Legal Business

Merger mania: Addleshaws and CMS discussed combination before entering current talks

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Legal mergers Addleshaw GoddardCMS UK
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Despite both firms now being in merger talks with other suitors, Legal Business understands CMS Cameron McKenna and Addleshaw Goddard considered merging with each other earlier this year.

Although discussions have since come to nothing, it is understood CMS Cameron McKenna approached Addleshaws for a possible tie-up.

CMS, the global brand of ten member firms, posted profits for 2015/16 of £735m, while Addleshaws saw a profit bump of 5% to pass the £200m mark this year.

Both firms have been repeatedly linked to mergers this year. CMS is currently understood to be in talks with Olswang in a move that would bolster its European IP and technology offering. The firm has had recent merger successes. Its combination with Scottish firm Dundas & Wilson in 2014 led to a boost in revenues of around 8.4%, expanding its energy and financial institutions sectors.

Addleshaws, which currently has four UK offices and a presence in Hong Kong, Singapore, Dubai, Oman and Qatar, has been clear about its goal to achieve £250m turnover by 2017/18. It posted fees of £201.8m for the 2015/16 financial year.

The firm was in talks to combine with Scots firm Maclay Murray & Spens, which were called off in March this year. Addleshaws is currently in discussions with Virginia-based law firm Hunton & Williams.

Both CMS and Addleshaws refused to comment.

This week Legal Business revealed that Addleshaws saw a significant uplift in its revenues with a bump of between £5-10m resulting from a settlement in the long-running Boris Berezovsky litigation.

matthew.field@legalease.co.uk

For the full story on Addleshaw Goddard under John Joyce, read: ‘Welcome to the John Joyce show: Addleshaws’ head aims to push national firm centre stage’

 

Legal Business

Berezovsky settlement revealed as ‘fee uplift’ to Addleshaws revenues

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Litigation Addleshaw Goddard
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An uplift of between £5-10m from a settlement relating to the long-running Berezovsky litigation helped bump Addleshaw Goddard over the £200m turnover mark in 2015/16, Legal Business can reveal.

The news comes as a High Court judge has ruled the late Russian oligarch’s estate is ‘hopelessly insolvent’ with £34m remaining while creditors’ claims run into hundreds of millions of pounds. The judge outlined financial facts in a ruling on the latest stage of litigation involving insolvency trustees and Boris Berezovsky’s former partner, Elena Gorbunova.

Earlier this month, Addleshaws announced it had surpassed the £200m revenue mark, with turnover up by 5% to £201.8m, which managing partner John Joyce attributed to a strong performance from the firm’s transactional practice, as well as a strategic plan set in motion two years ago to improve business focus, performance and returns.

An Addleshaws partner told Legal Business an email was circulated to the firm two weeks ago from Joyce (pictured) outlining that the figures showed a good performance underpinned by strong corporate and transactional activity, and confirmed revenues included an element of uplift from fees recovered from the Berezovsky litigation.

Addleshaws won the case last summer against the administrators of Berezovsky’s estate and secured over £12.6m in ‘hard earned’ fees at London’s High Court.

However the trustees appealed the decision and an undisclosed settlement was made in December. That sum is said to range between £5m and £10m – enough to push Addleshaws revenues over the £200m mark.

An Addleshaws spokesperson said: ‘We pointed out in our year end press announcement that last year’s figures included an element of uplift in fees paid for work executed in previous years but which couldn’t be recognised until last year. That detail is confidential, but even without any uplift we were pleased to record a rise in income and profits.’

sarah.downey@legalease.co.uk

For more on Addleshaw Goddard under John Joyce, read: ‘Welcome to the John Joyce show: Addleshaws’ head aims to push national firm centre stage’

Legal Business

Cracking the whip: Addleshaws Joyce forced into action to push through recent partnership changes

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Leadership Addleshaw Goddard
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Noted for introducing a more assertive style of management to Addleshaw Goddard since being elected as managing partner two years ago, it has emerged that John Joyce had to coax fixed-share partners to vote on recently agreed changes to the firm’s partnership deed.

While a spokesperson for the firm said when the proposals had been voted through that ‘the commercial bargain between the partners remains fundamentally unchanged’, the process of obtaining partnership approval now appears to have been less than straightforward. One partner at the firm has told Legal Business that upon discovering many of the firm’s fixed-share partners had not yet voted, emails were sent out by Joyce ahead of the vote to the entire partnership to ensure sufficient participation.

The partner said: ‘Joyce sent round an email basically saying, “I see you haven’t voted. If you don’t vote for this, you must not believe you have a career here”. It was very aggressive.’

However, a spokesman for the firm said in a statement: ‘There were no messages along those lines and so the picture being painted isn’t accurate.’

Under current rules the firm requires 50% of the partnership to vote, of which 75% is required to pass through any changes. This means a minimum of 38% of the total partnership was required to approve the changes.

Changes were first floated in October last year and had gone through several rounds of consultation before being put to a vote at the start of July. Speaking to Legal Business before the vote Joyce (pictured) said that ‘consultation had been done to death’ but ‘some points were taken on board.’

While the majority was secured, the firm would not state how many partners had approved the changes, which come into effect on 1 May 2017.

Currently 87 of Addleshaw’s 189 partners are full-equity partners and, as part of the voted through changes, the firm is moving toward an all-equity partnership model. While fixed share partners have now been given more powers and rights, including participating in elections for the remuneration committee, it is believed that resistance to the changes largely centred on new restrictions on partners leaving the firm.

The original deed had a ‘bottleneck provision’, which meant no more than seven equity partners could leave without board consent in one financial year. The provision has now been extended to fixed-share, or ‘category A’ partners. Other changes include the introduction of ‘bad leaver’ provisions and restrictive covenants relating to fee-earners.

sarah.downey@legalease.co.uk

For more on Addleshaw Goddard under John Joyce, read ‘Welcome to the John Joyce show: Addleshaws’ head aims to push national firm centre stage’

Legal Business

Welcome to the John Joyce show: Addleshaws’ head aims to push national firm centre stage

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Leadership Addleshaw Goddard
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Victoria Young and Kathryn McCann talk mergers, leaks and pay with Addleshaws’ no-nonsense head

For a firm until recently associated with dithering, drift and under-performance, Addleshaw Goddard has been in decisive mode of late. Over the last two years the national player has assumed a more assertive style under the leadership of managing partner John Joyce (pictured). Joyce, who took over after an unhappy period under predecessor Paul Devitt, quickly overhauled the firm’s strategy. But in truth, strategy changed little from that of Devitt and then senior partner Monica Burch. Transformed instead was the leadership style and managerial mood music from Joyce, a man who at times appears to be doing a parody of the bluff northerner but who pulls it off thanks to results and a good dose of humour and charisma. Not since Mark Jones at the height of his powers a decade ago has Addleshaws had such an unyielding operational grip on the tiller.

Legal Business

Addleshaws votes through key partnership deed changes including wider exit provisions

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Partnership Addleshaw Goddard
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After a drawn-out process, Addleshaw Goddard has voted through several changes to its partnership deed, including further restrictions on partner exits and changes to management terms.

Managing partner John Joyce (pictured) needed a 75% majority to see through a raft of reforms to change the firm’s decades-old partnership deed. While the majority was secured, the firm would not state how many partners approved the changes, which come into effect on 1 May 2017.

As part of the changes, the firm is moving toward an all equity partnership model. Currently 87 of the firm’s 189 partners are full equity partners.

Now there will be two categories of partners, with current full equity partners to be classed as category B partners. Fixed share partners will be known as category A partners.

Category A partners will be given more powers and rights, including participating in elections for Addleshaws’ remuneration committee, which reviews partner performance and pay.

The most contentious changes have been restrictions on partners leaving the firm. The original deed had a ‘bottleneck provision’, which meant no more than seven equity partners can leave without board consent in one financial year.

When the changes come into effect category A partners – those current fixed-share partners – will also be covered by exit restrictions. The ceiling on category B resignations will remain at seven a year, though there will also be a higher combined total in force across A and B.

While the total number of combined category A and category B partners that will be able to leave in one year is not clear, the reforms appear to have been somewhat watered down from earlier proposals, which had last year suggested current full equity partner resignations should be as low as three.

Joyce told Legal Business that the board can give consent to let partners leave and the limit has never been enforced.

Other changes include the introduction of ‘bad leaver’ provisions and restrictive covenants relating to fee-earners. The firm would not detail the covenants, but Joyce says they are ‘market standard and not aggressive’.

Finally, Addleshaws has also extended terms of office for senior partner and managing partner to four years from three.

A spokesperson said: ‘The consultation was well overdue and identified what was either fit for purpose or out of step with the Addleshaws of today and in need of modernisation.

‘The commercial bargain between the partners remains fundamentally unchanged and the new set of articles adopted by the partners via the vote which closed on Monday are now in place.’

kathryn.mccann@legalease.co.uk

victoria.young@legalease.co.uk

Legal Business

Improved strategy sees Addleshaw Goddard post modest revenue bump of 5% for 2015/16

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Financial results 2015/16 Addleshaw Goddard
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Following the pattern of other mid-tier firms, which have seen slower growth this year compared to the financial year 2014/15, Addleshaw Goddard has surpassed the £200m mark for 2015/16, with revenues up 5% to £201.8m.

Commenting on the results, Addleshaws’ managing partner John Joyce said the increase was a result of a plan set in motion two years ago to improve business focus, performance and returns – with the transactional and international teams performing particularly well. However unsurprisingly wider macro-economic issues had a negative effect on the top line.

On Brexit he told Legal Business: ‘Last year would fall into two halves, except they are not halves they are quarters. We definitely say a Brexit downturn from January really and if Brexit hadn’t happened we wouldn’t have that number. We are a transactional firm and that means we were more affected by Brexit.’

In a statement Joyce (pictured) added: ‘We are thankful that a lot of the measures we have taken over the last two years leave the firm not only in an incredibly strong position but also very well positioned with an improved platform, client portfolio and sector focus. Delivering sales growth is a key imperative for us this year but will clearly be a challenge.’

It has been a busy year for the national thoroughbred, which entered into merger talks with Scottish independent Maclay Murray & Spens last November, only for Addleshaws to call off the deal a few months later amid claims that Maclay’s wanted better financial terms. In May this year, Addleshaws’ turned to the US for a transatlantic tie-up and is believed to still be in talks with Virginia-based Hunton & Williams in a deal which would see the mid-tier player realise its goal of becoming a £250m-lawyer firm by 2017/18.

In addition, partners are currently voting on a raft of changes to Addleshaws’ 20-year-old partnership deed which will impact on articles containing remuneration and management terms.

In March the firm elected corporate head Charles Penney to the role of senior partner. Penney, who took up the role on 1 May, replaced Monica Burch, who had been in the post since 2010.

kathryn.mccann@legalease.co.uk

Legal Business

News in brief – June 2016

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In-house Addleshaw Goddard
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ADDLESHAWS IN MERGER TALKS WITH US FIRM

Addleshaw Goddard has turned to the US for a potential merger, having entered into talks with Virginia-based Hunton & Williams. The US firm had revenues of $528m in 2015, while Addleshaws made £193m in 2014/15.

 

Legal Business

American dream: Addleshaws eyes US play with Hunton & Williams merger talks

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Legal mergers Addleshaw GoddardHunton & Williams
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After failing to secure further consolidation in the UK recently, Addleshaw Goddard has turned to the US for a potential merger partner to achieve its aim of becoming a £250m-lawyer firm, and is believed to be in talks with Virginia-based Hunton & Williams.

According to the latest AmLaw 100, Hunton & Williams has 696 lawyers and 167 equity partners across 19 offices in the US, Europe and Asia. In 2015 it posted gross revenue of $528m, a 7% drop on 2014.

By contrast Addleshaw Goddard posted double digit revenue growth of 12%, up from £171m in 2013/14 to £193m for the financial year 2014/15. The turnover rise took revenue to its highest level since 2007/08 and just shy in nominal terms of the £195m it achieved then.

The firm, which recently elected a new senior partner Charles Penney, had until February this year been in talks with Maclay Murray & Spens to create a national practice with combined revenues of around £230m.

The firm has been clear that it wants to make £250m in fee income by the financial year 2017/18, which a takeover would help achieve.

In a statement that mirrors the one made when news broke of the merger talks with Maclays, Addleshaw Goddard said: ‘We’ve said before that we will never comment on speculation about mergers and that remains our position so we have nothing to say. Increasing our scale and coverage is something we constantly consider, and we’re always talking to individuals, teams and firms on a regular basis about a lot of things.’

victoria.young@legalease.co.uk

For more on Addleshaws’ strategy and its impact see: ‘Last orders – Addleshaws gets behind its new leader, but can it regain its form?’

Legal Business

Reed Smith the beneficiary as Addleshaw loses second insurance head in two years

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Strategic recruitment Addleshaw GoddardReed Smith
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Addleshaw Goddard (AG) head of insurance Mark Pring is leaving the firm to join Reed Smith, less than two years after he replaced Richard Leedham as team head.

Pring was a dispute resolution partner as well as head of insurance at the firm. He has extensive experience in handling high-value, multijurisdictional disputes and his practice has a strong focus on insurance and reinsurance work, including professional indemnity, financial institutions risks, and directors and officers liability insurance.

Pring became head of insurance litigation following the departure of Richard Leedham to Mishcon de Reya in 2014. He previously was a partner at another US firm, Chadbourne & Parke, where he spent two years in Dubai handling complex international arbitration proceedings and advising a range of commercial clients on core risk management issues.

Peter Hardy, leader of Reed Smith’s EMEA commercial disputes group and the insurance recoveries team in London, said: ‘Mark’s appointment emphasises our commitment to building upon our existing market leading brand for policyholder coverage work. His experience and particular understanding of the Middle Eastern market is a natural fit for our global footprint and international client base.’

Commenting on his departure, a spokesperson for AG said: ‘We are sorry to be losing Mark Pring to Reed Smith which he believes is the right step for him at this stage in his career and he goes with our best wishes. The ambitions for our insurance disputes practice are unaffected and we will of course continue to develop the team through the right mix of sponsoring and promoting internal talent, and also acquiring laterally if necessary.’

AG has promoted managing associate Richard Wise as Pring’s replacement. Wise, who specialises in insurance and international commercial arbitration, represents major national and multinational policyholders within the financial and professional services, retail and consumer, real estate, construction and pharmaceutical/health sectors. He also spent two years working in the firm’s Singapore office, advising clients throughout south-east Asia and India.

In March, another AG partner, Sonia Campbell, left the firm to join Leedham at Mishcon.

kathryn.mccann@legalease.co.uk

Legal Business

Partner promotions: Addleshaws makes up 15 including two in Dubai in reduced round

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Partnership promotions Addleshaw Goddard
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Addleshaw Goddard has promoted 15 to partner this year, three fewer than last year when it more than doubled its promotions with 18 making the ranks.

For the first time Addleshaws has made appointments outside of its UK offices, with Dubai-based Darren Harris and Bevan Farmer making the cut. Managing associate Harris is a corporate lawyer who was relocated to the Middle East about two years ago having worked for Addleshaws in the UK, while Farmer is also a managing associate, based in the firm’s construction and litigation team.

In the UK, the firm made up seven in London, four in Leeds and two in its Manchester office.

Addleshaws’ corporate practice saw the most hires, with six made up to partner, while four were made up in the firm’s banking team, and two in the firm’s commercial practice.

The firm’s employment, litigation and real estate departments each saw one partner promotion.

Addleshaws managing partner John Joyce (pictured) said: ‘It is always a pleasure to recognise the achievements of individuals operating across the firm and we are thrilled to be able to promote so many talented lawyers to partnership once again this year. Each individual has demonstrated a strong track record of success and will continue to deliver great value to our clients.’

Last month, the firm appointed a new senior partner with corporate head Charles Penney to take the reins from Monica Burch who was first elected to the role in 2010. Penney beat M&A partner Andrew Carpenter to the leadership role.

victoria.young@legalease.co.uk

Addleshaws’ partner promotions are as follows:

Paul Concannon, corporate, London

Darren Harris, corporate, Dubai

Hugh Lauritsen, corporate, London

Shelley McGivern, corporate, Manchester

Jonny Powling, corporate, London

Duncan Wilson, corporate, Manchester

Sally Hulston, employment and incentives, Leeds

Georgina Powling, commercial, Leeds

Simon Lofthouse, commercial, Leeds

Zoe Maurer, banking, London

Sarah Egbu, banking, London

Nick Barlow, banking, Leeds

Laurie Keel, banking, London

Bevan Farmer, construction litigation, Dubai

Luke Baines, real estate construction, London