Editor: It has been a year since we last spoke. Would you remind our readers of what was behind the strategic decision of the firm to open a London office in 2003? What was the firm trying to accomplish with this step?
Keffer: For some time we have been aware that many of the U.S. clients of the firm are becoming part of the global economy. We concluded, accordingly, that if we were to continue to serve the client group outside the U.S. we had to have a presence abroad. Among other things, we believed, such a step would demonstrate to our clients the firm's commitment to serve their needs. We thought, too, that London was the most obvious location to begin the strategy, and we decided to open an office there that focused on areas that resonated with our clients and with which we could add value in serving their needs. In 2003 the London office was opened with capability in M&A, private equity, finance and international arbitration. Over the years, these are the areas where we have focused our growth.
Editor: Please give us an overview of the London office and its practice.
Keffer: At the moment the office consists of 25 lawyers, all but three of whom are qualified to practice English law. We decided early on that the only way in which we could add value to our clients was to have English law practitioners in place, as well as people who were experienced in handling major transactions in the UK and throughout Europe. This has continued to influence our platform for growth, and we work hard to attract the best English-qualified lawyers to the office. We have also added a few legal disciplines to complement the ones with which we started the office, including tax employment, executive compensation and acquisition finance.
With respect to clients, it is an interesting mix of longstanding King & Spalding clients and clients that the London office has been able to develop on its own, both U.S. and international. To be sure, we provide a service to the firm's existing clients, but we are not a typical referral office living off work sent in from the firm's U.S. offices. Much of what we do has been generated from the London office.
Editor: What are the major developments that have taken place at the London office over the past year?
Keffer: Over the pat 12 months the practice of our international arbitration group has grown significantly. We have been able to attract a number of important cases under a variety of bilateral investment treaties that pit our clients against governments in Eastern Europe. This is an area of law where the firm is rather unique. King & Spalding handles more bilateral investment treaty cases than any other law firm in the world. Our reputation is such that we have been able to secure mandates from our clients to bring this type of case against a variety of governments in Eastern Europe.
Editor: I understand that the firm has opened a Frankfurt office during the past year. What is the strategy here?
Keffer: The Frankfurt office is our fourth new office in the past year and our ninth worldwide location. We believed that it was time for the firm to have a presence in Germany, Europe's largest economy, if we were to continue to serve clients in all of the areas they expected. The initial purpose of the office is to extend the firm's real estate capital markets capacity in Europe and the UK, and to this end we have attracted a strong team of real estate capital markets lawyers who act for German pension funds. Growth in the area of real estate capital markets constitutes a key strategy for the firm.
Editor: How does the London office fit into the firm's Frankfurt strategy?
Keffer: In recent years there has been a tremendous surge of activity in the high-end property market in Europe, and that includes the UK. This derives from a considerable migration of property stock into international investment vehicles, and London is one of the principal centers for this type of activity. The synergies here are natural.
We intend to have a real estate capital markets practice in London as well as Frankfurt, and we are currently in search of the right people. We think that having two teams - one in London and the other in Frankfurt - in this area gives us a wonderful platform from which to practice throughout Europe. At the moment, the London office provides support for our Frankfurt colleagues on English law issues, and they provide expertise with respect to German law for our English and international clients. We expect this collaboration to continue to provide benefits to both sides of the equation.
Editor: And new offices in Dubai and Riyadh? The firm's Middle East strategy appears to be taking off.
Keffer: The Middle East is a region where the firm has been active for at least the past 20 years. When we made the decision to open offices in Dubai and Riyadh this year we knew we would hit the ground running, but we have managed to exceed our expectations. Today we are the largest U.S. law firm in the Middle East in terms of numbers of lawyers, and I should add that, in addition to Dubai and Riyadh, we have a license to operate in Abu Dhabi as well.
These offices serve clients that are located in the region, and the Riyadh office in particular provides us with the ability to provide a high level of service to Saudi clients and on Saudi-related transactions. The key practice areas are private equity, conventional finance, including project finance, Islamic finance and energy projects. This past February the firm was able to represent The National Titanium Dioxide Company, based in Jeddah, Saudi Arabia, in its $1.2 billion acquisition of Lyondell Chemical Company's global Millennium Inorganic Chemicals business.
The lawyers residing in these offices are mostly native Arab speakers who have received at least some of their legal education in Europe or the U.S. There are a few American lawyers who have relocated to the region.
Editor: A year ago you spoke to us about what globalization has meant for King & Spalding and, in particular, for the London office. Would you update your thoughts on this for us?
Keffer: The pace of globalization has certainly not slowed down. We believe that the firm's geographic footprint needs to be somewhat broader if we are to continue to be able to serve our clients effectively in new markets. Markets outside the U.S. receive an increasing degree of attention as part of this process, and I point to the fact that in just the past 12 months we have opened an office in Frankfurt and three offices in the Middle East as evidence of how seriously we take this initiative. This is really quite extraordinary, considering that King & Spalding did not open its first overseas office until 2003. I think the lesson here is that we will take a long, hard look at any place where our clients indicate we should be in order to serve them.
Editor: Is the London office sort of an oversight point for these emerging offices overseas?
Keffer: We provide logistical and administrative support for the new offices, as well as moral support. We have obviously learned a number of lessons along the way, and we share our best practices. Each of these offices is in a market that is very different from the London market, however, and we do not attempt to manage them from London. Each office has its own managing partner structure, and while we collaborate and share ideas there is a certain degree of office autonomy that is commensurate with the unique market that office service serves.
Editor: In connection with this collaboration, do you share personnel among the various offices when a project requires specialized expertise?
Keffer: Absolutely. King & Spalding operates as a single firm, not office by office. We are in a position to call upon the expertise, and personnel, of all of the firm's offices, wherever located, and, in turn, our lawyers are on call to support other offices in meeting their needs. It is a rare week in London that we do not have lawyers from our other offices executing transactions on our premises and drawing upon all of our resources.
Editor: What about the future? Where do you see the London office in, say, five years?
Keffer: In light of the growth we have seen over the past five years, I don't want to speculate on a particular number. Certainly we are going to grow, and that growth will be reflected in an increasing number of practitioners. We will continue to focus on practice areas where we believe we can provide value to our clients, and we are already looking at areas where we have not been in but which have good synergies with what is underway here. Real estate and IP are primary examples. As always, if our clients have a particular need, we will take whatever steps are necessary to meet that need, including the development of the requisite expertise.
Editor: How about additional offices?
Keffer: I would not be too surprised if the firm did not open an office in the Far East in the not too distant future.