The benefits of association

Salans is a relatively young firm and in just over 30 years, has built a formidable reputation in Central and Eastern Europe (CEE) as well as the Commonwealth of Independent States (CIS). The firm also enjoys a strong position in Western Europe including Paris (where the firm first started), New York and most recently, China (Shanghai, Hong Kong and Beijing). One of the major contributors to our success is the development of strong, long-term client relationships, as well as the ability to deliver a full-service offering of consistent quality in a multi-jurisdictional environment. Empowerment at a local level is also key to Salans – the firm has no official headquarters, instead having global management based in all pockets of the globe, coming together to define the firm’s vision and strategy.

The development of globalised practice and sector capabilities is a relatively recent focus of the firm, designed to ensure continued cohesion, to capitalise more effectively on client relationships and to fulfil individual lawyer ambition. In effect, this has proved to consolidate the successful foundations of our global reach.

In answer to the first commonly-asked question, the key commercial benefits for the association include:

• New client opportunities, either through mutual referrals or joint pitches;
• Increased visibility, credibility and opportunity with existing clients;
• Geographical reach and improved access to sector and other expertise without significant investment;
• A safe haven for clients when conflicted out;
• The ability to fully resource the large-scale deals on both domestic and global platforms; and,
• Working together to reduce costs – for example, through increased purchasing power or coordinated training programmes.

In a more succinct way, the association gives Salans access to a complementary sector set as well as a critical mass of English law-qualified solicitors, something key to many of the deals we undertake in Central and Eastern Europe and the CIS, where English law is often the preferred law of choice. In addition, we also get further access to the Middle East via Pinsent Masons’ Dubai practice, which complements the presence we already have in the Middle East via a number of consultants at local law firms.

As for Pinsent Masons, they now have access to a European footprint encompassing Western Europe, the CEE and CIS. With a strong UK clientbase made up of long-term relationships, Pinsent Masons is now able to pitch for new instructions on the back of their newly-extended global coverage with these same clients.

Already, less than six months into the relationship, we have seen some strong successes. While client confidentiality prevents disclosure in most scenarios, two particular cases to cite include Hiscox and HSBC alongside Rabobank International.

Hiscox (a specialist insurer FTSE 250 company and a client of Pinsent Masons for many years), undertook a panel review earlier this year for which Pinsent Masons were seeking reappointment. Recognising Hiscox’s need to work with law firms that can provide a global solution, Pinsent Masons introduced Salans into the re-tender following the external announcement of the association. Not only were Pinsent Masons successfully reappointed to the panel, but their mandate was extended to include the provision of legal services in Europe following Salans’ inclusion in their submission.

HSBC is the world’s largest banking group and in the past has worked with both Salans and Pinsent Masons in differing jurisdictions. Earlier this year, the need arose for a cross-border credit facility across the UK, France, Germany and Poland for a German soft drinks manufacturer. Together, the two firms were able to form a combined legal team in order to deliver the desired result for HSBC, as well as Rabobank International, with the proceeds of the facility being used to refinance existing debt.

Commenting on the deal, HSBC Bank director Matthew Osborne said: “The legal process on this deal went very smoothly and we thought Pinsent Masons and Salans did an excellent job. The Alliance between the two firms, who between them covered all the work on the deal in the UK, Germany, France and Poland, provided a seamless service from a client perspective.”

Mergers invariably carry great risk – and these risks are heightened during an economic downturn. The time and financial investment required from management and the partners of both firms in fulfilling all transition and transformation challenges, such as compensation, structure and systems technology, would be resources diverted away from the most important element of any professional service firm – clients, particularly in a downturn. Given that many of the identified commercial and economic benefits of working together could still be achieved with an association, without the need to take on such risk, the way forward then became much clearer.

The association is non-exclusive. This is because both firms have existing arrangements with other firms and neither firm wanted to move away from such relationships. Salans, for example, has significant ties with a number of leading US firms. Salans also has a number of strategic associations, to supplement its international offering, where a full-scale Salans office is not achievable either because of regulatory reasons or where the region, while important, is not large enough to warrant the establishment of an office. Examples of such associations exist in Georgia, India and industrial regions of both Poland and Russia.

Where this association differs from the others is that it gives Salans the opportunity to move into a market space not occupied by many other law firms. Working together with Pinsent Masons, Salans now has the capacity to pitch for the big-ticket work previously thought the sole domain of Magic Circle firms, perhaps by the market and clients alike, yet retain the flexibility of a mid-sized firm in terms of efficient resourcing and minimal overheads. This is already striking a positive chord with clients.

And so in making an association between two law firms work, the main investment ingredient needed is time. Associations live and die on the back of partner enthusiasm, and it is pleasing so far to see that the partners of both firms have welcomed the move and shown an overwhelming willingness to pursue the opportunities that the association can generate.

In these early days, there is no end game position in mind vis-à-vis the association. Both firms will continue to forge ties together in a pragmatic manner, ensuring that the core focus of the initiative is making this work for clients.