Editors' Blog

French connection still delivers for Americans in Paris

Posted 31/03/2008 by Richard Lloyd

If Daniel Hurstel’s schedule on Thursday 27 March was anything to go by, the Paris legal market is in decent health. The head of Willkie Farr & Gallagher’s office in the French capital, Hurstel was frantically attempting to juggle two deals while explaining parts of the US firm’s strategy in London to a visitor. The Paris mood is cautious but it falls short of the outright pessimism of New York or the uncertainty of London.

“There’s some nervousness about volatility, but a lot of our corporate clients are looking at opportunities,” says Cleary Gottlieb Steen & Hamilton partner Pierre-Yves Chabert, echoing a common sentiment in the market. Some US law firms are looking at opportunities, too. For Willkie and Orrick Herrington & Sutcliffe, Paris has become the power-base of their European operations as they put expansion plans to the fore.

Of the two deals Hurstel was juggling on Thursday, one is publicly disclosed thus far: the $800m (£412m) buy-out of Kesa Electricals’ French furniture business by a private equity consortium comprising Goldman Sachs, Colony Capital and Merchant Equity Partners. Willkie is advising the consortium in a deal that shows there’s some life in the private equity mid-market in France.

Hurstel’s other current focus is London, as he leads a four-partner committee (including two partners in New York and one in Washington DC) that is reviewing the firm’s options for growing its presence in the city. Willkie now has a one-partner outpost in London, advising solely on US law. The current review is analysing how the firm can add English law to the office to complement the firm’s existing European outposts in Milan, Rome, Frankfurt, Brussels and Paris.

“We’re unusual in being fairly sizable on the continent but not in London,” Hurstel says. “We don’t rule anything out, but we won’t do it if we don’t find the right opportunity.”

Although Hurstel won’t be drawn on how or when the firm will make its London move — “It’s moving along nicely,” he says of the review — the current betting on the City grapevine is that something is imminent. Given the decimation of the leveraged buy-out market, Willkie seems to have swallowed the business school mantra of invest in a downturn.

Another Paris-based partner currently masterminding his firm’s attempts at European domination is Orrick’s David Syed. The US firm’s European senior partner has overseen the growth of the Paris office since he moved from Watson Farley & Williams in 2002. Paris is now the dominant piece in Orrick’s five-office European network, a full-service practice of just more than 100 lawyers, including 50 that joined from Paris’ Rambaud Martel in 2006.

Now Syed is playing a key role overseeing the growth of London and launching a presence in Germany. With around 50 fee earners, Orrick’s London arm hardly makes a splash in the City market but a couple of recent hires, such as corporate finance partner Hilary Winter from Jones Day, have given it some momentum. In Germany, merging with a local firm is solidly on the agenda, but Syed insists: “We’re not close yet.”

The strategy for growing London is premised on the notion that if Orrick has a decent network on the continent, the firm suddenly becomes a lot more attractive to potential laterals and even UK merger partners. “I call it a strategy of encirclement,” Syed explains.

For Willkie and Orrick, though, the risk is that if you don’t land the right partners or merger candidate, you simply go round in circles.