Legal Business

Bakers agrees landmark deal to unite bulk of Euro business in one profit pool but Franco/German axis holds out

Baker McKenzie is to bring London and seven of its offices in Europe, Middle East and Africa (EMEA) into one profit pool as the firm moves towards full financial integration in the region.

Global antitrust chief Fiona Carlin has been elected to lead the integrated business, uniting 1,000 lawyers in the City, Brussels, Amsterdam, Stockholm, Madrid, Johannesburg, Bahrain and Qatar.

The move will be viewed as a symbolic step for chair Paul Rawlinson in his goal of dramatically improving the institutional integrity of a sprawling giant with heritage as a globe-spanning franchise (which bequeathed the much-loathed ‘McFirm’ tag).

Rawlinson, who took over the leadership of Bakers in 2016, is aiming to unite its 77 offices worldwide into three profit centres in EMEA, America and Asia Pacific by 2020.

The new structure, which includes 250 partners, will go live on 1 July and see profits divided on a region-wide basis for the first time. Carlin was elected to the newly-established role earlier this month.

‘It’s a very exciting role,’ said Carlin, whose role will include overseeing partners’ remuneration. ‘The integration allows us to be more strategic in terms of the investment that we make into client relationships and align resources to make better decisions.’

The move means the firm now has four cross-jurisdictional profit pools in Europe, and Carlin will also be involved in negotiating further integration in the region. That will mean convincing the firm’s French and Germany practices to join up. The firm’s 200 lawyers in Frankfurt, Munich, Berlin and Dusseldorf share profits with its 40-lawyer Austrian branch, while its 170 professionals in Paris form an integrated business with the 40-strong Luxemburg outpost. Meanwhile, 130 lawyers in Russia form part of the fourth cross-border profit centre in the region alongside Ukraine, Kazakhstan and Azerbaijan.

‘We have chosen the right person to take us on this part of the journey,’ said Samantha Mobley, London head of EU, competition and trade. ‘The reason why I thought Fiona would be an excellent leader is that she is good at coming up with innovative solutions and has a great drive towards getting things done.’

Carlin said she will keep her role at the helm of the firm’s antitrust practice for the time being, although new arrangements will be made after a transitional phase.

A long-time advocate of gender diversity and one of the founders of female professional networking platform Womanat, Carlin’s election will bring fresh air to a firm whose image has recently been dented by news that one of its male partners was allowed to take on senior roles after allegations that he sexually assaulted a junior lawyer several years ago.

While Bakers’ long march to integration stretches back to the pioneering leadership of Christine Lagarde in the late 1990s, Rawlinson’s vision of regional profit pools, a single global governance system and a unified remuneration model by 2020 still has some obstacles to clear.

Bakers moved to bring its North American outposts into a single profit pool five years ago, but had to draft special deals for its Dallas and Washington DC arms before these agreed to join the grouping. Meanwhile, Asia Pacific’s 17 offices are operating five different profit centres.

marco.cillario@legalbusiness.co.uk

For more analysis on Baker McKenzie, see ‘Waking the giant’ (£)

Legal Business

#MeToo latest: Bakers appoints Simmons to review handling of complaint against partner accused of sexual assault

Simmons & Simmons will conduct an independent review of how Baker McKenzie handled allegations that one of its partners sexually assaulted a junior lawyer several years ago.

Bakers confirmed today (21 February) it has appointed Simmons to review the incident, which resulted in the associate leaving the firm after reaching a settlement and signing a non-disclosure agreement.

Simmons will also look at the firm’s complaint procedures when dealing with sexual misconduct and other inappropriate behaviour. The firm said in a statement: ‘The review will also look at and review all our complaints policies and procedures to ensure our employees are protected and have a voice. We will follow the recommendations of the review and will take all appropriate action.’

Bakers faced criticism for allowing the partner in question to stay at the firm and take on subsequent senior roles.

While the NDA has so far prevented the alleged perpetrator’s name from going public for risk of identifying the victim, Bakers confirmed in a statement on 5 February that the partner was no longer attending the office and will now be leaving the firm.

The firm, which conceded in the statement it ‘should have handled [the incident] better’, is also in dialogue with the Solicitors Regulation Authority (SRA) on the matter. Bakers said in today’s statement: ‘We are co-operating in full with the SRA.’

A spokesperson for the SRA said on 5 February: ‘Now that we’re aware of the issue, we will seek further information before deciding on appropriate action.’

This latest update comes as sexual harassment remains a live topic for the legal profession. On 9 February a court in Munich sentenced a former Linklaters partner to three years and three months in prison for sexual assaulting a student at a firm party several years ago. In January, it emerged that a Dentons partner had been put on a leave of absence while the firm investigates reports of sexual misconduct while over the last few weeks the fallout from the Presidents Club exposé revealed that a number of senior lawyers had attended the controversial event.

marco.cillario@legalbusiness.co.uk

Legal Business

Deal Watch: European acquisitions generate big-ticket roles for Latham, Bakers and Bonelli

Latham & Watkins, Baker McKenzie, Clifford Chance (CC) and Allen & Overy (A&O) have lined up alongside a group of top independents in two multi-billion euro deals as Europe’s M&A scene maintains its brisk 2018 form.

Latham advised Global Infrastructure Partners (GIP) on the €1.94bn acquisition of Italian railway operator Italo – Nuovo Trasporto Viaggiatori (Ntv). The deal means the only privately-owned high-speed rail operator in Europe has shifted to American control after shelving plans to float on the Milan stock exchange. The Rome-based group is the country’s second-largest railway operator after state-backed Ferrovie dello Stato.

Latham London partner David Walker (pictured), Italy managing partner Antonio Coletti and Milan partners Stefano Sciolla and Giovanni Sandicchi acted for the US investment fund as it acquired 100% of the group. Slaughter and May’s local ally BonelliErede advised the seller led by partners Carlo Montagna and Elena Busson.

The deal generated roles for a number of major Italian law firms, with Nctm also advising Italo-Ntv with a team headed by Sante Ricci and Lukas Plattner, while Chiomenti’s Francesco Tedeschini and Andrea Sacco Ginevri acted for shareholder Allegro. Pedersoli advised debt provider Intesa Sanpaolo, fielding a team under Carlo Pedersoli.

BonelliErede had previously advised Italo-Ntv as the company announced plans for an IPO by the end of February. Shearman & Sterling and Italy’s Lombardi Segni & Associati were also advising on the proposed floatation, which had received the backing of the country’s minister of economy and finances Pier Carlo Padoan. However, Italo’s stakeholders decided to accept GIP’s bid after the fund raised its initial €1.9bn offer on Wednesday (7 February) last week.

The deal sees foreign investors return to Italy for big-ticket deals after last year’s €50bn merger of French Essilor International and Italian Luxottica Group. Going the other way, Italy’s Atlantia is involved in a bid battle with Germany’s Hochtief to acquire Spanish toll road operator Albertis.

Moving to Northern Europe, Bakers, CC and A&O have advised on the $6.7bn takeover of Danish phone carrier TDC by a consortium including Australian infrastructure leader Macquarie and three local pension funds.

As interest in telecom assets grows from investors, the consortium aims to restructure TDC to create two separate infrastructure and consumer-facing businesses.

Bakers’ London corporate partners Tim Sheddick and James Thompson acted for longstanding client Macquarie. Plesners provided Danish law advice to the consortium, which also included local pension funds PFA, PKA and ATP.  CC advised the consortium on debt financing.

A&O London partner Jonathan Brownson led the team advising the lenders alongside partners Matt Moore and Jake Keaveny. Horten provided Danish law advice to the lenders with its head of banking and financing Claus Bennetsen leading. Danish leader Kromann Reumert advised TDC.

marco.cillario@legalease.co.uk

For more analysis of Italy’s legal market see Legal Business’s latest issue with the piece ‘Letter from… Milan’ (£)

Legal Business

Comment: Bakers in a #MeToo bind and big questions on the profession’s record on harassment

Referencing the Presidents Club fallout last month, LB noted that the profession’s record on sexual harassment would receive much tougher scrutiny in the era of #MeToo. While optimists argued post-Weinstein that the profession is now less tolerant of bad behaviour than 10 or 15 years ago, the jaded maintain that the status and rewards handed to partners still encourage abuse… and law firms to turn a blind eye.

But who could have predicted the debate would move on so quickly, with news emerging on 2 February that Baker McKenzie had sanctioned a partner following an allegation of sexual assault?

A settlement was agreed with the junior lawyer who raised the complaint, which included confidentiality obligations on the firm and complainant.

Within days Bakers was facing claims that it lacked rigor in its handling and had sought to silence the victim, including in The Times. On Monday (5 February), Bakers confirmed it was to launch a review of its procedures and handling of the matter, that the accused partner is leaving the firm and that Bakers had been in contact with the SRA.

As is so often the case with such sensitive issues, the focus rapidly shifts from the initial incident and immediate response to examine any short-comings of the subsequent wider handling of allegations, including their disclosure. Bakers conceded as much in the official statement, noting: ‘We are really sorry this incident ever happened and we acknowledge we should have handled it better.’

There are also recriminations that the partner was allowed to take on subsequent senior roles at the firm, a reality that makes it far more sensitive institutionally.

As yet, LB’s direct requests for comment from the departing partner have gone unreturned. Bakers maintains that it is unable to comment as to the identity.

Bakers will get little sympathy for the bind it now finds itself in. Having agreed a settlement with the complainant which obliges it to confidentiality, the firm now struggles to draw a line under the event after it has gone public. Its hands are tied on communication internally and to the outside world.

Meanwhile, an internal investigation will bring scrutiny of whether Bakers has been sufficiently rigorous in handling this complaint and any broadly comparable cases.

This brings us back to the wider issue illustrated by the allegations surrounding Harvey Weinstein last year that has so dramatically recast the debate on treatment of women in the workplace. Those allegations highlighted the controversial use of non-disclosure agreements. In some cases they may have reflected wishes of victims. Yet the ethical dilemma remains: do such private remedies come at the cost of covering up systemic failings and give abusers cover?

To put that quandary in personal terms, I worked on a story more than 15 years ago as a young reporter new to the legal industry. It involved claims that a partner had been kicked out of a firm that wasn’t easy to get kicked out of after an allegation of sexual assault against a junior lawyer. The individuals were tracked down but I abandoned the story on the basis that while I felt there was enough to get it into print, its publication would likely lead to the victim’s identity coming out (the circumstances being particular enough). Her name didn’t come out, I told myself it was the right call ethically and moved on to the next story. Yet the partner continued to get gigs in the legal industry, including in at least one case in which his new employer knew of the allegations. The truth is that I’m less sure now that I made the right decision.

Law firms appear to be less tolerant of abusive or inappropriate behavior by partners than back then. I’ve seen prominent partners quickly exited in response to allegations in recent years.

Things have changed to a point. But enough? People whose opinions I respect tell me law firms are still too prone to brushing complaints under the carpet.

Last month we were approached with a report of an associate at a leading City firm whose internal complaint of inappropriate behaviour by a department head was ignored (we offered to investigate if the individual would speak to us on background). We have also been hearing ominous claims of issues at the Bar in recent weeks.

Statistically, we know the profession’s record on retaining female lawyers in private practice is dire and that scores of women opt out of law for many reasons, even as industry leaders claim to be fighting for progress.

The legal media has generally been responsive when stories of harassment have reached it but it seems that too few have gotten that far and perhaps we’ve simply not focused enough on the issue.

What it comes down to is largely anecdotes and educated guesses. We don’t know how widespread abusive behavior to women is in the law… or how credible the industry’s collective response is. That lack of transparency won’t cut it anymore and doing better than 1998 on sexual harassment won’t be a tenable defence. The industry needs to get its house in order now as only the painfully naïve can believe that Baker McKenzie is where this scrutiny will stop.

alex.novarese@legalease.co.uk

Legal Business

#MeToo latest – Bakers to launch review of assault complaint-handling as claim partner to depart

Baker McKenzie is to launch a review of its procedures following the handling of an allegation that one of its partners sexually assaulted a junior lawyer. Bakers confirmed the move after details of the incident and its handling went public on Friday (2 February).

In a statement, Bakers confirmed the partner will be leaving the firm and added: ‘We are in dialogue with the SRA [Solicitors Regulation Authority] on this matter. As a firm, our values of inclusion and diversity are extremely important to us and we are committed to ensuring the safety and wellbeing of all employees. That is why we are commissioning an independent review of this particular incident and how it was subsequently handled by the firm.

‘The review will also consider how we handle complaints of sexual misconduct and other inappropriate behaviour toward colleagues, to ensure we are guaranteeing the protection of our employees. We are really sorry this incident ever happened and we acknowledge we should have handled it better.’

A spokesperson for the SRA said: ‘Now that we’re aware of the issue, we will seek further information before deciding on appropriate action.’

The alleged assault was first reported last week by RollOnFriday, following a claim by a junior lawyer. However, the incident took place several years ago. In response, a confidential settlement was agreed with the complainant.

However, that the partner remained with the firm and subsequently took another senior role will generate harsh scrutiny of Bakers’ initial handling of the complaint. Bakers was first notified of an inquiry regarding the incident in 2016 before it was brought to the firm’s attention again last month with more details.

The controversy comes after a troubling start to 2018 in terms of highlighting claims of harassment and misogyny in the legal industry.  In January, it emerged that a Dentons partner had been put on a leave of absence while the firm investigates reports of sexual misconduct while last week the fallout from the Presidents Club exposé revealed that a number of senior lawyers had attended the event.

tom.baker@legalease.co.uk

Marco.cillario@legalease.co.uk

Legal Business

#MeToo: Baker McKenzie partner sanctioned after accusations of sexual assault

A Baker McKenzie partner has been accused of sexually assaulting an associate, it has emerged in the latest of a string of uncomfortable developments for the legal profession.

The incident occurred several years ago and was reported by the law firm’s HR team. Bakers carried out an investigation and ‘sanctioned’ the partner, who has remained at the firm.

The associate reached a settlement with Bakers, which included terms that the identity of both the victim and partner remain confidential. The associate subsequently left the firm.

The story was originally reported today (2 February) on RollOnFriday, which said it contacted the firm in 2016 regarding a line in the firm’s accounts allegedly identified as a one-off payment to an associate.

A firm’s spokesperson said: ‘We are looking in to all aspects of the 2016 RollOnFriday enquiry to see if there are lessons that can be learned. Any suggestion, however, that the firm lied is inaccurate and something we refute.’

The firm’s spokesperson said: ‘We take any allegations of inappropriate behaviour or misconduct extremely seriously. This incident occurred several years ago and was reported by our HR team at the time. The firm treated the allegation very seriously and immediately carried out a thorough investigation, including obtaining both external and internal advice.

‘On completion of the investigation, the firm imposed sanctions on the partner concerned. A confidential settlement was then reached with the employee, which we are not in a position to discuss. Our code of business conduct reflects the values of our organisation, and we expect all of our people, whether partners or employees, to abide by the principles and standards of behaviour set out in that code.’

The firm did not comment on RollOnFriday’s report that the partner was promoted after the event took place.

With the recent #MeToo campaign shining a light on harassment and misogyny across a number of industries, the news comes as sexual harassment is becoming a live topic in the legal profession.

In January, it emerged that a Dentons partner had been put on a leave of absence while the firm investigates reports of sexual misconduct while last week the fallout from the Presidents Club exposé revealed that a number of senior lawyers had attended the controversial event.

Amid harsher scrutiny of the profession’s treatment of women and response to harassment, it seems certain that there will be more troubling disclosures. The core issue is clear: how credibly do major law firms address harassment and inappropriate behaviour by influential partners with control of significant billings and client relationships?

Marco.cillario@legalbusiness.co.uk

 

Legal Business

Revolving doors: Baker McKenzie and Clyde & Co double up in the City as international hires gain momentum

The City is stirring during a typically dreary January with at least six firms making lateral partner hires in London, while others bolster in Europe and Asia.

Baker McKenzie and Clyde & Co both landed two London partners in the last week, while Osborne Clarke, White & Case, Fieldfisher and Brown Rudnick added to the City moves with one lateral hire apiece.

Baker McKenzie added finance partner Matthew Cox from Ropes & Gray, while Megan Schellinger joined from Linklaters as a capital markets partner. Former European Commission head Jonathon Stoodley has also joined the firm as a special adviser.

Cox’s hire follows the recruitment of other banking and finance partners Geoff O’Dea and Matthew Smith, as well as Alex Lewis from Ropes & Gray as a private equity partner in April. Schellinger, meanwhile, will join the firm in March from Linklaters, where she is counsel in its capital markets group.

Baker McKenzie London managing partner Alex Chadwick said the appointments come as the firm looks to achieve greater bench strength in its corporate, private equity, tax and banking and finance practices.

Clyde & Co has brought in London insurance partners Mandip Sagoo and Angus Duncan from Mayer Brown. Sagoo is described as experienced in civil and criminal litigation and regulatory proceedings and investigations, while Duncan is experienced acting for insurers in the financial lines markets.

Elsewhere, Cadwalader Wickersham & Taft lost its fifth restructuring partner in a week after Brown Rudnick hired Louisa Watt. Watt was head of loan portfolios, claims and debt trading at her previous firm, and her departure follows Milbank Tweed Hadley & McCloy hiring four restructuring partners from the same firm earlier in the week.

Osborne Clarke has hired its second private equity partner from Squire Patton Boggs in the past four months, as Alistair Francis joined Tim Hewens at the firm. To round-off the City lateral moves, White & Case recruited Hannah Field-Lowes from Weil, Gotshal & Manges, where she was co-head of international dispute resolution in London, while Fieldfisher hired Shepherd and Wedderburn data privacy partner Judy Krieg to work with Phil Lee in the privacy, security and information and also with Tony Lewis in the corporate crime team.

Further afield, DLA Piper appointed Federico Pacelli, a partner in its international tax practice in Italy, where he will lead the Italian transfer pricing team. He was most recently at Italian Euro Elite firm BonelliErede.

Eversheds Sutherland expanded its Paris office with a corporate hire, bringing in Sébastien Pontillo as a partner in its private equity practice, and Ashurst added to its finance team in Frankfurt with the hire of real estate partner Filip Kurkowski, who was formerly of Baker McKenzie and Allen & Overy.

In Asia, Mayer Brown hired corporate partner Brian McKenna from Debevoise & Plimpton, and King & Spalding brought in M&A lawyer Lee Taylor in Singapore. Taylor previously led Clifford Chance’s M&A group in Singapore and the south-east Asia private equity practice. King & Spalding’s Singapore office opened in 2010 and now has 30 lawyers.

hamish.mcnicol@legalease.co.uk

 

 

 

 

Legal Business

Comment: What’s the point of Baker McKenzie? (And does Paul Rawlinson have an answer?)

Ever wonder what Baker McKenzie is waiting for? The firm once had a crystal clear market position as the only major commercial practice that got anywhere near being truly globalised. And while the sprawling nature of the network meant a 20-year battle to shrug off the franchise tag, Bakers has long achieved polished mid-market credibility in many key jurisdictions. While it was never a threat to the US and London elite, the logic for an emerging giant to handle the mid-stream work for global plcs speaks for itself. Yet Bakers has continually fallen short of its own rhetoric.

Having been an international trailblazer, growth has been pedestrian for a decade now and there is too little evidence of the oft-promised push up the value chain.

In the meantime, its global reach has been challenged by a string of firms deploying verein-backed consolidation, while top-tier deal and disputes shops have further widened the profitability gap.

Bakers’ much-touted leadership of Acritas’ brand index – which surreally concludes the firm has a stronger reputation than Clifford Chance, Allen & Overy, Linklaters, White & Case and Latham & Watkins – is a function of being everywhere, not respected. The Client Intelligence Report, which draws on more than 9,000 respondents, found the firm ranking towards the bottom of the global top 20.

Bakers has an image problem, never getting near achieving the prestige of a Linklaters or the iconoclastic dash of a DLA Piper. The pitch to clients is indistinct. Having gone to the huge trouble and expense of building a vast global network – managed while maintaining a collegiate partnership – Bakers has often squandered its considerable assets to pursue the path of compromise and least resistance.

As can be seen from this month’s analysis, the firm’s popular and ambitious new chair Paul Rawlinson (pictured) is aiming to change that. The good news is that the basic strategy is sound, promising a heavy investment in core money-centre hubs, improvements in profitability and a sharper focus on global clients. The first of these aims is particularly overdue. While Bakers has had a more-than-respectable London practice since the 1990s, its failure in the last decade to build on its pioneering efforts has seen a string of more potent and focused rivals outpace it. There has been a similar story in Hong Kong, the firm’s German practice is still underweight and it is downright bizarre for a 4,500-lawyer practice to have barely 120 lawyers in New York. No-one achieves the kind of global aspirations Bakers has without making a far greater impact in these global hubs. There is also bold and overdue talk of pushing the firm towards effective operational integration by 2020.

The sentiment is welcome but getting there will not be easy. In fact it will be exceedingly difficult. Bakers is a hugely complex beast to marshal, while its fondness for consensus has often tipped over into bureaucracy and outright inertia. And for an operator with widely-cited communication skills, Rawlinson at times makes heavy going of articulating what is a coherent game plan.

The new chair should not be too concerned with preserving the status quo or diplomacy. Bakers has just about held its position over the last decade but no more. It is time for something more daring.

alex.novarese@legalease.co.uk

For our full analysis of Baker McKenzie, please read: Waking the giant

Legal Business

What’s the point of Baker McKenzie?

Ever wonder what Baker McKenzie is waiting for? The firm once had a crystal clear market position as the only major commercial practice that got anywhere near being truly globalised. And while the sprawling nature of the network meant a 20-year battle to shrug off the franchise tag, Bakers has long achieved polished mid-market credibility in many key jurisdictions. While it was never a threat to the US and London elite, the logic for an emerging giant to handle the mid-stream work for global plcs speaks for itself. Yet Bakers has continually fallen short of its own rhetoric.

Having been an international trailblazer, growth has been pedestrian for a decade now and there is too little evidence of the oft-promised push up the value chain.

Legal Business

Waking the giant

Making Baker McKenzie stand out was once a simple business. The day in 1948 Russell Baker met John McKenzie by chance in a cab, he had already conceived the notion of an international law firm. Formed in 1949, its first international office was added six years later in Caracas, Venezuela. In the decades to follow, the Chicago-bred firm stood out as a genuinely global operator in a profession that remained largely a domestic concern.

True, having been stitched together from a series of financially separate offices, Bakers never worried the legal elite in New York and London, being dismissed by some as a mid-market franchise thanks to a multi-partnership model that was then unheard of. But Bakers could point to global coverage well beyond any peer, including market-leading practices in many jurisdictions where few rivals dared venture. Passing the $1bn mark in 2001, Bakers turned over more than $2bn just seven years later, making it one of the largest firms in the world.