Less fudge leaves Freshfields finance team with smaller seat at the table

To think it was only a few years ago that Freshfields Bruckhaus Deringer was doing all it could to promote its low-profile finance offering in the City.

Million-pound McKinsey reviews, a ‘top 10 banks’ hit-list and a PR push on any finance-related deal were part of a wider effort to convince the world the firm was really, honestly, serious about beefing up in finance, rather than relying on a handful of tasty niches practices (see comment).

How the tables have turned. News of finance veteran David Ereira’s impending departure, revealed exclusively by legalweek.com today (see story), brought a surprisingly nonchalant response from a firm that would previously have been horrified at the prospect of losing any partner – let alone one of its top finance names - to Linklaters.

In the same day, the London arm of Morrison & Foerster has hired two other finance partners, while a fourth is understood to be leaving in Germany.

Even the most Calvinistic observer could observe that this is no coincidence. So what changed?

Firstly, the firm was never entirely convincing in its quest to appear serious about London finance. While competing against Clifford Chance and Allen & Overy was always going to be hard, battling for serious backing from management was probably even harder. Even some of Freshfields’ French finance practitioners say they have better relations with major banks than their London counterparts.

Secondly, the booming M&A market - in which Freshfields is currently dominant across Europe - has quashed the need for a finance offering to hedge the flow of work. Quite the opposite in fact. With corporate running rampant, the word from one reliable opinion-former inside the firm is that Freshfields is increasingly looking to finance to support its M&A team rather than develop under its own steam.

Finally – and most importantly – the firm is trying to cut its number of equity points. Call it cynical, call it simplistic, but partners in the firm privately say it straight: the firm is on a mission.

Would Freshfields risk its partnership culture and disregard years of strategic planning for this? Oh yes.

paul.hodkinson@legalweek.com