City firm sets up ‘cheaper’ subsidiary for hedge fund clients

Usher: Risk of costs contamination

City law firm FieldFisher has set up a separate practice with lower overheads to attract hedge fund clients who could not afford its fees.

Cummings Fisher is a standalone law firm and a subsidiary of FieldFisher that is the latest “alternative solution” created by the firm.

Field Fisher bought Cummings Law – set up in 2003 by Claire Cummings – last year, and has now relaunched it with two additional partners, Ron Feldman (formerly a partner at MJ Hudson) leading the derivatives practice and James Tinworth, who was previously head of hedge funds at Stephenson Harwood, heading the funds practice.

It has also recruited two associates to join the two who moved over with Ms Cummings.

Cummings Fisher has moved into an office in Mayfair, at the heart of London and the UK’s hedge fund and alternative investment management district.

Fieldfisher will support the firm with what Guy Usher, its head of financial markets and products, told Legal Futures was “a light infrastructure that is commensurate with the rates that we think the clients want to pay for the services”.

Asked why Fieldfisher did not just recruit the partners and set up the practice itself, Mr Usher explained that that many hedge funds struggled to pay the fees charged by large City firms, largely because of the their costs base.

Mr Usher said Fieldfisher’s experience showed that setting up the practice within its infrastructure led to “costs contamination”.

“So we bought Cummings Law last year with this project in mind… We’ve put more into it but not the ‘whole’ Fieldfisher.”

Cummings Fisher will be able to draw on Fieldfisher’s expertise where required – Mr Usher said “we are loaning a tax partner as and when they need it”, on a pay-as-you-go basis – as well as the network of Fieldfisher offices in Europe.

This filled a gap that existed between hedge funds’ current choice of either big City firms or sole practitioner businesses like Cummings Law used to be.

Another benefit would be to help Fieldfisher navigate potential commercial conflicts where it is on a bank’s panel but not advising on particular trading documents, but is instructed by the fund on the other side.

At the moment it seeks conflict waivers, which Mr Usher indicated was a cumbersome process, but the initial reaction from banks to the work being done by a separate firm with a clear firewall has been “positive”, he said.

He added that the new venture also combined with Fieldfisher’s other innovations, “complex advisory and cost-efficient document handling” using its service centre in Belfast, which already has 30 trading document negotiators, and data extraction solutions using its Condor alternative legal solutions platform.

Mr Usher said the plan has been “to create a layer of revenue from our clients for alternative solutions”.

While the platform created for Cummings Fisher could be replicated if the right opportunity came along – “It’s all about giving clients choice” – he said Fieldfisher was not formally offering it as a service.

A third benefit, as a result of Mr Feldman’s recruitment, was that Cummings Fisher has expanded its offering to buy-side clients in the alternative investment sector.

Ms Cummings, managing partner of Cummings Fisher, said: “We are delighted to be backed by a firm which provides us with access to a broad platform of comprehensive legal expertise, professional support resources and industry memberships, to which we can add specialist knowledge of alternative investments and our own recognised thought leadership and events.”

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