A couple of weeks ago, the two volume history of the firm of Allen & Overy arrived FedEx from Europe. I had just recently learned that the books existed, and the firm was kind enough to send me them when I expressed interest. When they arrived, they were not remotely what I had expected.
First of all, the two books could not be more different, in format and typography, tone of voice, subject matter and organization, or even print quality (uniformly high, I hasten to add, but not remotely similar otherwise).
Volume 1 (Allen & Overy The Firm 1930 – 1998, Allen & Overy, London, 1999), written by Humphrey Keenlyside, an alumnus of A&O, covers the years from the founding of the firm in 1930 through 1998, and resembles a classic law firm history with a greyish-silver cover, thick and heavy stock, and a standard chronological organization.
Volume 2 (A&O at 75, Allen & Overy, London, 2005), is a different beast entirely. In format it’s "landscape" not "portrait;" it’s softbound not hardbound; it’s printed in full, glorious, high-gloss color, with abstract commissioned drawings liberally sprinkled throughout; it covers no particular chronological period although it brings the story forward in time to 2005 (the firm’s 75th Anniversary); and it’s organized geographically, by office, rather than chronologically or by practice area or client.
As Guy Beringer puts it in his foreword, "Rather than simply update the existing history of Allen & Overy, I thought it would be appropriate to focus on the single most important change that has happened to the firm — our internationalisation."
Together, the two volumes tell what I believe is a story worth summarizing here in the pages of "Adam Smith, Esq.," for what it has to say about fortuity and foresight, luck and preparedness, vision and blinkered sight, and building on strength and recovering from disasters.
The history is voluminous enough that I will report it in three installments. Here is the first.
A&O opened its doors on a remarkably inauspicious day, January 1, 1930, at the start of what we now know was to be the Great Depression. And although it seems alien to our current thinking, recall that Europe had still not psychically or physically recovered from World War I; the Continent, in particular, was still rebuilding. Fortunately for A&O, George Allen and Tom Overy came from their previous firm, Roney & Co.—which they left because they were generating a large portion of the billings and receiving a small portion of the compensation—with a number of good clients that would get the firm on its feet.
Conditions were, by today’s lights, primitive. The lift to the office "wheezed," heat, such as it was, came from coal, and transporting client files from Roney to the new global headquarters of A&O was accomplished in an overstuffed cab with Allen and Overy doing all they could to keep the piles from careening off onto the pavement. (One imagines the same transfer of documents could be accomplished today through one or two zipped email attachments surreptitiously to oneself @googlemail.com.)
The history calls George and Tom "The Odd Couple," and indeed they seem to have been. Allen "was exceptionally handsome, a dark, somber face offset by strong piercing eyes" and with an, austere, precise, scrupulously tidy military bearing. Overy, by contrast, was all of 5’3" "and, if anything, gave the impression of being smaller, with the sort of face that scares small children." In the first of several remarkably candid notes, the history states flatly that "it is quite possible that they were not even particularly good friends." But share a commitment to the development of the firm they did.
The firm’s first big break came when King Edward VIII abdicated the throne in December 1936 in order to marry Wallis Simpson; George Allen was the King’s solicitor and arguably his key advisor during the crisis, spending the climactic ten days in almost continual close touch with his royal client. Allen’s gift for succinctness showed itself at a critical moment when the King, on the phone with Wallis Simpson (who was in France), covered the phone with his hand and asked Allen what he should say to summarize the situation to her. Allen wrote, and the King relayed, "The only conditions on which I can stay here are if I renounce you for all time."
Although sensationally high-profile matters such as that undoubtedly helped the firm’s profile, it’s worth pausing for a moment to note that all is relative compared to the A&O we are familiar with today.
After proclaiming that "the firm picked up quickly once the war [WWII] finished," it immediately follows with numbers which would be less than underwhelming today: Total revenue for the year 1947 was £100,000, and Allen and Overy each earned nearly £12,000, which, we are reassured, was "the equivalent of £275,000 in today’s money."
But if the firm was doing well, something I can only describe as human tragedy was in the offing. In the summer of 1951, George Allen and Tom Overy decided to consult with their accountants to determine what they thought would be a simple matter: The terms upon which they would retire.
The key issue was how the ongoing partnership would be able to repay the capital that Allen and Overy had contributed, together with the additional goodwill generated as a return on their investment. The sticking point came to be how long the partnership would have to make good on the repayment. The accountant initially suggested at three-year period, which Allen endorsed on the ground that even young partners were enjoying a high income by virtue of being partners. Overy, on the other hand, favored giving the young partners longer to meet their sizable obligation.
Time was not on their side.
The partnership deed was due to be renewed January 1, 1952, and relations between Allen and Overy "became increasingly acrimonious," to the point that they were communicating only by written notes. On December 31, 1951, they finally agreed on terms. But the story was not ended.
Early in 1952, as the junior partners began to realize the burden they had unwittingly assumed, they began lobbying to extend the repayment period from 3 years to 7. Overy sympathized and took their side, but Allen "detected a conspiracy" and threatened to resign from the partnership altogether. He even refused to attend a celebratory dinner with the partnership planned for the occasion of his knighthood by Queen Elizabeth in June 1952. In June 1953 he formally retired from the firm.
George Allen in a formal portrait
And alas, the strain Overy had gone through began to take its toll as the decade continued, and "he began behaving strangely and unpredictably." So long as this could be cabined within the four walls of the firm, it was manageable if awkward. But the last straw was when he appeared unannounced one day at the offices of Morgan Grenfell (a client) demanding to be taken to lunch. A senior A&O partner was summoned to pick him up, and shortly afterwards he would be committed.
As the book candidly puts it, "It is not clear whether Tom Overy suffered a full-blown nervous breakdown or whether it was a temporary mental illness," but in November 1960 he was hospitalized and never again worked at the firm. He died 13 years later at 80.
Tom Overy (undated photo)
In the early 1960’s Allen & Overy seemed to be humming. A 1962 book, Anatomy of Britain, identified it as one of the top four firms in the City, the other three being Linklaters & Paines, Slaughter and May, and Freshfields. Customs of that time—well within the lifetime of many followers of "Adam Smith, Esq."—are as quaint and beguiling as they are unimaginable today. For example, following the annual Christmas partners’ lunch, all would proceed to Locks the Hatters in St James’s Street to be sized and fitted for a new bowler for the coming year.
At the offices, each partner—in the absence of his own secretary, which of course all had—could buzz down to the general office where a light would blink next to his nameplate, prompting someone to rush to his office. We are told that "if it was 4:00 pm and it was Tony Overy’s buzzer going, the office boys would know the order that was coming: a packet of DuMaurier cigarettes from the tobacconist opposite. Years later, the instruction would more probably be for a visit to the off-licence." [The "off-licence" is a liquor store, and Tony was Tom’s son. He had been made partner as of right under the original 1930 articles of partnership, which entitled George and Tom each to anoint one son as a partner.]
After Overy’s departure, the role of "senior partner" was assumed by a triumvirate of Godfrey Morley, Willie Martin, and Jim Thomson, but "in reality it was Thomson who called the shots." By all accounts he was a superb lawyer—some have said his reputation was as the finest commercial lawyer in the City—but it was his drive and ambition that gave him the impact he would have.
"He was fiercely ambitious, not just for himself but also for the firm. He made it his business to know everything that was going on. No one, from senior partners down, escaped his attention. He would call up files opened in the name of other partners without telling the partner responsible. Whenever he passed anyone in the corridor he would shoot them a question about how a particular matter was being dealt with."
Thomson’s leadership of A&O came at a time when the profession was undergoing a sea change whose repercussions are still being felt today: It was no longer possible or desirable to be a generalist. An update to The Anatomy of Britain published in 1965 read:
"’The new kind of lawyer is a more adaptable and positive person; he is staking his claim in the new corporate world, and prepared to deal with any business, including tax, pensions, and hire purchase, that his client might have.’ Substitute the words ‘derivatives,’ ‘securitization,’ and ‘mergers’ for those last three examples and that same sentence could just as easily be written today."
While the firm had made great strides during the ’60’s, several large shocks hit it as the ’70’s began. In the spring of 1970 John New, one of the new generation of leading lights, died of a heart attack at age 42. He was the first at A&O to pursue the new field of intellectual property (and to realize its coming centrality to a sophisticated practice), and his death "left a huge hole." In 1971, Robin Broadley, a partner since 1964, left to go to Barings. He had been indispensable in developing the firm’s banking work.
But the worst happened in the spring of 1971. Thomson was in South Africa on business with a client. On July 8, 1971, the car he was riding in to the airport for the return flight to London was forced off the road by a swerving driver; it hit a barrier and flipped over. Thomson died on the way to the hospital. Each of the other three people in the car was seriously injured, but ultimately survived.
The firm was "devastated. Everyone went into a state of shock and a numbness spread throughout. Allen & Overy revolved around Jim Thomson." As the chairman of a major bank client put it: "That will be the end of Allen & Overy."
Jim Thomson (undated photo)
To be continued….