Ambitious Duane Morris launches UK expansion project by cometjunkie43

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									THE BUSINESS                          THE US MARKET



Tom
                                            STRATEGY
Freeman
in New York


 US mid-market
                                            Ambitious Duane Morris
 players prepare to                         launches UK expansion project
 invest in London                           Philadelphia firm looks to build up City practice
 THE 3 SEPTEMBER LABOR
 Day holiday marked the end of              At the start of September, one of America’s           practice areas and be the best of the best’,
 New York’s summer, and the                 legion of national law firms, Duane Morris,           believing that ‘this itself can be risky’. He cites
 start of its busiest season. On            hired a search firm to look at expansion              the cyclical nature of ‘purer’ corporate practices,
 Wall Street, the hundreds of               options for its London office. Nothing is ruled       observing that the sheer volume of firms that
 billions of dollars of financings          out, from major team hires to a merger with a         have adopted this approach is leading to ‘more
 pledged for the year’s largest             substantial UK firm. The Philadelphia-based           and more rates being renegotiated by sophisticat-
 LBOs are now being marketed                practice already has a low-key, seven-partner         ed corporate clients’. He’s made Duane Morris
 with aggression. Fall 2006 is              London operation (formed by some ex-Rakisons          partners ‘leverage our knowledge base’.
 most certainly the season of               partners who merged their subsequent                     As such, the partnership has started several
 Sullivan, Simpson, Shearman –              boutique into Duane Morris in 2000) from              ancillary businesses that now employ 100 non-
 and financing successes.                   which to direct the hunt for laying down some         legal professionals and cover a diverse array of
     But beneath the arena of the           sizeable European roots. Slowly but surely the        areas, all of which have spun off from some of
 biggest-ticket capital markets             firm joins a slew of formerly ‘mid-market’ US         the firm’s key practice areas. These include a
 players, the large national US             law firms looking to follow the vanguard of New       medical malpractice insurance business (which
 law firms are raising the activity         York, California and Chicago giants that now          undercuts competitors by being earlier to spot
 levels of their own international          dominate the lateral-hiring market in London.         doctor error); a financial planning and invest-
 investment programmes.                        Sheldon Bonovitz, Duane Morris CEO since           ment advisory business with $1.2bn under
     New York’s Proskauer Rose,             1998, has set an aggressive pace for the firm.        administration (this was built from a thriving
 California’s Heller Ehrman and             When he took over in 1998, revenues had just          trusts and estates practice – an area often
 Philadelphia’s Duane Morris                                                                                    discarded by similar-sized com-
 are all heading the hunt for                                                                                   mercial firms); lobbying; securities
 sizeable UK investments. While                                        ‘The tendency to                         fraud damage assessment; and
 not at the forefront of the Wall                                                                               even a financing arm for hospital
 Street capital markets deals,                                         pick two or three key                    purchases of surgical implants.
 all have enough depth of multi-                                                                                    Furthermore, about $15m of
 national client bases to present                                      practice areas and                       revenue is set aside to support a
 cogent business cases for their                                                                                focused contingency-fee litigation
 partnerships to invest.                                               be the best of the                       arm – where critical risk assess-
     Out in front, of course, is                                                                                ment is key to the acceptance of
 Reed Smith, having secured                                            best can be risky.’                      cases (and banks, accountancy
 Richards Butler’s merger                                                                                       firms and health companies are
 signature. Managing partner                                             Sheldon Bonovitz, Duane Morris         never chosen, it should be added).
 Greg Jordan has been putting                                                                                   Last year, Walt Disney paid up
 the airmiles in to Hong Kong of                                                                                $7m in one case; the biggest
 late in an attempt to persuade             hit $73m. Today they’re up to $330m. Profits,         single win in legal fees to date: $25m. ‘These
 the semi-detached enclave of               which are $675,000 per equity partner, are            additional business streams are run by
 Richards Butler’s HK partner-              divided by looking at practice group perfor-          professionals, not lawyers,’ Bonovitz stresses.
 ship to join in the party.                 mance over a five-year period, and are                   Duane Morris is not alone among America’s
     The losers in all this manoeu-         transparent among all the equity and                  mid-market firms in weighing up its London
 vring will be the UK firms that            non-equity partners.                                  options. Greenberg Traurig, once viewed as a
 don’t act quickly enough to                    Bonovitz’s love of ‘outsider art’ – provoca-      sleepy Florida firm and now a 30-office and
 secure proper integration with             tive and dramatic visual works by untrained           1,500 lawyer practice, has pinned its colours
 the consolidating US legal                 artists, often homeless African Americans –           to an alliance with Olswang.
 market. Gentlemanly reliances              gives Duane Morris an immediate corporate                After walking away from a Richards
 on referrals from a range of US            image: bold, brave, even brash. His and his           Butler deal (allowing Reed Smith to step in),
 firms can no longer promise a              partners’ vast collection dominate the walls of       Proskauer Rose’s chairman, Allen Fagin, is
 secure future for internationally          each of the firm’s 17 US offices.                     actively hunting a more suitable UK partner.
 minded top 100 UK firms.                       Quite apart from the artwork, Duane Morris        So is Heller Ehrman – one of California’s
 Partners should demand of their            distinguishes itself in part by refusing to align     sharpest new national giants. Duane Morris has
 executives the security of a well-         with the prevailing winds of growth strategy. First   something of a head start in the battle to stand
 established transatlantic policy.          off, generalism is welcomed. Bonovitz dismisses       out in the City.
                                            ‘the tendency of firms to pick two or three key                                              Tom Freeman


36 Legal Business October 2006

								
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