Editors' Blog

Italian indies: giant killers turned masochists

Posted 23/11/2007 by Alex Novarese

Just a few years ago, Italy’s leading law firms looked like the exception to the rule in global legal markets.

Where the top US and UK law firms had elsewhere swept all before them, Italy’s blend of individualism, rainmaker-friendly pay and nepotistic capitalism let the country’s leading law firms shrug off the foreign invaders with nonchalant distain. And even when London firms could recruit top Italian partners they struggled to integrate them within their blander, institutional confines - causing tensions that led to a string of departures at the local offices of top UK firms.

Now, with Slaughter and May ally Bonelli Erede Pappalardo the latest Italian heavyweight to suffer a substantial walk-out, it seems that the very model that played havoc with Anglo Saxon firms’ local efforts is ultimately coming to sow almost as much discord at the practices it once served so well.

Unsurprisingly, Bonelli has been quick to the play down the departure of the five-partner team to Latham & Watkins. But the corporate and banking team, which includes rising star Andrea Novarese, obviously represent the kind of next-generation talents that top Italian firms are so desperate to retain.

The move comes after key Bonelli rival Gianni Origoni Grippo & Partners last month suffered an even more dramatic split, with a 17-partner team opting to go it alone after disputes regarding strategy and succession. In essence the departing team was opposed to the typically Italian model of Gianni Origoni, which concentrated powers in the hands of a handful of aging founding partners.

Bonelli was wrestling with similar issues, having this year finally squeezed through an overhaul of its partnership pay (after prolonged debate) in a move designed to placate younger partners. Perhaps the only surprise is that the founding fathers of Italy’s commercial legal community managed to delay for so long the point until these intergenerational tensions spilt into the open.

After all, though Italy’s economy still operates as something of a law unto itself, the worst excesses of slipshod governance and protectionism have been curbed in the years since companies like Parmalat and Fiat attracted derision in the international business community. And with sectors like banking rapidly consolidating and going global, clients are understandably becoming more comfortable with international law firms. Such shifts have clearly handed more influence to a new breed of lawyer with a more corporate outlook than their predecessors.

Interestingly, some have cited the 2006 creation of Rome boutique Labruna Mazziotti Segni, again a Gianni break-off, as a turning point for the market after it became clear that partners could leave a top firm and prize clients away from the celebrated founding partners.

The response from Italian firms so far has looked like quietly attempting to ape many of the Anglo-Saxon characteristics that they had spent the last decade decrying. Unsurprisingly, it’s a shift in style that they are struggling to implement convincingly given their cultural baggage. But they had better adjust very quickly to this new reality in which younger partners will wield much greater influence - or they risk facing the full brunt of the market forces they have so long defied.

alex.novarese@legalweek.com