WPP Group v Adam & Eve, which will come to court in late November, won’t be the trial of the century (if it gets that far) but it will be a salutary lesson for breakaway agencies. If you’re going to nick data to set up your new agency, don’t get caught.
A&E (the agency prefers A+E for understandable reasons) is not nearly as accident-prone as it may sound. Launched about 18 months ago to great industry fanfare, it was essentially a top-slice of talents from WPP-owned Rainey Kelly Campbell Roalfe/Y&R. Its founding partners comprised agency chief James Murphy, creative chief Ben Priest and planning chief David Golding. To these was quickly added Jon Forsyth, Naked’s head of strategy.
A&E is a classic case of a successful start-up in a recession, reminiscent in some ways of BBH in 1982. It had no founding client when it opened its doors in January 2008, but soon found one in the £8m Daily Telegraph. To this it has added a remarkable number of other wins, including Phones4U, Williams F1, EMI and most recently the £20m John Lewis account. This year, it was ranked the AAR’s third most successful agency at winning pitches, and had a conversion rate of 60%. Pretty commendable by any standards.
And all the more remarkable given the running ulcer that has been its behind-the-scenes conflict with WPP. WPP alleges that Murphy & Co plundered the Rainey Kelly database, absconding with a rich harvest of client and agency information. They are also said (it seems almost superfluous to add) to have broken the terms of their gardening leave.
Whether because this is an open-and-shut case, or because no one really wants WPP chief executive Sir Martin Sorrell on their back for long, A&E fairly quickly decided to come to terms. It offered to pay into court half of the £500,000 being demanded. No deal. In fact I hear the price has now gone up to £750,000. Nor is there likely to be an “arrangement” whereby WPP takes its money in A&E stock. This is war to the knife.
Not something I’d like to sleep on at night.
UPDATE 4.11.09: The date of the hearing has been set for Monday, November 23rd. A&E is now understood to have paid £750,000 into court. The significance of paying a sum of money into court is that the defendant may limit his financial exposure should the case go against him. If the judge finds for the plaintiff, but awards below the sum paid in, costs are likely to be picked up by the plaintiff, not the defendant. No sign so far of WPP settling out of court. I hear Sir Martin wants a lot more than £750,000. But it’s up to the court to decide.