Editors' Blog

CC’s M&A reshuffle: bringing private equity into the heart of corporate

Posted 14/12/2007 by Deal Comment

So, after months of debate, Clifford Chance (CC) has merged its three mainstream M&A and private equity teams into one large group.

While CC says the motivation was a desire to remove unnecessary divisions and simplify the working of the group, there are those in the market who are not so sure. Perhaps that is the legacy of the unsuccessful attempt by Weil Gotshal & Manges three years ago to recruit two of CC’s private equity heavyweights, James Baird and Matthew Layton. That move, which was averted at the last minute, did highlight the difficulties of managing CC’s buy-out team – widely viewed as Europe’s top private equity practice – within CC’s wider M&A team. The group was at the time claimed to be feeling unappreciated, though ironically the firm’s success in turning around the pair is now seen by some as marking the beginning of CC’s triumphant fightback.

CC also says that having a unified group will solve some anomalies of its client management – for example, trophy private equity clients Kohlberg Kravis Roberts & Co (KKR) and Warburg Pincus were both managed in the public M&A group while banking clients were split between both M&A teams.

As such, the client breakdown also made it difficult to account for associates’ time on paper, distorting activity levels and billings across the groups, which were run as three separate profit centres.

However, some believe the move is more significant than just office budgets. No-one can claim Daniel Kossoff has been hiding in the shadows with his role on KKR’s bid for Alliance Boots earlier this year, but there are those that argue the private equity team still has the lion's share of CC’s top M&A names. In this context, it is argued that giving a greater role to Signy and Layton will give a lift to the team as a whole.

No-one expects such a pair of confirmed client men to get bogged down in administrative duties, but a bit of peer pressure and leading by example would fit the bill.

As one City partner familiar with the firm told Legal Week: “Adam and Matthew are figureheads to inspire people. By putting them together it will not be perceived as being private equity as the jewel and the rest of corporate below them. It means they can help each other out and collaborate.”

With leading lights Signy and Layton respectively in their early fifties and late forties, client succession must surely also be on CC’s mind if the firm wants to continue making the inroads it has achieved in European M&A in recent years.

One private equity rival sums up the reaction at rivals: “The interesting thing is that Signy has been asked for years to take on management jobs and refused. If he and Layton are really going to drive things it could be a sign that they are going after business more aggressively - and that would be interesting.”

georgina.stanley@legalweek.com