The Firms
June 30, 2008 11:24 PM
London Calling: Willkie Farr Announces Alliance With Dickson Minto
Posted by Brian Baxter
Long a dominant player on the Continent, Willkie Farr & Gallagher may finally have found an answer to its London problem.
The New York firm’s strong French and German law capabilities have been offset by its inability to land an English rainmaker to complement the six lawyers--one partner and five associates--currently working in London.
Thus the impetus behind the alliance announced on Monday with Dickson Minto, a 70-lawyer U.K. corporate boutique with offices in London and Edinburgh. Name partners Alastair Dickson and Bruce Minto founded the firm in 1985 after departing from Edinburgh's Dundas & Wilson. Today, the firm's U.K. private equity practice, led by Dickson, is considered top notch in the European market. So the alliance has the potential to give 570-lawyer Willkie the English law expertise it long has sought.
"We are especially pleased to have found in Dickson Minto a partner that represents the very best of what we wish to offer our clients in our mutual areas of expertise," said Willkie chairman Jack Nusbaum in a statement released by the firm. Adds Dickson: "We have had a long relationship with and have a very high regard for Willkie Farr. We are delighted to have been able to make this alliance."
Conspicuously absent from both statements was any mention of merger talks. Amidst merger rumors in May, sibling publication Legal Week cited an internal Dickson Minto strategy document from several years ago that questioned whether independence was sustainable in the long term, even while noting a "general antipathy among the partners for a link-up with a U.S. firm."
According to Legal Week, Dickson Minto had gross revenues of roughly $60 million last year and profits per partner just shy of $2 million. By comparison, according to this year's Am Law 100 rankings, Willkie brought in revenues of $603 million and profits per equity partner of nearly $2.25 million. (Dickson Minto's Edinburgh partners receive a draw equal to that of their London counterparts, a luxury they might not enjoy if absorbed by Willkie.)
Willkie has been busy raiding its Magic Circle competitors in recent years, bolstering its Continental corporate practice. Long a player in Paris--Willkie opened its first office there in the 1920's--the firm snatched lateral partners Mario Schmidt from Clifford Chance and Jochem Winter from Linklaters for its Frankfurt office two years ago, enhancing its private equity work in the German market. Willkie also grabbed European antitrust partners Jacques-Philippe Gunther and David Tayar from Freshfields Bruckhaus Deringer in 2006.
Sources familiar with the deal insist that merger discussions were never on the table, and that when others caught wind of the alliance talks, they merely presumed it was the prelude to a more formal partnership.
The alliance itself stems from the close ties Willkie's Paris office enjoys with Dickson Minto. Paris-based Willkie corporate partner Daniel Payan, widely considered one of the top private equity lawyers in France, has worked on several matters with Dickson and Michael Barron, the head of the U.K. boutique's financing group. In fact, Payan's Parisian colleague, Willkie M&A partner Daniel Hurstel, is leading the firm's alliance efforts.
The two firms have worked on several large deals together for clients like Paris-based private equity powerhouse PAI Partners and London-based buyout shop BC Partners Limited. While opening Willkie's world up to the U.K.'s slice of the private equity pie, the arrangement also introduces Dickson Minto to opportunities in the U.S.
While the referral relationship is not restrictive, sources at Willkie say they hope it will be substantially exclusive except in cases where there are conflicts or pre-existing relationships that get in the way. Those sources also confirm that Willkie is mostly interested in Dickson Minto’s London-based financing and private equity group, rather than the financial services-related work coming out of Edinburgh, the less profitable of the firm’s two offices.
Whether or not a merger is the end result of this alliance remains to be seen. Dickson Minto might find that it doesn't get the same flow of referral work now that it's associated more closely with Willkie. And Willkie might find that a partnership short of an actual merger doesn't provide clients with the same unified platform as a firm with substantial London and Continental operations.
Also, a formal alliance is itself a somewhat antiquated means of expanding one's reach. After their initial forays into the London market, Dewey Ballantine (now Dewey & LeBoeuf) and Weil, Gotshal & Manges abandoned similar alliances with Theodore Goddard (now Addleshaw Goddard) and Nabarro Nathanson, respectively, to build their own English law practices. New York's Kramer Levin Naftalis & Frankel and Berwin Leighton Paisner decided to scrap a similar arrangement in October 2007 after five years.
If Willkie doesn't eventually make off with the bulk of Dickson Minto's private equity practice, this newest alliance could end the same way.
Additional reporting by Richard Lloyd in London.
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