London disputes specialist Stewarts Law was shortlisted for Law Firm of the Year at the Legal Business Awards in February on the back of an outstanding performance during 2010/11. But with revenues up 42%, a profit margin of 41% and PEP of £890,000, you could be forgiven for wondering why it has now decided to open two offices in the US.
The firm has hired two US litigation specialists and opened in Delaware and New York on 1 May. The two partners, David Straite and Ralph Sianni, left securities litigation firm Grant & Eisenhofer a year ago to set up their own outfit, which will close as they form part of a separate US LLP under the Stewarts Law name. It will be run by an executive committee chaired by Stewarts Law’s UK managing partner John Cahill and UK partners Clive Zietman and Stuart Dench.
According to Cahill, the Delaware office will take advantage of the state’s status as one of the most important centres of corporate litigation in the US, particularly for M&A and derivatives disputes. The New York office will also focus on corporate litigation, most notably securities and antitrust.
The move is simply a response to the demand of UK and European clients wanting to litigate in the US.
Cahill says the move is simply a response to the demand of UK and European clients wanting to litigate in the US ‘rather than trying to attack the US domestic market’. He expects to work collaboratively with US law firms that lead the pack in investor protection cases in the US.
‘Working with US attorneys over time has opened our eyes to the fact that there is some activity that we should be doing ourselves in the US,’ he says.
That said, the move will see Stewarts Law potentially lock horns with the second-most profitable firm in the world, Quinn Emanuel Urquhart & Sullivan. Quinn has, to date,made the most of its transatlantic litigation practice after creating a pre-eminent London practice, but few UK firms have made similar moves in the opposite direction. Cahill simply says that the firms are already competitors in London and will no doubt be the same in the US but will continue to refer work to each other.
There are no short-term targets for how much Stewarts Law’s US practice needs to add to the top line, particularly as the type of cases the firm will be handling will involve contingent fees and so revenues will be long tail. ‘In the US we need to walk before we can run,’ he says. ‘I don’t think anyone’s set up a practice in the US thinking they were going to make any money at all the first year.’
That said, Stewarts Law has made a very good fist of expanding its business in the UK in recent years. If any firm could make such a bold move work, then it’s this one.