The head of Clifford Chance in Asia has said that he was "not impressed" with how Allen & Overy entered the Australian market.
At the opening launch of the firm's Australian operations in Sydney last night (3 May), Peter Charlton, the firm's Asia head, told Lawyers Weekly he is confident that the merger model with which Clifford Chance chose to enter the Australian market is superior to that of its magic circle rival Allen & Overy, which entered Australia last year by poaching 15 lawyers from Clayton Utz.
"In March 2010 A&O do their thing and my initial reaction was 'they have beaten me to it,'' Charlton said. "But then I thought 'I don't mind not being the first, I will watch to see what they have done', and I was not that impressed, frankly. They have taken a group of people with a particular bias.
"The only thing I thought was clever was the Perth end."
Clifford Chance officially opened in Australia on 1 May after it merged with Sydney firm Chang, Pistilli & Simmons (CPS) and Perth firm Cochrane Lishman Carson Luscombe (CLCL).
Charlton, a partner at Clifford Chance since 1986, was appointed as the head of Asia in 2009. He was at the forefront of the firm's push into Australia after a strategic review in 2010.
"I came to Asia and I thought, 'I like M&A and high-end litigation' and the most active M&A market in Asia is Australia," he said. "The things that make sense at Clifford Chance and stick with our global strategy are fund formation, high-end finance and particularly cross-border work. We are global leaders in financial regulation and the whole regulatory environment around the world is changing. Why shouldn't Australia have a piece of that and pay for it?"
Charlton said he studied the A&O model and other models in looking at the best way to enter the Australian market, and settled on the merger model because of the ability to harness existing cultures and expertise within a small firm.
"I thought, 'I can do a raid on a firm, but I will get the same result as A&O, with a mix of some people that are good, bad and indifferent'," he said. "Then I thought, 'I will cherry pick three from here, three from there, one or two from here and there', and found it would be very, very, hard.
"You would have different cultures and people that don't know each other. It might work if you are lucky, but nine times out of 10, you are unlucky."
He added that the merger route became the best model for the firm to enter Australia when he analysed the quality of domestic boutiques.
"I took two trips to Sydney and spoke to people and even though the first meeting with CPS wasn't great, and I wasn't sure, I got to know them very well and they grew on me and I thought 'this will work'. They told me the firm [I had] to talk to in Perth was CLCS.
"A couple of other partners [from Clifford Chance] met with Michael Blakiston and key partners at major Australian firms and they said the person that impressed them most was Michael Lishman and Ian Cochrane. So I went down and chatted to them and was also quite impressed.
"I like [CPS] being young and elbowy because it suits this market (Sydney), and I like the fact that [CLCL] are establishment and very well connected."
Clifford Chance has targeted high-end M&A work and litigation in the Australian market. Mark Pistilli said that while this might be a "risk", he is confident it is a model that will work.
"The reality is that as a small boutique firm, and CLCL is the same, we have been operating in the market for five years and have been quite comfortable to draw in experts from other firms," he said. "The way this model works is to be friendly with other law firms. So we abide by our ethical standards to refer pieces of work out and we often call on the expertise of others when there is a piece of the transaction missing."
Pistilli, the Clifford Chance Sydney managing partner, said that under the Clifford Chance name he will continue to have cross-referral arrangements with firms such as Harmers Workplace Lawyers.
Charlton said that despite Clifford Chance having merger discussions with Mallesons Stephen Jaques, stretching back to 1999, a merger between the two firms "was never going to happen" when their interest in Australia shifted from the quality of Australia's lawyers to the quality of the corporate work on offer.
"Australia changed, and suddenly it is interesting, not because it is full of lawyers or full of well-trained people to fuel our growth, it was because it was interesting to our clients," he said.
"And where are our clients? They are in China, Japan, India, Korea - and they are all investing in Australia."
A similar opening launch for Clifford Chance will be held in Perth tonight (4 May).
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