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Freshfields launches in Silicon Valley

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Magic circle player moves into thriving San Fran tech hub

San Francisco

Freshfields is to open a new office in Silicon Valley, an area in Northern California perhaps best known for being home to some of the world’s largest tech companies.

The magic circle player — which already has two offices in the US, in New York and Washington — has assembled what it describes as a “dream team” of seven founding partners through five external hires and two internal moves.

Sarah Solum joins from US firm Davis Polk and will head up the Silicon Valley outpost as managing partner. John Fisher and Maj Vaseghi join from Sidley Austin and Latham & Watkins, while Boris Feldman and Doru Gavril join from California outfit Wilson Sonsini. They will team-up with existing Freshfields duo, Pamela Marcogliese and Alan Ryan.

“Silicon Valley is one of the most dynamic regions in the world and it continues to lead innovation across the globe,” Freshfields’ chair Edward Braham said. “The impact and strategic importance of technology and life sciences businesses will only continue to grow and advisers who can provide strategic counsel on key domestic issues within a global context will be highly prized. We are thrilled to have five of the country’s top corporate and litigation lawyers from the Bay Area join us to deliver the firm and its expertise seamlessly in Northern California.”

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Silicon Valley is widely considered to be the global centre for tech, innovation and social media, with the likes of Apple, Facebook, Google and Netflix (to name just a few) all operating in the area — potential rich pickings for corporate lawyers.

Ethan Klingsberg, partner and head of US corporate and M&A at Freshfields, added:

“Combining this dream team of talent with our global platform and our high-powered teams in New York and DC enables us to respond to the needs of Bay Area clients. These needs are global, complex and demanding of constant focus and creativity.”

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26 Comments

#1

Not needing to reduce salaries and now this. Freshfields is undeniably THE elite English law firm, other firms really are left in its dust

(55)(13)

Chad

Only about 20 years late to the party… You gotta love the British firms, so behind the times!

(8)(16)

B

Better late than never … the US continues to produce tech giants while Europe has produced none

(1)(0)

Observer

Will be interesting to see how this project goes. FBD are the only Magic Circle firm still trying to break the US market. The others have all but abandoned their efforts.

I wonder if any London partners are annoyed at suffering the cost of this investment (Klingsberg is reportedly on $10m and presumably the new hires are also on above-lockstep deals). If there are, maybe we can expect more Higginses and Maguires.

(13)(4)

Bart Simpson

No, it won’t be that interesting – they aren’t going to crack this market and nobody cares.

Get a better hobby than wondering about the politics/salaries of Freshfields’ management. Talk to girls or something, like a normal undergraduate.

(9)(1)

Pedant

Didn’t realise that Silicon Valley was “perhaps” best known as being home some of the world’s largest tech companies…

(12)(0)

John

Freshfields refused to value employees by not paying bonuses and not granting the pay rises they were due. Despite drumming up huge business over the last months. And now this in the middle of a global pandemic. Disrespectful.

(5)(15)

Oh come on

“Not paying bonuses” – you either don’t work there or don’t understand what “deferred” means. Delaying bonuses (oh the hardship!) rather than making rash salary/job cuts? Ah yes, the pinnacle of disrespect. Try: prudent

(19)(1)

Zineb

Breaking: old white male partners discover Facebook and Google.

(15)(15)

Incoming FF Trainee

Winning in the US market is crucial if you want to be a truly global firm and Freshfields is the only magic circle firm making a real effort anymore. Their efforts in NY, their established position in Washington in anti-trust and now this…its still too early to tell and the odds of success are still pretty long but FF is giving this a real shot which is very exciting.

(7)(10)

Anon

Yikes, this actually hurt to read. So young and full of hope. I wonder how long before the disillusionment sets in.

(40)(1)

Kirkland NQ

Lol! Good luck bro, I give it two years tied to a photocopier at 3am 6 days a week before you realise the only way is to jump ship and get the dolla at a proper US shop

(4)(1)

lol

I’m sure the US firms will be quaking in their boots

(12)(4)

Stephen

Silicon Valley is crazy, I’m telling you. I was visiting my pal there and we got invited to a party where literally everybody was fully naked. It was crazy but quite special. Nothing sexual or anything, just no clothing. They party like mad in that place. I have never seen anything quite like it.

(12)(3)

ExFreshfielder

The core issue here is profitability. Freshfields is the most profitable MC firm by some stretch. I used to work there. It’s a great firm but it wouldn’t be among even the top 25 or 30 most profitable US firms which is why it won’t emerge as a true competitor to the best US firms (e.g. elite NY firms, Latham, Kirkland etc).

Freshfields has broken its lockstep to recruit quality US partners. That’s an acceptable business decision for the firm to make but it does come at a real cost. Davis Polk’s PEP is almost $ 2 million higher than Freshfields (FF around $2.8m, Davis Polk around $4.5 m). In order to recruit partners of this calibre Freshfields needs to pay far in excess of what they are getting at their current firm, which is actually more profitable than Freshfields, which means going well above Freshfields’ lockstep.

The profit centres for Freshfields are the UK and Germany. Almost no other offices turn a profit (as I understand it). It’s a bit like robbing Peter to pay Paul. By paying laterals over the lockstep you are therefore also reducing the profits available to pay UK and German partners. That causes a great deal of resentment amongst UK and German partners.

In addition, it means that your ‘home grown’ partners (in the UK and Germany) with profitable practices are very easy pickings for the 25 or so more profitable US firms looking to expand in London and Germany (see recent corporate exists to Latham and Kirkland). You are then fighting a war on two fronts.

The core issue here is profitability. MC firms (Freshfields included) expanded into non-core jurisdictions pre-2008 and recruited a huge number of non-legal facing support staff that arguably weren’t needed (e.g. they’ve culled secretaries and paralegals while recruiting very expensive ‘Heads of Innovation’ and ‘Innovation analysts’). They have suffered because of it.

The profitability issue won’t be fixed unless MC firms decide to (i) focus solely on profitable non-panel work, or (ii) shed overseas offices that don’t make them any money.

(26)(0)

Jonathan

This is exactly why Slaughter and May, despite being a truly global firm, only has four offices (London, HK, Brussels and China). It’s allowed us to remain far more profitable than the rest of the MC.

(15)(19)

USlawyer

That’s not correct. The main reason Slaughter and May is more profitable is because it is highly leveraged. There are only 110 or so equity partners as against 600 or so associates worldwide which is how it maintains its PEP.

(18)(8)

Hello Bozo

Lol what? There are over 208 partners (all equity) last time I checked

(9)(14)

USlawyer

Check again then, idiot

Student

Informative post, especially is one is thinking of applying to Freshfields (or likewise differentiating it from the rest of the MC). One question though, what is meant by “non-panel work”?

(0)(2)

Contrariwise

Latham and Skadden have a similar amount of offices as Freshfields yet still have sky high PEP – not saying specialisation doesn’t have some benefits but size and PEP isn’t always mutually exclusive.

(0)(0)

A&O Lej

This’ll just be a highstreet firm in Silicon Valley. Everyone knows FF is in serious decline.

(5)(25)

John

Realistically this provides no fight against the likes of Kirkland and Latham in Palo Alto, who are not only huge in Silicon Valley but now huge in London. They’re competing and starting to lose on their home turf, let alone on new turf. Give in 5 years, this office will close.

(8)(8)

Anon

Of all the issues going on in the legal industry right now, e.g. lack of diversity; increased pressure on legal fees; threats of the big 4 + other providers taking away the bulk of city law firm work; is partnership the right governance structure for a firm in the 21st century; why should clients pay for a service provider that makes more money the longer it takes to do things; why law firms are being run by a bunch of people who have zero boardroom experience; all that technology jazz – they choose good old office expansion as the cure, and continue the same business model they’ve had for decades.

(3)(6)

Brent Williams

The worst part is that nobody questioned that your photo of Los Angeles is your one titled “San Francisco” for this article, despite being some 600km away.

(1)(0)

Parp

Clifford Chance opened an office in Silicon Valley about 20 years ago, and closed it a few years after that.

(0)(0)

Comments are closed.

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