Clyde & Co saw seven partners leave its Hong Kong arm in April. Significantly, the departures were all former Barlow Lyde & Gilbert (BLG) partners that Clydes inherited following the two firms’ merger last year.
‘Our strategy in Hong Kong has been to focus on corporate insurance,’ said Peter Hasson, chief executive at Clydes. ‘The loss of our more generalist insurance team in Hong Kong is not an issue for us.’
The team is understood not to be subject to the lock-in terms set out under the merger agreement that requires BLG partners looking to leave within three years of the tie-up to pay financial penalties (up to £60,000 for each year of the lock-in).
Three international firms are set to benefit from the exits. Corporate partner Pádraig Walsh and disputes partner Richard Keady will join Bird & Bird, while Simmons & Simmons has snapped up disputes partner Tom Fyfe. However, the bulk of the departures – senior partner of the Hong Kong office David Smyth; marine insurance partner Andrew Horton; insurance partner Antony Sassi and disputes partner Gary Yin – will join insurance rival RPC’s new Hong Kong office.
‘The loss of our more generalist insurance team in Hong Kong is not an issue for us.’
Peter Hasson, Clyde & Co
The departures, however, have not moved Clydes to alter its investment strategy in the country.
‘The marine practice was a bit of an oddity for BLG – it was not known as a marine firm,’ said Hasson. ‘We already have a good platform for that practice area in the region, as well as planned internal promotions, so it is not an area where we will be recruiting to replace. The strength of BLG was on the insurance side but we would have looked to strengthen that side of the practice in any event.’
RPC’s Hong Kong launch on the back of the hires means that Clydes’ merger with BLG in November 2011 has now gifted RPC with two international platforms. In addition to Hong Kong, RPC hired Mark Errington, BLG’s local insurance and reinsurance head in Singapore to launch its first office outside the UK in November. The firm has also been in growth mode nationally. In January last year it launched a Bristol office through the hire of a seven-partner team from CMS Cameron McKenna, while it also hired property insurance partner Victoria Sheratt in September 2011 – also from BLG.
RPC declined to comment.
Since the merger there has been a trickle of departures from Clydes. Its most high-profile BLG-side losses include non-contentious energy partner Humphrey Douglas in November 2011 to SNR Denton, restructuring chief Jon Yorke to Edwards Wildman Palmer that same month and commercial risk and reinsurance head Clive O’Connell to US firm Goldberg Segalla in March. However, the firm has also invested heavily. It beefed up its US capability through several lateral hires, including a two-partner team from Tucker Ellis & West, and in December 2011 it hired the former head of Trowers & Hamlins’ Abu Dhabi office, Adrian Creed, to bolster its historically strong Middle East offering.
Over the past 12 months, the firm has also opened its doors in Mongolia and is awaiting a licence to launch in Beijing, while Australia has been earmarked as the next likely addition to the firm’s international network, in line with its Asian ambitions.
‘One of the key features of our international strategy was always that the merger was not going to get in the way of what we were planning to do,’ said Hasson. ‘The key attraction for BLG was Clydes’ international platform and our recent investments have been partly opportunistic but in keeping with our international strategy.’
Recent regional losses aside, the firm continues to post good revenue growth in Asia and remains committed to expansion.
‘Excluding the BLG team that has just left in Hong Kong we have recorded 40% growth across the region,’ said Hasson. ‘Partners have doubled from nine to 18 over the past year and following the next promotion round on 1 May that will grow to 21.’ As well as Hong Kong, the firm also has offices in Singapore and Shanghai.
‘The days where you could sit and cover Asia from one base are long gone. If you look at the key centres, Hong Kong has always been seen as the gateway into China, and it still has that role, but the days when it was the only gateway are over,’ said Hasson.
‘The growth of Shanghai is the main story for us, we have five partners there now. When the office opened we thought it would do well at attracting inbound investment but we are also seeing an increase in outbound work as the Chinese are increasingly active in Africa (where we have an office in Tanzania), Brazil (where we have an office in Rio de Janeiro), and the Middle East (where we are the largest Western firm in the region).’
Clydes’ international success is expected to see the firm reach double-digit growth in turnover this year, even without taking the BLG merger into account. Pre-merger financials for 2010/11 showed Clydes’ revenues up 10% to £211.8m, with a five-year compound annual growth rate of 11%.
‘We have grown substantially across the piece,’ said Hasson. ‘In the Middle East our network has benefited from two main trends: the flight back to Dubai as people respond to events around the region, while our Saudi Arabia and Qatar offices have benefited from governments that are keen to invest to ensure they avoid the political situations seen elsewhere.’
The firm has also seen strong growth across the Americas on the back of its North American expansion and the increasing maturity of the insurance market in Latin America.