7th April 2003
The Leader Column
Ah, those poor, poor magic circle partners. The possibility of their average
profits falling be-low £700,000, all those conflicts being scrutinised
and - oh, horror! - the prospect of being appraised by assistants.
Added to this, there's that fine line to walk between commoditisation
and premium billing. Nowhere is this clearer than in banking, where stories
of undercutting on auctions are legion, but where the rewards are potentially
huge. After all, Clifford Chance handled the original Marconi loan agreement
for a few grand and ended up with more than £10m in the bank for
the workout. Nice.
So here comes Linklaters, with its box-fresh new product aimed at the
syndications desks in banks. Without wishing to bore you senseless with
the details, it's an online questionnaire, which when filled out will
generate a term sheet, as if by magic. It's called, erm, Term Sheet Generator,
which I suppose has the virtue of doing what it says on the tin.
Before A&O and CC scoff too much, let's just remember those dealrooms,
shall we? This was intranet-based technology which allowed firm and client
to communicate… look sorry, it's too tedious for words. All you
need to know is that three years ago they were tremendously fashionable
and sucked up an insane amount of A&O's and CC's cash. They died a
death and are mostly now used for 'internal' purposes.
Given that the LMA standard loan agreement is already out there - and
there's another one due on leveraged financing later this year - it's
not as if there are no precedents floating about. But Linklaters reckons
its new product is already giving its partners airtime with bankers, many
with plenty of space in their diaries for chats over coffee.
What's more significant is how far Linklaters has come in the senior debt
market. It has, of course, been helped by the almost complete lack of
balls on the part of its competitors. Freshfields has no ambition. Norton
Rose is licking its wounds. White & Case is still marginal. Ashursts
is solid, but poses little threat in London. Shearman & Sterling is
treading water. It's too early for Cadwalader. Latham & Watkins is
too small. DLA is increasingly impressive, but only in the mid-market.
All of which leaves Linklaters as the number three banking firm after
A&O and CC - something you wouldn't have said even a year ago. If
you think Linklaters' new product is about technology, think again. This
time it's all about relationships.
catrin.griffiths@thelawyer.com
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