Legal Business

The deal is off: A&O and O’Melveny call an end to transatlantic merger talks

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Legal mergers Allen & OveryO'Melveny & Myers

Allen & Overy has conceded the ‘compelling synergies’ between it and O’Melveny & Myers were not quite enough to seal a long sought-after tie-up, having today (2 September) said they were calling it a day on merger talks.

The news comes after months of market speculation since a possible merger between the Magic Circle giant and the Los Angeles-bred firm first emerged in spring 2018.

For a potential merger of this kind, the process had been unusually long-winded with few details coming to light along the way, with the need to align A&O’s remuneration to make it more akin to a US structure, as well as culturally assimilating the two firms often cited as profound stumbling blocks to an already complicated deal.

There had also been talk of factions in London between a handful of dissenting influential corporate partners at A&O and management, while disputes partners had been more pro-merger, given the significant strength of O’Melveny’s stateside litigation practice.

The foiled attempt will doubtless have proved a body blow to senior partner Wim Dejonghe and managing partner Andrew Ballheimer, both of whom have had building out a credible US business at the top of their agenda since 2016 when they took up their management roles.

Success would have created an international player with more than 3,000 lawyers and combined revenues of around £2.4bn.

A&O said in a statement: ‘Allen & Overy and O’Melveny & Myers have held discussions about a possible combination and, despite agreeing that there were some compelling synergies between us and that it was sensible to explore a possible deal in some detail, we have mutually decided not to continue these discussions. Both firms have developed a great deal of mutual respect and expect to remain in close contact in the service of our shared clients.’

The firm insisted that building its presence in the US remained the ‘highest priority’. ‘We will significantly increase our immediate focus on lateral individual and team hires, while remaining open to considering opportunities for larger combinations that may arise in the future,’ the statement added.

A spokesperson for O’Melveny concluded: ‘O’Melveny has concluded that the firm’s best course is to continue executing on its strategic plan—which has led to an unmatched culture, deep client partnerships, and record financial performances.’

nathalie.tidman@legalease.co.uk

Legal Business

Revolving doors: KPMG and Orrick hire City partners as Ashurst and A&O focus on Germany

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Strategic recruitment Allen & OveryAshurstKPMGMacfarlanesOrrick, Herrington & Sutcliffe

Lateral hires in London and Germany were the order of last week, with KPMG  bolstering its City legal services bench, Orrick, Herrington & Sutcliffe hiring a London-based energy and infrastructure partner, while Ashurst and Allen & Overy recruited practice heads in Germany.

Big Four accountancy firm KPMG has hired partners Kate Eades from Greenberg Traurig and Usman Wahid from Bryan Cave Leighton Paisner in a further boon to its legal services capabilities.

Corporate partner Eades’ experience includes advising on mergers and acquisitions, restructurings and joint ventures while Wahid is a commercial and technology partner focusing on IT/technology and outsourcing transactions. He has acted for clients on business critical software, new and disruptive technology as well as infrastructure deals.

UK head of Legal Services at KPMG Nick Roome (pictured) commented: ‘Our clients need the best expertise when they look to KPMG for support with business reorganisations, deals and other complex transactions, which is why we’ve brought in Kate and Usman. Their knowledge and skills will considerably strengthen the depth of our capabilities in this area and further enhance our ability to support KPMG clients with the challenges they face.’

The appointments follow that of Peter Workman in March who joined from PwC and leads the Midlands legal services hub and Angela Savin, who joined the legal service’s tax litigation team as partner from Norton Rose Fulbright in January.

Elsewhere in London, US firm Orrick has hired as a partner former Herbert Smith Freehills energy and infrastructure senior associate Hannah Roscoe.

Roscoe is experienced in global transactional and regulatory matters including project developments, financings and mergers and acquisitions.

Global head of Orrick’s energy and infrastructure group Blake Winburne told Legal Business: ‘Our strategy is to look at the opportunities that present themselves to us in Europe for transactions as well as opportunities that are available from that platform into developing markets around the world. Hannah is going to be an important member for us, particularly on the power regulatory side but also more broadly in the power sector as well as the infrastructure side.’

Macfarlanes is set to lose senior adviser and head of digital and innovation Mike Rebeiro after 18 months. He led an initiative introduced last year to develop the firm’s digital and innovation capability. The firm said Rebeiro will not be replaced, instead a number of partners from across the firm will be moving the initiative forward.

A spokesperson for Macfarlanes said: ‘Mike has led our team to a successful conclusion of our project and we believe we are now uniquely placed to advise our clients in all sectors on the disruptive effects of new technologies. We wish Mike every success in his future endeavours and thank him for the contribution he has made to Macfarlanes.’

Meanwhile in Germany, Ashurst has hired former Shearman & Sterling tax lawyer Anders Kraft to its Frankfurt office as head of tax.

Kraft has experience in national and international tax advice, capital markets transactions, internal corporate restructurings as well as general tax planning and tax disputes. He acts for domestic and international corporate clients, private equity firms, banks and financial services providers.

Managing partner of Ashurst in Germany Tobias Krug commented: ‘Anders is highly experienced in advising on the tax aspects of domestic and international real estate, private equity and corporate transactions and he is a perfectly complement to the European and German tax team.

He added: ‘Ashurst is already ideally positioned in these areas and Anders will make a significant contribution and help us deliver even more for our clients.’

Also in Germany A&O has hired Osborne Clarke data protection expert Ulrich Baumgartner to its Munich office as head of the data protection team in Germany.

Baumgartner focuses on German and European data protection law as well as cloud and IT law. He will work closely with the firm’s IP/tech team.

Senior partner of Allen & Overy in Germany Thomas Ubber commented: ‘Client demand for advice in the field of data and data protection has grown strongly in the wake of various new laws and increased digitalisation and use of technology.

‘With Ulrich, we now have the necessary enhancement at partner level and at the same time further develop our global consulting practice on cloud-based business models.’ Ubber added.

Finally, in Singapore, HFW has added dry shipping expert Christopher Metcalf to its growing shipping practice. Metcalf, who joins from Clyde & Co, has acted for vessel owners, charterers, offshore service contractors, oil majors, mining companies and traders in contentious and non-contentious matters in the shipping, offshore and oil and gas sectors.

In the last five months, HFW has added eight shipping experts globally including shipbroker Chris Jones and an Ince shipping team, which launched the firm’s Monaco office earlier this month.

muna.abdi@legalease.co.uk

Legal Business

Allen & Overy loses litigation partner Florent to Baker McKenzie’s City hiring spree

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Strategic recruitment Allen & OveryBaker McKenzie

Allen & Overy (A&O) has lost its second London partner in as many weeks with the defection of Marc Florent (pictured), head of the Magic Circle firm’s UK insolvency litigation practice, to the expansive City office of Baker McKenzie.

The rare London exit nevertheless follows the news last week (19 August) that A&O’s head of fraud Mona Vaswani was leaving after 26 years to join US rival Milbank, Tweed, Hadley & McCloy.

The moves come as A&O has still yet to make an announcement over a potential transatlantic tie-up with the litigation-heavy O’Melveny & Myers after nearly 18 months of speculation.

Florent had been at A&O for more than 19 years and has been a partner since 2002. Before that he worked at fellow Magic Circle firm Freshfields Bruckhaus Deringer for nearly 10 years.

He is experienced in banking and finance litigation with a particular focus on wholesale and retail banking sectors, asset management, funds and sponsors on cross-border matters.

Steve Abraham, Bakers’ London and EMEA head of dispute resolution, commented: ‘Marc is a great addition to our growing and highly successful dispute resolution team in both banking and finance litigation and broader commercial litigation. Marc is a top tier and highly experienced practitioner whose joining will help us to go from strength to strength.’

Bakers’ financial institutions group global chair Jonathan Peddie said the hire would add significantly to the firm’s contentious offering.

In the last 12 months Bakers has made ten London partner hires, including Prabhu Narasimhan from White & Case (tax), Philip Thomson from Ashurst (corporate/energy, mining & infrastructure), Philip Annett from A&O (financial services), Caitlin McErlane from Sidley Austin (financial services), Peter Lu from White & Case (corporate M&A), Rob Mathews from White & Case (capital markets), David Becker from White & Case (capital markets), Mathew Dening from Sidley Austin (structured capital markets) and Haden Henderson from Ropes & Gray (capital markets).

Former Ropes & Gray partner Tony Horspool also joined the banking and finance team as a consultant specialising in restructuring in August.

Last year A&O lost Daniel Busse, the head of its German dispute resolution team, who left to form his own boutique, as well as intellectual property partner Nicola Dagg, who joined Kirkland & Ellis last October.

muna.abdi@legalease.co.uk

Legal Business

Revolving doors: Ince appoints London managing partner duo as City players hire globally

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Strategic recruitment Allen & OveryDLA PiperInce

After an eventful few months following its acquisition by Gordon Dadds, Ince has put down some roots with the appointment of Nick Goldstone and Michael Volikas as joint managing partners of the London office.

The move came after Gordon Dadds last month posted a 69% revenue hike from to £52.6m and a 73% rise in profit to £15.2m on the back of its £43m acquisition of Ince.

Ince’s former head of dispute resolution, Goldstone specialises in media-related disputes, reputation management and human rights. Volikas was previously global managing partner for the Ince & Co shipping group where he acted mainly on dispute resolution matters.

Goldstone told Legal Business: ‘We intend to be one of the go-to firms, not just for law, but for professional advice. We think we offer a fairly unique offering and intend to keep growing our sectors.’

He said he intends to move the firm forward and work through all the opportunities that have been created by last year’s merger. The firm aims to build out its core areas of strength in shipping, energy and insurance as well as its corporate, commercial and property sectors.

Goldstone is confident the current political and economic climate will bring in more work. ‘So far as the Strait of Hormuz is concerned and the trade war that’s potentially building up between the United States, China and the sanction issues with Iran – these create problems and opportunities. We are well-equipped to help our existing client base and new clients deal with these issues.’ Goldstone said.

Adrian Biles, the chief executive of both Ince and Gordon Dadds, will focus on the firm’s international outlook.

Meanwhile in Frankfurt, DLA Piper bolstered its tax practice with the hire of Ulf Andresen from PwC where he headed the Frankfurt transfer pricing group and the German financial services transfer pricing group.

Andresen has experience in structuring and implementing cross-border activities, evaluating tax accounting impact and defending these structures in audits. The move is part of DLA’s plan to expand its capabilities in transfer pricing, an area of law which is becoming increasingly important due to changes in the international tax landscape.

Co-managing partner Konrad Rohde told Legal Business: ‘We have a transfer pricing practice already in the UK and China. We’re very strong in terms of transfer pricing in the US and we also have capabilities in Italy. We have a lot of clients that do international reorganisations and transfer pricing is a huge driver for that. We also see a lot of opportunities to interface with other areas we practice in, in particular intellectual property, corporate and also white collar crime.’

‘We think that it will help us grow the practice but also give us an edge in comparison to other firms. If you look at law firms in Germany, very few typically cover transfer pricing. This will really give us a good footprint in the German legal market’ Rohde added.

Elsewhere, in Hong Kong, Allen & Overy appointed restructuring lawyer Ian Chapman to the partnership and its Asia Pa00cific restructuring and recovery group. Chapman has over 30 years of experience advising publicly-owned and private companies on complex and high profile restructurings and insolvencies in Asia.

Meanwhile, Burness Paull, has enhanced its tech sector capabilities with the hire of IP, commercial and competition partner Colin Miller from DWF.  He has acted for clients including C-Trip/Skyscanner, Expedia Group, Zoopla, uSwitch and Administrate, as well as the Oil & Gas Technology Centre.

Finally in China, Linklaters’ Shanghai free trade zone joint operation partner Zhao Sheng has hired Vivian Cao to its Beijing competition practice and corporate M&A lawyer Colette Pan to it Shanghai office. Cao has international and domestic competition law experience while Pan specialises in China-facing financial institution, tech and fintech M&A and financial regulation. Both partners join from Fangda Partners and are PRC and New York State qualified.

muna.abdi@legalease.co.uk

Legal Business

Legal 500 Data: Behind the story

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The Legal 500 Allen & OveryBaker McKenzieClifford Chance

This issue holds our annual Global 100 survey results, but which Global 100 firms top The Legal 500 for number of top-tier recommendations?

To view the editorial commentary of the rankings go to: legal500.com

Legal Business

Not easy out there: A&O adds £75m to its top line amid muted PEP showing

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Financial results 2018/19 Allen & Overy

Bringing up the rear of the Big Four City firms to post solid but unspectacular financial results, Allen & Overy (A&O) has increased its top line by 5%, sending revenue up by £75m to nearly £1.63bn.

A&O’s £1.627bn turnover relegated it from second to third largest Magic Circle firm in revenue terms after Clifford Chance (£1.693bn) and Linklaters (£1.629bn) but above Freshfields Bruckhaus Deringer (£1.472bn).

A pacier 8% growth in profit before tax to £708m was more heartening, even as profit per equity partner (PEP) rose just 1% to £1.66m amid a 2.4% uptick in headcount for the year. The firm has 2,300 lawyers and 550 partners.

Andrew Ballheimer, A&O’s managing partner, pointed to significant investments in the firm’s global platform and in its new consultancy business, A&O Consulting, part of the City giant’s advanced delivery services business which also includes Peerpoint, aosphere, and Fuse. Those businesses have grown more than 20% in the last year.

Geographically, Asia has been a particular standout along with other emerging markets, while international capital markets, and corporate were the most prolific practice areas.

‘We have acted on more deals, by a significant margin, than anyone else around the world and are ramping up the international platform,’ Ballheimer told Legal Business. He said multi-jurisdictional transactions were a main driver for the firm: ‘Very few law firms have a comparable offering.’

On the firm’s outlook, and market sentiment more broadly, Ballheimer commented: ‘The pipeline is good, but it’s not easy out there. There are headwinds including increased protectionism and the threat of trade wars. But if we focus on clients and ensure our platform is high quality, our business will be ok.’

He added: ‘Activity in the M&A market has to come to an end eventually, it’s been the longest bull-run in memory. Our business is in a good place but there is an understanding that it is not at all easy out there. We aren’t being complacent.’

Looking ahead, investments in innovation and technology, as well as diversity and inclusion, will be focal points for the firm. Deal highlights for 2018/19 include advising BMW on its €3bn acquisition of its passenger car joint venture with Brilliance China Automotive, Blackstone on its €1bn acquisition of a majority stake in Luminor Bank from Nordea and DNB and Virgin Money on its €4.4bn merger with CYBG.

The results follow hot on the heels of Linklaters’, which by far outstripped its peer group against every metric with a 7% revenue uptick to £1.63bn and double-digit profit growth.

nathalie.tidman@legalease.co.uk

Legal Business

A&O pips Links to the post in Magic Circle NQ pay hikes

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Associates Allen & Overy

Allen & Overy (A&O) has become the latest Magic Circle firm to hike its salary for newly-qualified solicitors (NQs) to £100,000, narrowly beating a similar commitment from final holdout Linklaters.

The move will see NQs take home a minimum of £100,000, including bonus, marking a 20% uptick on the £83,000 salary set by A&O less than a year ago.

Freshfields Bruckhaus Deringer last month became the first of the Magic Circle firms to tackle head-on the increased competitive pressure from US counterparts, raising its NQ salary by £15,000 to £100,000 plus discretionary bonus.

Clifford Chance (CC) followed suit a month later with £100,000 including bonus, a package matched by Slaughter and May the following week.

An A&O spokesperson said of the salary increase: ‘We have always been committed to rewarding our people fairly and competitively. This year, to maintain this position, newly qualified lawyers will receive a minimum total cash of £100,000, comprised of salary and a sign-on bonus.’

An announcement from Linklaters will now be imminent in order to keep pace with City peers and US rivals. The firm last October announced the second increase in its trainee and newly qualified (NQ) salaries, with the latter taking home £83,000 in basic pay.

The Magic Circle firms have this year upped their promotion efforts with A&O, CC, Freshfields, Linklaters and Slaughters collectively making up 120 partners in 2019, a significant 35% increase.

This year, the group also made up noticeably more women lawyers, after an embarrassing 2018 for many.

nathalie.tidman@legalease.co.uk

Legal Business

Sponsored briefing: Allen & Overy horizon scans to the workplace of the future

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Commercial Allen & Overy

A Q&A with Sarah Henchoz, head of employment at Allen & Overy

Sarah Henchoz is a partner and head of Allen & Overy’s London employment team. In this interview, she draws on her experience to explain how the massive shift in workplace culture will define the future world of work.

Legal Business

A&O ups the ante on female partner promotions as Skadden ends City investment drought

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Partnership promotions Allen & OverySkadden, Arps, Slate, Meagher & Flom

Allen & Overy has promoted 14 London partners amid a scaled up 34-strong global round while Skadden, Arps, Slate, Meagher & Flom has promoted its first City partner in three years.

The Magic Circle firm made heavier investment in new partners than last year and also significantly improved the promotion of women, minting eight females – equal to 24% of the newest partners – of which two are part-time. Last year, A&O made up only two women in its 20-strong round, having the same month vowed to redouble its diversity efforts.

Notably, Shruti Ajitsaria, the head of its tech innovation space Fuse, was promoted to partner.

Ajitsaria said: ‘After training at A&O, I think it’s fair to say I have taken a slightly alternative career path. The success of Fuse is testament to the spirit of innovation which runs throughout the firm – from management to our trainees and across our global offices.’

Jonathan Brayne, chairman of Fuse, added: ‘Shruti has been fundamental to the highly successful launch and operation of Fuse, A&O’s tech innovation space.  I’m confident she will take it to another level as a partner and will find new ways of keeping Fuse – and with it Allen & Overy – in the vanguard of legal market tech innovation.’

The firm has a target of having 30% female partner candidates by 2021 with a view to having 30% women in its partnership overall. The other London promotions saw five made up in banking, four in corporate, two in international capital markets (ICM) and two in litigation.

Skadden, meanwhile, has promoted Denis Klimentchenko from counsel to partner for its City M&A bench, a rare investment for the firm having bypassed London altogether for two-years running.

While a show of support for the London office, the 11-strong global round is scaled back from previous years when 14 were made up in 2018 and 12 were promoted in 2017. Klimentchenko is the first promotion in London since Sandro de Bernardini was minted to Skadden’s City M&A team back in 2016.

 

The full list of A&O partner promotions:

Arnold Keizer, litigation, Amsterdam

Hilde Van der Baan, litigation, Amsterdam

Sarah Wilson, banking, Bangkok

Thales Mertens, litigation, Brussels

Kyle Nevin, banking, Dubai

Anthony Traboulsi, banking, Dubai

Zeid Qursha, corporate, Dubai

Tina LeDinh, corporate, Ho Chi Minh City

Oleg Khomenko, banking, London

Catherine Lang-Anderson, banking, London

Nick Lister, banking, London

Ed Moser, banking, London

Jodi Norman, banking, London

Michael Bloch, corporate, London

Kate McInerney, corporate, London

Hugh Robinson, corporate, London

William Samengo-Turner, corporate, London

Shruti Ajitsaria, Fuse, London

Peter Crossan, ICM, London

Suril Patel, ICM, London

Brandon O’Neil, litigation, London

Robbie Sinclair, litigation, London

Yannick Arbaut, banking, Luxembourg

Jacques Graas, corporate, Luxembourg

Paul Peporte, ICM, Luxembourg

Santiago de Vicente, real estate, Madrid

Paolo Nastasi, corporate, Milan

Bulat Zhambalnimbuev, corporate, Moscow

Magnus Mueller, tax, Munich

Xavier Jancène, real estate, Paris

Aloysius Tan, ICM, Singapore

Tokutaka Ito, corporate, Tokyo

Bartosz Merczynski, litigation, Warsaw

Maura Rezendes, corporate, Washington DC

 

The full list of Skadden partner promotions:

Christopher Barlow, M&A, New York

Julie Cohen, litigation, New York

Elena Coyle, financial institutions, New York

Alec Jarvis, tax, New York

Denis Klimentchenko, M&A, London

Joseph Larkin, litigation/corporate restructuring, Wilmington

Christopher Murphy, tax controversy, Palo Alto

Alisha Nanda, litigation, Boston

Christine Okike, corporate restructuring, New York

Paloma Wang, capital markets, Hong Kong

Geoffrey Wyatt, mass torts, insurance & consumer litigation, Washington DC

 

nathalie.tidman@legalease.co.uk

Legal Business

SRA attempts to prosecute A&O lawyer over controversial Weinstein gagging deal

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Legal regulation Allen & Overy

An Allen & Overy (A&O) solicitor has been recommended for prosecution by the Solicitors Regulation Authority (SRA) over a controversial non-disclosure agreement (NDA) drafted for film producer Harvey Weinstein.

SRA chief executive Paul Philip confirmed today (3 April) that it aims to prosecute an unnamed lawyer from the firm, and is awaiting confirmation from the Solicitors Disciplinary Tribunal (SDT) as to whether the prosecution will proceed. Such considerations from the SDT tend to not take longer than six months.

A&O was dragged into the spotlight a year ago, after it was revealed the City firm had drafted an NDA for Weinstein in 1998 after Zelda Perkins (pictured), who worked at the producer’s company Miramax, alleged Weinstein had sexually harassed a colleague.

Last April, A&O employment partner Mark Mansell (who was involved in drafting the agreement) was grilled by a Women and Equalities select committee as part of a probe into the ethics of NDAs. The SRA announced it was investigating A&O shortly after.

The case against the unnamed lawyer is one of 13 NDA-related investigations the SRA is currently pursuing. In March 2018, the SRA issued a warning notice reminding lawyers of their responsibility to ensure that such agreements are not used to prevent the signatory from reporting to the regulator or police in the event of alleged sexual misconduct.

Philip today (3 April) commented: ‘There is no doubt, with the benefit of hindsight, there has been a lack of clarity [before the guidance]. There is now more of a discussion and heightened awareness about this and [solicitors] are less likely to engage without thinking very carefully about it.’

He added: ‘I don’t think an ex-employee who leaves the business should be left in any doubt who they can and cannot tell.’

An A&O spokesperson said: ‘We cannot comment on an ongoing investigation.’

tom.baker@legalease.co.uk

For in-depth coverage of the Weinstein NDA and the controversy over the profession’s role in concealing harassment, see last year’s piece ‘Draining the swamp’ (£)