When its financial year closes at the end of March, Slaughter and May will
have set a record for profitability in the UK legal market. Already the only
European firm among the world's ten most profitable law firms, Slaughter and
May's top partners are set to pocket £2.5 million each this year, a jump of
more than a million pounds on last year. Overall, the firm — only a minnow
with 126 partners compared with Clifford Chance's 575 — will book revenues
of £400 million.
Tim Clark, the senior partner - a tall, charming, self-effacing smoker who has
spent his entire career with the firm and whose father was a partner before
him - refuses to comment on the numbers. That much is perhaps to be expected
given the firm's reputation as being the most closed and conservative of the
so-called "magic circle" firms. But Clark, sitting in his office
near the Barbican, does talk enthusiastically about the strategy behind the
firm's remarkable success.
Slaughter and May has been unique among the UK elite in shunning the global
one-stop shop model of international expansion and in refusing to tinker
with a partnership structure that has been in place since 1889. While other
law firms rush to restructure themselves in order to present themselves as
dynamic, forward-thinking businesses, Slaughter and May remains resolutely,
unapologetically old-fashioned - which means Clark's role in the firm
differs from senior partners elsewhere.
“If you talk to our friends in most other major law firms, the decision-making
power has moved away from the partners, and partners have become much more
like employees," Clark says. "For us, that’s a direction we would
never want to go in. We don’t give significant powers to the senior partner
– my role is to think about things we should be doing. I have the power to
make suggestions, but my partners are perfectly able to reject them.”
Clark says there are three things that make Slaughter and May different from
its rivals, the envy of the profession. First, it is ruthlessly selective
about its work, doing only value-added, high-end work in preference to
commoditised deals. The result is more listed clients than any rival:
according to The Lawyer, it has 27 FTSE100 clients, ahead of
Linklaters with 22. Last year it represented Corus on its £6.7 billion
takeover by Tata Steel, RWE on its £4.8 billion sale of Thames Water, and
Abbey on the £3.6 billion sale of its life insurance businesses.
Second is the international strategy, where Slaughter and May has preferred to
build up a network of relationships with other independent law firms
overseas instead of merging or opening offices. “It is a strategy that, we
believe, has worked extraordinarily well for us," Clark says. "It
has allowed us to keep independent, and at the same time to work with the
leading lawyers in the world on a seamless basis using integrated teams that
are usually more familiar with each other than those at some of our
competitors."
The evolution of that strategy under his watch is something of which he is
particularly proud, with trips to meet compatriots at firms around the world
taking up a lot of his time. He was in Paris the day before this interview,
and Markus Meier, a partner at Slaughter and May’s German best-friend firm
Hengeler Mueller, says he is frequently in Germany. “We all at Hengeler have
a lot of personal contact with Tim, and both firms are keen on meeting at
all levels," Meier says. "Tim has been over here in Germany this
week; he was at our regular partners’ lunch, we chatted about the world and
how it is today. Tim is straightforward in making his point, he has a clear
strategic vision, and a strong and pragmatic sense of what would work and
what would not work.”
That collaborative approach is the third defining characteristic of Slaughter
and May, Clark says. “We have maintained ourselves as a partnership in the
original sense of the word. The business is run by the partners, and there
are only two out of 126 of us who are excused client work on a full-time
basis. Most of the things that are delegated up or down elsewhere are done
by the partners here. For example, we don’t have a marketing department here
– marketing is the responsibility of all of us. All of this means that
partners have responsibilities as being owners of the business as well, of
course, as looking after client work.”
Clark himself qualified at the firm in 1976 and built his career advising on
takeovers, acquisitions and public offerings. He was forced to give up doing
deals when he became senior partner in 2001, although he maintained contact
with key long-term clients such as Gallaher, the tobacco group.
After being convinced to extend his initial five-year term to seven years,
Clark is readying himself to step down in 18 months, although the keen
Chelsea fan says he has no plans for his next career move. He looks to his
father's career as proof that something will come along. His father, now 84,
had a distinguished career in the armed forces before joining Slaughter and
May, becoming a partner and then leaving in 1960 - 14 years before his son
signed up - to join Philip Hill, now part of merchant bank Hill Samuel.
“He says you can’t plan your career,” Clark says. “He believes in serendipity,
because life is full of chances and the real talent is to recognise an
opportunity when it comes. I hope at some stage in the next year something
will slide across my path that I will realise that I want to do. Partly for
this reason, I’m not taking an active course at the moment and, if nothing
emerges, then I will start thinking about it seriously next year.”
For now his focus is on securing his legacy by maintaining the position he has
helped build. The biggest pressure, Clark concedes, is on getting over the
message about the international strategy given the absence of a single
international brand. “The reality is that we provide the highest quality
legal services across the business world through our integrated teams,” he
says. “But unlike our competitors, who struggle to match us in a number of
countries, there is no unified brand to convey the message.”
Then there are the inefficiencies of running a business with 126 partners
participating in every decision, although he says that those are minor when
set against the benefits.
Clark says that whatever he does next, he will be able to return in 10 years’
time to a place largely unchanged in its approach.
That is, “If there are two ways of doing something, it seems to me that we
always adopt the one that’s more difficult. I think of the old Avis
advertising slogan, 'We Try Harder'. Because we often follow the less
obvious course, that’s where we are. Ours is not always the natural way, and
we are very lucky that we are able to run our business the way we do. If you
were setting up an international law firm from scratch, not everyone would
choose to do it like this.”
