Legal Business

‘Experience and energy’: Corporate head Penney wins Addleshaws senior partner race

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Corporate Addleshaw Goddard
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Corporate head Charles Penney (pictured) has been appointed Addleshaw Goddard‘s new senior partner, replacing Monica Burch, who was first elected to the role in 2010.

Penney, who joined the firm in 2005 will take up the job on May 1, for a term of three years. He has acted for both domestic and international clients on substantial mergers and acquisitions including, particularly, public takeovers, IPOs and joint ventures.

At the time of the firm’s proposed leadership shake-up of its partnership terms and governance structure late last year, it was discussed that the senior partner role may be reduced to a part time position. Addleshaw Goddard said that Penney will combine his existing client responsibilities with his new leadership responsibilities, focusing on the firm’s growth across the firm’s UK and international markets.

Following the announcement of his appointment, Penney said: ‘We are well recognised in our chosen sectors and markets – both in the UK and internationally – as a premium business which is great to work both with and for. Alongside client commitments, the continued focus on our growth, our brand and our culture will be key priorities for me as senior partner.’

Penney was up against Andrew Carpenter, a partner in the firm’s M&A and private equity group who leads the team responsible for its international strategy, implementation and its relationships with law firms in jurisdictions outside of England and Wales.

Outgoing senior partner Monica Bruch said: ‘I wish Charles well as my successor. He brings experience and energy and, with Charles as senior partner and John Joyce as managing partner, the firm is in very good hands. They have the support of our business and are passionate about two aspects which remain core to AG – our people and our clients.’

Last month it was reported merger talks between Addleshaws and Scottish firm Maclay Murray & Spens were called off. The deal, which would have created a national practice with combined revenues of around £230m, was planned to go ahead in May this year.

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

madeleine.farman@legalease.co.uk

Legal Business

Reed Smith replaced as Addleshaw Goddard joins Siemens UK legal panel

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Adviser reviews Addleshaw GoddardReed Smith
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Eversheds and Osborne Clarke have been reappointed to Siemens UK’s legal panel, while newcomer Addleshaw Goddard will replace Reed Smith, following a review.

The new panel will take effect from March 2016, spanning a three year term. Siemens general counsel Claire Carless, appointed in 2012, leads the company’s legal team, which operates across the UK and is aligned to Siemens’ four business sectors, energy, healthcare, industry and infrastructure & cities, and in addition supports other busineses such as its financial services division.

The energy and technology company streamlined its legal panel during its last panel review in 2013. The goal was to work on ensuring firms on the panel had a ‘better understanding of the Siemens businesses and to create greater efficiencies and value for the UK organisation.’

Eversheds has acted for Siemens since 2013, and anti-trust partner Richard Prowse, who led the panel bid, said he looks forward to continuing the relationship.

Prowse said: ‘Over the past three years we have worked closely with the Siemens in-house team and have developed a deep understanding of the business. We are thrilled to be reappointed to the panel, which underscores our strength in the various practice areas.’

Slaughter and May is not on the panel but has also advised Siemens in the past on Nokia’s €1.7bn buyout of Siemens’ stake in Nokia Siemens Networks in 2013.

Other recently concluded panel reviews include Credit Suisse which appointed Ashurst alongside four Magic Circle advisers, JPMorgan Chase, which appointed the entire Magic Circle, as well as CMS Cameron McKenna, Eversheds and Norton Rose Fulbright, while The Royal Bank of Scotland also undertook a review, and appointed Clifford Chance, Linklaters and Allen & Overy among several others to its roster for the next three years.

madeleine.farman@legalease.co.uk

Legal Business

News in brief – March 2016

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Addleshaw GoddardDLA Piper
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EE LEGAL HEAD REVEALS PLANS POST-TELCO MERGER

Following BT’s high-profile £12.5bn takeover of UK mobile business EE, it has emerged the telco plans to consolidate external legal panels, while EE’s general counsel (GC) James Blendis has been appointed to BT’s legal leadership team. Blendis will now sit on BT’s legal leadership board, which comprises senior legal management, including group GC Dan Fitz.

 

Legal Business

Addleshaws confirms two candidates for senior partner post

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Leadership Addleshaw Goddard
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Addleshaw Goddard has confirmed two candidates for its upcoming senior partner election to replace senior partner Monica Burch.

M&A partner Andrew Carpenter and head of corporate finance Charles Penney have both put their names forward to replace Burch on May 1. Burch was first elected to the role in 2010. 

A partner at Addleshaws for over nine years, Carpenter leads the team responsible for its international strategy, implementation and its relationships with law firms in jurisdictions outside of England and Wales.

Penney, who joined the firm in 2005 from legacy firm Lovells had worked as the firm’s resident managing partner for New York and did a secondment as secretary of the UK Takeover Panel.

At the time of the firm’s proposed leadership shake-up of its partnership terms and governance structure late last year, it was discussed that the senior partner role may be reduced to a part time position. An Addleshaws spokesperson said the role would continue to be full time as Burch’s was, but that the successful candidate would continue to engage in work with clients.

Legal Business also reported managing partner John Joyce favoured an external appointment for the senior partner role. The firm did not wish to comment on this point.

Last month merger talks between Addleshaws and Scottish firm Maclay Murray & Spens were called off. The deal, which would have created a national practice with combined revenues of around £230m, was planned to go ahead in May this year.

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

madeleine.farman@legalease.co.uk

Legal Business

End of the affair: Addleshaws Scottish takeover called off

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Legal mergers Addleshaw GoddardMaclay Murray & Spens
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Merger talks between Addleshaw Goddard and Maclay Murray & Spens to create a national practice with combined revenues of around £230m have been called off.

Addleshaws’ takeover of the Glasgow-based practice would have been the latest in a run of Scots takeovers, and was planned to go ahead in May this year. The firm has been clear that it wants to make £250m in fee income by the financial year 2017/18, which a takeover would have helped achieve.

A spokesperson for Maclays confirmed it is not presently in any ongoing discussions with any firm, but it remains open to the option of a merger.

‘We are resolutely committed to growing the firm, organically; through lateral hires; strategic acquisitions; or mergers. However, any such move has been and will continue to be assessed on the individual financial and strategic merits.’

The tie-up would have given Addleshaws a presence in eleven locations, including London, Manchester, Aberdeen, Edinburgh and Hong Kong.

Top 25 UK firm Addleshaws saw a turnaround this financial year, after a period dominated by internal discord, management changes and falling revenues. The 2014/15 year saw the firm post revenue growth of 12%, up from £171m in 2013/14 to £193m – the highest levels since 2007/08. Profits per equity partner (PEP) was up 26% to £491,000.

Maclays, which announced revenues of £43.5m for 2014/15, has faced its own challenges in recent years amid a difficult national legal market. Growth was stagnant for last year with revenues at the firm down 17% over the last five years. However, PEP was up 10% annually to £283,000.

Maclays is one of Scotland’s last remaining major independent firms, following Dundas & Wilson’s 2014 merger with CMS, McGrigors 2012 tie-up with Pinsent Masons and Clyde & Co’s takeover of Simpson Marwick last year. Maclays had previously entered talks with legacy firm Bond Pearce in 2011.

Addleshaws declined to comment on the matter.

For more on management changes and strategic challenges for Addleshaw Goddard, see: Last orders – Addleshaws gets behind its new leader, but can it regain its form? 

Legal Business

Addleshaws staff costs rise as firm ups partner rewards, accounts reveal

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Financial results 2015/16 Addleshaw Goddard
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Addleshaw Goddard‘s staff costs rose 12% from £57,000 to £63,600 in the 2014/15 financial year, the firm’s filings at Companies House show, after it paid larger bonuses and salaries to its employees.

The largest increase was in staff wages which grew by about 12% from just under £48m to a little over £54m despite the average number of persons employed during the year dropping 2% to 1,019 in 2015 from 1,042 in the previous year.

Fee-earner headcount fell 3% from 641 heads to 624 over the same period, while support staff heads also decreased by six down to 395. Pension costs at the firm also rose from £3,800 to £4,100.

In August last year, Addleshaws top of equity figure edged closer to the £1m goal, initially set by managing partner John Joyce in the firm’s revamped strategy, with the firm’s highest paid member taking home £936,000 – an increase of 67.5% increase from £560,000 the prior year. Addleshaws said this was paid to a continuing partner as it does not include retiring partners in its accounts.

We have had a strong year so felt it was necessary to place emphasis on reward,’ the firm’s chief finance officer Colin Brown told Legal Business, ‘we saw a substantial investment in staff costs that reflect the wider market but also a commitment to increase variable reward and if appropriate we will look to cast this theme again. Simply focusing on base salary is no longer appropriate, it doesn’t allow you to reward exceptional performances/contributions as quickly as we would like.’

Profits also shot up 19% to £57.3m from £48.2m for the financial year available for division amongst partners, while operating profit increased 16% to £60.4m from £52m

The firm’s filings also showed a net cash positive position for the first time since 2009, which the firm said was achieved through better financial management, improvements in working capital, an increased focus on billing and cash collection.

Turnover at the firm came in at £186.9m for the financial year, not including revenues from Addleshaw’s associated offices in the Middle East and Asia. With these added revenues, turnover hit £193m – up 12% from £171m in 2013/14.

‘We saw an uptick in transactions at the back-end of 2013/14 and this market confidence continued through the year, and in conjunction with a number of new mandates and panel wins underpinned the results for the year.’

Brown added: ‘Whilst a number of peer firms focus solely on London we have a very strong presence in both Leeds and Manchester, with partners in all offices increasingly leveraging our international presence to compete internationally.’

jaishree.kalia@legalease.co.uk

Legal Business

Property panel: Freshfields, Herbert Smith and Addleshaws make British Land roster

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Adviser reviews Addleshaw GoddardFreshfields Bruckhaus DeringerHerbert Smith Freehills
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Magic circle heavyweight Freshfields Bruckhaus Deringer has joined Addleshaw Goddard, Herbert Smith Freehills, Jones Day, King & Wood Mallesons, Mayer Brown and Simmons & Simmons on British Land’s first panel.

The property investment firm, which appointed former Freshfields partner Elaine Williams as its first general counsel in September, said it would also continue to work with other firms such as Sheppherd & Wedderburn and Carey Olsen in specialist areas.

While the panel review began before Williams joined as the FTSE 100 firm’s first general counsel in November, Williams was involved in the later stages and final decision making.

Williams said: ‘We were extremely impressed with the quality of the proposals submitted and in particular the thoughtful suggestions for effective collaboration and efficient provision of legal services. We are looking forward to developing closer collaborative ways of working with our panel firms”

King & Wood Mallesons legacy firm SJ Berwin has been a long-time adviser to British Land, with partner Matthew Priday advising on its complex acquisition of Aviva’s Paddington Central estate for £470m in ten weeks in 2013. Priday also acted on all aspects of the company’s West End portfolios including the flagship Regent’s Place scheme.

Other panel reviews to wrap up before Christmas include Edinburgh City Council, Tata Chemicals and Coca-Cola.

victoria.young@legalease.co.uk

Legal Business

‘Brought to an end’: Addleshaw Goddard and Grant Thornton settle Berezovsky fee dispute

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Litigation Addleshaw GoddardGrant Thornton
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Following an original High Court costs ruling in April, Addleshaw Goddard has reached a settlement with the administrators of former client Boris Berezovsky’s estate, ending a dispute over £12.6m in fees.

The administrators, Grant Thornton partners Nicholas Wood and Kevin Hellard, had refused to pay the legal fees relating to litigation undertaken by Berezovsky against the estate of Arkadi Patarkatsishvili, metals magnate Vasily Anisimov and other parties, as they believed the estate to be insolvent. These disputes were run concurrent to the more well-known court action Berezovsky had against Roman Abramovich, which Addleshaws also acted on.

The administrators argued against Addleshaws, claiming the firm’s contract with Berezovsky had been a conditional fee arrangement rather than a contentious business agreement and that even if owed, that the firm would rank alongside unsecured creditors.

However, the court disagreed and Master Campbell handed down judgment on 8 April in Addleshaws’ favour. Grant Thornton appealed the decision and the case was due to be heard in the Chancery Division of the High Court on 8 December, but has now settled.

Addleshaws said in a statement: ‘The parties are pleased to announce that the proceedings have been brought to an end. The terms of the settlement agreement are confidential and no further comment will be made.’

The firm began legal proceedings in the High Court against trustees Wood and Hellard of Grant Thornton – which were then the administrators, and later became the trustees of the estate – back in October 2014.

Addleshaws’ instructed Nicholas Bacon QC and Danial Saoul of 4 New Square on its claim alongside South Square’s John Briggs. The administrators turned to Holman Fenwick Willan partner Noel Campbell for their defence, which instructed 4 New Square’s Robert Marven and Stephen Atherton QC from 20 Essex Street.

jaishree.kalia@legalease.co.uk

For more coverage of the landmark Berezovsky litigation see: Battle Royale. 

 

Legal Business

Revolving doors: Addleshaws strengthens in corporate finance as key players hire in Europe, the Middle East and Latin America

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Addleshaw Goddard has added Squire Patton Boggs partner Giles Distin to its corporate finance practice as it aims to ramp up its City offering.

Distin has experience advising on UK public company transactions and has been on secondment as assistant secretary at the UK Takeover Panel. Addleshaw Goddard corporate and commercial division managing partner Yunus Seedat said: ‘[Distin] has a stellar client base, an enviable list of contacts amongst the UK financial advisory community and excellent networking abilities.’

Going the other way, Squire Patton Boggs announced it has hired employment partner Ludovic Roche in Paris from Fasken Martineau and corporate partner Georgy Borisov from K&L Gates in Moscow.

Fresh from adding partners to its South African team, Clyde & Co has shifted its attention to the Middle East and has hired energy partner Richard Devine. Devine moves to the firm from Baker Botts which he joined back in 2013 as part of a 14 lawyer group defecting from Norton Rose Fulbright soon after its merger. Clyde & Co said Devine will led the firm’s oil & gas group in MENA, region, having more than a decade of experience in Dubai. Regional corporate practice head Niall O’Toole said: ‘Richard’s appointment will bolster our energy offering and expansion in key areas such as Saudi Arabia, Africa and China, as well as our drive into Iran and other new markets.’

Also in Dubai, Watson Farley & Williams (WFW) has boosted its finance group with the hire of banking and finance specialist Neale Downes. Formerly a partner at SGH Martineau’s London office, Downes is recommended by The Legal 500 for corporate finance work in Bahrain, where he had practised at Trowers & Hamlins.

Meanwhile, Dublin firm William Fry has picked up two new partners as it continues to develop its litigation practice. The firm has appointed Mason Hayes & Curran partner Paul Convery who led the firm’s contentious media team, and the former head of AIB’s banking inquiry unit, Derek Hegarty.

William Fry managing partner Bryan Bourke said since January this year, the firm has appointed eight new partners and over 70 solicitors and business support staff.

Finally, Paul Hastings has made another hire to work in the firm’s São Paulo office, appointing Veirano Advogados partner Roberta Bassegio. Bassegio is a New York and Brazil-qualified energy and infrastructure lawyer who specialises in energy and infrastructure related project development and finance. Paul Hastings has already hired finance lawyers Robert Kartheiser and Cathleen McLaughlin to join the office, which is subject to regulatory approval but is expected to open within two to four months.

Project finance chair Robert Kartheiser said: ‘Our proposed office along with Roberta’s arrival will propel our leading transactional, disputes, and compliance-focused practice areas, and make them more accessible to our Brazil-based clients. In short, we are taking Paul Hastings in Brazil, and in Latin America, to the next level.’

victoria.young@legalease.co.uk

Legal Business

Addleshaws abandons ‘bottleneck’ reforms restricting senior exits amid all-equity partnership shake-up

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Addleshaw Goddard‘s leadership has floated a major shake-up of its partnership terms and governance structure in what promises to be a sensitive process as the firm holds merger talks with Maclay Murray & Spens.

The changes have been floated as part of a proposed shake-up of Addleshaws’ partnership agreement, including moving to a single equity structure. Addleshaws currently has 96 equity partners and 77 on salaried status. The consultations, made up of groups of partners, have been led by the firm’s managing partner John Joyce and general counsel Simon Callander across the 670-lawyer firm’s UK offices over the last five weeks.

There are also a number of proposals apparently designed to strengthen the role and responsibilities of the managing partner. Partners are being asked to decide if responsibilities should be delegated from the partnership giving the managing partner clearer accountability and authority for the running of the business and if Addleshaws’ board should function in a supervisory check-and-balance mode.

The shake-up discusses reducing the scope of the senior partner role, including whether the role is full or part time, the title of the role and if the appointment of Monica Burch’s successor in spring 2016 will be internal or external. Joyce is said to favour an external appointment.

A vote on any proposed amendments to the firm’s partnership terms would come ahead of a partnership vote on Addleshaws’ merger with Maclays.

The scope and terms of the shake-up are bound to be controversial amid concerns that Addleshaws’ leadership is attempting to railroad the partnership.

According to one partner, tensions have been heightened by the emergence of the Maclays discussions, which the partnership was only informed of on Tuesday afternoon (24 November), when Joyce sent an email. The partner commented: ‘Management want to look everyone in the eye and sell this as cosy cosy “we are protecting the business” but it is not about that. They are trying to lock people in.’

However, the firm indicated today that it is not pursuing proposed ‘bottleneck’ provisions on the number of partners that can quit in any one year. Legal Business understands that the number of equity partner resignations in a financial year is currently limited to seven, but had been floated as low as three. Proposals had initially also included handing the firm powers to reduce earnings of departing equity partners while enforcing a 12-month notice period, in what would be regarded as hard-line measures to ward off departures and predatory recruitment.

Despite several of Addleshaws’ peers agreeing major Scots tie-ups in recent years, such a union would be opposed by those who argue that the firm needs to focus on its City and international practices.

An Addleshaws spokesperson said the discussions were part of a ‘debate and conversation with a view to the exec returning with a more formal set of proposals’.

Joyce added in a statement: ‘The current partner consultation reflects a more open and inclusive approach which encourages the partnership to come together and openly discuss the business. Our articles have served their purpose well, but they are now very old and would benefit from a modernisation and refresh and we have been consulting partners on how we do that, before returning with a more formal set of proposals which mirror the “commercial” bargain we currently have between partners – ie not fundamentally changing the commercial terms between the partners, but updates them in areas where they seem to be inappropriate in the modern world.

‘It is something the new leadership team has had on its agenda. We know that some elements will not change either because they were not seen to be an issue or are fit for purpose. For example, the notice period for all partners was not discussed at all in the meetings and so will stay as it is, and we have no plans either to reduce the number of partners permitted to resign in any one year.’

kathryn.mccann@legalease.co.uk