Inside Perkins Coie’s London play: City veteran Ian Bagshaw on launching a US firm in a crowded market, attracting the best talent, and the rise of private capital

This week I'm joined by Ian Bagshaw, a veteran city private equity lawyer and now the driving force behind Perkins Kui's London office, which launched last year. Yes, it's Kui not Kui. Ian's curious band's top roles at Linknator's White & Case & Clifford Chance, and now he's taking on what he calls his last dance, building a next-generation law firm for the companies of tomorrow. We talk about what it takes to launch a US firm in a crowded London market. How Perkins is attracting the right type of talent, the rise of private capital, and why law firms need a startup mentality to stay relevant. Now Ian, look, before we get started, because I know the firm is pretty new to the London market, can we just make sure we're on the same page about the pronunciation of the firm? I'm going to let you go for it. Perkins Kui. Right, there you go. It is Perkins Kui, because we have some funny interpretations of Kui. Kui? Kui. The Kui one must be the most used, but just to be clear, it is Perkins Kui. It's in doubt. It's in doubt. There you go. If in doubt, just call it Perkins. I want to dive straight into Perkins launch in London. Why did you decide to essentially come out of retirement to spearhead the London launch? It was an opportunity. I couldn't turn down. Once I'd retired from the first career, I did a lot of interesting things. I was on a number of boards to work with investors raising capital. I'd always been on a busman's holiday from working with financial investors anyhow on a legal sense. Then I felt too young not to do something kind of key or to take one last challenge or last dance as I called it. Then I looked around the different opportunities and I felt law is a business I knew best and having been on boards for non-leaf businesses. It was a relatively light touch role compared to operating as a managing partner of an office. I felt like I wanted to operate on a day-to-day basis, not on an executive basis. Therefore, I felt like I should come back into law but do it in a different way for a different set of clients kind of largely. Using my accumulated experience and then having been outside of the industry for four years, I'd picked up lots of different ideas about how businesses would operate more efficiently, which I think we can bring back into the industry. I was rejuvenated. I wanted to do one last challenge and it was an offer that was too good to turn down. How did that come about then? Did you what were you contacted by the team? Not at all. I think we looked at different routes back into law whether it was setting up a law firm with independent funding, going back into a bigger firm, doing a kind of paste and repeat of white and case and think letters before that. I didn't want to do that stage. I realized that funding the law firm from a standalone basis was a really credible option. Ultimately, when we looked at it in the current market for growth equity clients in particular, it made more sense and was far more compelling client proposition to work with an established player from the US because our markets in Europe are really US dollar denominated, US technology driven. Therefore, to have that interaction with an established and highly credible US player, it kind of just made it a more compelling proposition for both clients and talent from a law firm perspective, unless you're compelling in a client experience perspective as well as providing a genuine talent experience, it's much harder to succeed. So when you look at it from a business viewpoint, the type of practice we wanted to build made much more sense working within a US firm and of all the US firms that kind of by looked at Perkins by foreign away had the kind of strongest legacy and desire to build something in Europe. So it was compelling proposition. Hence, it was something that was too good to turn down. Why now then for Perkins in London? Well, why not? London and Europe has huge legal markets. London is easily in the top five legal markets globally on a standalone basis. When you aggregate the European growth capital, seeing the number of entrepreneurs and the activity levels, it's comparable to the US geographically spread. There's no European version of Silicon Valley, but there are a lot of hotspots and focal points within Europe, which mean it was the right time to really focus their energies on that European scene. Historically, Perkins has built up a practice in the US, which has a large number of institutional tech clients. They weren't servicing those clients in Europe. That market obviously is going to grow dramatically over the next few years, because some of these clients are the biggest businesses in the world by value and relevance, really, in terms of a digital economy. And then we're a point of change. And sometimes coming in and looking at a strategic shift at a point of change gives you a real impetus, and that changes the energy transition movement to a clear digital economy, different types of business growth fueled by equity as opposed to leverage and equity, kind of maturing of the entrepreneur, ecosystem in Europe to really get on board with and learn from the lessons of the US entrepreneur, founder entrepreneur ecosystem for data driven businesses. So they had a lot of experience. They understood the types of issues those clients faced. They built a preeminent advisory position for institutional tech. So it was about taking that position, making it fit in Europe, and ideally adding a cutting edge so that we can make them proud in the US by building a complementary practice in Europe. So the business rationale was compelling. The timing was very good. Their level of interest was fantastic. So all the stars aligned. So the firm is known as being very tech client focused, isn't it? Is that going to be the main type of client that you're looking for in the European and UK market? I know that you're also looking at those private equity clients as well. Well, I think the core nature of the business is really to work with founders, the investors behind founders, to help them build what we consider to be the companies of tomorrow. They will be the focal point of the practice. So we really saw a big white space for that level of focus. A lot of the market in Europe, law firms are all things to all men, if you will. They're so big and have so many specialities and a lot of firms have a large number of excellent kind of quality specialities. But the kind of core focus is they want to be the leading law firm. Whereas what we wanted to do was work with founders and investors behind them to build the companies of tomorrow and deliver our institutional tech clients, the level of service over time, which is complementary to the level of service to get in the US. And if we could build those two things together, then we really would have a business that united private capital, gross capital and institutional tech. And that would look different than other law firms in Europe in terms of client base and would give us a differentiated focus, which would help us go with those founders and the investors on the journey from small to big because we've already done that journey, especially through the Seattle team with clients like Amazon and Microsoft. So it was really a compelling proposition, you know, looking at a number of other alternatives, it's a heads and shoulders really when you pull those pieces together. And having stepped away from law, that business analysis was like fundamental in terms of making the decision because you really wanted to ensure that, you know, the horse you pick when you're coming out of retirement, putting the team together, you know, is the one that's, you know, kind of best place to win the race. I suppose then so Perkins entered London, you know, middle of last year, 2024. I have to say it seems like then from a sort of tech sector perspective that, you know, the narrative that has been the very high growth tech companies in the UK and Europe are looking to move to the US, you know, either sort of list in the US, move their HQs to the US, you know, the established ones are lots of them are sort of delisting from the socket changes over here. What do you make then of that kind of trend? Well, it's definitely a trend. I think to understand it's origin, you know, there's a huge amount of geopolitics in the play with tech businesses because they often have a huge amount of sensitive data. Their business models are driven by data. So the reality is, as things stand, if you're looking for investment in your business as a founder, particularly at a B-Round or later stage, the European market has much lower liquidity and valuations in the US market. The US market is the leading kind of market. So a lot of those founders are looking to build an exorcist into the US to attract US dollar investors who are based in the US. This is a natural evolution. Secondly, there's a lot of entrepreneurial activity in Europe. You know, on our data, there is as many B-Rounds active in Europe as they're on the US. The size of those rounds is smaller. But the scale, the ambition of those founders is no different. Access to capital is one of the things that's slowing down the European market. So being able to introduce our US experience to those European founders allows us to play in that space. I think the last thing that really is driving the market is regulation. A lot of our regulations are trying to harmonize both in Europe and the UK with the US style. Whether you look at AI governance, how you manage data, wider anti-trust quotations. These worlds are not colliding with a clarity that founders feel gives them a lot of business certainty. So having the ability to understand those patterns predict certain types of behaviour so that founders can build their business against a stable understanding of a regulatory environment is a differentiator for us. So having that experience in the US and then bringing in someone like Miranda Cole in London to really help with that is designed to build out that service delivery for founders. So the big experience that we're bringing to bear is, is designed to improve the client experience and the talent experience. And if it doesn't do one or both, we don't do it. And that's why when you look at the market trends, the reason we went with Perkins as opposed to any other form was they had the experience in the US to deal with those issues. We saw them coming. And they've got experience to deal with many more issues that we see coming. But I'll just keep it to the headline issues for the purposes of our conversation. So once you can deliver that experience in a European way, you've got a differentiated position. And provide an enhanced client experience. And that's what, in my view, clients want. Now, I mean, you've been in the game a little while. You've been in worked at some mega firms. How have you approached kind of building out an office from scratch with Perkins? Well, we approached it in a way that we wanted to capture startup energy and startup mentality. When I left White and Case, I worked with a number of different founders, one of which was Joe Sedan, the founder of Zero Gravity, who developed an algorithm for relative intelligence to promote social mobility. And I could see with a small number of people who are agile in mind, tech enabled, how you could grow something quite quickly. And one of my big book, Burs Historically, was kind of law firms tended to get busy and hire people to deal with the business. So they increased the human capital count to deal with business. When I was at Chair of Zero Gravity, we improved our technology use to deal with business, not necessarily human capital headcount. We wanted to capture that startup mentality. Because when you're opening anything from scratch, you're going to face a lot of headwinds. Particularly when you're trying to do it to compete with firms that are well established, have embedded infrastructure and market reputations. So lots of difficult business to come up from scratch is much easier, essentially, from a client experience perspective to potentially join an established player in the short term. But because our view was in the medium and long term, if we built something properly, then we would enhance the client experience and that would give us the differentiated opening. So the startup mentality, fundamental, the second point was, what does that look like in practice, I suppose, is the question is, well, I think it looks, as I said, kind of from experience, we're using technology more and we're keeping people agile so that they're doing a lot more work when compared to their kind of peer in an established law firm, which is different. So they're doing different levels of work, different approaches. So in London, we don't have a huge amount of business professional support. A lot of our junior talent takes on the role of putting pitch docs together, managing fees, kind of running processes using tech-enabled processes for wider shop for client experience. So all those things we can bring to bear when you have a small team, kind of with high ambition, you find a way. So very much involving the more junior talent in the business side of things as well. Everyone's involved because we wanted a horizontal kind of structure, not necessarily a kind of legal pyramid, because we wanted to empower as many people in the team to own the development of the business as possible, which is what you do in a normal business, in a law firm that's institutionalized as a hierarchy of power. Everyone's got a role, you fit into that pyramid. We wanted to have a more open approach to get the business off the ground. Inevitably as it matures, it will look kind of more like an institutional office, but ultimately, hopefully, we'll have empowered sufficient number of people that there'll be a lot of owners of different initiatives within the business at all levels. So we get different outcomes. We get a lot of reverse mentoring from junior talent. We got increased use of technology to improve client service, which is quite difficult if you're just repeating what you've done for 10 years. You can get disrupted terms of how you deliver client service quite easily. If you're working with a 22-year-old elite graduate who says why you're doing this, why don't you use this or save you a lot of time, be a lot quicker, and the outcomes will be much clearer. So creating an open environment where everyone's involved and everyone sees it as their primary deliverable to make the business better. That's the culture we wanted. That's what I describe as start-up culture. The second point was we wanted to be in the office. It may not be politically correct within law to talk about working in the office as much as possible, but as a start-up, we wanted to get people into the office. So we were very careful in relation to both where we chose our office, what kind of space it was, and how we kitted it out. Because we wanted to create like a home office in work. Because we wanted a lot of energy and junior talent in the business. And London's a hard place for junior talent to get the foot on the housing ladder. So we wanted to create an environment where they come into work and find it a collaborative and learning experience. Because there's no replacement for physical interaction. When you're trying to collaborate on an accelerated basis to build something up. So we had to book the trend of work from home, particularly in the London market of being in the office two to three days a week, et cetera, et cetera. We wanted people to be in as much as practicable. And how have the associates responded to that? Really well, I think we've got fantastic in office attendance. So yeah, really well. And it reinforces my view that people want to learn, people want to grow, and if you provide a stimulating environment in which they can both learn and grow and feel included, they turn up every day physically. So we found it kind of very straightforward. So tell me about kind of compensation then, if you can again, because I haven't seen any sort of figures coming out yet for-- We pay proper skills. We pay proper skill. We pay kind of top-brates New York for our associate talent. And our partners are really well compensated. But we don't publish that because in our mind, that's an outcome. We want you to come into the business. We want you to be the best version of yourself. And we also want you to own the strategy, understand where we're going, and develop an advisory mindset, and skill set that fits the clients that we are working towards acting for. And some of them don't actually exist in the form we want to act for them yet, which is why our strapline is along for the journey, working with the founders and investors to build the companies of tomorrow. So. So we tried to design our talent experience to create like the lawyer of tomorrow, the council of tomorrow. So we could say, look, this is what people will going to need in the next five years. We'll trade you to look like what we think they're going to need because these are the clients we think will have in the next five years. So when you're looking in that space, you just need to plan further ahead. So as I said, to you at the start, all the client experience, talent experience, happy clients, happy people, big wins. And when what's the vision then for Perkins in London and Europe in maybe sort of 10 year vision? Well, it's a long time. We kind of have two phases. In just a few, we have our startup phase, which we're in now, and that will go through maybe the next two to three years. And then we have a scale of phase, once we've established the business through the startup phase, you know, the vision is we act for the clients that, you know, kind of we want to, you know, support and we believe will be, you know, kind of market leaders, data driven businesses, essentially the companies of tomorrow. That's the long term vision that we're defined by those companies. In terms of taking a step back and looking at that as our north star, you know, we want a client base of tech enabled businesses in five to 10 years. In terms of bringing that back, how do we build that while we target the founders and investors who are building those companies today? And we work with them along the journey so that, you know, when they are the unicorn or the desicorn or even bigger, where their advisor of choice. Now, if we achieve that, that'll be the outcome that's justified all the effort. And, you know, in some respects, law firms is more a continuous process of becoming. There is no destination, you know, as my, you know, grant, it's like painting a bridge, you know, once you get to one end, you're going to start again because, you know, kind of, you just keep painting, you know, the bridge and the continuous process of becoming means we've got to enjoy the journey, but we're also going to see the long term outcomes we want. And we've got to build backwards from that. Now, I'm going to switch gears a bit if, if I can, and one of the arguments that's been made is that, you know, certainly since the financial crisis, a lot of the big law firms have become very heavily reliant on a handful of key private capital clients. That has meant that those relationships have become ever more personal, you know, linked to rain makers, deal makers, and less institutional. Therefore, it's made them much more fragile as businesses because one or two of those, you know, key partners leaves more, loisly with them. And then the firms, you know, at risk of, you know, quite serious harm from that. What's your take on on that? And just generally how kind of private capital that seems to have just taken over a big law over the past decade or so. Well, I think private capital always drove law firms, you know, because most law firms didn't have a lot of public capital clients. So I think this is, you know, any different private capital is always driven the bus. You know, in London as a, you know, kind of center of legal excellence, there were historically a number of firms that, you know, had public capital practices, but they were small, you know, and they were distinguished firms who built that practice. The rest of the law firms were driven, you know, largely by private capital. So private capital driving the bus is not a new thing. I think secondly, and I'll come on to an interesting feature private capital next, but secondly, law firms historically have not institutionalized clients well. And this has led them to, you know, kind of suffer when a client lead leaves, you know, that the client decides not to stay or not to stay wholly with the firm and will go with the client lead or go wholly with the client lead. So it creates a dynamic market. And law firms, you know, kind of have tried, but have not necessarily succeeded in institutionalizing client relationships in the same way that accounts and see firms have, for example. So I think there's some features within institutional firms which has meant this has become a fertile breeding ground for origination driven partners to move. And then you add in that dynamic of US firm, non-US firm, you know, the environment, the compensation, the ambition, the access to the US market, you know, 15 years ago, there was a lot of risk attached to moving from a non-US firm to US firm. There isn't that level of risk anymore. In fact, it could actually be more of an accelerant if you've got a private capital practice than not. And even if you've got a public capital practice, some of the US firms now are leading players in public capital. So so the risk of moving to US firm, non-US firm is as gone. In fact, it's often more positive than a negative if you move to the right firm. So when you lay all those D things together, plus the inability of law firms to control these situations, then you have created a fertile ground for partners with practices, you know, to, you know, to kind of have loud voices within organizations, particularly at moments of client stress because you're going back to law firms, you know, client stress is a bad client experience and bad client experience is bad for business. So you thought we're going to be a fourth. Now, the interesting thing when you talk about private capital is when you look at kind of investment capital coming into the industry because investment capital coming into the industry will want a stable client base and a stable partner base. So the big challenge of invested private capital coming into law firms is to provide a more business solution to slow down this kind of, you know, proprietorship over clients because you leave the relationship. And that's going to be one of the interesting features of the next decade as more third party capital looks to invest in law firms because they're going to want to fix a few things. One is law firms taking all the money out of a business every year rather than investing it. Second, you know, kind of institutionalizing clients will go to value because in order to, you know, kind of exit a private capital deal, you'll inevitably have to make three times your money in five to seven years uses standard metrics. So you won't want to lose many big clients or many big hitting partners. So you going to have to change the lock in culture at the firm both for clients and for talent. So, you know, this kind of fertile environment is probably one of the biggest challenges for private capital investment in law firms and perhaps the only private capital coming in from the outside can really make the changes in these organizations because lawyers, policing lawyers, it hasn't proven to be so effective, particularly, you know, when you look at the European market, which is the one I know best, you know. So it's become a very fertile market for lift and shift practices to support partner transitioning to new firms. You know, clients have always been sticky. They have a good partner lead and a good team. That lead and team moves. Then they tend to transition some work with that partner. That partner gets a chance. They take it more work transitions. They don't always lift and shift everything to follow a lead partner. But, you know, the way it's reported makes it seem so binary because it's all, you know, it's all gone a bit too Hollywood in relation to compensation packages. The reporting is not very business like it. It just feels like we're descending into lots of romance, politics, kind of money involved. Not that sexy, but it's a great business. If you've got the clients and the talent in the right place. So I think these environments have always been there. And I think the influx of private capital in the industry has to slow that down to create an investable climate that will justify the returns that these investors need to put the money in the first place. So that's the real challenge that private capital has in investing in law firms by definition. So I wanted you to take your private capital in and be right in time. No, so to the right. So you've got exactly those two sort of impacts there. And you look at some of the investment that law firms themselves have been making and bringing on board private equity focused talent. So, you know, Sidley Austin has been doing that quite aggressively in London, hasn't it over the past 12 months. That's multi-multimillions of investment, isn't it? That they now need to recoup over the next three, four, five years or whatever through all the additional client revenue. That in itself makes the whole landscape so much more ruthless and aggressive, doesn't it? And then, as you say, private equity, other forms of private capital actually investing into law firms, you know, that's the big trend in accounting, isn't it, at the moment, in the UK? What do you think that that is a proper threat to kind of, you know, let's say top 50 law firms in the UK? You know, do you think private equity would be interested in investing into them? Yes. And I think in terms of the accountancy trends, you know, before accountants, there was other, you know, professional service partnerships consultancies, et cetera, even, you know, you know, boutique investment banks. So, professional services businesses are attractive because they're often high margin. and potential fast growth if you get the right people. So they're compelling in propositions. The question is, was the exit ultimately, to get that exit, you're gonna have to kind of stabilize a lot of things that are not so stable when they're kind of owned in a traditional partnership structure. But ultimately, the investment in partners, going through stages usually, the first two years, it's a betting in phase, people reach their potential, kind of somewhere between kind of year two and year four, in my experience, which is why you've got this concept of lock-ins or guarantees to let people feel comfortable on compensation until they reach their potential. The reality is, they reach the benefit for the firm over a much longer period. The firm's re-rewards from partners who are very stable and very long-term. And the rewards are both financial and kind of an emotional. Those partners become kind of an established partner and the firm, they can bring different things to the table for that firm outside of financial contribution. But financial contribution is what's normally the first gating item to acceptance. So kind of in terms of the ruthlessness as you talk about, it's inevitable. It happens everywhere. If you're increasingly going to a transfer market, kind of pay people big money to move, you often expect big outcomes. And if people fail to deliver, then you've got to deal with that. And there are some cases now where partners are coming in at big name partners coming in and they're going out within a relatively short period of time. Well, there's clearly like cultural issues. There's kind of non-performance issues generally, but primarily financial. Because intuitively, you're just initially on financial and then kind of on a more longer term value play on a more balanced scorecard. So the industry has a lot to learn about acquiring and integrating talent. So there's a methodology to building a business by going into the transfer market. And I think it's different than nurturing talent over a long period of time. So again, as law firms are maturing into businesses from being kind of large institutional partnerships, some of these issues will need to get dealt with to attract private capital. The accountant businesses tend to be more business-like. The pay of the account is less. The geographic spread is greater, the bigger businesses. So therefore they have to repeat, the repeat more repeatedly. They have a longer established institutionalized client programs. They rotate lead partners. They do lots of things where the clients defer them, the partner serves the client for a tenure. Law firms often have not really addressed that issue in such a way. Because it's been very difficult for them to do that. And some firms have, and some firms haven't. Some firms have successfully done it historically, but find it difficult now. Firms have historically not done it, and are finding it much easier now. So it goes to the partnership dynamic and the culture of the firm. But to be investable, you'll need to show, I think, stable talent and stable clients with a business plan for growth. And a lot of law firms haven't yet gone through the rigor of that. And that was why a lot of the US firms came coming into the market in London and Europe over the last 20 years have been so successful. They do have very clear business-organized plans and focuses. And their clients, because they're in the US market, as a starting point, they've got a competitive advantage because what happens in the US first comes to Europe second. And their client relationships and the way the business is run, is just more efficient. Use of capital, both human and financial. So they've had a competitive advantage to come in. And the markets now catching up. The UK firms, the UK had quartered firms and European firms are doing lots of good moves to balance. So it's not one way street anymore in relation to partner moves. It's just a very dynamic and interesting time. But-- It is, for sure. Biggie is a big deal. It's big deal. It will be someone next year and last year it was poor. So this is a trend that will just keep coming. In terms of that investment opportunity then for the private equity firms, you touch on it there. Surely the IPO market is essentially closed now to law firms after the 5 or 6th that have listed over the past decade or so. You know, I don't know about that. If I'm honest, I kind of think the types of law firms differ would come to market. You can't compare different forms of businesses just because of the services they provide. Some of them are very different features. I think looking back, there's lots of very successful businesses that have become fast growth businesses and of IPO. They've got the characteristics of an IPOable business. So I think if you're an investor, you want to come in and build a law firm to IPO it. You have to get the characteristics of a successful IPO business. Not necessarily the characteristics as a successful law firm that pays its profits out to its partners at year end and then starts again. And the interesting thing with the accountants, because they're going to go first. But the accounting market's also interesting. You've got businesses where established players are buying in to an established accounts firm. And you've got some new startup businesses like Unity where private capital has put a large amount of money aside to build a startup from scratch. So you're having this kind of debate, which is what's better. Something built from scratch, a new build business or taken established business and remodel it. So you just got to pick which methodology you want to apply. But I think that the dynamism in the market is going to increase. I don't think it's going to decrease. I don't think we've seen, you know, kind of the last 10 years as something when we look back in 10 years and say, well, that was a dynamic period. We're now back to sleepy hollow in law. I kind of feel like this is just a start of a dynamic period because you're going to start getting tech disruption into businesses, you know, clear report their spring box business. You'll start seeing other law firms trying to insource, you know, kind of technology solutions from people who are not lawyers or training law firms to, you know, to basically accelerate that. You'll start seeing startups. You know, there's amazing startups in law, but they've done it on a cash flow driven basis. So if you can get investment and drive that to accelerated growth, you know, how much quicker would Quinnie Manual have grown? You know, if they want to give in John Quinn 400 million to build any manual in press for time. So I'm just going to finish with just a couple of, a few sort of quick fire ones if I can. OK. OK, so just get your can of your thinking cap on quickly. So first one, I just, what advice would you give to junior lawyers then starting out today? Enjoy the journey. Enjoy the journey. Love it. Is there a one firm in particular that you admire? Other than Perkins, obviously. And no, I mean, I have my lots of firms and lots of lots of people for what they've done and achieved. You know, if you look at Quinnie Manual who built his business on suing investment banks, it took a contrarian idea that we're going to sue investment banks when everyone else wouldn't really do that and built a business model from that, which is we want to lead in litigation practices, you know, in the world. That's a genuine story of entrepreneurship in any industry, you know, kind of through disruptive vision. And so I kind of feel like there's lots of left field, right field, you know, kind of examples. I'm going to finish with this one for you. What separates a good lawyer from a great one, you think? Serendipity. Oh, I like that. Very sort of thought provoking. The hard you practice the look you get. There you go. But ultimately, but ultimately, you know, great ones sometimes meet the right client at the right time and that client takes them on a journey. And so hence, there's a lot of Serendipity and a lot of perspiration following that Serendipitous moment. But I suppose you've always got to buy the ticket. How many, you know? Well, you win the raffle if you don't have a ticket. Right. Cool. There's a ton of things I'd love to chat with you in. But anyway, we are done for time. So thanks very much for joining. Thank you.