Legal Business

Bit between the teeth

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Litigation Baker McKenzie
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 MARKET VIEW – ARBITRATION 

ICSID secretary general Meg Kinnear talks annulment, case administration and the globalisation of treaty arbitration with Baker & McKenzie partners Grant Hanessian and Teddy Baldwin

That more cases were filed at the International Centre for Settlement of Investment Disputes (ICSID) in 2013 than during the first 24 years of its existence reflects the extent to which treaty arbitration is now arguably the fastest-growing area of international dispute resolution. Notwithstanding criticism from some NGOs that treaty arbitration is biased in favour of investors, the fact is that governments prevail in more than half of all treaty cases, and it is clear that a host state’s ability to attract foreign direct investment is diminished substantially unless it offers a system under which to enforce investors’ rights. Arbitration under the ICSID rules remains by far the most popular for investment treaty disputes because its awards may be enforced without recourse to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) and because of the strength of the ICSID secretariat and the quality of the arbitrators it appoints. Some users do criticise the length of time it takes ICSID tribunals to render awards – at least 20 of which have been issued five or more years after the filing request.

Legal Business

Baker & McKenzie takes Norton Rose Fulbright’s EMEA head of energy

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Baker & McKenzie has brought in leading energy lawyer, Weero Koster, who headed Norton Rose Fulbright’s EMEA energy practice, to spearhead an energy drive in continental Europe.

Koster, who leaves Norton Rose Fulbright after 12 years at the firm, has been appointed as head of Baker & McKenzie’s Amsterdam energy practice.

Koster, who spearheaded a sizeable expansion of Norton Rose’s energy practice in Europe before its merger with US energy-focused law firm Fulbright last year, specialises in upstream oil and gas and renewable energy projects. He advises on privatizations, mergers and acquisitions, divestments and joint ventures.

A lawyer of 35 years, Koster has had stints at Magic Circle firm Allen & Overy and Dutch firm Houthoff Buruma after starting his career in-house, with time spent at airliners KLM Royal Dutch Airlines and Praxair. Mike Jansen, managing partner of Baker & McKenzie’s Amsterdam office, said that Koster’s arrival ‘further enhances our capabilities, making the energy sector a key focus for the Amsterdam office’.

Koster said: ‘Baker & McKenzie is responding to the reality of the rapidly-changing international energy market. The emergence of unconventional exploration and extraction methods, our sustainability needs, the Netherlands’ desire to become the gas hub of Europe, the nuclear debate, and the emergence of the BRIC countries and Africa make for a complex picture for the energy industry, which is reflected in their growing legal needs.

He added: ‘The global character of Baker & McKenzie and the scale of its EMI Group are ideally placed to meet client demands driven by these developments. I am excited to be further expanding my practice at Baker & McKenzie.’

tom.moore@legalease.co.uk

Legal Business

Eduardo Leite set to be re-elected as Baker & McKenzie chairman

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Eduardo Leite is set to be re-appointed as chairman of Baker & McKenzie after the law firm regained its title as the world’s largest law firm. Leite, who took charge of the firm in 2010, faced no opposition for the post and partners at the firm understand his re-election will be a mere formality.

His next term is expected to be passed by partners during the firm’s upcoming annual meeting in London in October. Baker & McKenzie typically look to extend leadership positions on a rolling basis, with Leite set to stay on as chairman for between two and four further years. Should he see out the full four years, Leite will become the firm’s longest serving chairman in recent history, with previous incumbent John Conroy having served a four-year term and a two-year extension that ended in 2010 and the firm’s most famous alumni, IMF chief Christine Lagarde, having headed the firm for five years until 2004. A partner familiar with the matter told Legal Business: ‘There is no fixed term but everyone is happy with Eduardo and no challengers have emerged.’

Leite has overseen a period of rapid international expansion at Baker & McKenzie, opening nine new offices in four years, with the firm having launched in Doha, Istanbul, Johannesburg, Casablanca, Lima, Seoul, Dubai, Yangon and Brisbane. This compares to the decade before which saw the firm open in just two new locations.

Despite increased fee pressure following the global financial crisis, revenue has risen 21% from $2.1bn to $2.54bn during Leite’s time at the helm, making it the first law firm to cross the $2.5bn threshold. Profits have also risen by 13% to $910m and the number of lawyers crossed the 4,000 barrier to reach 4,245.

Leite, who became the first Latin American to be elected chairman of an international law firm in 2010, was selected last year by the Obama Administration to also serve a three-year term on the US-Brazil CEO Forum.

John Leadley, who heads Baker & McKenzie’s product and operational risk group in London and manages the dispute resolution department, told Legal Business: ‘Eduardo is very popular within the firm and has overseen international growth and a rise in revenue. London, which is the firm’s biggest office, continues to be busy.’

Tom.moore@legalease.co.uk

Legal Business

Bakers’ Leite set for second term leading world’s largest law firm

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Eduardo Leite looks set to be re-appointed as chairman of Baker & McKenzie shortly after it regained its position as the world’s largest law firm. Leite, who took charge of the US-bred practice in 2010, has faced no opposition for the post and partners at the firm understand his re-election will be a formality.

His next term is expected to be confirmed by partners during the firm’s upcoming annual meeting in London in October. Bakers typically looks to extend leadership positions on a rolling basis, with Leite set to stay on as chairman for between two and four further years.

Legal Business

Baker & McKenzie to open legal services outpost in Belfast

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Baker & McKenzie has become the latest law firm to open a legal services office in Belfast as greater differentiation between high and low value work appears within mandates.

Bakers becomes the first US-headquartered firm to launch a legal services centre in the UK and is the fourth global law firm to create a Belfast outpost for low-value legal work, with Magic Circle firm Allen & Overy and Herbert Smith Freehills having opened similar operations in recent years.

The launch in Belfast, which follows an 18-month process that looked at more than 12 locations, takes the firm up to two global services centres, following the launch of a legal services base in Manila in 2000. Timezone was a key consideration, with the EMEA region the biggest source of revenue for the firm, accounting for 38% of the Baker & McKenzie’s record $2.54bn turnover for the year ending 30 June 2014.

The centre is expected to include around 120 professionals by the end of its first year of operation, rising to between 200 and 250 after three years. Initially around two-thirds of professionals will be in business services support and one-third legal staff.

Baker & McKenzie’s global director of operations, Jason Marty, is relocating from Chicago to Belfast to serve as the initial executive director of the centre. The firm will now look to secure premises and launch a local recruitment drive, with the expectation that the centre will be operational by September 2014.

The world’s largest law firm, Baker & McKenzie, which has opened nine offices in the last four years, was the first global law firm to open a legal services centre when it opened in Manilla, which has increased in size 10% year-on-year since 2000 to house more than 600 business services and legal staff supporting the firm’s 76 offices. The firm hopes to further lower costs with this latest opening, which will allow around the clock services and reduce the firm’s dependency on its Manilla base, which has been used by the likes of Unilever to process IP advice.

As greater proportions of legal work are being sliced to be handled in a more cost-effective manner, Belfast will provide a higher level of capability than on offer in Manilla, with plans in place to service a greater element of corporate and litigation work from the Northern Ireland base.

Tim Gee, head of the firm’s global M&A practice, said: ‘We are planning on building global centres of excellence in Belfast in the areas of due diligence and deal closing, which will be an integral part of our transactional team. Backed by project management specialists, the centres of excellence will provide integrated support to our deal teams around the world. The value for clients will be better risk assessment and more efficient execution.’

Eduardo Leite, chairman of Baker & McKenzie, said: ‘Clients consistently expect us to offer efficient and innovative services and manage costs. In response to client demand we have been centralising a range of front-line and back-office services in Manila over the past 14 years. This has given us great experience in off-shoring back-office support services and mid-office support for practice groups such as our global intellectual property support team for centralized, high-quality intellectual property management services for multinational clients.’

Paul Rawlinson, London managing partner at Baker & McKenzie, added: ‘One of the compelling reasons for choosing Belfast was the availability of a high-quality, well-educated workforce, able to support not just EMEA but all of our other regions.’

Tom.moore@legalease.co.uk

Legal Business

‘Clients are more confident about the market’: Baker & McKenzie becomes world’s largest law firm

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Baker & McKenzie has overtaken DLA Piper as the world’s largest law firm, with revenues for the year ending 30 June 2014 climbing by 5% to $2.54 billion after a transactions bonanza.

The firm, which last year opened offices in Myanmar and Dubai, is the first law firm to break the $2.5 billion revenue barrier since the global financial crisis, with the firm’s transactions practices accounting for $1bn of that figure.

Profits at the 4,254-lawyer firm rose from $865m to $910m, producing an improved profit per partner of $1.29m, an increase of 7% on 2013.

Baker & McKenzie reported a sharp rise in revenue from the Americas, and while North America still provides a greater revenue share than its southerly neighbour, Latin America now has a higher headcount courtesy of the firm’s Peruvian expansion. Revenue in the Americas increased from $871m to $914m as that expansion paid dividends when the firm was called upon to advise on Chinese miner CITIC Metal on its $5.85 billion acquisition of Las Bambas Copper Project in Peru from Glencore Xstrata. Europe’s economic recovery, guarded closely by toughed up regulation, produced a stellar year in EMEA with revenue up from $895m to $965m, boosted by mandates that included the $1.1 billion receivership of London’s iconic Gherkin building, one of the largest commercial property restructurings in the market.

Baker & McKenzie chairman, Eduardo Leite, said: ‘We’ve witnessed an improvement on the complexity and challenging quality of the work in the transactional areas, we’ve seen an uptick in M&A and clients are more confident about the market. It’s not come back to 2007 but work now has added complexity coming from stricter due diligence on mergers and acquisitions and investments.’

‘Clients are getting more and more global, they need and they must move into the growth markets, and the more they move into emerging markets the rule of law is not as stable and they face greater risk. The regulators in the emerging markets are getting as sophisticated as in Europe and the US and that means greater risks of dealing with local issues so for us, being so widely spread across the globe, is a competitive advantage.’

‘We are concerned about the instability in some places. We have our people in jurisdictions that go through crisis and the situation in Ukraine and Russia we hope will deescalate and will not go completely out of control. We’ve had challenging times in our Cairo office, where we’ve been since 1995, which is now stabalising again. We have our own security systems but it’s a risk of doing business globally that our clients face and we should not be shy or afraid but careful of going into new jurisdictions or investing for the long-term.’

Growth was flat in Asia Pacific, where the likes of Allen & Overy, Norton Rose Fulbright and Eversheds have all pulled back on investment this past year, with revenue rising from $653m to $660m.

Baker & McKenzie was appointed to 35 legal panels over the past 12 months, including BP, Shell and Barclays. The firm is also the largest in terms of headcount, with 10,896 fee earners and an expanded partnership after making 56 laterals and promoting 65 associates to partner.

Tom.moore@legalease.co.uk

Legal Business

Baker & McKenzie takes lead role on £650m Gherkin receivership

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Global 100 firm Baker & McKenzie has secured a heavyweight real estate mandate advising on the receivership of London’s iconic building, the Gherkin, valued at around £650m and which has been put up for sale after collapsing into receivership earlier this year.

As one of London’s most distinctive and recognisable landmarks, the 40-storey City of London skyscraper is expected to be purchased by a foreign buyer. Located at St Mary Axe in the City’s primary financial district, the building was placed into receivership in April after one of its owners was placed in insolvency, with big four giant Deloitte appointed as a receiver.

The Bakers team, led by London-based partner and global co-head of financial restructuring & insolvency Ian Jack, is acting for the facility agent for the senior lender syndicate and its receivers Deloitte. The syndicate comprises five banks and is led by Bayerische Landesbank. Other Bakers lawyers involved include London-based restructuring partner Louise Webb as well as teams from the firm’s German and Luxembourg offices.

Bakers’ Jack said: ‘In addition to being one of UK’s best loved buildings, this is currently one of the largest matters in the London real estate market. For those reasons how the receivership progresses is going to be of interest to a lot of people.’

Designed by English architect Lord Foster and opened in 2004, the Gherkin is one of the most well-known buildings in the world. It was purchased by German real estate company IVG Immobilien and investment banking company Evans Randall from Swiss Re for £630m in 2006 but has struggled with debt issues in recent years. That deal saw CMS Cameron McKenna advise IVG on the 50/50 joint venture, which constituted the largest ever UK property transaction for a single office building, while Linklaters advised Swiss Re, and SJ Berwin advised Evans Randall.

The Gherkin is currently home to law firms including US firms Kirkland & Ellis and Hunton & Williams.

Sarah.downey@legalease.co.uk

Legal Business

Asia-Pacific: office number 76 for Baker & McKenzie in Brisbane

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Baker & McKenzie has opened a third office in Australia, launching in Brisbane as it targets expansion into energy and resource-rich jurisdictions.

Brisbane becomes Baker & McKenzie’s seventeenth office in Asia-Pacific and is the firm’s second new office in the region in this year, following the firm’s move into Myanmar in February.

The firm will staff the office, which will work closely with the firm’s practices in Sydney and Melbourne, with three partners. The firm has hired former Herbert Smith Freehills energy lawyer Philip Christensen, who left in the aftermath of the Anglo-Australian merger to found mining and natural resources law boutique Christensen Legal, to launch the office alongside regulatory partner Jo Daniels, who was hired from Allens, and energy and natural resources partner Darren Fooks, who makes the switch from Clayton Utz. Daniels was previously a partner at both Middletons (now K&L Gates) and Clayton Utz.

Brisbane is Baker & McKenzie’s seventh office opening in three years, following the launch of its offices in Yangon, Seoul, Dubai, Lima, Casablanca and Johannesburg.

Baker & McKenzie’s Australia national managing partner, Chris Freeland, said: ‘Our new Brisbane office is key to deepening our firm’s offering across a number of sectors in Australia and globally. Baker & McKenzie is in 12 of the 15 most resource-rich jurisdictions in the world. Few law firms can say that. We have built one of the strongest energy and resources teams in the country and our top-tier infrastructure and construction practices are outstanding. There is no better time than now for us to move into the Queensland market.’

Baker & McKenzie’s chairman Eduardo Leite added: ‘There are significant opportunities for our Australian and international clients in resources, infrastructure development and agribusiness in Queensland.’

The firm recently made up 65 new partners across 22 countries in its worldwide promotions round, including 28 in Asia Pacific, the most of any region.

tom.moore@legalease.co.uk

Legal Business

Partner promotions: Baker & McKenzie makes up 65, Withers 7

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In the annual eye-watering reminder of just how large Baker & McKenzie really is, the top ten LB100 firm this week made up 65 new partners across 22 countries in its worldwide promotions round, including four in the City, bringing the partnership to 1,480. Withers, meanwhile, maintained last year’s tally of seven, with just one in London and six internationally.

Baker’s promotions, which take effect from 1 July, saw the largest number of promotions across the Europe, Middle East and Africa region, where 32% of lawyers were promoted. Twenty nine percent of those promoted this year are in the Asia Pacific region; 14% in Latin America; and 25% in North America.

Twenty eight percent of the latest round of promotions are women.

Those promoted in the City include Mark Agnew and Nigel Dolman within the corporate tax practice, private client-focused Salpy Kouyoumijan, and disputes specialist Charles Thomson. The promotions bring the total number of partners based in London to 86.

Baker & McKenzie’s chairman of the executive committee Eduardo Leite (pictured) said: ‘We continue to grow in ways that benefit our clients around the world, including making strategic investments in our talent. These individuals represent the next generation of leaders at our firm. They have excelled in their respective practices, having shown the leadership and dedication, which we encourage in a trusted advisor to our clients.’

Meanwhile, Withers yesterday (26 June) announced the appointment of seven new partners across its international offices, primarily across the firm’s tax and wealth planning team in Hong Kong, New Haven and London. The remainder fell in New York in the immigration team and art law team, and one in the litigation practice in the British Virgin Islands.

The appointments bring the firm’s total number of partners to 115.

Withers’ managing partner Margaret Robertson said: ‘I am pleased that the growing demand of our clients – successful people and families around the world – has enabled us to appoint so many new partners across our offices and practice groups.

‘Our global immigration practice benefits from the appointment of Reaz Jafri and our art law practice from the promotion of Diana Wierbicki. Our BVI office strengthens its litigation and insolvency capability with the appointment of Niki Olympitis. The success of our international tax and wealth planning team means we are able to continue its growth across the regions with the appointment of US attorney Tim Burns in Hong Kong, Charlie Tee in London and tax lawyers Andrew Haave and Bill Kambas in our East Coast US offices.’

Sarah.downey@legalease.co.uk

Legal Business

International expansion: openings for Charles Russell in Saudi; Eversheds in Durban; Osborne Clarke in Amsterdam

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A trio of UK firms have this week expanded their international office base as Charles Russell agrees a formal association with Saudi Arabian firm Al-Soaib Law, Eversheds continues to enhance its operations in Africa via a tie-up with Durban-based Knight Turner and Osborne Clarke (OC) opens an office in Amsterdam with a four partner hire.

Charles Russell, which is currently in merger talks with Speechly Bircham, said on Sunday (1 June) that the association with Al-Saoaib Law is a key part of its plans for expansion in the wider Gulf region.

The firm, which already has offices in Bahrain and Qatar and has worked with Al-Soaib on international and cross-border matters, will now have offices in Riyadh and Al Khobar.

Head of Charles Russell’s Bahrain office, Patrick Gearon, said: ‘The formalising of our relationship with Al-Soaib Law further demonstrates our commitment to the region. Our story in the Middle East is one of growth, with over 20 lawyers now based in Bahrain and a team now also based in our new offices in Doha, a presence in the Kingdom of Saudi Arabia is a natural next step and we are delighted to be able to team up with our friends at Al-Soaib.’

It comes after the top 50 firm last month unveiled healthy growth for the 2013/14 financial year, with revenue at the 310-lawyer firm up 7% while profit per equity partner (PEP) is expected to increase to around £350,000, constituting a 10% rise.

Yesterday (2 June), meanwhile, saw Eversheds build its footprint in Africa through an alliance with Durban-based law firm Knight Turner, a move which will see the local independent firm rebrand as Eversheds KZN. One of the most important manufacturing hubs in South Africa alongside Johannesburg, the firm’s entry into Durban follows the formation of its ‘pan-African’ strategy, leading to tie-ups with Mahons Attorneys in South Africa, as well as a presence in Johannesburg, Cape Town and Port Louis in Mauritius.

Eversheds chief executive Bryan Hughes said: ‘This latest agreement with established firm Knight Turner, forms a key part of our Pan African strategy as we firmly establish a presence in South Africa. Durban offers a strong commercial and logistics hub and we look forward to working collaboratively with the team at Eversheds KZN to offer a seamless client experience.’

Elsewhere, OC has made further inroads into the European legal market with the opening of an office in Amsterdam. Maintaining its focus on the digital sector, the firm has appointed Baker & McKenzie’s head of IP Michiel Odink to lead the team as managing partner of OC Amsterdam. Odink moves alongside fellow Bakers partner Jeroen Bedaux, who specialises in commercial litigation; London-based Norton Rose Fulbright IT partner Jeroen Lub; and employment partner Jorgo Tsiris who joins from Steins Bisschop & Schepel. Odink, Lub, and Tsiris are also all former Allen & Overy associates.

The addition of the Amsterdam office gives the firm a total of 18 offices in eight jurisdictions following the launch of its San Francisco office this year and Paris, New York and Brussels offices in 2013.

OC’s CEO Simon Beswick said: ‘As well as being a significant international hub, establishing our Amsterdam office gives us the increased ability to provide deep local and international market knowledge to our growing client base and access successful businesses in the Netherlands in the sectors in which we are strong. We intend to grow the office quickly over the coming months and are continuing our recruitment drive in the Amsterdam area.’

sarah.downey@legalease.co.uk