilling services contractor Ocean Rig; advised the lenders on Bridgepoint Capital’s acquisition of vehicle rental firm Zenith Group.
Traditionally a reluctant globalist, Milbank, Tweed, Hadley & McCloy’s 39-year-old London arm turned heads in recent months by announcing six laterals in the space of a few days in early 2018.
The spree came off the back of a robust 2017 for the office, which grew its top line 9% to $125m without adding a single partner. That performance saw London outperform a 7% firm-wide revenue hike as the Wall Street shop’s income hit $916.54m.
In January this year Milbank brought in a 15-lawyer financial restructuring team from Cadwalader, Wickersham & Taft led by well-regarded former Linklaters partner Yushan Ng. A team of that size would typically account for around $20m of annual business and also includes ex-Linklaters lawyers Jacqueline Ingram and Karen McMaster as well as former Simpson Thacher & Bartlett lawyer Sinjini Saha. Headline clients include Oaktree Capital, Centerbridge, GSO, Apollo and Avenue Capital, a credible spread of the fêted sponsor clients that all law firms are trying to cultivate.
The much-tipped team had historically focused on sponsors investing in financial restructuring situations but has been intent on broadening its coverage into more related transactional work. ‘As our client base and range of services have grown, we needed more support from a top-tier practice,’ says Ng. ‘Milbank is a very credible firm in a number of areas.’
Still in January, Milbank tapped Shearman & Sterling for its well-liked head of European capital markets, the high-yield specialist Apostolos Gkoutzinis, who moved across along with fellow partner Rebecca Marques and a team of associates. Put together, the hires increased the firm’s London lawyer headcount 30% to 150, including 28 partners. A contrast certainly to a flat 2017 in terms of headcount growth.
Yet the London management strikes a cautious tone. ‘These hires had been on our radar for some time but it was in many ways a coincidence they happened almost at the same time,’ says London co-managing partner Julian Stait.
While the election of Scott Edelman to global chair in 2013 had made the firm a little more open to international expansion, such shifts are gradual at Milbank. Operating a modified lockstep, in 2017 it maintained a tight equity at 145 – plus 14 non-equity partners – out of 690 lawyers, and boasts the profitability typical of successful New York firms. Profit per equity partner grew by 11% to $3.46m last year, underlining its position among the top 15 Manhattan firms.
With a rock-solid Wall Street pedigree and strong finance reputation, few doubt the firm has the scope to be a more effective operator in the City… if it wants. Partners also speak warmly of a light-touch management, with the two London heads among the highest City billers – as a veteran litigator with strong TMT slant to his practice, Stait is cited as one of the most successful US laterals since his move from DLA Piper in 2009. Currently, its London office is reported to be achieving profitability comparable to its US heartlands.
The question for Milbank remains much as it did in the 2000s, when it failed to build on the recruitment of Freshfields Bruckhaus Deringer playmaker Tim Emmerson: is the firm ready to commit to long-term expansion? In the words of one former partner: ‘They are trying to build the London practice, but they don’t want to reduce profitability, that’s the issue.’
Before this year’s hiring spree, the City operations had been adding two partners per year on average since 2009. While the firm initially focused on its calling-card practices in projects and deal finance, its restructuring and capital markets teams have certainly been reinforced in recent years. Revenue, likewise, looks certain to receive a substantial boost this year thanks to Ng’s team.
With a rock-solid Wall Street pedigree and strong finance reputation, few doubt the firm has the scope to be a more effective operator in the City… if it wants.
Meanwhile, inroads have been made in litigation following the hire of Stait and Tom Canning from DLA in 2009/10 and Charles Evans from Norton Rose Fulbright in 2013. The firm recently acted on some high-profile cases in London representing clients such as Visa and Rabobank.
But establishing a credible corporate presence has proven harder going. Emmerson quit for Sullivan & Cromwell in 2007 and, while the arrival of Linklaters’ Mark Stamp in 2012 ushered in a seasoned deal hand, the firm has not made a major hire in corporate for years. It currently counts just two M&A partners in London.
London co-managing partner Suhrud Mehta says that growing the firm’s corporate capability is on the agenda but remains cagey on timeframe. Mehta comments: ‘If we find top-of-the-market people this year, we’ll do it this year, if we find them in ten years, we’ll do it in ten years – it’s not entirely within our control when to make it happen.’
Yet the reality is that in an ultra-competitive market there are easier US brands to sell to top M&A partners considering a move in the Square Mile. There will be many who question if Milbank’s conservative stance can remain sustainable in a market in which a group of aggressive US entrants have reset expectations on growth and ambition. As one former partner points out, an office which was the size of Latham & Watkins in the early 2000s is now dwarfed by many US rivals. Milbank will, of course, remain a highly profitable, successful law firm. But the debate simmering inside its London office about the extent of its ambition is far from resolved.
marco.cillario@legalease.co.uk
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