Editors' Blog

David Gold’s very fast right of reply

Posted 6/12/2007 by Alex Novarese

Stupidly, I’ve recently said a few times that Legal Week should work harder to represent the views of our subjects and to give them more of a right to reply - whether we agree with their views or not.

It sounds good in theory but, of course, takes a bit of effort to actually make happen. Still, one opportunity arose this week while working on a comment article that touched on Herbert Smith’s international strategy and partnership culture. Though the firm did take the time to talk to us, I felt that for reasons of time and space, we hadn’t been able to adequately convey their side in the commentary piece that appears in today’s edition of Legal Week.

As such, I thought it would be worthwhile to run an edited extract of my interview with senior partner David Gold, which articulates some of the firm’s strategy and acts as a counterpoint to Legal Week’s comment piece. While I’ll have to agree to disagree with David and the firm on some of the relevant issues, I’ve had my say. For more of Herbert Smith in its own words, read on.

Legal Week: The [Herbert Smith, Gleiss Lutz, Stibbe] alliance has existed for a number of years and it seems, at least from the outside, to have not made that much progress in that time. How would you respond to that?

David Gold: Our market share has made progress. Major clients have accepted the alliance as a living, breathing entity that is a real competitor to the global firms. Another strength of the alliance is that you get firms that are the best in their jurisdictions, rather than having to go to a second or third tier arm of a global firm. If we can provide all that, and the client is happy, I say, ‘why do we need to merge?’

LW: Because with joint ventures or alliances, agendas ultimately diverge. There is also a cost to not having complete control of your destiny. Isn’t the danger that you fall behind rivals who have already gone through the trouble of integration?

DG: I accept that there are pros and cons to each approach but we feel this works for us. I would also say the three firms have a common vision. One thing I have been struck by in recent years and is just how warm the relationship has become between the firms.

LW: The global firms you were competing against five years ago then had very immature practices – they’d only existed in that international form for a short space of time. But they have had a lot more time to improve their cross-border service. Does that not make the alliance much harder to sell to clients?

DG: I concede that they have improved their service. This means that we have to work a bit harder than them to compete. I want to get to the stage where we don’t really need to talk about mergers but if we are doing our jobs we could get to the point where it may be the natural thing. In that sense, I think about it as a win/win.

LW: The firm has been working on a number of initiatives, such as the partnership charter, to make it clearer what is expected of partners. To what extent are you aiming to have stronger central management and more of a performance culture?

DG: We are not trying to take power away from partners; we are trying to strike a balance. I was deliberately separate from the drawing up of the partnership charter as we wanted it to be something the partners could get involved in, something they could put up on their walls, and I think it’s been very positive. In terms of performance, we are looking to help some partners that may have struggled but we don’t want the kind of cuts that have been seen at some firms. I see myself as a shepherd.

LW: How do you think the last 18 months have gone for the firm?

DG: We have made some astute decisions. In that sense I would highlight the work we have done in developing markets like China, Russia and the Middle East. The firm has also got the right mix of to its practice, which you can see from the growth of our regulatory practice – the hire of Patrick Buckingham from Lehman is a good example there. Ten years ago we decided that we wanted to be much closer than we were to the investment banks and that has made tremendous progress. We said that we wanted to grow finance further and that has gone very well – the team has proved phenomenonally profitable. There is still work to do but I’ve been in this role for two years and, as a half-time report, I feel we’ve made good progress.

alex.novarese@legalweek.com