The redundancies in Herbert Smith’s London corporate and real estate practices (The Lawyer, 30 April) are a sign of the times.
The economy is not looking up and big firms need to reconfigure according to the new world order: in a nutshell, fewer people in London and more in Asia.
While corporate is expected to be hit heaviest in Herbies’ London cuts, with up to 23 fee-earners being asked to leave, the announcement that five staff will be cut from its real estate practice is bad news. For a start, Herbies’ property team is much smaller than its corporate team, so cuts will be felt more deeply.
When the firm was surveyed in summer 2011 for The Lawyer UK 200 Annual Report it had around 120 corporate partners compared with 19 real estate partners. Also, it has not made up many real estate partners in the past two years.
All this lends weight to speculation that in years to come real estate practices at magic circle firms (and those just outside, like Herbert Smith) will be little more than corporate support practices, with just four or five partners who all charge corporate rates: a prediction made in The Lawyer recently by one of the City’s most respected property lawyers.
There are, however, firms that still treat real estate as a priority. For them, the perceived retrenchment by the City’s historically most prestigious players is a boon. Berwin Leighton Paisner (BLP) – which made up three real estate partners alone this year in its annual round of promotions – has been taking the opportunity to hoover up some of the finest property lawyers around. Most recently, it hired Linklaters real estate finance partner Claire Watson, whom one recruiter described as “really top drawer”. Eversheds too has been picking up real estate partners, most recently from BLP and Dundas & Wilson, while Macfarlanes nixed any talk it was moving away from the sector by hiring Shearman & Sterling partner Ian Nisse at the end of 2011 – a big name in the market.
All this is on top of the niche real estate practices such as Brecher and Maples Teesdale reporting signs of winning market share.