The world is not enough for Magic Circle boss Linklaters' Simon Davies

An early love of Asia has propelled the legal eagle around the globe — and his dramatic links to James Bond have come in handy, too

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Mark Leftly

30 November 2012

Should James Bond ever decide to settle his disputes in court rather than through the smoking barrel of a Walther PPK, he’ll know where to get his lawyer: Linklaters.

As a teenager, Simon Davies, global managing partner of the Magic Circle firm, was a budding actor and in the year below Daniel Craig at the National Youth Theatre. A direct contemporary was Lloyd Owen, who, like original Bond Sir Sean Connery, once played Indiana Jones’ dad in a television spin-off and is now treading the West End boards in the title role of The Bodyguard.

Great lawyers are often thought of as great actors — Tony Blair an oft-cited example — so that background surely helped propel the London-born, Wales-bred Davies to the hot seat of the £1.2 billion-turnover legal behemoth.

Unfortunately, Davies has had to play the role of villain of late, chopping about 30 partners in a redundancy drive that nearly cost him his job this year. Despite standing unopposed, Davies initially failed to secure the 75% of votes needed to guarantee his re-election.

Now, though, he is safely into a second term, which runs to 2016 and he looks relaxed sipping Earl Grey tea. “Sadly [job cuts] are not unusual in law firms,” he says. “I don’t think law firms are immune to the crisis and some of the changes are a reflection of clients’ businesses changing.”

What the 45-year-old wants to talk about is growth rather than playing the axeman. Davies is focused on an international expansion drive as the 174-year-old firm looks to meet its website promise that it is “everywhere our clients need us to be”. Those clients encompass a quarter of the FTSE 100, including oil empire BP and mining outfit Anglo American, as well as big investment banks such as Credit Suisse which so badly need legal advice as they’re weighed down by increasingly burdensome regulation.

The noticeable thing about all of these clients is that they rarely operate in only one or two countries. That means Linklaters must follow suit, opening offices and training lawyers in the vagaries of all kinds of legal systems, particularly in the emerging markets of Asia and South America.

Davies comes across like the legal version of Judith Chalmers as he lists the cities, countries and continents he has just or is about to visit on business, including Buenos Aires, the US, Germany, Australia and Asia.

That last market is close to Davies’ heart: as a precocious teenager, his parents asked where they should go on holiday and he “gulped hard” and suggested the costly option of a tour round the Far East. A bold ask, as this was not a wealthy family, with their background in railways and coalmines, (Davies was state-educated and was to become the first generation to go to university).

He got his way and fell in love with China in the age of “blue suits and bicycles”. After joining Linklaters, he advised Vodafone on what was then the biggest restructuring in Japanese history at loss-making subsidiary Japan Telecom, before going on to become the law firm’s Asian boss. Davies even found himself a Japanese missus. Since returning to London in 2008, he has been picking up the air miles. “Earlier this year, I went to Brazil to learn in concrete terms just where new trade flow goes. I spent quite a lot of time looking at the world last summer.”

Still, 45% of Linklaters’ turnover is generated from London, which takes on a lot of the work based around emerging markets. For the past four years, much of that income has come from the restructuring and insolvency side of the business, which helped unwind the hugely complicated web of assets that the failed Lehman Brothers held in 82 countries. What used to be the bread-and-butter work of mergers and acquisitions advisory is in a bit of funk, which is why Davies thinks that litigation and regulatory advice will underpin the business for some time to come.

However, Davies believes that there is “an awful lot of money waiting in the wings” so that, as young bosses scarred by the crisis get a little bit more confident, they will eventually be tempted into flashing the cash.

“There’s a new breed of chief executive, which is a little more cautious, whereas the older breed were expansionist. My own sense is that this is a passing phase.”

Linklaters drew up the papers on the lengthy saga that has been the £50 billion mega-merger of nickel-to-cotton trader Glencore with coal and copper miner Xstrata. The regulatory jurisdictions involved in clearing that deal, including the EU, South Africa and China, show just how international the big lawyers now need to be.

Perhaps the most notable overseas move Davies made this year was an alliance with Australian lawyer Allens Arthur Robinson. Davies and his Aussie counterpart, Michael Rose, realised that they held similar ambitions for their businesses over lunch in California in May last year, and 11 months later 600 partners at the two firms voted to create the alliance.

This type of partnership is a far looser arrangement than, for example, Clifford Chance’s purchase of boutique firms in Perth and Sydney. Australian legal advice is still conducted by Allens, so Linklaters will refer its own clients to the 190-year-old firm when they’re looking for advice Down Under and vice versa, and the pair have profit-sharing joint ventures in Asia.

“That’s mainly client-service integration rather than financial integration,” says Davies, which rather bucks the trend of major City lawyers such as Norton Rose and Herbert Smith internationalising by fully merging with foreign rivals.

He claims the statistics show that the idea has worked, as at the start of November there had been 124 referrals between the two firms since May. He reckons that without the alliance the firms would have only had about 40 referrals between them and other lawyers — so they’ve prospered by securing three times as much work.

Having spent six months making sure that the alliance was running smoothly, Davies’s next half-year will involve rewriting what he refers to as Linklaters’ “aspirational clients list”. Two years ago, Davies and his colleagues drew up more than 100 big companies Linklaters wanted to work with; since then, the firm has been paid by about two-thirds of them.

That’s the kind of hit rate of which Bond would be proud. Those successes should also mean that Davies takes the targets off the back of any more Linklaters partners — at least for now.

LIFE AND TIMES

CV MILESTONES

1990 Linklaters trainee solicitor

1995 Hong Kong assistant solicitor

1999 Tokyo partner

2003 Asia managing partner

2008 Global managing partner

PERSONAL LIFE

Married for just over five years to Minori, from Japan. Two children, a four-and-a-half-year old called Coca, which means “happy flowers in spring” and a seven month old named Taiyo, which means “sun setting”.

BEST ADVICE I'VE RECEIVED

“One piece of general advice I’ve always heeded is that preparation is conducive to success. You need to put the time in, the effort to be well-prepared. I visited [former Vodafone Asia Americas boss] Bill Keever after he retired and asked him what he had learned. He said that in the previous 15 years he had only one practical skill, and that was listening.”

The world is not enough for Magic Circle boss Linklaters' Simon Davies

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