Those familiar with Simpson Thacher & Bartlett’s modus operandi will barely know what’s hit them this month as the usually conservative New York outfit launched a European restructuring practice and announced a Brussels office within a couple of days of each other.
The addition of a London restructuring practice to serve Europe is something of a coup coming as it does at a time when market commentators are predicting an uptick in distressed transactions on the back of the coronavirus downturn. Perhaps even more importantly, the move deprives Freshfields Bruckhaus Deringer of one of the most influential partners of its heavyweight restructuring team in the form of Adam Gallagher. A partner since 2007, Gallagher will be joined by James Watson, a partner at Kirkland & Ellis since 2017 and a fellow Freshfields alumnus.
This followed news that Simpson Thacher would be opening an office in Brussels to capitalise on client demand in the region post Brexit and the enhanced regulatory challenges surrounding it. In January, the firm hired Antonio Bavasso, Allen & Overy’s co-head of global antitrust and co-head of telecoms, media and technology, to its London antitrust and trade regulation practice. Qualified in the UK and Italy, he had been at the Magic Circle firm for nearly 24 years. He started at Simpson Thacher this week.
Law firm leaders may be understandably reticent to shout their good performances from the rooftops as in previous years – it is not difficult to come across as tone-deaf in publicising such things while much of the world is still in the grip of the coronavirus pandemic. However, Simpson Thacher has cause for quiet cheer, having grown London revenue an impressive 14% from $200.6m in 2019 to $232m on the back of outperforming funds and leveraged finance practices.
These latest hires bring the number of laterals to six in less than a year, also including tax partner Yash Rupal from Linklaters in May 2020, corporate partner James Howe from Gibson Dunn & Crutcher in August 2020 and Clifford Chance’s investment management regulatory partner Owen Lysak this year.
Speaking to Legal Business, London managing partner Jason Glover (pictured) admits to the conservative reputation but insists he won’t hire if the result is not additive and only serves to dilute profitability. He is bullish on the moves: ‘The good thing is that each of the laterals we’ve gone for has been initiated and targeted by us. We are managing to get the people we are targeting – they are our first choices.
‘There is usually a pull factor and a push factor. Here there was a pull factor financially but no push factor. The people we hired weren’t looking to leave their firms.’
Glover is alive to the challenges, noting that the firm first started work on creating a restructuring practice back in November 2019, with the process requiring extensive market research with an external business to understand the market and identify the right players.
Speaking about the rationale behind the European restructuring practice, Glover said: ‘In the States we have a good, albeit small, restructuring practice with four partners that focuses on the debtor/ creditor side but we are not an established player. There is a desire to create a top-three player for restructuring. We are ambitious and looking at scale in Europe with five to seven partners over time. It will act as a catalyst for potential growth in the US.’
He is adamant that the Brussels office is driven by antitrust and will not be the start of a pan-European operation. ‘It was clear that to operate effectively with EU antitrust legislation we couldn’t do that just out of London. In time we will have two or three partners and 10 people in total in Brussels.’
And, all being well, the acquisitive streak looks set to continue. Concludes Glover: ‘We are always mindful of hiring great talent when it is additive as well as providing opportunities for internal candidates. In addition to the laterals, we made three people up to partner. We are definitely planning to add to the restructuring practice, so watch this space.’