Category Archives: Uncategorized

Schoenherr turns Brussels rep office into fully-fledged operation

Austrian firm Schoenherr is moving to staff its Brussels office full-time, after 20 years with a representative presence in Belgium.

Vienna-based partner Volker Weiss is relocating to Brussels to head up the operation and will lead a team of EU and competition specialists from across Schoenherr’s network of Central and Eastern European (CEE) offices.

The firm is the latest Continental European outfit to open in Brussels, joining a host of Anglo-Saxon firms with a base in the city to act on EU and competition law issues. Firms which have launched in Brussels within the last year include Noerr (3 May 2013), Osborne Clarke (3 June 2013), Winston & Strawn (5 March 2013) and China’s Yingke (18 March 2013).

However Luxembourg’s Arendt & Medernach (1 July 2013) and US IP firm Finnegan Henderson Farabow Garrett & Dunner (16 August 2013) both closed down their Brussels offices.

Schoenherr’s managing partner Christoph Lindinger said there was a “distinct EU angle” to many of its matters and bulking up in Brussels was a logical step.

“We want to bring CEE closer to Brussels – and Brussels closer to CEE,” said Weiss. “We see a lot of market potential in advising companies in those countries which have recently acceded to the EU or are set to do so.”

He added that other competition lawyers would also relocate to Brussels in due course. Matters which the office will deal with include merger control filings, cartel cases, state aid, competition compliance and regulatory.

A&O’s Wickenden heads to Hong Kong to steer US securities practice

Allen & Overy’s (A&O) London-based capital markets partner Jim Wickenden has moved to Hong Kong to steer the firm’s US securities practice.

The move comes months after the firm lost US capital markets lawyer James Grandolfo, who was the firm’s regional head of the Asia Pacific international capital markets, to US firm Milbank Tweed Hadley & McCloy (30 October 2013).

Wickenden was head of capital markets at legacy Herbert Smith, where he developed the firm’s US securities capability, before he resigned for A&O in 2011 (4 October 2011). He joined with US-qualified Adam Wells, a partner in the firm’s corporate division who has remained in London.

Last year the office saw one of its former partners, David Kidd, join Linklaters as its first head of Asia restructuring and insolvency practice (3 September 2013).

Kidd left A&O in September 2012, around the same time as a number of other partner departures, including senior litigation partner Angus Ross who joined Ashurst’s Hong Kong office (7 September 2012) and corporate partner Jeremy Hunt who moved to Morrison & Foerster (3 October 2012).

The office has lost a number of partners to US firms in Hong Kong, including partner Ashley Young and senior associate Douglas Murning to Kirkland & Ellis in 2011 (9 August 2011) and seven partners to Latham & Watkins in 2008 (10 October 2008).

An A&O spokesperson insisted that Wickenden’s move was “temporary” and would span “months”, but refused to divulge further details on why he been relocated.

Dundas and CMS partners agree two-year lock-in as merger terms take shape

Dundas & Wilson and CMS Cameron McKenna partners have agreed a two-year partner lock-in period as a condition of their proposed £277m merger this year, The Lawyer understands.

The lock-in was agreed as part of a “high-level” package put together by the firms’ management, which guaranteed co-managing partner Caryn Penley a seat on CMS’ 15-strong board.

All partners in both firms are believed to have been locked in for two years with an income guarantee based on average earnings over a set period.

The terms were put in place ahead of the 12 December merger vote (12 December 2013).

The guaranteed income level may be aimed at placating Dundas partners who could receive a decreased chunk of equity when they join CMS, sources said. Dundas was previously an all-equity partnership but moved to a two-tier structure in 2011 (17 October 2011).

It is understood that all Dundas partners will join the first two tiers of CMS’ recently overhauled structure. In April CMS shook up the partnership model, allowing junior partners to progress faster through the lockstep, which runs from 28 points to a 70-point plateau (12 April 2012).

Dundas partners are understood to have been made aware of their individual pay packets and obligations via email, but, according to sources close to the firm, many had still not seen the full terms and conditions until last month.

A source said: “They hadn’t seen the deal a few weeks ago, been told what they would get paid and where they would be in the system and that was it.”

The firm has kept the details of the merger under wraps since its inception, telling partners about the deal only one week before the vote.

The merger will see all of Dundas’ practice groups will align under CMS’ six practice group heads, with each CMS head remaining the same. The combined firm will add an opposite number in Scotland to each area.

That would put CMS corporate head Andrew Sheach opposite Dundas corporate chief Wendy Colquhoun, and CMS’ banking partner Rita Lowe opposite financial services head Philip Mackay at Dundas.

But it raises questions over Iain Lindsey, Dundas’ head of real estate who is based in London, where CMS’ real estate group is headed by Mark Heighton.

A source said: “One of the attractions for CMS will be coming in and subsuming Dundas & Wilson within the CMS structure. This is such a merger of unequals. I wouldn’t expect Dundas & Wilson to have had much of a hand at the table.”

The two firms are now engaged in a flurry of meetings aimed at hammering out the next stages of the process, including how the groups will join together. Dundas’ current tax and government public sector groups do not currently fit neatly into CMS’ practice groups, leaving question marks over the roles of tax partner Jim Hillian and public sector partner Michael McAuley.

On 6 January CMS managing partner Duncan Weston and senior partner elect Penelope Warne travelled to Edinburgh to the Dundas office with the firm’s six practice group leaders.

That included Lowe and energy, projects and construction head Stephen Millar, who led the merger deal with Warne.

It was followed by a well-attended 7 January meeting organised in a single day at CMS’ London base, which all Dundas’ London office was invited to.

The London office is the focus of much speculation as it is seen as the biggest area of overlap for the two firms. The real estate team is thought to be valued by CMS and clients like National Grid add extra weight to CMS’ existing panel relationship with the company.

But a further source commented: “CMS will be far more interested in the clients than the people.”

Another said: “There are also issues about overlap clients – who will take the benefit of that because CMS will argue they’ve already got the relationship.”

Lloyds Banking Group could be one such client, historically important to Dundas due to its HBOS links and a real estate client of the firm in London, as well as a client of CMS led by partner Will Meredith.

Some partners have already voted with their feet. Former CMS real estate disputes partner left Dundas following the announcement as well as five other partners (8 January 2013). Construction partner Siobhan McCloskey-Oudahar left with employment partner David Walker. They were joined by environment, health and safety chief Mark Brumwell and employment partner Mandy Laurie as well as former Bank of Scotland partner Allan Wardhaugh have also quit.

Their departures follow that of former chairman David Hardie (7 January 2014) who retired from the partnership at the end of 2013, six months after he was succeeded by Laurence Ward as chairman.

Wragges to relinquish all-equity model as it gears up for LG tie-up

Wragge & Co is to temporarily relinquish its all-equity partnership model as it aligns its remuneration structure with Lawrence Graham (LG), The Lawyer can reveal.

The two firms will merge in May to create a £170m firm under the brand Wragge Lawrence Graham & Co (13 December 2013).

A remuneration committee will assess all of LG’s 35 non-equity partners to decide if anyone should be promoted to equity before they join Wragges, which has long prided itself on its 100 per cent equity partnership.

Wragge’s senior partner Quentin Poole told The Lawyer that the decision to drop the model is transitional, with the aim being to return to Wragge & Co’s current all-equity system once the merger is bedded in.

“You can’t be all equity on day one,” he said. “At the merged firm, the bar to equity will be slightly lower [than at LG’s] as a result of the merged firm abandoning fixed share partners over time.”

The Lawyer can also reveal that the aligned structure will be a meritocratic system based on performance. A combined remuneration committee will retain control of decisions surrounding partner salaries. There is not expected to be a bonus pool.

The new structure was proposed to partners in a 100-page prospectus just before the merger vote.

“Had there been no merger, both firms’ remuneration would have been based on performance,” Poole said. “In assessing remuneration for this year, because it’s based on historic performance, each legacy firm will have to lead the decision making [on partner pay].”

LG is slightly over-partnered compared with Birmingham-based Wragges; it logged a revenue per partner of £740,000 compared to Wragges’ £1m in the previous financial year. If the firms had fully merged net profit and equity partners it would have created a PEP of £322,000, not far under Wragges’ current figure of £339,000 (25 November 2013).

Meanwhile LG’s current revenue per lawyer of £305,000, benefiting from a London weighting, stacks up well against Wragges’ £263,000.

HR directors are now tasked with aligning LG and Wragge’s current employee benefits, such as rail passes and gym memberships, and are scheduled to come up with a recommendation in the next few months.

The two firms started speaking in 2009, when Wragges began drawing up a list of London merger targets as it looked to invest £20m in reserved cash (18 November 2013). However they decided not to go ahead with the tie-up, with Wragge’s partners showing little appetite to pursue a merger a year into the recession.

After the recent merger vote got the go ahead, Poole said: “Neither firm has gone through a metamorphosis since 2009. [The previous talks] were just after Lehman, everyone was very risk adverse and you didn’t know where the world would end up. It was a mighty, mighty uncertain time. Fundamentally, the waters are much calmer [now]. The environment looks more user-friendly.”

The merger needs 75 per cent approval to go ahead. However Poole said at the time that they achieved “way more than that” with over 90 per cent giving the idea the thumbs-up.

Luxembourg’s Kleyr Grasso picks up Linklaters partner

Luxembourg firm Kleyr Grasso Associés has made a lateral partner hire from Linklaters, appointing Jean-Paul Spang as its ninth partner.

Spang will join the firm on 1 February 2014.

He has been a partner at Linklaters and its legacy firms in Luxembourg since 1998. Spang advises on a broad range of corporate and finance matters, and also lectures at the University of Luxembourg.

Kleyr Grasso managing partner Marc Kleyr said the hire was in line with the firm’s plans to develop its corporate finance practice.

Linklaters last lost a partner in Luxembourg just over a year ago, when corporate partner Laurent Schummer moved to local giant Arendt & Medernach (6 November 2012). The magic circle firm moved into the jurisdiction in 1999, when it signed Loesch & Wolter up to its European alliance (31 May 1999), through a merger with Belgian ally De Bandt van Hecke & Legae.

Slaughter and May makes first Asia lateral hire with MoFo addition

Slaughter and May has made its first lateral hire in Asia with the addition of Morrison & Foerster’s (MoFo) co-head of China capital markets John Moore.

The move will gift Slaughters a US law capability for capital markets transactions in Hong Kong, a strategy which has been on the cards since 2012 (24 September 2012).

A source said the strategy of hiring US-qualified lawyers in Hong Kong was triggered in 2012 by “significant changes in the market” after a number of US firms moved to take on Hong Kong law capabilities.

These include Davis Polk & Wardwell, a Slaughter and May best friend, which has developed local law capabilites in numerous jurisdictions, including London and Hong Kong.

Partner Paul Olney said the firm will initially look to hire two or three associates to support Moore, but is unlikely to bring in another US-qualified partner. He stressed that the US firms Slaughters has a relationship with have been kept informed of the move since 2012.

John Moore, who will start at Slaughters next month, joined MoFo from legacy Herbert Smith in 2011, where he was head of the firm’s US capital markets in Asia. He was previously a senior legal counsel at Goldman Sachs, where he was responsible for legal coverage in Asia.

It was while at Goldman Sachs that Moore first started working with the firm, with both advising on the Tracker Fund IPO in 1999. “Since then, we have worked together on several client matters, so I know the team well and have the highest regard for them,” Moore said.

He added: “My joining Slaughter and May in Hong Kong will enable the firm to provide integrated Hong Kong and US law capability for capital markets transactions in Hong Kong and strengthen the firm’s long-established presence and practice in Hong Kong.

Olney said Slaughters has no intention to practice US law in London.

Eversheds continues Africa focus

Eversheds has added five firms to the Eversheds African Law Institute (EALI), the forum it set up last year to promote networking among African firms.

The five firms bring the number of EALI members to 23 in 21 countries. The fims are meeting this week in Paris at the first EALI summit, which will be followed later this year by a summit for clients.

The new firms are Advocats HK in Benin, Comoros firm Avocats Compres, Malawi’s Nbendera & Nkhono, Rwandan firm K Solutions & Partners, and Pardiwalla Twomey Lablanche in the Seychelles. Advocats HK is the second EALI member firm from Benin while the other four add new country capabilities to the project.

Eversheds launched EALI in October last year (1 October 2013) and followed up by announcing it was tying up with South African firm Mahons and Tunisia’s El Heni, gifting it a presence in both countries as well as Mauritius (4 December 2013).

Separately, global network Lex Mundi has also increased its presence in Africa. The group signed up Kenya’s Coulson Harney and Ugandan firm AF Mpanga as exclusive members for the two East African countries. Both firms are part of the Bowman Gilfillan Africa Group, which is led from South Africa by Lex Mundi firm Bowman Gilfillan.

Lex Mundi now has member firms with a presence in 17 African countries.

Clyde & Co partners boost profit share and reduce contributions

Clyde & Co’s LLP members more than halved their capital contributions to the firm last year, from £18m to £6.7m, according to accounts filed today with Companies House.

It was a good year to be a Clyde & Co partner – the firm added 39 members over 2012/13 and raised the discretionary profit share by over 20 per cent to £81.6m on top of a remuneration package of £3.3m.

Members’ drawings stood at £71.9m up from £56.6m the previous year and the highest-paid partner took home £1.29m compared to £1.27m in 2012.

Groupwide, Clydes, which includes offices in Greece, Tanzania and Australia, also paid higher group wages and salaries to its 1,341 staff – up from 1,195 the previous year – at £129.4m, a 26 per cent increase on 2012.

The UK-registered firm paid £34.7m to staff, up from £30.9m and employed an average 202 practice staff in 2013, up from 190 in 2012.

Turnover at the firm increased from £285.8m to £334.5m and profit was up 20 per cent, from £70m to £84.9m. The firm took in a higher fee income of £334.6m in 2013 and work performed and unbilled stood at £25.95m – down slightly on the previous year’s £27.4m.

The firm also reduced the amount of loans due within a year by 61 per cent, down from £442,000 to £169,000 and cut its overdraft from £7.3m to £2.2m.

Over the year the firm sold off £1.1m of cars and increased its cash flow substantially, from a decrease of £25.2m in 2012 to an increase of £1.2m in 20123.

The firm has seen a growth in corporate and M&A fees over the past few years, with corporate revenue climbing from £53m in 2012 to £70.7m in 2013 (3 December 2013).

In June 2013 the firm reported a rise in profit per equity partner (PEP) of 5 per cent to £580,000, just above the £550,000 predicted by chief executive Peter Hasson in 2012 (11 June 2013).

But things are not all rosy at the firm – it is heading for a Supreme Court hearing on 24 March over a whistleblowing claim bought by former partner Krista Bates van Winkelhof (24 September 2013). The partner alleges she was unfairly dismissed from the firm after blowing the whistle on the managing partner of Clydes’ association firm Ako Law in Tanzania (26 September 2012).

Freshfields and Simpson Thacher advise on £600m Guardian sale of Trader Media Group

Freshfields has advised the Guardian Media Group in its £600m sale of a 50.1 per cent stake in Trader Media Group (TMG) to Apax Partners.

Corporate partner Simon Marchant led the deal to sell its remaining stake in the business to joint partner Apax, which bought 49.9 per cent of TMG in 2007.

The former Asia chief was joined on the deal by corporate associate Rikin Morjaria.

The sale, which is subject to approval and completion, is expected to value TMG at around £1.8bn including debt.

The Guardian Media Group is owned by the charitable Scott Trust, which has authorised the board to reinvest the proceeds in order to continue to safeguard the financial independence of the paper.

Simpson Thacher & Bartlett advised Apax partners in the deal, led by former Allen & Overy (A&O) private equity head Derek Baird who moved across in 2012 (8 November 2012).

Indeed A&O had a good chance at winning the deal for Apax after taking on former Ashurst global head Stephen Lloyd in December (3 December 2013). The private equity house was one Lloyd’s star clients at Ashurst. He is understood to have snared the client back in 2004 and is expected to bring it with him to his new firm.

Ashurst also maintain links with the company, with M&A partner Charlie Geffen one of those responsbile for secure the firm a panel spot with Apax back in 2006 (24 April 2006).

But Simpson Thacher has historically earned work from Apax on big ticket deals. In 2005 the firm teamed up with Danish firm Bech-Brunn to advise Danish telecoms group TDC on the biggest European leveraged buyout (LBO) of all time. TDC accepted a $10.2bn (£5.6bn) bid from Nordic Telephone Company (NTC). The firm advised the Apax-led consortium comprised of Blackstone, KKR, Permira and Providence (28 January 2008).

The firm also took on another senior associate with close ties to Apex and other key client Apax Partners and BC Partners in May 2013. Clifford Chance associate Seema Shah joined the US firm after spending a period of secondment at the company (21 May 2013).

DAC Beachcroft launches in New York

DAC Beachcroft has made its first move into the US through the launch of a representative office in New York.

The firm said the office would support its international network, which has expanded rapidly across Latin America since the merger between legacy Beachcroft and legacy Davies Arnold Cooper (31 October 2011).
Most recently the firm formed an alliance with Colombian insurance outfit De La Torre & Monroy Abogados Asociados, which started trading as DAC Beachcroft Colombia in December (2 December 2013).

DAC said the New York base would focus on primarily on international litigation and arbitration work. It said partners would be sent to the base on a rolling basis. This would include insurance head David Pollitt, the Mexico office head Francisco Fernandes-Fletes and reinsurance chief Julian Miller.

The firm’s global head Paulino Farjado, who has been a driving force behind its international expansion, will also spend time in the New York office.

“We know there are opportunities for the firm on the other side of the Atlantic,” said DAC managing partner Paul Murray. “This base will allow us to build relationships in North America, which is another important step toward our long-term goal of becoming the leading international provider of legal services to the insurance sector.”

The move is part of a strategic alliance with Manhattan-based specialist insurance firm Abrams Gorelick Friedman & Jacobson (AGF&J). The alliance will see the two firms working together in New York and London.

In November DAC set out ambitious growth plans with an eye on achieving revenues of £200m by the 2013/14 year end (18 November 2013).

The firm issued a £10m cash call to the firm’s LLP members while increasing its rolling credit facility to £40m to help fund growth.

It hasn’t all been growth for the firm, however. In April Clyde & Co raided the Madrid base for a team of four partners to launch its Spanish base. The team included Ignacio Figuerol, who was a board member at the time (16 April 2013).