Global 100: The stories of the year

Merger talks, management reshuffles and structural changes – here is our recap of the stories that defined the global legal market during the past 12 months.

2015

August

• Global 100 firms continued to pile into South Korea as White & Case launched in Seoul in August, a move quickly followed by Allen & Overy a month later. In January 2016 Ashurst said its plans to launch had been put on ice following the departure of Tokyo head John McClenahan to King & Spalding. In February, Latham & Watkins revealed it had signed a lease on a property in Seoul and submitted an application for a foreign legal consultant office.

September

• Brewing giant SABMiller turned to Linklaters and regular adviser Hogan Lovells, as it became the focus of a £71bn takeover approach from Anheuser-Busch InBev, which instructed Freshfields Bruckhaus Deringer. In preparation, Allen & Overy, Freshfields and Hogan Lovells won roles on the divestment of SABMiller’s European brands to Japan’s Asahi Breweries.

October

• Clyde & Co secured a merger with Scots firm Simpson & Marwick after months of talks. Following other London-based insurance players in establishing a presence in Scotland, the move added $45m to Clydes’ top line.
• Shearman & Sterling’s 200-strong partnership voted to remove defined-benefit pensions for future partners, which typically hand retirees an annual payment based on a percentage of their final ‘salary’. New partners, whether a promotion or a lateral hire, will have retirement payouts capped at five-years.
• Dentons announced plans to create a tripartite union with Australian firm Gadens and Singapore’s Rodyk & Davidson, following its combination with Dacheng Law Offices in January 2015. It was later announced in April 2016 that Dacheng was in the process of restructuring its practice to reduce the number of profit pools from 15 to five.
• Further proposals for banking reform issued by the Bank of England have caused significant internal restructuring of in-house legal teams, with some banks effectively having two separate legal functions. Under the reforms, banks with core deposits greater than £25bn, including Barclays, HSBC and Lloyds Banking Group, will from 2019 need to separate their retail banking function from the rest of their group, dividing the activities of their legal teams.

Proposals for banking reform issued by the Bank of England (pictured) in October have led to significant internal restructuring of in-house legal teams

November

• Linklaters global banking head Gideon Moore defeated five other candidates to be voted in as the firm’s new managing partner, ending a four-month search. Moore, who was selected by Linklaters’ 13-strong partnership board, succeeded Simon Davies, who departed after eight years as managing partner to join Lloyds.
• Germany saw a flurry of activity, with Freshfields Bruckhaus Deringer and White & Case consolidating their operations, while Herbert Smith Freehills went the other way and set up shop in Düsseldorf. Freshfields’ Cologne and Düsseldorf bases are set to merge this year, while White & Case prepared to close its Munich arm a decade after launching.
• DLA Piper International announced a review of its remuneration structure to encourage greater cross-selling. The firm wants to give greater reward to partners outside of the US who cross-sell clients across its 89 offices and help advance the firm’s push in chosen sector groups.
• In the same month DLA Piper decided to go it alone in Africa through launches in Morocco and Johannesburg, following its split from South African associate firm Cliffe Dekker Hofmeyr in September. This was DLA’s first on-the-ground presence in Africa, having enjoyed a relationship with firms through its Africa group since 2006.
• Dentons announced the opening of its first Italian office in November, hiring 21 lawyers from DLA Piper, as well as from a local employment law boutique. Leading the team leaving DLA was its former managing director for Europe and Africa, Federico Sutti. In May 2016 Dentons also announced it was launching in Munich in a bid to boost its corporate offering, recruiting three partners from Norton Rose Fulbright.

December

• Eversheds confirmed it would continue to search for a US deal after the firm’s top target, Milwaukee-based Foley & Lardner, ended merger discussions in December.
• Freshfields Bruckhaus Deringer stripped back its worldwide support network in favour of its new Manchester legal services centre, with the firm announcing in December it would close its global IT and helpdesk function in Germany. The new hub, called the Global Centre, is expected to grow to 300 employees in 2016. In April, the firm also announced plans to open another legal services centre, this time in Vancouver, Canada.
• Meanwhile, Clifford Chance announced it would move its 400 operational staff from its Canary Wharf headquarters to a new open-plan office in a building just five minutes’ walk away, after agreeing to sub-let 400,000 sq ft of space at its headquarters to Deutsche Bank and spurning the idea of a low-cost centre in a cheaper part of the UK.
• DLA Piper struck a highly unusual deal to provide contract services to its clients via Berwin Leighton Paisner-owned Lawyers On Demand, in a move to create and manage a contract lawyer business. The deal meant DLA aborted plans to launch its own contract lawyer arm.
• In a rare move, Debevoise & Plimpton announced in December it had picked up Hong Kong-based corporate partner William Chua from Sullivan & Cromwell in a bid to strengthen the firm’s transactional capabilities in Asia and to complement its private equity funds practice in the region.

2016

January

• Fried, Frank, Harris, Shriver & Jacobson kick-started 2016 with the hire of Mayer Brown’s co-head of restructuring Ashley Katz. This followed the addition of Kirkland & Ellis’ high-profile funds trio Mark Mifsud, Kate Downey and Alexandra Conroy in 2015 as well as King & Wood Mallesons financial markets partner Gregg Beechey, Hogan Lovells finance partner Stuart Brinkworth and O’Melveny & Myers partner Daniel Oates.
• Reed Smith axed 45 lawyers from its US, Europe and Middle Eastern offices in a bid to make the ‘necessary adjustments to remain competitive’. The firm made the decision to restructure its legal staff, along with a number of non-legal employees, after it undertook a review of its staffing model.
• Slaughter and May’s new senior partner Steve Cooke pledged to retain the firm’s City focus after winning a hotly contested election. He took up his five-year term at the helm of the UK’s most profitable law firm in May, taking over from Chris Saul.

February

• The combination between Wragge Lawrence Graham & Co and Gowling Lafleur Henderson, to form Gowling WLG, went live, creating a $600m practice that will feature in the Global 100 next year. The 622-partner firm boasts 18 offices across Canada, Europe, the Middle East and Asia.
• The Australian market saw some of the world’s largest firms make changes in February, with Skadden, Arps, Slate, Meagher & Flom shutting its small Sydney practice after nearly three decades of operation. Clifford Chance’s Australian founding partners Mark Pistilli and Danny Simmons stepped down from their roles, while Clyde & Co continued to invest in its rapidly expanding Australian offering in February, hiring two partners from Norton Rose Fulbright. Subsequently, Allen & Overy confirmed it had added a three-strong US securities team from Skadden to its Australian operations in May.
• Charges of grand larceny were dropped against former Dewey & LeBoeuf executive director Stephen DiCarmine and chief finance officer Joel Sanders, leaving only three minor charges to go to trial this January. The pair, alongside former chair Steven Davis, were alleged to have intentionally inflated revenue at Dewey and used accounting tricks to comply with covenants over its debt arrangements.
• Slaughter and May, Allen & Overy, Clifford Chance, Linklaters, Freshfields Bruckhaus Deringer, CMS, Eversheds and Norton Rose Fulbright all won places on JPMorgan Chase’s EMEA panel following a review that was finalised last year. It is understood the bank requested that firms consider taking fee cuts of at least 2% to qualify.

March

• Merger discussions between Berwin Leighton Paisner and Greenberg Traurig, reported in February, were called off, with Greenberg claiming it walked away because of its belief that ‘culture eats strategy for lunch’ and its ‘conservative approach to financial risk’. A deal would have created a firm with 2,700 lawyers and revenues of over $1.5bn.
• After a four-month election process, Allen & Overy’s partnership opted for continuity as Wim Dejonghe, who has been managing partner for the past eight years, was named senior partner. Co-head of corporate Andrew Ballheimer (pictured) was elected global managing partner.
• Following a major overhaul of its practice structure, King & Wood Mallesons said in March it would axe 15% of its Europe and Middle East partnership, and make 45 business services employees redundant in London. Twenty-four partners will leave the firm in the second shake-up of the legacy SJ Berwin partnership in 12 months.
• With many major law firms losing money in the Middle East after overinvesting during the oil boom in the 2000s, it was announced in March that Simmons & Simmons had followed Latham & Watkins, Vinson & Elkins and Herbert Smith Freehills in shutting down its Abu Dhabi operations.

April

• Less than a fortnight after negotiations were reported, Reed Smith and Pepper Hamilton confirmed in April they had called off talks over a combination. A merger between the two US firms would have comprised more than 2,000 lawyers with revenues of $1.5bn.
• Shell pared its global panel back from 11 firms to just six, with Eversheds, Reed Smith, Clifford Chance, Allen & Overy, Baker & McKenzie and Norton Rose Fulbright all surviving the cut.
• The 3 April leak of 11 million documents from Panama law firm Mossack Fonseca & Co led to a public outcry about tax evasion. The leak revealed some 12 world leaders, including associates of Russian president Vladimir Putin and 143 politicians, used the firm to avoid tax in developed countries while a number of Global 100 firms were linked to Mossack and the leaked documents.
• A power shift towards Australia was seen at Ashurst in April when the firm announced its next global managing partner would be Sydney-based banking partner Paul Jenkins. Jenkins will join New Zealander chair Ben Tidswell at the helm, splitting his time between London and Sydney.

May

• Within a year of setting up a private equity practice in London, Goodwin Procter announced it was opening a Paris office to build a French private equity platform, raiding King & Wood Mallesons’ partnership for the second time in 12 months, hiring six partners.
• Ahead of its UK legal panel review scheduled for 2017, energy giant BP informed its current external advisers they will now be required to pitch for instructions worth over $1m in legal fees, in a bid to curb costs.
• Kirkland & Ellis tapped Linklaters for one of its last remaining private equity heavyweights in London, confirming its hire of David Holdsworth in May as the US firm rebuilds its London office. The appointment followed the news earlier this year that Kirkland lost capital markets partner Andrew Hagan, who quit to join Freshfields Bruckhaus Deringer, days after the firm lost a six-partner team to Sidley Austin.
• Shearman & Sterling, Reed Smith, Dentons and Eversheds were among the firms appointed to Nokia’s newly-created global legal panel. There could be more work in the pipeline too, with Nokia’s team still analysing the legal spend of recently-acquired French telecoms company Alcatel-Lucent.
• Dentons in May established a free-to-use law firm referral network, which uses a technology-focused platform that allows member law firms to ‘easily connect and track referrals’. Dubbed ‘Nextlaw Global Referral Network’, the venture allows members within the network to search for firms with differing strengths in any city.
• After failing to secure further consolidation in February with Maclay Murray & Spens, Addleshaw Goddard has turned to the US for a potential merger partner and is in talks with Virginia-based Hunton & Williams.
• Clyde & Co confirmed the opening of its new Miami office in May with the acquisition of five-partner litigation firm Thornton, Davis & Fein. The team will be joined by Clyde & Co partner Ricardo Lewandowski who will relocate to the new office from London to launch a Latin America liaison service in Miami.
• Sullivan & Cromwell, Allen & Overy and Wachtell, Lipton, Rosen & Katz all won roles as healthcare and agriculture giant Bayer placed a bid to acquire agricultural company Monsanto for $62bn, in a deal that would create the world’s biggest agricultural supplier.
• Pitching himself as an outward-facing leader paid off for Linklaters M&A heavyweight Charlie Jacobs, who won the firm’s senior partner election in May. Jacobs will replace Robert Elliott when he finishes his five-year term at the end of September.
• DLA Piper is to cut 200 business support jobs in the UK in a move that will see the firm make one of the largest law firm redundancies since the financial crisis. The restructuring comes as other Global 100 firms, including Norton Rose Fulbright, also decided to cut back-office jobs. Meanwhile, Dentons revealed plans for a back office in Poland. The move is expected to affect 50 back-office jobs in the UK and Dentons will launch in Warsaw later this year.

Baker & McKenzie appointed London head Paul Rawlinson as global chair

June

• As part of a significant push by Magic Circle firms to practise local law in China, it was announced in June that Linklaters will spin off part of its Shanghai office in a bid to then merge with it at a later date. The firm had searched for a joint venture under new Shanghai Free-Trade Zone rules, which permit domestic law firms to tie up with international giants, but decided to go it alone.
• Hogan Lovells has made further moves to strengthen its position in South-East Asia, confirming a new association in June with Indonesian law firm Dewi Negara Fachri & Partners.
• Norton Rose Fulbright opened a new San Francisco office in June as part of the expansion of its public finance practice, hiring 17 lawyers with six partners located in New York, Washington DC and San Francisco from Sidley Austin. The San Francisco office will be the firm’s second in California after Los Angeles.
• Baker & McKenzie appointed its first British chair with London head Paul Rawlinson (pictured) winning an election to replace current global chair Eduardo Leite when he steps down in October.
• White & Case has put its plans to build a 500-lawyer practice in London by 2020 into action in the last 12 months, with the June hire of Freshfields Bruckhaus Deringer real estate finance partner Jeffrey Rubinoff. Other notable lateral hires in the last year include Ashurst’s former London head of disputes Mark Clarke and Hogan Lovells’ corporate partner Guy Potel. The firm also added capital markets partner Jonathan Parry from Ashurst.
• In the first marquee joint venture between a Big Four accountant and a Magic Circle law firm, Allen & Overy teamed up with Deloitte to create a tech-driven service to help banks handle post-Lehman regulation. The new service – dubbed MarginMatrix – will deploy automation to help banks address incoming global regulation of the $500trn over-the-counter derivatives market.
• On 23 June, the UK shocked the legal profession, markets and Western governments after narrowly voting to leave the EU in a national referendum. The vote looks set to take the UK out of its 43-year association with the body, triggering a political crisis in the UK and huge fears in the City over its long-term status amid the threat of reduced access to the EU. Commercial lawyers had, along with most large businesses, widely backed a vote to remain.

LB

madeleine.farman@legalease.co.uk

 

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