Disputes Yearbook 2019 Firm profile: Sidley Austin

Sidley Austin’s place in the top ten global law firms is well established. Integral to this is a standout international disputes capability, which contributes approximately a third of the firm’s total revenue ($2.2bn in 2018) and engages over 500 lawyers dealing with domestic and international litigation, international arbitration and cross-border investigations.

Sidley’s London office is home to over 140 lawyers, most of whom are English-law qualified. In non-contentious matters, Sidley’s London office acts in the most complex and cutting-edge transactions in private equity, M&A, restructuring, structured finance, capital markets, investment funds and insurance, as well as boasting a market-leading financial services regulatory advisory practice. Additionally, and befitting the firm’s global profile, Sidley’s London dispute resolution group acts for clients in some of the largest business-critical disputes and investigations in the London market. By virtue of the depth and breadth of its experience, and bolstered by recent strategic recruitment, the group is well placed to provide a stellar service to its clients across all disputes practice areas.

The group is led by Matthew Shankland, a barrister and solicitor-advocate, who joined Sidley in 2013 with then associate and now partner, Andrew Fox. The group has been further enhanced by the recent hire of market-leading investigations, regulatory and financial crime lawyer Sara George from Stephenson Harwood.

‘My job is not to be rolled out to do a bit of glad-handing, I’m here to do the work.’
Matthew Shankland, Sidley Austin

In describing the group’s unique approach, Shankland explains: ‘We operate a true partner-led service. The partners in the group are fully engaged with the matters that we handle on a day-to-day basis. We often see competitors field two or three partners and huge associate groups on matters, but it is clear that they are not personally invested. Clients want a sensible balance. They want a streamlined team of associates and to know that they can get round-the-clock access to partners with market-leading expertise and experience. That’s something Sidley does very well.’

He comments: ‘We work in smaller teams and clients like that: it develops a deeper relationship. Culturally at Sidley, the expectation is on partners leading from the front and being instrumental in delivering client service. My job is not to be rolled out to do a bit of glad-handing, I’m here to do the work.’

Before and since joining Sidley in 2013, Shankland has deployed this hands-on approach in some of the most significant financial services disputes of the past decade. These have often involved litigation around complex, cross-border insolvencies or the bankruptcy of major corporate and financial institutions.

Andrew Fox joined Shankland as a newly-qualified associate in his previous team. This was around the time that Shankland began advising Kaupthing Bank (the Icelandic bank that collapsed in 2008) on its global litigation strategy and was heavily involved in the same way with Lehman Brothers Special Financing. In both cases, Shankland was instrumental in the clients’ English and European asset-protection programmes and litigation positions. He is also well known for having acted for interests associated with Sir David and Sir Frederick Barclay, in the high-profile Coroin litigation and his work for longstanding client, Investec Bank.

‘It has been extremely fulfilling so far, but it’s only the beginning. There remains considerable scope to grow the London disputes group.’
Andrew Fox, Sidley Austin

What has he learned from his experience? ‘The best approach in any dispute, however large or complex, is to reduce it to the core issues and develop clear strategic milestones early on,’ says Shankland. ‘This results in the short and long-term goals becoming readily apparent. From this, you identify the best case-management steps or interim applications to apply and maintain leverage over the other side – a staged approach through a series of planned steps. This enables you to manage everyone’s expectations and get much better results.

‘One thing that is common to many of the larger-scale insolvency-related disputes that we have dealt with since 2008 is how much of the clients’ knowledge of their own history was destroyed overnight by filing for administration or bankruptcy protection, etc. Getting to the bottom of what has gone on and why is a key skill for litigators in every case. Reconstructing the overall road map of how and why things were done, the corporate memory if you like, is a challenge, but it’s one that we have risen to on many occasions.’

Alongside Shankland, Fox worked on Kaupthing and Lehman before their move to Sidley. Of that move, Fox comments: ‘We were excited to join a premier global firm whose litigation practice served as a core part of its culture and client offering, and which would support us in developing a leveraged team of top-quality disputes lawyers in London, attracting the biggest, most complex cases. Our recent cases, victories for clients and recruitment bear testament to meeting that goal.’

Shankland and Fox have worked on a broad spectrum of matters at Sidley. These include obtaining high-value court judgments for private equity clients as assignees of early termination amounts due under International Swaps and Derivatives Association documentation; successfully defending the operation of the constitutional agreements of a global commercial property group in an International Chamber of Commerce (ICC) arbitration in London; and successfully defending Investec Bank in its five-year battle with former senior employees over the application of the bank’s bonus policy. This year, Fox has been active for hedge funds in enforcing senior secured lending packages against insolvent borrowers and Shankland recently scored a major success for one of the firm’s flagship clients, Northern Trust Corporation.

As Fox notes, the current workload in London is distinguished by its considerable variety in terms of subject matter and geographic scope. ‘We currently act in a case which will eventually stand as a precedent on the extent to which US sanctions affect the rights and obligations of parties to English law banking documentation, and we represent US-based client, Genworth Financial, in its major PPI misselling-related litigation ongoing with AXA.’

International arbitration is a particular Sidley strength. Supplemented by its international reach in Geneva, Hong Kong, New York and Washington, DC, arbitration forms a key part of the London practice. ‘We proudly conduct all of our international arbitration advocacy in-house and we are committed to developing a bench of associates who thrive in that element of practice,’ says Fox. ‘The team is currently involved in a Middle Eastern oil and gas construction arbitration, seated in Singapore and conducted under the ICC Rules; and a London-seated arbitration under the LCIA [London Court of International Arbitration]Rules concerning the construction and enforcement of guarantee provisions in a $350m LMA [Loan Market Association] credit facility extended to a central European industrial conglomerate.’

Despite having a heavy emphasis on financial services, Sidley also acts for large corporates in London. ‘Very few of the cases that we are instructed on by corporate clients are confined to a single jurisdiction,’ says Shankland. ‘The best expression of our global reach is what we call CLD – the commercial litigation and disputes practice area team. That team covers every single geography in which we are located. We’re committed to giving clients a practical, business-focused outcome that reflects their international spread.’

‘The Sidley culture is humble, hard-working and prudent. That style works really well for government-type investigations.’
Sara George, Sidley Austin

Like his fellow Scot, Shankland, Fox shares a work ethic that is relentlessly focused on achieving the best results for clients, while at the same time growing the practice. On their development of the group, he comments: ‘It has been extremely fulfilling so far, but it’s only the beginning. There remains considerable scope to grow the London disputes group and we want to press on. Sara adds tremendous experience and credibility to our investigations and white-collar practice, and we are all looking forward to working with her. Across our New York and Washington, DC offices, the firm’s contentious regulatory practice has a seat at the very top table in the world’s most regulatory-heavy jurisdiction with many practitioners who have spent time at the DoJ [Department of Justice], the SEC [Securities and Exchange Commission], the CFTC [Commodity Futures Trading Commission] or the US Attorney’s Office for the Southern District of New York – the primary bodies through which these matters either arise or are resolved. Sara’s practice in London fits perfectly with that platform.’

The new addition to Sidley’s London disputes group, George, joins Sidley as a partner in the firm’s global securities and derivatives enforcement and regulatory practice. Having worked as a barrister, a prosecutor for the Financial Services Authority (FSA) and as a law firm partner, she combines a wealth of experience. ‘I am, first and foremost, a criminal lawyer, but with regulatory expertise,’ she says, adding that she was attracted to Sidley by ‘the breadth and depth of its US relationships with the SEC, the DoJ and the FBI.’

George has significant experience in dealing with international regulatory and criminal investigations, particularly in financial services. As a criminal barrister, she advocated before the Financial Services Tribunal, the Regulatory Decisions Committee of the Financial Conduct Authority, the Crown Court and the Court of Appeal. She has also led numerous criminal and regulatory investigations, involving the SEC, the DoJ and the CFTC.

She anticipates: ‘There will be no shortage of government investigations nor any slowdown on the part of the regulators willing to take on big cases. There is also real momentum in the influence of whistle-blowers and, in particular, paid whistle-blowers in other jurisdictions.’

Her understanding of how regulators work and think enables her to advise clients across a broad spectrum, including accusations of involvement in regulatory contraventions, market abuse, insider trading, money laundering, fraud, corruption and bribery. She is recognised for having brought landmark cases, including the first criminal prosecution by the FSA against a director for misleading the market and the first Listing Rule contravention.

Another critical factor that attracted George to Sidley was the firm’s culture and values. ‘There is a tendency in the UK market to think that all US firms are very much alike – they most certainly aren’t,’ she reflects. ‘The Sidley culture is humble, hard-working and prudent. That style works well for government-type investigations. A culture that looks to the long term – governments and regulators can have confidence in the firm’s work because they know it’s not been done for a short-term relationship gain.’

In summarising Sidley’s London disputes offering, Shankland says: ‘What we do best are disputes and investigations which involve complex, cross-border business arrangements and regulation, however fact intensive they may be. Receiving information, quickly making sense of it, and giving the client a clear picture of the strategic objectives and path forward is key,’ he notes. ‘It’s our mastery of the technical legal elements and the depth of our procedural expertise that we can really turn to a client’s advantage in multiple scenarios. That is our point of difference.’