Signy quits - not an earthquake but a definite fault line

Adam Signy's departure from Clifford Chance (CC) may have been well-trailed in the Square Mile, but all the forewarning in the world is unlikely to have lessened the blow for CC.

Not only was Signy generally considered to be the top name in the magic circle firm's public M&A practice, but his move marks the best corporate CV to hit a US firm's London office since Mike Francies joined Weil Gotshal & Manges way back in 1998.

The fact that Signy (pictured) is CC born and raised - having spent some 22 years as a partner - only drums home the symbolism; particularly since the last time CC was in this position it managed to hold on to private equity duo James Baird and Matthew Layton, who came within a whisker of joining Weil Gotshal in 2004.

Of course, US firms have managed to recruit some UK heavyweights in finance - as Simpson Thacher did with Tony Keal. But US firms' corporate ambitions in Europe have been held back by their inability to attract the top corporate partners in the City, a highly select club of 15-20 that Signy has membership of.

That Signy - who is believed to have also held informal discussions with Debevoise & Plimpton and Sullivan & Cromwell - was disenfranchised is worrying for CC. Like many rivals, CC is in the middle of a restructuring that is expected to see more than 50 leave the partnership, a process which had certainly disconcerted Signy. And you can ignore the rumour mill - there's no truth to the scuttlebutt that Signy was among the enforced partners; CC has spent the last few weeks trying to talk him out of the Simpson Thacher move.

And aside from the general morale of CC's partnership (and there's a limit to what you can tell about morale from one departing partner, however senior) and the fact that the firm's profitability is expected to dip further than its big four rivals this year, for some the loss raises questions about CC's corporate practice.

The firm has built itself so successfully around banks, private equity houses and other forms of debt-backed institutions that flourished through the credit boom that it doesn't have the same FTSE 100 client base of its rivals. Nor does it have a rank of high-profile public M&A partners ready to fill the gap Signy will leave behind, with the obvious exception of Guy Norman.

Critics would contend that the firm should have fixed the roof while the sun was shining - ie, it should have started the notoriously long-winded process of wooing major plc clients while sponsors were still driving the practice.

Set against that it should be stressed that CC has a large corporate practice and that Signy has been less associated with marquee clients in recent years (his most regular client of late has been ailing buyout house Candover). But the firm that has built Europe's best private equity practice will now have to conclusively demonstrate that it has the up-and-coming partners to take forward its general corporate team.

In contrast, there's little risk involved for Simpson Thacher as a result of Signy's hire. The notoriously conservative New York firm has been looking to recruit for at least a year and has plenty of clients for whom Signy will be able to provide UK advice when the market does pick up.

Reading the runes, although Simpson Thacher is obviously looking for some M&A growth post-Signy, this doesn't belong to the If We Build It They Will Come school of US expansionism. Given the narrow focus of Simpson Thacher's 12-partner City arm, that's probably just as well.

CC, on the other hand, will want to get a coherent message to corporate clients - both current and prospective. General M&A takes investment and lots of patience, so there's no time to waste.