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Overview
Like some other leading City firms, Lovells has struggled to close the gap on the magic circle giants positioned above it in the UK top 50. Its task has not been made any easier by the departure of a number of its leading partners in recent years, while root-and-branch performance reviews are an almost annual occurence. "The firm is solid," suggests one contributor, "but lacks true star quality - apart from a few partners."
That view would be echoed by many in the City. Lovells is a member of a group of firms that is sometimes loosely referred to as the 'chasing pack', alongside Herbert Smith, Ashurst, Norton Rose and Simmons & Simmons. Of the group, the next band beneath the magic circle, Lovells has arguably faced the most turbulence in recent years. Despite having built a sizeable and generally effective international practice, some question whether the firm can reinvigorate its London HQ to compete with larger, corporate-driven rivals.
The firm’s financial performance in 2006-07 - with revenues growing 7% to hit £425m, while average partner profits have risen 5% to £599,000 - will be seen as a touch behind the pace set by many rivals in what has been a commercially busy period.
History
The firm was largely formed in the UK in its current guise via the 1988 merger between Lovell White & King and Durrant Piesse, uniting under the banner Lovell White Durrant. After protracted post-merger integration, Lovells surprised many in the City in the late 1990s when it committed to aggressive international expansion despite being regarded as less focused on M&A and banking work than some of its rivals. The firm, after all, had sizeable litigation practices and commercial teams covering IP, employment and media work. Likewise, Lovells had a reputation as a laid-back, ‘friendly’ firm.
However, under the influence of partners like then-international head John Pheasant and managing partner Lesley MacDonagh, the firm went on to secure a string of mergers between 1999 and 2002, including sizeable deals in Germany, France and the Netherlands. The strategic imperative was then – as it largely is now – to make Lovells fit to operate in the more competitive world that was emerging in the rapidly-changing legal market and tilt the firm’s culture towards a more energetic style.
Bedding down its largest merger in Germany with relatively little fuss, Lovells was to go on to have more success than many predicted, continuing to be a solid financial performer even as larger rivals were badly affected by the downturn in deal activity in 2002-2003. However, by late 2004, it became clear that Lovells was struggling to maintain its momentum. In December of that year the firm announced a radical restructuring aimed at exiting 25 of its equity partners, part of a move to get its business back on track.
Since that decision, which was taken by managing partner David Harris and senior partner John Young, the firm has struggled to hit its stride. Despite an international practice that is still expanding, the firm has faced a lack of growth in its London heartland. Likewise, recent years have seen the firm lose a number of partners, probably the most significant being tax partner Daniel Friel to Latham & Watkins and a respected private equity team led by Marco Compagnoni that left for Weil Gotshal & Manges in early 2006.
In 2005 the firm also saw the end of the long-running BCCI/Bank of England litigation, which had generated a lucrative stream of contentious work that had helped to hedge the firm. A long-running review of its partnership structure, which confusingly was conducted twice before ending in early 2007 with only minor changes, also raised eyebrows.
Culture
Despite moves to sharpen up its culture stretching back a decade, the firm is still regarded as a ‘friendly’ partnership. Lovells has traditionally faced some tension between its older guard and more impatient, younger crowd wanting shifts in direction. None of which should obscure the fact that the firm has a reputation for treating its assistants well.
In early 2008 the firm pushed ahead with plans to give extended voting rights to salaried partners, whom account for around a third of the firm's 300-plus partners.
Key departments/leading partners
When discussing the strengths of the City giant, Lovells' formidable dispute resolution practice seems as an obvious a place to start as any, despite what continues to be a tough market for litigators everywhere. "Litigation is starting to mature well," observes one contributor. "A lot of mid-level partners are now coming to fruition to replace the older heavyweights." (Who are the rising stars? Time to name names. - Wiki Ed.)
In property, high-profile practice head Bob Kidby is also singled out as a key figure. "Competition is strong," notes the reader, highlighting Susan Bright as an obvious top performer. However, departures have had an inevitable impact.
"Tax has taken a big hit," he suggests, citing the loss of international tax head Daniel Friel and partner Sean Finn to Latham & Watkins at the start of 2006 as a setback for the practice.
The loss of veteran corporate partner Hugh Nineham in January 2008 to McDermott Will & Emery was hardly a plus, either.
National/international coverage
A strength. The firm has a large and successful German practice thanks to its tie-up with Boesebeck Droste, despite the closure in 2006 of its less profitable Berlin branch. Likewise, the firm has won plaudits for growing energetic practices in Spain and Italy, two markets where larger rivals have floundered. The firm also has a solid Asian network and a US practice that has - unusually - targeted contentious work, so far more successfully than many give credit for. The firm offers many opportunities to the internationally-minded lawyer.
In early 2007 made its long-awaited Dubai launch.
Key clients
The firm acts for a string of major bluechips, even if rivals have made in-roads with some of Lovells’ major clients in recent years. Top clients include SAB Miller, ITV, Barclays, the BBC, Royal Mail and JP Morgan. The firm is also particularly well represented in the insurance sector, thanks in part to the practice of senior partner John Young, having handled work for clients like Prudential and Swiss Re.
Career prospects
Good, in the sense that the firm has made little secret of its hopes to reposition itself to attract more young talent. With a substantial number of exits due to its restructuring in 2004-05 and several partner departures, the firm has plenty of space to promote, as could be seen in 2007, it made up 12 partners in London.
Salaries
According to one contributor, the salaries Lovells pays out don't quite tally up with its long-held ambitions of challenging the magic circle. "To be a top 10 European firm and a top five UK firm, salaries are well below market, especially in continental Europe," the poster says.
Rates would be viewed as a touch off magic circle. Trainees start on £36,000. Newly-qualifieds get £63,500, first years’ £66,000 and second £76,000, rising to £85,000 at three years’ qualification. Not viewed as the most generous firm in terms of bonus awards.
Recruitment
Takes around 90 trainees a year. However, it was noticed in 2007 when a number of trainees were not taken on due to the firm offering most of its positions in corporate and banking (see story).
Work-life balance
Lovells operates a pretty standard 1,700 hours annual billing target. Does not have a reputation as a sweatshop. Whether that is changing given the firm’s stated ambitions to be more transactionally-focused, however, remains to be seen.
Diversity
