Legal Business

A&O, Addleshaw and Hogan Lovells line up on Co-op’s £620m pharmacy spin-off to Bestway

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Corporate Addleshaw GoddardAllen & OveryHogan Lovells
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As the Co-operative Group moves to reduce its £1.2bn capital deficit and focus on core business lines it has turned to longstanding advisers Allen & Overy (A&O) and Addleshaw Goddard to lead on the £620m sale of its pharmaceutical business to Bestway Group, advised by Hogan Lovells.

Addleshaw corporate finance partner Richard Thomas led the deal for the Co-op, supported by corporate partner Richard Fleetwood and associates Andy Green, Ryan Barber, Dean Cox. The Co-op is a longstanding client of Thomas, who is also a member of Addleshaw’s healthcare group and counts as clients Lloyds Pharmacy and Capita, which he advised on its acquisitions relate to its Medicals Direct Group.

At A&O, banking partner David Lines and pensions partner Dana Burstow led for the Magic Circle firm, which last year advised the Co-op on a capital generation plan in the aftermath of it unveiling a hole of in excess of £1bn, and which saw finance partner Alistair Asher join as Co-op Group’s general counsel.

Tom Brassington, a corporate partner at Hogan Lovells who counts Johnson and Johnson among his clients, advised Bestway.

This latest transaction is due to complete in October 2014.

The deal sees 774 pharmacies transferred to Bestway in a move that will mean the group, run by Asian tycoon Sir Anwar Pervez, will own the third largest chain of pharmacies in the UK and have an annual turnover of around £3.4 billion.

Brassington said: ‘Hogan Lovells has worked with Dawood Pervez and the Bestway team for a number of years and we were extremely happy to assist with this major acquisition for the group. The Co-op Pharmacy’s focus on supporting and servicing the needs of local communities makes it a natural fit with Bestway’s existing portfolio of businesses.’

Richard Pennycook, interim group chief executive of The Co-operative Group, said: ‘The proceeds will enable The Co-operative to reduce debt and invest in our business and is part of the focused delivery of our clear strategic plans and priorities.’

Tom.moore@legalease.co.uk

Legal Business

Financial results 2013/14: Addleshaws posts mixed results as profit down 11% after partner restructuring and CFA write-off

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Financial results 2013/14 Addleshaw Goddard
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Addleshaw Goddard today (9 June) unveiled mixed financial results for the 2013/14 period, with turnover up by 3% to £171.4m but net profit down 11% from £44.9m to £39.8m.

The dip in profits was blamed on exceptional expenses during the year, namely partner restructuring and a written off conditional fee agreement, which relates to the firm’s role advising the late Boris Berezovsky in his high profile court battle with former business partner, Russian oligarch Roman Abramovich.

In a statement today Addleshaw said: ‘During 2013/14, 14 partners left the firm for a range of changing client, business and personal circumstances. In view of that, the firm has decided to provide for a significant element of the profit share of those partners that will be payable during their notice periods, in its 2013/14 accounts.’

Prior to these exceptional items the firm achieved an underlying fee income of £172.5m, an increase of 5% on the prior year, and the highest for five years, as well as an equity partner profit of £44 million.

In a statement today, John Joyce, Addleshaw Goddard’s newly-elected managing partner, said: ‘Underlying growth of between five and eight per cent combined with a margin of 26 per cent in half a year of investment shows the strength of core business.

‘Our performance climbed throughout the year, and since the half-year more strongly still across the business. Our focus now will be to translate this momentum and our continued investment in the business, in the UK and internationally, into a material improvement in our competitiveness, performance and returns.’

Joyce was appointed in mid-May for a three-year term following a contested election against real estate head Adrian Collins.

kathryn.mccann@legalease.co.uk

For further commentary on Addleshaw Goddard see Comment: Democracy and half measures are not delivering for Addleshaws

Legal Business

Keystone brings in partners from Addleshaws, SGH Martineau and former GC of Yahoo!

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Keystone Law has hired into its most senior ranks a former partner from Addleshaw Goddard and SGH Martineau alongside a former general counsel (GC) of Yahoo! to bolster its disputes, corporate and TMT practices.

Robert Harvey has joined Keystone’s disputes team of 32 lawyers after leaving Addleshaw Goddard’s partnership in November last year. He joins as a consultant as Keystone, whose lawyers work from home, has no partners after converting to an alternative business structure (ABS) last year.

Harvey has experience of advising on large-scale commercial litigation and white-collar crime investigations for high-net-worth individuals and companies, including those in the FTSE 100 and FTSE 250.

Andrew Stilton joins Keystone after 34 years at SGH Martineau, where he focussed on mergers and acquisitions and corporate finance. He was previously involved in the consultation process that culminated in the enactment of the Companies Act 2006.

The third appointment is the former GC of Yahoo! UK, Liyen McCoy, who has joined Keystone’s TMT group. She joins with knowledge of the digital and telecommunications sector and sat on the management board of Yahoo! UK, where she was charged with all legal and regulatory matters. She also served as the company’s head of European compliance for three years.

James Knight, managing director of Keystone Law, said: ‘With the economy on the rise again we have seen an increase in client activity across all areas, and we are absolutely delighted that Robert, Andrew and Liyen—three leading industry figures in their respective areas—will be joining the growing teams here at Keystone.’

Keystone operates a performance-based remuneration structure rather than paying conventional salaries. Lawyers receive support from a central London office, which provides meeting rooms and support staff and performs the firm’s administrative functions.

Last year Keystone hired ten lawyers, including six partners, from firms including Berwin Leighton Paisner (BLP) and Davenport Lyons and Nokia’s director of legal and IP Stephen McCue.

Addleshaw Goddard, meanwhile, saw DWF last week hire its former national head of employment, Andrew Chamberlain, to take on an identical role at his new firm. This shortly followed the news that global accountancy giant EY had hired Addleshaw’s corporate managing partner Philip Goodstone in a bid to build up its UK legal credentials.

jaishree.kalia@legalease.co.uk

Legal Business

Strategic hires: DWF brings in Addleshaws employment head; Addleshaws takes on Eversheds financial services partner

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Strategic recruitment Addleshaw GoddardDWFEversheds Sutherland
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DWF has hired Addleshaw Goddard’s former national head of employment Andrew Chamberlain to take on an identical role at his new firm, leading the strategic growth of its 60-strong UK-wide employment team.

Chamberlain headed Addleshaws employment team for nine years until 2012, when Michael Leftley took over, and served terms on both the firm’s executive committee and its governance board.

He has over 25 years’ experience advising corporate clients and FTSE 100 employers on all aspects of employment, from service agreements through to termination and restrictive covenants to TUPE, and has particular in-depth industry expertise in the financial services, transport and retail sectors.

Chamberlain initiated and led the development of Addleshaw Goddard’s transaction services team, an in-house centralised support team to manage the process elements of legal work, which was recognised in the Financial Times’ Innovative Lawyers Awards.

Commenting on the appointment, Andrew Leaitherland, managing partner & CEO at DWF said: ‘The UK legal market is undergoing significant change and these changes are bringing opportunities, which Andrew has said to me he feels strongly that DWF, based on its current market proposition, its senior management sponsorship and its ambition, has the right mindset to embrace and build a new employment proposition in the market which better meets the needs of clients.’

Chamberlain’s appointment is the latest in a series of strategic lateral hires for DWF which include, most recently, the recruitment of Stephen Miles as CEO for commercial services from Pinsent Masons.

Meanwhile, Addleshaw Goddard this week announced the hire of financial services partner Fiona Ghosh from Eversheds.

City based Ghosh, who currently co-heads Eversheds payment processing group, acts for financial services providers in the retail and investment banking and insurance services sector, as well as being a key advisor in the field of retail payments.

A statement from the 174-partner firm said: ‘[Fiona] has market leading expertise in joint ventures and acts for acquirers, payment facilitators and merchants on a global basis – her clients include American Express, Euronet and numerous US merchant acquirers.’

The hire marks a return to Addleshaws for Ghosh, who was a lawyer at the top 25 firm between 2001 and 2006.

Malcolm Pike, Addleshaws commercial services divisional managing partner said: ‘We are delighted to welcome Fiona back to the firm. Her skill set perfectly complements ours in that she has an existing strong track record of deals under her belt, she has financial services market credibility; and excellent client and relationship skills.’

Ghosh’s hire follows the announcement on 16 May that Addleshaws has appointed business support and restructuring head John Joyce as managing partner for a three-year term after a contested election against real estate head Adrian Collins, following outgoing chief Paul Devitt’s ahead-of-term resignation.

Devitt stood down more than a year before his term was due to end on 30 April 2015. The 174-partner firm carried out a soundings process followed by a formal period for nominations, which closed around Easter time and moved to a formal vote this month.

caroline.hill@legalease.co.uk

Legal Business

New leadership for Addleshaws with election of John Joyce to managing partner

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Addleshaw Goddard has today (16 May) announced the appointment of business support and restructuring head John Joyce as managing partner for a three-year term after a contested election against real estate head Adrian Collins, following outgoing chief Paul Devitt’s ahead-of-term resignation.

Devitt stood down more than a year before his term was due to end on 30 April 2015. The 174-partner firm carried out a soundings process followed by a formal period for nominations, which closed around Easter time and moved to a formal vote this month.

Addleshaw Goddard made it into the headlines in recent months when it emerged that it had miscalculated partner profit points and overestimated its profitability on one measure at the halfway point of its 2013/14 financial year.

The firm said it reviewed its procedures after underestimating the number of allocated equity points but stressed that it would not impact on underlying profitability.

Senior partner Monica Burch told Legal Business in early April: ‘It’s the pizza and slices analogy: the profitability isn’t affected, the size of the pizza isn’t affected, but the size of the slices were thought to be bigger. The points are slightly less valuable than they thought they were.’

Burch said of Joyce’s appointment: ‘Our congratulations go to John Joyce, as well as our thanks to both Adrian Collins and John for standing.

‘At a time when businesses continue to concentrate instructions amongst smaller groups of law firms, we have retained and greatly improved our position and opportunity with many significant clients. We have gained a strong reputation for innovation and for commitment to and understanding of clients’ needs. We have developed our sector focus and expertise, both in areas of traditional strength for the firm such as financial services, and in other areas such as energy and rail. We have significantly increased our international capability. And we have invested in building the experience and expertise within the partner group. Our thanks go to Paul Devitt for his leadership over the past five years and for his significant contribution to all of this.

‘We now look forward to the future with John as managing partner, and, as a partnership, to formulating our strategy for the next phase of Addleshaw Goddard’s development.’

Joyce (pictured) added: ‘I am delighted to serve as managing partner of Addleshaw Goddard, and to drive forward our firm’s growth and development. We have great clients and great lawyers and it is a privilege to have been given the responsibility to lead our continued progress and to helping the firm fulfil its potential.’

Sarah.downey@legalease.co.uk

For further analysis and commentary on Addleshaw Goddard see Comment: Democracy and half measures are not delivering for Addleshaws

Legal Business

Nabarro launches in Manchester with hire of Addleshaws trio; CMS brings in BLP partner to head aircraft finance

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Strategic recruitment Addleshaw GoddardCMS UK
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Nabarro is set to launch an office in Manchester with the hire of a trio of real estate partners from Addleshaw Goddard as CMS Cameron McKenna also announced today (14 May) that it has hired Berwin Leighton Paisner (BLP) asset finance partner Keith Wilson, who joins to head up the top 10 UK firm’s aircraft finance practice.

Joining Nabarro are Addleshaws real estate head Mark Haywood and partners Nathan Jansen and Monica Brij, who the top 30 firm said it has taken on in a bid to ‘enhance its practice and reputation for acting on the largest and most complex deals in the sector.’

It is understood that Addleshaws announced the departures to its partnership yesterday. Haywood has served as head of real estate at Addleshaws since last summer, after taking over from partner Adrian Collins. A spokesperson for the firm confirmed that real estate partner Michael Reevey is taking over as interim head of real estate before the firm officially appoints a successor. Brij, meanwhile, joined Addleshaws in 2007 after a four-year stint at Linklaters.

The launch of a lower-cost Manchester office follows the announcement by BLP in March that it is launching in the North West City, from where it has already been appointed as Tesco’s go-to real estate provider after a panel pitch.

The firm’s head of real estate, Ciaran Carvalho said: ‘Mark, Nathan and Monica are fantastic additions to our real estate team. Today’s announcement is a sign of intent. Nabarro is rightly proud of its market leading real estate practice and we are confident in investing to continue to support national and international clients in the sector.

‘An office handling the most complex real estate structures, funds and deals in Manchester will strengthen the reputation established by our London team and complement the high quality investment, leasing and asset management work we deliver to clients from our Sheffield office.’

Nabarro has made several lateral hires in recent months including Osborne Clarke employment partner Richard Brown last September; IT and disputes partner Lee Gluyas from DLA Piper in March; and real estate and healthcare partner Candice Blackwood from BLP in early May.

Elsewhere, Wilson’s departure to CMS comes three years after he joined from Paul Hastings’ City office, where he was head of finance.

Wilson has 25 years’ experience in aircraft finance and has acted for clients within debt and capital market transactions, leasing transactions and portfolio acquisitions and sales. He also has experience advising in oil and gas financing and leasing particularly reserve based lending, vendor financing, ship finance and real estate finance.

CMS banking and international finance head Rita Lowe said: ‘His [Wilson’s] appointment is consistent with our global strategy and in particular our focus on sectors which support our clients. Keith will work alongside an international team to support and strengthen our existing expertise and international client base.’

Wilson’s move to CMS is the most recent in a spate of BLP exits, and follows the departure of former head of finance Matthew Kellett to accountancy giant EY in April and head of banking and finance litigation David Hughes to King & Spalding.

Sarah.downey@legalease.co.uk

Jaishree.kalia@legalease.co.uk

Legal Business

Addleshaw Goddard’s Collins and Joyce go forward for contested managing partner elections

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Leadership Addleshaw Goddard
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Addleshaw Goddard partners have nominated Adrian Collins and John Joyce as challengers for the managing partner role in the forthcoming elections after incumbent Paul Devitt announced he is stepping down almost a year early.

Real estate partner Collins and business support and restructuring head Joyce were widely predicted as forerunners in the contested election. Voting is due to close in mid-May following a period of hustings.

Adrian Collins joined the LB100 top 25 firm in 2000 as a partner in the real estate division, has served on the firm’s governance board and held the role of real estate managing partner from 2009 until 2013.

A partner since 1998, Joyce has been head of business support and restructuring since 2007, and is also a serving member of the firm’s governance board.

The new managing partner will serve a three-year term beginning mid-May, almost a year earlier than planned after Devitt stepped down long before his term expired in April 2015.

The firm said in a statement today: ‘The board, Paul Devitt and partners are in agreement that bringing forward the managing partner election process to coincide with the next iteration of our strategy (from May 2014), allows for a constructive discussion about the next phase of the firm’s strategy, helps to build momentum entering that phase, avoids a drawn out hustings, and provides certainty over our managing partner for the next 3 years, from the beginning of the coming financial year.’

Speaking to Legal Business after Devitt’s move from management was confirmed, senior partner Monica Burch commented: ‘We have had a strategy that we’ve focused on until 2014 and now it’s time to look at the macro as well as the micro environment to see what will be the kick-start for the strategy for the next five years. With the managing partner election coming up, it’s a great time to do that.’

The firm recently confirmed it is reviewing the administration of its partner remuneration system following an error in calculations at the start of the current financial year, which related to the number of points by reference to which profit is distributed to partners, which will result in a slightly lower than forecast end-of-year pounds per point.

It also emerged last month that the firm has decided to write off a large success fee on the basis that it would be extremely difficult to collect. That fee is understood to relate to litigation brought by the late Russian oligarch Boris Berezovsky.

francesca.fanshawe@legalease.co.uk

For further commentary on Addleshaw Goddard see Comment: Democracy and half measures are not delivering for Addleshaws and ‘We’ll see who wants to step up’ – Burch on growth, ambition and managing partners

Legal Business

Deal watch: Nabarro and Addleshaws take the lead on £800m Hermes/Co-Op regeneration joint venture

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Corporate Addleshaw GoddardCMS UK
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While major real estate deals are hard to come by, the usual suspects continue to take the lion’s share of the work as LB100 firms Nabarro and Addleshaw Goddard have advised on a £800m real estate deal between Hermes Real Estate and The Co-Operative Group to become equal partners on the regeneration of buildings and land in central Manchester.

The 20-acre regeneration of Manchester urban land, called NOMA, is considered to be the UK’s biggest regional redevelopment project. The joint venture involved teams of lawyers at both firms to cover real estate, joint venture and tax aspects of the deal.

The Nabarro team advising longstanding client Hermes was led by real estate partner Simon Staite and included funds and indirect real estate partner Chris Luck, planning partner Christopher Bowes, and tax partner Nick Burt.

At Addleshaws, the team advising The Co-Op was led by real estate partners Mark Haywood and Monica Brij, as well as partners Justine Delroy and Philip Goodstone who specialise in tax and joint ventures respectively.

Nabarro’s Staite, said: ‘This is an exciting deal and the UK’s largest regional redevelopment. The range of what our clients intend to build will create a vibrant new neighbourhood in one of Europe’s most vibrant cities. It only takes a site visit to see the potential of this project, right next to the Co-Ops’ new HQ, the refurbished Manchester Victoria Station and the Printworks.’

Addleshaws’ Haywood added: ‘This 20-acre, £800m scheme promises to be a game changer for Manchester’s continuing urban re- invention as an international city for business and investment.

‘We are delighted to have played a part in bringing together two organisations that share the same vision for responsible sustainable mixed use city centre development, and who together will unlock real long-term value for investors, residents and business.’

Other high-profile real estate coups for Nabarro recently includes partner Marie Scott being shortlisted for Real Estate team of the Year at the 2014 Legal Business awards for work advising Google on all aspects of its £1bn acquisition and development of a site at Argent’s King’s Cross estate for the development of its new UK headquarters, which includes around one million square feet of office space.

Addleshaws, meanwhile, which was appointed to a panel of five firms to provide commercial legal services for both the Co-operative Group and Co-operative Financial Services, has previously advised the group on the sale and leaseback of its new head office building in Manchester, after a foreign investor purchased the One Angel Square property for £142.3m.

Sarah.downey@legalease.co.uk

Legal Business

Comment: Democracy and half measures are not delivering for Addleshaws

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Comment Addleshaw Goddard
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I wrote recently of the need, when commenting on the firms and individual lawyers we cover, to give the benefit of the doubt, and I meant it, but sometimes it’s hard to find that silver lining or constructive slant. Addleshaw Goddard, unfortunately, has become a case in point.

Recent years have seen materially below-trend financial performance, indications of tension between its City arm and northern offices and an international strategy that looked just too little, too late. Perhaps more damaging has been the uncertain tone that has emanated from Addleshaws about where it sits in the market and wants to go.

The previous long-running management pair of Mark Jones and Paul Lee was not perfect. Indeed, some of the decisions taken during the boom years caused a good deal of the legacy problems the current leadership team have been wrestling with, notably an oversized real estate practice and an expensive City office. But they had the virtue of a complementary mix of styles and a willingness to robustly and unitarily run the firm when necessary.

As such, it has not always been apparent that the democratic instincts of senior partner Monica Burch and managing partner Paul Devitt are what the firm needs.

Remember, this is a firm that had professed to have had its long, hard look in the mirror three years ago, having been chastened by falling revenues and one of the lowest profit figures in the UK top 50. There has been no evidence of revival since, with Addleshaws’ top line still £30m below its 2007/08 high.

Recent news that the firm has had to write off substantial fees on litigation uplifts – recalling a £6m shortfall that occurred in its 2010/11 year due to conditional fee agreements undershooting expectations – and miscalculated profit points only heightens the sense that something is not right.

It’s been apparent for a while that Addleshaws – despite a formidable plc client base and having secured probably the best national/City merger in 2003 with Theodore Goddard is suffering more than its peers with commoditisation and fee pressure.

On one hand its efforts to respond creatively to a changing market with its low-cost Manchester centre are commendable. But rather than forging a strong brand to resonate with clients, much of the New Law pizazz has been lost amid talk of process mapping. And even if such a venture had been pulled off with Axiom-style panache, it hardly answers concerns that Addleshaws needs to be pushing higher into premium work, while managing costs at the commodity end.

The argument put forward before the breakaway of the litigation boutique Enyo Law that the firm should differentiate itself with a sustained push into high-end disputes in retrospect looks to have been a stronger notion than the generalist stance it has trudged on with.

In the end, the time for half measures has now surely long passed. There are a handful of strategies Addleshaws can credibly pursue – some involving substantive mergers but all demanding a clearer view about the firm’s London and international ambitions. Which path is for the firm to decide, not pontificating pundits. What is crucial is that Addleshaws – with a change in management looming – fixes on a clear plan of action and then unambiguously executes it. Sometimes in business you need to be your own harshest critic.

alex.novarese@legalease.co.uk

See also ‘We’ll see who wants to step up’ – Burch on growth, ambition and managing partners

Legal Business

Partner promotions – Trowers, Nabarro and BLP see reduced numbers as Addleshaws holds on eight

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Partnership promotions Addleshaw GoddardBerwin Leighton PaisnerCMS UK
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Partner promotions at the UK’s leading firms have largely been down so far down this year, as firms including Trowers & Hamlins, Nabarro and Berwin Leighton Paisner all promote fewer senior associates than last year, with Addleshaw Goddard maintaining a promotion level of eight associates.

Trowers & Hamlins made up just four new partners globally, down from seven in 2013, of which three were in the Middle East – Oman, Dubai and Bahrain – and just one in London.

Three of the promotions were across the top 50 firm’s global real estate practice, with the remaining one promotion in corporate. The promotions were a 50:50 split in female and male promotions. All promotions will take effect from 1 April 2014. Last year, the majority of promotions took place in London, while elsewhere they were in Manchester and Dubai.

Trowers’ senior partner Jennie Gubbins said: ‘We have a strong, international portfolio of work across real estate and corporate, which are both highly important, strategic areas for the firm. We are actively developing and expanding these core areas in the UK and overseas. These promotions will help us make additional strides towards bolstering our offering to clients and – with three promotions in the Gulf – further strengthening our Middle East offices.’

Meanwhile, Nabarro announced last week (27 March) that three associates would be made up, down from eight last year, taking effect from 1 May. The top 30 firm said this year’s round focused on the firm’s intellectual property, funds and real estate practice areas in London. All the partners came of age through Nabarro’s talent development programme for senior associates – a joint venture with the London Business School set up in December 2010 to create a wider pool of potential partnership candidates.

Elsewhere Berwin Leighton Paisner (BLP) made up eight senior associates to partner level, down one from last year, of which the lion’s share are in London.

Six promotions took place in London, while the remaining two were in Moscow and Hong Kong. BLP’s corporate department saw the largest intake with four partner promotions, followed by finance with two, and one each in disputes and real estate. All of the appointments are effective from 1 May 2014. BLP’s managing partner Neville Eisenberg said: ‘I am delighted to welcome these very talented lawyers into the partnership.’

Addleshaw Goddard, on the other hand, promoted eight, in an all-male round of promotions, also taking effect from 1 May. Last year, the firm made up three female partners, also from a total of eight. Promotions have remained UK-based for the last two rounds, with London and Leeds taking on three partners this year and two in Manchester.

‘Unusually for us, this year all the successful candidates meeting the competencies in those areas are male,’ says Addleshaws senior partner Monica Burch. ‘We have a strong cohort of managing associates pushing for partnership and I anticipate that we will have a more gender balanced slate next year and going forward.’

The results follow a mixed set of numbers from the Magic Circle so far: Freshfields Bruckhaus Deringer is promoting 15 this year, up one on last year; Allen & Overy is promoting 16, down from 19; and at Slaughter and May it is a bumper year for promotions, with seven associates made up to partner, up from two in the previous two years.

Jaishree.kalia@legalease.co.uk