Beside the majority of the UK’s top 50 law firms who have offices on every continent and a multitude of legal professionals, Macfarlanes is something of an anomaly. Despite its singular office and modest staff of just 300 lawyers, the firm boasts a mighty corporate team that competes with much larger outfits. Half of the firm’s corporate work is international, thanks to a global referral network. In 2007, Macfarlanes became the first non-Magic Circle firm to break the £1 million average profits per equity partner barrier.
Having never merged, and shunning lateral hires as a general rule, Macfarlanes has a reputation for independence and commitment to recruiting and grooming high-calibre talent. That approach has clearly paid off: The firm is one of the most profitable in the city. Driven primarily by its corporate department, which includes debt finance, pensions, tax, employment, M&A and investment funds, and represents 50 per cent of the firm’s turnover, Macfarlanes can also boast significant strength in litigation, property and contentious IP work.
On top of this is Macfarlanes’ private client practice which, although small, affords it valuable access to wealthy individuals who are often the source of further instructions for other departments. Most recently, the firm’s private client group benefited from an influx of Indian businessmen to London and, in November 2008, it was named “Private Client Team of the Year” at the Financial News Legal Awards.
A tidy few billion
While global corporate and property markets have suffered from the economic downturn, the effect on Macfarlanes at year end 2007-2008 was mercifully slight. Profit per equity partner was down from £1.25 million to £1.1 million, while turnover grew by 6.7 per cent to £110 million. The firm’s corporate team, which got its hands dirty in a number of major deals in 2008, was largely to thank.
In April 2008, the firm advised longstanding client Pernod Ricard on its €5.8 billion acquisition of Vin & Sprit, producers of Absolut Vodka. Toward the end of the year, Macfarlanes’ links with US firm Paul Weiss Rifkind Wharton & Garrison landed it a role advising Mitsubishi Rayon on its €1.6 billion acquisition of Lucite International. A consortium led by Goldman Sachs Asset Management also turned to Macfarlanes in November 2008, for advice on its €950 million acquisition of a portfolio of buyout investments from AAC Capital Partners.
The firm advised European Land on the £113,500,000 debt financing of the development of the Carmine Building in Paddington, London, in October 2008. In what was the firm’s first financing deal for European Land, the funds were provided by Deutsche Postbank AG and Landesbank Hessen-Thüringen Girozentrale. Also in November, Macfarlanes was instructed by longstanding client Alchemy Partners in the £197.5 million sale of CompAir, an air and gas compressor business.
In a landmark deal at the end of 2008, Macfarlanes played a role in the largest pension insurance buyout ever executed in the UK. The firm advised Thorn Limited in negotiations with the trustees of the Thorn Pension Fund in relation to the £1 billion buyout with Pension Insurance Corporation. The buyout secures the benefits of more than 15,000 fund members. The following month, the firm won a role as adviser to M DuMont Schauberg, a Cologne-based publishing house, in its acquisition of Mecom Group’s German operations for €152 million.
Take me to your new leader
Commentators predicted a change in managerial style at Macfarlanes when the firm announced that long-term leaders Robert Sutton and Paul Phippen would stand down from their leadership posts in May 2008. Appointed in 1999, Sutton and Phippen served three consecutive terms each as senior partner and managing partner, respectively, and played a significant role in the firm’s development during their time in office.
The new chiefs, corporate head Simon Martin and private equity partner Charles Martin, asserted that there would be no major strategic changes to the way the firm was run or how it did business. In May 2008, however, the firm instituted one change as it converted to limited liability partnership status and brought in a formal partnership agreement.
Reacting to the recession
Macfarlanes has not emerged unscathed from the economic crisis. In January 2009, the firm undertook a redundancy consultation that saw 14 staff, including seven property lawyers, leaving the firm. The firm launched a second round of redundancy talks with support staff in the spring. In another reaction to the changing economic climate, the firm took the rare step of recruiting a lateral partner in March 2009. The firm announced the hire of David Berman, formerly a managing director at Dresdner Kleinwort, as a regulatory partner in the financial services group. His regulatory expertise should prove useful as clients’ needs shift in the wake of the credit crisis and changing regulation of the financial industry.
20 Cursitor Street
London EC4A 1LT EC4A 1LT
Phone: +44 (0)20 7831 9222
Employer Type: Private
Managing Partner: Simon Martin
Total No. Attorneys 2009: 227
London, United Kingdom