Legal Business

Baker McKenzie sees London revenue up to £176m as profits leap

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Financial results 2016 Baker McKenzie

Baker McKenzie‘s London office has seen its revenue jump by more than 20% in the firm’s LLP accounts, with turnover up to £176m in 2016 from £145.2m the previous year.

The international firm, which runs its financial reporting year until 30 June, has seen its London office continue a trajectory of strong growth, outstripping the firm’s global growth rate. In the 12 months to June 2015, the firm also added 9% to its London top line.

The London office has also seen a major boost in profitability, with profit for distribution among members up from £47.2m to £70m, a 48% increase.

The total number of fee earners at the firm, excluding partners, increased from 306 in 2015 to 340 in 2016, while the number of support staff remained the same at 308. The total number of UK-qualified partners fell slightly from 85 to 83, while the highest paid member took home £1.2m last year compared to £1.78m in 2015.

The firm hired ten new partners in the City in 2016, including three tax specialists from Big Four accountants. Key deals for the global firm included acting for Bain Capital on a $3.1bn deal to sell food distributor Brakes Group.

London has also been singled out for further expansion by the firm’s global chair Paul Rawlinson. Rawlinson is aiming to expand the firm’s transactional practices with between 10 and 20 new partner level lawyers over the next three years.

Bakers London managing partner Alex Chadwick (pictured) said: ‘Our strong London results are a good example of how this client-focus is working for us. Looking ahead, I want to capitalise on this momentum by continuing to drive growth across our transactional practices, improving profitability and ensuring that we continue to win significant client mandates.’

matthew.field@legalease.co.uk

For more on international firms in the City, see the 2017 Global London report

Legal Business

‘Reputation is catching up with reality’: White & Case and Bakers enjoy City revenues gains as rivals stall

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Financial results 2016/17 Baker McKenzieWhite & Case

London turnover down at Akin Gump, Debevoise and Reed Smith

The London outposts of leading international firms reported mixed results for 2016, with White & Case and Baker McKenzie reporting income growth while Reed Smith and Debevoise & Plimpton both struggled.

Legal Business

Baker McKenzie chair Rawlinson targets 250-strong New York office and launches new industrials sector group

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Leadership Baker McKenzie

With his international tour as global chair coming to a close, Baker McKenzie‘s new chief Paul Rawlinson is targeting renewed growth in the firm’s transactional practices in London, New York and China.

The former London managing partner has singled out the firm’s corporate and transactional centres for further investment.

Highlight aims included boosting the New York office and recruiting up to 20 transactional partners in London over the next three years.

At the firm’s London regional partners meeting, Rawlinson (pictured) told Legal Business: ‘We haven’t got a set in stone target, but internally we have aspirations. We have around 400 lawyers in London but we would want to increase the bench strength in regular M&A, private equity, banking and finance by 10 to 20 partners in two or three years from around 30 at the moment.

‘In North America we have 800 plus lawyers, we need to motor in New York, from in the region of 120 people now to a 250 strong office which is what we need in the next few years.’

The firm’s former chair Eduardo Leite has been engaged in helping to build out the New York office, while Rawlinson has also been meeting with candidates in the city to grow out its presence.

Baker McKenzie has also followed up its launch of a new consumer goods & retail group in 2016 with a new major industrials sector group to be launched this year.

The consumer goods sector was launched after the firm’s October partners meeting in Barcelona last year, headed up by Paris partner Alyssa Gallot-Auberger, who serves as the group’s chair. Major industrials will be the firm’s sixth group, targeting clients who may be in several key sectors or industries.

Rawlinson added: ‘I was elected on a global client mandate, I was someone who had developed deep client relationships globally, developing a global client vision. I put a mandate out there to deepen our relationships through an industry perspective.’

matthew.field@legalease.co.uk

Legal Business

Bakers takes on seven lawyer team from KWM including London employment head

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Strategic recruitment Baker McKenzieKing & Wood Mallesons

Baker & McKenzie is to take on two partners from King & Wood Mallesons‘ European partnership including private equity partner Will Holder and employment partner Carl Richards.

The pair arrive with a team of five associates including members of the private equity and employment teams. Holder was previously head of KWM’s China Group and spent ten months seconded to Chinese offices.

Richards (pictured) was head of the firm’s employment group with experience of advising on employment aspects of corporate transactions and disputes.

Bakers managing partner Alex Chadwick said: ‘Both of them bring many years of experience and expertise in their respective practice areas, which will strengthen our existing capabilities and prove invaluable to our clients.’

KWM is currently in the process of appointing administrators before 16 January. In December the firm confirmed its European arm had filed a Notice of Intention to Appoint Administrators with the court.

The beleaguered firm recently lost partners to Fieldfisher and Debevoise & Plimpton in exits reported today. Fieldfisher hired technology partner James Walsh, whilst Debevoise announced it is taking on private equity lawyer Simon Witney as a consultant. In Germany, Frankfurt-based corporate partner Michiel Huizinga is expected to move to Allen & Overy while DLA Piper has taken on the firm’s former head of real estate for Germany Lars Reubekeul and real estate partner Florian Biesalski.

The latest departures come as Legal Business revealed yesterday that KWM’s European arm had stopped paying 100 staff. Employees were notified of the decision on 3 January – the first day back for many after the Christmas break.

matthew.field@legalease.co.uk

Legal Business

Q&A: Baker McKenzie managing partner Chadwick on leadership, the Big Four and law firm consolidation

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Leadership Baker McKenzie
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Having taken on the top London role from popular global chair Paul Rawlinson, Baker & McKenzie London managing partner Alex Chadwick (pictured) talks to Matthew Field on the challenges of leadership.

What were your early years like as a lawyer?

I joined Baker McKenzie as a trainee because I thought it was different, different from the Magic Circle and smaller firms at the time like Ashurst Morris Crisp or Travers Smith – a global firm that sat in a different position.

What are the priorities for you in London?

We want to continue to grow where we are relatively small compared with the market generally, such as in corporate transaction. But we want to retain what is special about us, being a good place to be an employee and spend a career.

It’s particularly important to me that we are diverse and we are inclusive and as we grow we are reflective of all this set of talent, respecting the values we have always had internationally as a firm.

Have any lawyers been particular mentors during your career?

A partner I found most inspirational as a lawyer was Geoff Kay. I sat with him as a trainee many years ago. What I valued in him was his ability to simply and clearly interpret, analyse and advise on complex set of rules that is the tax code. I thought that he was a clearer thinker than any person I had worked at the time.

How much of a threat are the Big Four to law firms giving tax advice?

The Big Four have been very commercial about how they serve clients across multiple practice areas. In many ways their renewed enthusiasm in certain markets is a significant threat to global law firms.

Where we are focused on is our position to support clients at the crossover between cross-border and complex multi-practice projects. We need to keep building on practice areas where we can capture more work, particularly in the UK, through greater bench strength such as in M&A and corporate practitioners.

2016 has been a year of upsets. Brexit. Trump. Is there any hope?

Change is unsettling and challenging, but it is also a cause for looking at opportunities when you do what we do. We want to start to look at what the new dynamic will be for business operating into the UK and from the US. At the end of the day Trump, the May government and the EU will all react with new laws and our job is to help clients navigate that.

More UK firms are consolidating and firms like Dentons have become global players. How does Bakers react to this?

We are in an increasingly global marketplace, where our clients do business and look for professional advice globally. These moves are firms that have not been as global as us in responding to that client imperative. But we have always been global. We have always been built of strong local practitioners across a spread of markets. For us, the objective is not to jockey to be the largest firm in the world but to continue to support our clients on a fully integrated basis – and we don’t have the challenge of significant integration on the back of a major merger.

What has been the most challenging time in your career?

Possibly now, but not in a bad way. The last few months have been quite a challenge in that I have gone from one job into another job which is both similar but dramatically different. I still want a meaningful role as a client facing tax partner while executing the good work that has been going on in London.

matthew.field@legalease.co.uk

Legal Business

Baker & McKenzie bolsters Swiss offering with ten-lawyer team hire

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Strategic recruitment Baker McKenzie
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Baker & McKenzie has hired 10 lawyers including five partners to its Zurich office, boosting the firm’s presence in the Swiss financial centre to 130 lawyers.

The team of five partners and five associates moves from leading Swiss firm Froriep, which has 80 lawyers and offices in Zurich, Geneva, Zug, Madrid and London.

The new partners include corporate and M&A partners Beat Barthold and Pascal Richard, banking and finance partner Ansgar Schott, antitrust partner Boris Wenger and intellectual property and IT partner Alessandro Celli.

Corporate partner Barthold is recommended in The Legal 500 as a leading Zurich lawyer and is described as ‘a great adviser with excellent business understanding’.

Baker & McKenzie executive committee member Erik Scheer said: ‘Many of our global clients have major business in Switzerland and this team’s global outlook commitment to excellence and international client base is a perfect fit.’

The firm also recently hired Christoph Wild, a healthcare and sciences lawyer, who joined the Zurich office as a partner from Wenger Plattner at the end of September.

Baker & McKenzie has reinforced its presence in its major financial centres following a strong financial year for the firm. The firm added KPMG tax partner Steve Labrum into its London office last month. Labrum spent two years at the Big Four accountant, and had previously worked at EY, Deloitte and PwC.

In New York, Baker & McKenzie hired corporate partner Steven Canner from Kaye Scholer this summer as well as Jan Joosten from Hughes, Hubbard and Leed. It also added bankruptcy partner Debra Dandeneau from Weil Gotshal & Manges, who will serve as co-head of the firm’s global restructuring and insolvency group, and Peter Goodman from McKool Smith.

The firm recently recorded a comeback year for financial growth with results that make it the largest law firm in the world by turnover after an 8% increase to $2.62bn for 2015/16.

matthew.field@legalease.co.uk

Read more on the Swiss market in: ‘Red dragon, white cross – Can Chinese money kickstart Swiss markets’

Legal Business

Bakers looks to Big Four lateral to bolster tax offering as Chadwick moves upstairs

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Strategic recruitment Baker McKenzie
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Baker & McKenzie has hired experienced KPMG tax partner Steve Labrum to strengthen its City transfer pricing team.

Labrum joins the firm’s London office after spending two years at the Big Four accountant. Prior to this, he spent two years as global head of transfer pricing at Alvarex and Marsal, joining the firm in 2012. He was also previously a partner at EY, spending 17 years at the accounting giant and has also held roles with Deloitte and PwC.

His move to Baker & McKenzie follows the election of former UK head of tax Alex Chadwick as London managing partner for a three-year term in August. Chadwick will be replaced as London head of tax by Mark Delaney.

Chadwick (pictured) said: ‘This latest appointment continues our ongoing strong strategic commitment to grow our London tax, disputes and transactional practices.’

Baker & McKenzie has made a number of lateral hires in recent months to strengthen the London office, which experienced solid growth under previous managing partner Paul Rawlinson, who was elected global chair of the firm earlier this year.

At the start of the year, Baker & McKenzie added to its disputes practice with the hire of former Hogan Lovells litigator Hugh Lyons. The firm also recently brought over Andy Moody from Eversheds, Barclays managing director of litigation Jonathan Peddie and BBC head of litigation Nadia Banno.

The firm’s reshuffle in London leadership comes after former global chair Eduardo Leite stepped down after six years in the role. His final year at the firm saw Baker & McKenzie post an 8% boost in revenues to $2.62bn for 2015/16, after reporting falling revenues the year before.

For more on Baker & McKenzie, see Alex Chadwick’s Horizon Scan: ‘Fighting back – a golden opportunity to take on the Big Four in tax services’

matthew.field@legalease.co.uk

Legal Business

Fighting back – a golden opportunity to take on the Big Four in tax services

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Comment Baker McKenzie
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Bakers City head Alex Chadwick argues that law firms are increasingly primed to take core tax work off Big Four rivals

As the international tax framework becomes subject to increased scrutiny and legal change, the demand for strategic global advice has never been stronger. In the UK, law firms have traditionally played second fiddle to the Big Four accountants when advising on tax. Today, however, law firms with the right infrastructure are incredibly well positioned to take more of a leading role in the tax affairs of their clients. This is down to a combination of greater regulation of audit services, tougher restrictions on the provision by accounting firms of non-audit services, such as tax, valuation and legal services and deregulation of the legal profession.

Legal Business

Revolving doors: Gibson Dunn adds New York PE strength while Bakers hires two in tax

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Strategic recruitment Baker McKenzieGibson, Dunn & Crutcher
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US hires were on the cards for Baker & McKenzie and Gibson, Dunn & Crutcher, while Withers added in Hong Kong and telecoms firm Altice USA turned to Shearman & Sterling for its new general counsel.

Baker & McKenzie continued to expand its North American tax practice with two laterals into its Washington DC and Chicago offices. Tax partner David Berek’s transfer to Baker & McKenzie comes after stints as a partner at Chicago-based firm Horwood, Marcus & Berk and private wealth boutique Handler Thayer. The firm also hired Jennifer Molnar as a partner into its Washington DC office. She re-joins Baker & McKenzie from Sutherland Asbill & Brennan.

This week’s additions bring Baker & McKenzie to five new tax partner hires in the US this year, with the arrival of Patrick Cox from Withers Bergman in New York, Dan Cullen from Bryan Cave in Chicago and Steven Schneider from Goulston & Storrs in Washington DC.

Meanwhile in New York, Gibson Dunn has hired John Pollack from Schulte Roth & Zabel. Pollack was formerly the co-chair of the firm’s M&A and securities group, with major clients including Veritas Capital and Liberty Hall Capital Partners.

Gibson Dunn New York co-head Steven Shoemate said: ‘John has a substantial private equity practice that is very complementary with our M&A, private equity and investment funds practices. He will be a terrific addition to the New York office.’

Also in New York, telecoms and media firm Altice has appointed former Shearman & Sterling partner David Connolly as executive vice president and its new GC. Connelly has 14 years’ experience at Shearman working as an M&A lawyer and helped advise Altice on its acquisition of Cablevision for $10bn in June this year.

And over in Hong Kong, Withers has expanded its hotels operation by hiring corporate partner David Mallinson from Mayer Brown JSM. The hire grows the firm’s hotels and hospitality practice which was launched in March 2016 with hires in Australia and Singapore. Withers recruited Robert Williams as head of the firm’s Asia-Pacific hotels practice from Australia-based Ryan Lawyers, along with partner Justin Gross.

Williams said: ‘David extends the reach and depth of our hotels group, giving us a senior and on-the-ground presence in north Asia. This is a direct response to client demand, and highlights the firm’s commitment to our existing clients in Hong Kong and the wider region.’

matthew.field@legalease.co.uk

Legal Business

A comeback year for Baker & McKenzie as firm posts 8% turnover growth

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Financial results 2015/16 Baker McKenzie
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In results that see the firm leapfrog DLA Piper, to make it the second largest law firm in the world by turnover, Baker & McKenzie has bounced back from falling revenues in 2014/15 to post an 8% increase in revenue to $2.62bn for 2015/16.

Last year, Baker & McKenzie’s turnover fell 4% to $2.43bn, but the boost in turnover takes the firm beyond its previous $2.54bn high watermark in 2013/14.

Profit per equity partner (PEP) was also up 13% to $1.3m, still significantly below high billing rival and Global 100 leader Latham & Watkins which posted PEP of $2.9ml. Baker & McKenzie’s net profit increased 14% to $904m.

Baker & McKenzie global chairman Eduardo Leite (pictured) said: ‘These strong results represent the work of many years, investing in our clients and investing in our talent, as well as leadership and strategy. This year compared to last year was fantastic, last year we had very challenging times.’

The firm added 65 lateral hires in the last financial year and promoted 85 partners last month, including 34 women, matching the firm’s previous gender diversity benchmark.

Leite cited London as a top performing office, reflected in the election of London managing partner Paul Rawlinson as the firm’s new global chairman. The office saw City revenue up 9% to £145m in figures reported in March for 2014/15.

Rawlinson fought off competition in a four-way election against Latin America chair Claudia Prado, EMEA chair Gary Senior and former Paris managing partner Eric Lasry. His win was announced in June and he will take up the role on 23 October following the firm’s annual meeting in Barcelona.

‘Paul is a great choice for the firm,’ said Leite. ‘He has the cultural sensitivity that someone leading Baker & McKenzie needs. He is a global citizen, something which Baker & McKenzie has always looked for in its leaders.’

He said the legal world was markedly different from when he took up the chair role in 2010. Many law firms were adopting aggressive globalisation strategies, while political and economic turmoil and technological disruption were forcing law firms and clients to innovate.

Leite said the firm would continue to focus on several core markets: New York, London and China. In London the firm has elected Alex Chadwick to take on the managing partner role from Rawlinson.

The firm also expected to continue to make inroads to developing legal markets, in South America, Africa and Asia. ‘We need to expand our footprint in the markets of the future, Africa is one where we have a very ambitious and aggressive strategy,’ said Leite.

On his exit from the top job, following in the footsteps of past chairs John Conroy and Christine Lagarde, Leite said he planned to continue working with the firm in some capacity, although spending more time in closer to home in Brazil.

‘We managed to expand over six years and have consolidated our position in many regions. We have ten new offices in very important areas, I know many firms are very challenged to keep doing that. And we are still number one in South America,’ said Leite.

matthew.field@legalease.co.uk