The Simmons interview: What to worry about

Legal Business: Simmons seems to have come out of a period of malaise. What have been the primary drivers for that growth over the last two years?

Jeremy Hoyland, managing partner: Most of that has been driven by the sectors, so [opening in] Ireland is not because we’re interested in the domestic market. We’re interested because it’s an important market for banks and funds.

LB: Luxembourg as well? They’re small branches but they don’t need to be big to do targeted work.

Hoyland: Dublin is very new, we opened about five months ago with four partners. In Luxembourg we opened with four partners as well, so those decisions about new offices and new practice areas and laterals are driven from the sectors.

LB: What proportion of Simmons’ revenue is coming out of continental Europe?

Hoyland: Probably 30%. It’s gone up but not that much. One of the unusual things about us is we have been expanding the partnership in the UK, particularly Bristol but London also. I saw some stats a year ago which showed nearly all the firms had flat or reduced partner numbers in the UK and we had grown by seven or eight.

If you look at last year’s results nearly all the firms who reported profit growth also reported small or negative turnover change. That tells me they’re managing their partnership tightly – managing out partners, but we have taken a different approach and are on a growth trajectory.

‘I don’t know if we’re Silver Circle or whatever, you just learn to be comfortable with who we are.’
Colin Passmore

LB: The firm has had phases of managing partners out, are you saying that hasn’t been done in recent years?

Hoyland: We continue to look at partner performance and to earn a lot of money, they have to perform to a high standard and we manage them out if they don’t. What I’m saying is, despite that, the net numbers continue to go up.

LB: Simmons’ Adaptive business launched four years ago, can we get a few minutes on what that does?

Hoyland: It’s similar to Lawyers On Demand and Peerpoint. It was originally driven almost entirely off [Simmons’] alumni, and designed to allow us to access temporary resource. It has now expanded beyond alumni. The business has grown well, we hear great client feedback. Most of the appointments are extended, we have had very good reaction because of the individuals. We hear from clients that other firms are less careful about that.
Last year we generated £10m out of Adaptive. I saw some figures that LOD was £14m in the UK, I was surprised, because it means it’s pretty much the same size as us now. They do a better job of getting their message out, I would have said it was three to four times the size of Adaptive, so we need to get more of getting our message out there.

LB: Is that still growing at a clip or is it more mature now?

Hoyland: Still growing. I am surprised there are so many people who want to work in that sort of arrangement. Is it going to get to £40m? I don’t think so, but if you asked me if it would have got to £10m I would have said ‘no’.

Colin Passmore, senior partner: A former GC contact of mine who’s 58 just sent me his CV asking to join Adaptive. It’s a high-end gig economy.

LB: I ran into a senior GC who’s doing stuff like that, a former FTSE 100 GC – he loves it.

Passmore: When you reach a certain age you want to keep your brain going. One of the huge differences between being a senior partner now and 20 or 30 years ago is that we’re still working as hard as we did 30 years ago. We can’t get away to the golf course Friday afternoon or have long lunches.

LB: You do alright, Colin, I’ve had lunch with you.

Passmore: Yeah, occasionally, but there’s no question of an early long lunch Thursday and Friday, and that’s one of the major differences.

LB: Looking back over the last couple of years it’s been a period of growth, are there any highlights? We’ll get to the stuff that’s gone wrong in a minute.

Passmore: You’ll need to remind us of that.

‘Brexit will result in a diminution of the power, influence and scale of the City of London.’
Jeremy Hoyland

LB: We’ve got notes, don’t worry.

Passmore: The Paris office has done really well in all of its practice groups and sectors, it is a standout office in all the good things like gender balance. The funds practice continues to go from strength-to-strength. Disputes has been on a great roll that may just be pausing coming out of the financial crisis. The [regulatory] practice has been standout, we’re really, really pleased with how those groups are performing.

LB: How do you see the market in general?

Hoyland: One of the major concerns is around Brexit, speaking personally, I am concerned. I think it will result in a diminution of the power, influence and scale of the City of London.

We’ve had a good first quarter to this year, lawyers tend to do well in periods of uncertainty. It’s important we have a good first half, because I think the second half will be less good than the first.

We’ve had a fantastic run in terms of post-crisis litigation. One of the best bits of the business here that gets under-appreciated is the litigation practice, which is top drawer.

LB: How do you feel about where Simmons sits in the market?

Hoyland: We used to worry about differentiation in our peer group and how different we looked from the client’s perspective – I worry less about that now. Our strategy is a lot tighter than other firms. That is a mantra we have had for seven years or so: focus on the strengths. That’s partly a function of scale. We focus on quality not quantity. Some of our competitors have gone for the benefits of scale, and there are benefits of scale absolutely. [But] we have taken a different route, and time will tell whether that was the right decision.

Passmore: In our jobs you don’t learn not to worry but learn what to worry about and what matters. This market position thing, I don’t know if we’re ‘Silver Circle’ or whatever, you just learn to be comfortable with who we are as a firm.

LB: What other stuff worries you?

Hoyland: I worry about absolutely everything. I worry constantly.

LB: About everything?

Hoyland: Yes. Stuff I can do nothing about like the next global crisis. Stuff I can do things about. One of the challenges is where do you put your money? In technology we’ve spent money over the last couple of years and I hope we’ve spent it well. Some of that tech is pretty innovative, but half or two thirds of it will probably crash and burn.

I worry about the next generation of lawyers. We hear professionals are less inclined to stay in one job, and the whole partnership ethos is you do the hard yards, learn the easy stuff and move onto difficult stuff then move to the really difficult stuff. Then you move onto generating business and one day someone says: ‘You should be partner.’ How does that work if everyone wants to be a doctor after four years?

LB: What percentage of the partnership is female currently?

Passmore: Twenty percent.

‘Ten to 15 years ago we didn’t address problems effectively, and we do now. That’s why some of the malaise has been addressed.’
Colin Passmore

LB: That sounds quite bad.

Hoyland: What was it three years ago?

Passmore: Fourteen percent.

Hoyland: Is it bad? Yeah, it’s not great, but it’s better than it was. But we haven’t seen the impact of that ‘snowflake generation’ where people don’t want to make a long-term commitment to an institution.

Passmore: We have no shortage of managing associates who want to be partner, and I am pleasantly surprised by that, we were told five years ago that pipeline would run out.

LB: People are changing jobs less than they used to. If you were an associate coming through at a law firm, what were the odds of making partner? One in three? What is it now – one in ten? Who broke up with who? The employee or the employer?

Hoyland: You’re saying there is less mobility than there was?

LB: I’m saying if you triple the odds of making partner and make people wait for 12 years instead of seven or eight, don’t be surprised if some of the kids say: ‘Screw this, I’ll do something else.’

Hoyland: It has got statistically harder to become a partner, and I would say that is correct as considering what you’re paid as a partner you have to be really, really good. And there aren’t many people that are really, really good, so that’s an appropriate shift.

LB: What makes you think it’s appropriate?

Hoyland: You have to meet a higher standard than you did 20 years ago. When I was made a partner it was a load easier, I was much younger and less experienced and, yes, I got paid less. But if these voices are correct that there is a shift in the mentality of the next generation, is that going to drive fundamental shifts in the structure in law?

We see this IPO activity and hear rumours other firms are engaged in it, if that was to become a trend at major law firms and combine that with this next generation, you get a structural shift.

LB: Do you see any attraction to floating or deploying a different business model?

Hoyland: It’s a funny thing to say, but I’m not sure what we’d do with the money. It’s great to have lots of money but what [investors] do is invest and expect a return.

LB: What about the issue of US law? You got close years ago with Mayer Brown.

Passmore: That was quite a long time ago.

LB: But it was also closer than people generally accept, I understand.

Hoyland: I was involved in those discussions, I’m interested in whether you heard that from the Simmons side or their side.

LB: From the Simmons side from someone I have history with, and I understand a determining factor was a speech from [then Simmons’ senior partner] David Dickinson, which went down like a lead balloon with the management from Mayer Brown.

Hoyland: Well he never gave a speech to Mayer Brown’s management, he might have said some words in a meeting but I don’t know.

Passmore: I wasn’t involved in that. I was in the partners meeting when we were told about it then it broke and all finished pretty quickly. I have never heard that story.

LB: How do you feel about doing a US merger now?

Passmore: Well I’ll tell you where we are on that candidly. When we were both first elected some years ago, we were of the view that we wanted to do a US merger because that’s the way the world’s going and we won’t survive. We have looked. We have never found the right partners, we have never gone into talks but have talked with all the right people. As Brexit happens, it became very clear that US interest in doing a merger with a UK-headquartered firm had finished, and I don’t think it’s come back.

‘I think I’m too nice. Nobody agrees.’
Jeremy Hoyland

We’ve learned we will survive at the moment without doing a US merger. We know there is a need for US law capability particularly in the asset management sector, we have relationships with US firms, which at the moment is enough.

Hoyland: Also what we’ve seen with the mergers recently is US firms who have been less strong in their domestic market. I don’t want to cause any offence here…

LB: Go on, cause some offence.

Hoyland: … those UK and European firms have been so keen in seeing US capacity they have gone further down the list of US firms to find a firm that was interested.

LB: You mentioned that the firm has made some progress in gender balance, but do you feel you can kick it up a notch?

Passmore: We have had this as a top business issue for three, four years. We say to head-hunters, ‘please don’t give us an all-male slate’ and we have people here thinking about balanced teams when we do pitches. We try very, very hard to ensure we have balanced teams.
The other thing we’ve done is got much more relaxed about our working practices. People work at home, they don’t need permission, there’s no 5 o’ clock walk of shame.

LB: How female friendly do you think you are as a firm? There’s been a lot of #MeToo in the industry and the firm is advising Baker McKenzie on its situation, where do you think Simmons is?

Hoyland: I don’t think that has been a big issue for us. Our problems with gender balance are not because we’ve had people misbehaving.

LB: Really? With the amount of partners around here, there must be.

Hoyland: Honestly, I don’t think there is. I’m not saying there’s never been that, but I just don’t think that is the cause of the issue. The cause is much more complicated, the cause is the promotion to partnership is timed at perhaps the most difficult possible time for women.

Traditionally to get promoted to partnership you had to be in the building long hours and that meant for women who wanted to have children or had young families it was extremely difficult.

LB: You know what happened with Allen & Overy don’t you? They’ve got a poor record of promoting people because they delegate it down to the practice heads.

Passmore: The message has to come from the top, and the message has to be work on your females so they want to be partners, get them ready for partnership and put them forward as you would with a male.

LB: If we rattled Simmons’ cage, how many NDAs will we find?

Passmore: Have we ever been sued for unfair dismissal and have we ever had issues with alcohol and improper behaviour? Of course. But on the whole from what reaches my desk we’re a pretty well-behaved bunch, and I’d be pretty unhappy if you were to give me some names with evidence. They’d be in my room tomorrow.

LB: Fair enough. You’re on term three now, Colin?

Passmore: Yes, that runs until August 2021.

LB: And, Jeremy, you’re on term two now. Is two enough for you?

Hoyland: Let’s see.

LB: I’m taking that as no.

Hoyland: Take it how you like.

Passmore: That’s going to be our one no-comment issue. [Hoyland was subsequently confirmed as managing partner for a third term in late October.]

LB: How would you describe your leadership styles and what difference has it made to the firm?

Passmore: We complement each other, with an ‘e’ not an ‘i.’

Hoyland: I certainly can’t remember the last time you complimented me.

Passmore: I can tell you nobody else bloody compliments us. We have worked out a modus operandi, the best analogy is Jeremy is the chief executive, he is responsible for the big decisions, I chair the board and we supervise what Jeremy does. I wouldn’t say we speak every day, but we speak on a very regular basis. We don’t often criticise each other but if we do something that hacks the other one off, we’ll know about it. We can’t agree on every single issue, but we seem to see most things the same way, and we’re quite effective together.

LB: How would you describe your style, Colin?

Passmore: I like to think I’m approachable, I can bite heads off if I have to, I am a litigator, and I can be pretty direct and not shy away from challenges or problems.

One of the great things about our culture is Ten to 15 years ago we didn’t address problems effectively, and we do now. That’s partly why some of the malaise you have referred to has been addressed.

LB: What’s your style, Jeremy?

Hoyland: I used to have something on my white board that said: ‘Be less nice,’ it was my message to myself.

LB: You’re too nice?

Hoyland: I think I’m too nice, and nobody agrees. I am detail orientated. Careful. Someone said to me the other day I could take more risks.

Passmore: Prudent is good. He is a fantastic detail person, and that’s partly why it works. I am no longer a details person, I’m an instinct person.

LB: Anything else we should cover?

Hoyland: You’ve not asked about Bristol.

LB: What do you want me to ask you about Bristol? This is your back-office thing?

Hoyland: It’s not you see, it really isn’t.

LB: Let me guess, it does some regional banking stuff?

Hoyland: No, it doesn’t.

LB: OK, tell me – you’ve battered me into Bristolian submission.

Hoyland: It doesn’t do any local work. The Bristol office is now about to move into some swanky new offices, it’s our third largest office, it is not a back office, and it is not an A&O Belfast.

Passmore: And it is not a paralegal centre.

LB: How many staff are in the office?

Hoyland: About 150, which includes business services. About 70 lawyers, and has been the fastest-growing part of the business and the most profitable office at the firm for the last few years.

LB: You want to sort London out. I can see the headline already: ‘Bristol canes London.’

Hoyland: What would be wrong with that? We have done a really good job with it. Other than intellectual property, every London group is there. I mention it because it’s a success but also your immediate reaction is what worries me. People always think it’s got maybe one partner and a shed-load of paralegals.

LB: Speaking of location, have you seen Ready Player One? City Point is in it.

Hoyland: Oh, yes there’s a bit when they run out of the building at the end.

LB: You wouldn’t get that with the Bristol office.

Passmore: Well, we do have a £10m Banksy on the side.

Hoyland: Do we?

Passmore: No.

Hoyland: I was going to say, we should sell it.

alex.novarese@legalease.co.uk
thomas.alan@legalease.co.uk