‘Our team was nearly twice the size of Akin Gump’s London team. There was potential for vulnerability on both sides. They didn’t want their entire lives disrupted by a very large cuckoo in the nest.’ Five years on, restructuring partner James Roome reflects on the potential pitfalls of Akin Gump Strauss Hauer & Feld’s 28-partner acquisition of the City arm of his former shop, Boston’s ill-fated Bingham McCutchen.
In contrast to more ostentatious US counterparts, the Texas-bred Akin Gump has since flown under the radar to turn Bingham’s bust into its boom, thanks largely to the trophy restructuring team fronted by Roome. City growth has culminated in a blistering 2018 run as revenue spiked 28% to $123.5m, catapulting it into Legal Business’ Global London top ten firms by revenue.
Kim Koopersmith, Akin Gump’s chair, is unsurprisingly upbeat about a ‘spectacular’ 2018 in London. ‘I don’t expect the same every year but some significant transactions mean the results were pretty extraordinary.’
It has not been a one-off. While five-year global revenue growth has been less dramatic, rising to $1.07bn, a 29% increase from 2013, London has hiked turnover four-fold in the last five years, starting from a lowish base of its pre-Bingham UK turnover of $31.6m (the Bingham haul brought over a $50m business, including seven partners across Hong Kong and Frankfurt). A three-year view shows 35% revenue growth from $91.4m, again outpacing the firm’s 15% global income growth during the same period. London is now responsible for 12% of firm-wide revenue.
Much of the recent success is down to timing. Koopersmith became chair in March 2013, determined to beef up London, build a leading creditor-side practice and double the firm’s presence outside of its US homeland. Bingham, for its part, had been a pioneer in building a bondholder-centric restructuring team in the UK and had related muscle in disputes and regulatory matters. The fit sold itself.
‘Our business came into being to deal with private equity deals that don’t work.’
James Roome, Akin Gump
Koopersmith, who this year started her third term, says investment continues to pay off. ‘Looking back to 2014, the performance of London has been far beyond my wildest expectations. ‘London is now our third largest office. We were 83 lawyers when we came together and we’ve added several dozen since then. We see London as a main opportunity of the firm and we will continue to build on our strengths.’
That is borne out by the fact that two London partners, Roome and Dan Walsh, are on Akin’s 12-strong management committee and Sebastian Rice is chair of the partnership admissions committee, which also includes highly-regarded restructuring partner James Terry.
Roome notes that market tailwinds have not hurt either, with the oil price falling below $50 a barrel in 2014, yielding much work in oil and gas and shipping insolvencies – perfect for a firm heavy in both energy and restructuring. ‘What followed was a few years of very substantial cases in offshore and shipping. To an extent, our business came into being to deal with private equity deals that don’t work,’ says Roome.
Akin Gump also benefited from unrest at O’Melveny & Myers’ London branch as merger talks with Allen & Overy linger on unresolved. Private equity funds partners to jump ship to Akin Gump so far comprise John Daghlian and Mary Lavelle in June, following in the footstep of Daniel Quinn and Aleksander Bakic in April.
Quinn is effusive about his new home and cites two reasons for moving: ‘Coming from a firm with a great culture, it was important to join a firm that is collegiate and collaborative. Secondly, it was a good strategic fit for what we wanted to achieve over the next three to five years with our practice.’ He notes strength in the US, London and Asia, as well as a willingness to keep investing in funds as a draw.
Meanwhile, Gavin Weir’s addition from White & Case will bring City partner numbers to 42 this month and is viewed as a shot in the arm for its M&A practice, which has not been a historic focus.
Last year’s performance will be hard to emulate through 2019 given that huge restructuring mandates like Noble Group ($3.5bn), Agrokor (€6.6bn) and Seadrill ($17bn) are hard to come by. Says Roome: ‘On the big, one-off, cross-border deals, you never know when one’s going to come along. With cov-lite [debt packages] you don’t have the same trips or triggers you used to have. It’s changed our business dramatically.’
However, ongoing matters, including the high-profile $380m Tatneft litigation and the contentious restructuring of Oceanwood Capital Management, promise to keep restructuring and litigation counsel busy for a while.
Rice strikes a similarly bullish note: ‘We have reached critical mass to attract better talent. We are growing in areas of core strength and not pretending to be full-service.’ And in truth, with the wave of restructuring work looking set to continue for years, Akin looks superbly placed. Not so much a cuckoo in the nest as a golden goose.