In what has been termed by one rival City partner as a ‘night of the long knives’, Ropes & Gray has axed four of its London real estate and restructuring partners.
The move comes as the firm shifts the focus of the real estate practice back to its prized client base of asset managers, hedge funds, credit funds and direct investors amid a recent drift. The firm’s restructuring – or ‘special situations’ – practice is also being repackaged to appeal to the desired client base.
Mike Goetz (pictured), London-based finance partner, told Legal Business the cuts are not a sign of Ropes’ impending departure from the Square Mile. ‘No way is this a sign of retrenchment. Last year the firm overall had the best year ever. But when things are not working we need to fix them.’
He added: ‘They are all very good lawyers. I was instrumental in hiring them, so it’s difficult. But to make a business successful you have to do this kind of thing from time to time. Luckily I can say that we are not planning to make any further cuts in London.’
London-based finance partner Jane Rogers agreed: ‘Refocusing our strategy in these areas is part of our ongoing success in London and comes off the back of a great year. We are doing a lot of great deals and this will allow us to continue to be successful.’
The firm’s City branch has had a rocky time in recent months amid a number of partner exits and potential tensions arising from increased scrutiny from its US practice.
Having almost quadrupled the size of its London practice over the previous five years, the firm’s 2017 financial year saw it shrink by 13% to 125 lawyers and its City partnership by 20% to 27. Kirkland & Ellis, Watson Farley & Williams, King & Spalding, Linklaters, White & Case and Dechert recruited partners from the firm.
In April, Ropes named New York real estate partner David Djaha as the successor to David Chapin as firm-wide managing partner when he retires at the end of 2019, while corporate partner Julie Jones was named chair, to take over from long-standing leader Bradford Malt.
Meanwhile, Ropes’ vision for London would see its litigation, funds and private equity offering expanded.
The firmwide revenues of nearly $1.6bn for 2017 – a 7.5% increase on the prior year. While it does not provide revenue breakdowns by office, the firm said the London base enjoyed its best performance last year.
The firm points to its recent hire of Goldman Sachs loan negotiation group managing director and CC alumni Carol Van Der Vorst as a sign of its strengths in London. ‘As we look towards the next phase of growth, we think expansion in the underwriter side and further expansion on the large-cap sponsor side will be a good source of business,’ co-head of finance Michael Kazakevich told Legal Business at the time.
Ropes started the year with another marquee hire in the form of Clifford Chance white-collar crime partner Judith Seddon as co-head of its London international risk practice, a move designed to bolster its English-qualified litigation firepower.
