1 April saw the merger of two transatlantic heavyweights. Sarah Jackman talks to the real estate leads of newly formed Bryan Cave Leighton Paisner to find out what the deal means for the sector.
When London-based Berwin Leighton Paisner (BLP) integrated with US firm Bryan Cave on 1 April, they created Bryan Cave Leighton Paisner LLP (BCLP) – a global law firm with combined revenues of more than £660m.
There’s no doubt that figure is eye-catching, but what lies behind the integration for the real estate sector?
Shared ambitions
Being the “best in class” is the shared goal of Chris de Pury (pictured left) – global department managing partner real estate – and Andrew Auerbach (right) – global deputy department managing partner real estate.
Their strategy for achieving this draws on many strands – innovation, talent development and technology, to name a few – with an emphasis on accessing different client bases and increasing their global reach.
“BLP has always been very strong in certain aspects of private equity and private capital and with some of the more domestic property companies,” says de Pury. “It has tended to be relatively dominant in a slightly narrower area: city office buildings, retail and hotels, etc. We have had no market penetration at all geographically in the US, but we traditionally have not had a big corporate client base.
“You look at where Bryan Cave have come from – it gives us the penetration into that massive market. The starting point is to see how well we can cross-sell.”
It is a sentiment that Auerbach – based in the firm’s New York office – echoes: “It gives us the ability with the larger platform to be able to service our clients across the entire world.”
Global reach
It is easy to see how the combination will help to serve legacy BLP clients in the US and historical Bryan Cave clients in Europe. In particular, they cite one recent deal where a real estate private equity client based in the US was able to take advantage of the new capacity in Europe to help with the purchase of a £650m portfolio in the Netherlands – “the largest in Holland this year”, says Auerbach.
But that’s not where the ambition ends. “It allows a huge opportunity to create a global platform in some of the more emerging nations or the next wave of more mature jurisdictions,” says de Pury, mentioning their success already in acting on deals relating to Korean, Hong Kong Chinese, Taiwanese and mainland Chinese funds.
Client response
Response from clients to the combination has been overwhelmingly positive, in large part owing, Auerbach and de Pury think, to the fact their cultures are so similar. “It’s like looking in a mirror,” affirms Auerbach – a reassuring factor for clients.
In the departmental context, they believe that their respective legacy firms’ approach to focusing on real estate as a core sector, not simply running it as a support practice for the corporate group, stands out. Not that they are taking anything for granted. As de Pury suggests: “There are more real estate lawyers in their various manifestations globally than any other type of lawyer.”
Inevitably, conflicts do place some constraints on the type of clients that the firm is able to work for, but by and large Auerbach feels that one of the many things that “leaped off the page” when they did the pre-integration due diligence was that “there weren’t many conflicts”.
Competitor landscape
If the client outlook is positive, what about the competition? “There isn’t any!” de Pury laughs. But joking aside, the conversation turns to other high-profile names such as Baker McKenzie and Dentons. Yet de Pury and Auerbach – while acknowledging the strength of the competitor landscape – remain confident in their positioning.
In large part this is because of their ongoing focus on real estate as a core practice area. They point to their willingness to embrace all aspects of real estate: management, leasing, buying and selling, asset management, zoning, development and projects work – all the way through to tax and capital markets.
“A lot of other people won’t do that,” says de Pury. “We are a house that says we will do it all and that has held us in pretty good stead.”
This approach may be key if the market polarisation that de Pury predicts becomes a reality. He asserts the need for two things in real estate: local knowledge and international capability.
While he acknowledges that firms can still be “incredibly successful locally” without international capability, they are ultimately boutique. That is a factor he feels will fuel future consolidation in the legal industry, and underscores why this merger will prove to be a positive force.
Technology and innovation
Another area where they hope to embrace all the possibilities is in relation to tech and AI. One initiative is the recent partnering with Saïd Business School to look at the use of proptech and to identify how systems and processes in the real estate field can be speeded up. De Pury acknowledges the importance of data to this process and the need to engage the younger generation of real estate lawyers on proptech issues in order to drive innovation in a sector which he feels can be slow to adapt to technological change.
One area they have been quick to build on is pricing and service delivery planning. Auerbach identifies the practice economics group at legacy Bryan Cave as “a great add to the combination”. The unit, staffed both by former lawyers and non-lawyers, reviews projects and identifies the best way to staff and price them, which, he says, is “efficient and effective both for the client and for us”.
Future of real estate
Asked about the state of the market, Auerbach feels that “it’s unclear where we are in the current cycle”, but observes: “In the US, there is a lot of money sitting on the sidelines looking for good opportunities. The one thing I know for sure is – and if you go back in history – there will be a downturn at some point and then those people who are sitting on their money will take advantage of that and do business.”
De Pury echoes his bullishness: “I would love there to be a downturn because I think it would accelerate what we are trying to achieve.” He references BLP’s emergence from the 2008 financial crisis and its ability to attract quality staff and clients because “everybody gave up on real estate”. A further downturn, de Pury muses, would enable BCLP to accelerate “some of the thinking and opportunity available to us”.
In the immediate term, BCLP is supporting its vision for the future by taking 125,000 sq ft of new office space at Governors House, EC4. Although smaller than its current London home – Adelaide House – it offers “more net usable space” and will enable more collaborative working and flexibility. While remaining at his current New York offices, Auerbach hopes to mirror that thinking via a renovation and reduction in floor space to align with contemporary working practices.
Whatever the shape of the future BCLP offices, there is no doubting the enthusiasm of the real estate leads on both sides of the Atlantic to rise to the global challenges. It will be interesting to watch whether they achieve their stated aim over the next few years: to be the best in class.
Vital statistics
- Bryan Cave Leighton Paisner officially launched on 1 April 2018
- At launch the combined firm’s real estate department had 369 lawyers across 20 offices
- In the past two years, the firm has advised clients on real estate projects valued at approximately $75bn (£56bn)
- Legacy BLP has advised on three of the UK’s largest-ever single asset real estate deals: Walkie Talkie (£1.28bn), Cheesegrater (£1.15bn) and HSBC Tower (£1.17bn)
