With its pure lockstep model, collegiate structure and prestigious allure arming it against poachers, Slaughter and May has always been the protected castle at the heart of the U.K.’s legal elite. It has been so well-guarded that, historically, headhunters wouldn’t even bother calling Slaughters partners.
But the departure in August of corporate insurance partner Robert Chaplin to Skadden, Arps, Slate, Meagher & Flom has retriggered conversations around the firm’s widely admired brand, its culture and compensation model that peaked after star partner Murray Cox left the firm for Weil Gotshal & Manges in 2021.
Cox was by all accounts a major loss for the firm. But can the same be said of Chaplin, and is his departure the latest crack in the once impenetrable fortress of Slaughter and May?
And what action, if any, do the firm’s new leaders need to take to prevent further exits? The questions have a new significance. One person who knows the firm well said Slaughters is now “just a normal firm”, as opposed to being that “mysterious place that nobody leaves”.
Cox’s departure last February caused a stir on the market, and with good reason. Held up by firm leaders as a superstar who waved the Slaughters private equity flag, Murray’s exit threw up urgent questions on the firm’s direction.
Though his was the most notable, it was by no means the only exit in recent times. Last month, associate Di Yu joined White & Case as partner, Ben Kingsley, former fin-tech co-head retired after 22 years at the firm, while in 2020 corporate restructuring and insolvency partner Richard de Carle left to join Ashurst.
These exits have emboldened headhunters who are now more willing to approach Slaughters partners, according to one London recruiter, who predicts that departures will continue. The person conceded, however, that due to the “institutionalised” nature of the firms clients, it remains a challenge to place prospective Slaughters movers.
Nevertheless, among some commentators, the sense is that the firm no longer has the sheen of presitge that it once did, possibly making it less of a draw, and an easier firm to leave.
A person close to the firm went as far as to say that the “prestige is gone” and that it is difficult for the firm to “maintain its niche”, adding, “[Chaplin’s] exit is not catastrophic but it is symbolic that the firm isn’t on its A-game anymore”.
Chaplin a big loss?
But is it right to think that Chaplin’s loss is a harbinger of more departures and indicative of a ‘loss of prestige’?
Chaplin joined Slaughter and May in 1997 and was promoted to partner in 2006, according to his website profile. Notable deal work includes advising U.K. private jet business Signature Aviation on its £3.4 billion takeover by Global Infrastructure Partners and leading the team on a vaccine procurement agreement in Africa in 2021.
Top of the equity at Slaughters, Chaplin was described by a person with deep knowledge of the firm as somebody who was “great on insurance”, but “not the biggest loss” because he was not necessarily a huge rainmaker with an expansive client base. They added he was “not much of a leader internally” like current co-head of corporate and M&A Richard Smith, for example, and his exit is not as worrying as it would be if someone like rising star Harry Bacon were to leave, the person said.
Chaplin was a “lone wolf”, according to another person who knew him, while second person said Chaplin tended to be ”on the outside”, and that he “wasn’t in the club” of close-knit Slaughters partners.
Meanwhile, a major client of Chaplin’s, Pollen Street Capital, is set to remain with the firm, one of the people with knowledge of the move said. One partner in the ‘best friend’ network said that it was “incredible” that the firm has managed to maintain its client portfolio, particularly for the “strategic listed clients”.
“Maybe the clients love the way they are. It is absolutely the same client base,” they continued, emphasising that the clients staying put is evidence that the firm’s prestige is not diminishing.
The numbers appear to back this up. According to the latest adviser rankings, Slaughters tops the tables with 33 FTSE 100 clients, which is up from 29 in 10 years ago.
Rather than pulling back, the partner expects growth for the firm, particularly in the private equity space. Recent work with KKR and the changing private equity market means “the firm may become a private equity player again”.
Slaughters’ loss is Skadden’s gain?
For Skadden, people have indicated that the hire of Chaplin makes a good deal of sense, timely, even, as insurance heavyweight Robert Stirling prepares to retire, one person said.
The firm’s leaders are certainly convinced of Chaplin’s prowess.
In response to the points made in this piece, Skadden’s global head of financial institutions Todd Freed said in a statement: “We are extremely excited that Robert is joining us. He is one of the leading U.K. insurance M&A partners, with a 25-year track record of successfully advising clients.
“Robert’s arrival further strengthens and expands our go-to insurance M&A platform in the U.K. and Europe. As one of only a few global firms with a premier insurance practice focusing on transactional, finance and regulatory matters, Skadden offers an ideal global platform for Robert’s demonstrated skills and experience.”
Skadden’s global transactions head, Lorenzo Corte, added: “Last year, we were the number one firm for M&A in the U.K. Robert’s arrival will further enhance that practice, as well as expand the specialised insurance expertise that our blue chip clients in the sector rightly expect.”
Will leaders take action?
Whether Chaplin is a big loss or not, the inevitable questions that would help it guard against future poaching attempts are still being asked. For one, Chaplin’s exit has reinvigorated the discussion on Slaughters’ lockstep model. With monied public M&A firms like Weil and Skadden poking around, is the pure lockstep still fit for purpose?
“I don’t know how anyone can confront [the lockstep] there,” one person with knowledge of the firm said. “It creates such anxiety and annoyance.”
In November 2020, the firm decided against discussing any changes to its lockstep system. Slaughters operates a traditional lockstep system with a 10-year ladder to reach the top of the equity, which the most recent intel suggests is not far above the £2.5 million mark, well below what U.S.-led firms can offer. However, one person close to the firm said it was far higher than this.
The recruiter added that while the firm must be thinking about its lockstep structure, “whether they actually do something is another question”, noting that if more partners leave, it will be forced to address it.
Ultimately, the firm is very wedded to its lockstep model, they added, while another said moves may not be about the money but rather the culture. To this point, one person close to the firm conceded that the firm’s leaders could perhaps have done more to make Chaplin feel like he belongs.
“It signals that the glue in the firm is not quite as strong and secure as it used to be,” they said.
But the Slaughters’ loyal are quick to defend against such suggestions. A person in the firm’s ‘best friend’ network insisted that, despite the recent exit, “Slaughters will always be Slaughters”.
While it “may not be the firm from the 90s”, times have changed and it is no bad thing that the firm is changing, the person said, adding: “It’s not my perception that the firm’s prestige is over.”
“I don’t see any revolution within the firm. They might be different but they’re still there. They’re still Slaughters.”
Slaughter and May declined to comment.
With reporting by Krishnan Nair.