Legal Business

Clifford Chance reworks Saudi arrangements with new association

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Middle East and Africa Clifford Chance
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Following talk of contention with local authorities over the legality of its Saudi Arabia office, Clifford Chance (CC) has reworked its operations in the region, and entered into an association with newly-established Abuhimed Alsheikh Alhagbani Law Firm (AS&H).

AS&H has been formed by CC lawyer Fahad Abuhimed who will take the role of managing partner and is formerly of Al-Jadaan & Partners, alongside CC lawyers Majid Al-Sheikh and Mansoor Al-Hagbani. Most recently Abuhimed was a deputy minister at the Ministry of Commerce and Investment.

AS&H will operate from CC’s current offices at Business Gate in Riyadh and work closely with CC’s existing partners, while the Saudi lawyers and business services staff currently employed by CC in Riyadh will transition to AS&H. The new arrangement replaces the stand-alone CC law firm licenced in 2013.

The office will provide support to clients across corporate M&A, finance, equity and debt capital markets, anti-trust and competition, privatisations, financial services, real estate and construction, legislative drafting, regulatory, public policy and disputes.

Major mandates picked up by CC since it opened in the country include the establishment of the Saudi Telecom Company’s SAR5bn sukuk issuance programme; a $10bn revolving credit facility for Saudi Aramco; and, the Public Investment Fund’s acquisition of a $1.3bn stake in Korea’s POSCO E&C.

CC formally announced the launch of its joint Saudi and foreign-owned law firm in Riyadh, Al-Jadaan three years ago, boasting an institutionalised career path for Saudi lawyers as it became the first international firm to establish an integrated partnership in the Kingdom.

The firm faced contention earlier this year however after local courts began reviewing the firm’s licensing arrangements and the roles of local authorities when CC got its licence.

In a statement, Abuhimed said: ‘We expect the coming months and years to see a significant increase in the demand for legal services in Saudi Arabia, with a greater requirement for deep specialisation across a broader range of expertise. We are looking forward to working together to ensure a seamless transition for clients and staff when the new association becomes operational later this year.’

sarah.downey@legalease.co.uk

Legal Business

Clifford Chance latest Magic Circle firm to boost New York office with restructuring hire

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Clifford Chance (CC) has tapped Chadbourne & Parke for restructuring lawyer Douglas Deutsch, its second hire to the New York office this week.

The hire comes after CC announced on Monday it had taken on Robert Rice, the former chief counsel to the chair of the Securities Exchange Commission (SEC) in New York.

The move comes as rival Allen & Overy made a major play in Manhattan last week, appointing four partners, three from White & Case and one from Proskauer Rose, as well as adding an associate from Milbank, Tweed, Hadley & McCloy as partner.

Deutsch has more than 18 years’ experience in bankruptcy proceedings and restructurings, having worked as an associate at now defunct Texan firm Sheinfeld, Maley & Kay before spending 15 years at Chadbourne & Parke.

CC head of Americas financial restructuring group Andrew Brozman said Deutsch was ‘an excellent fit for our practice’.

‘He has the substantive skills and talent to service and grow relationships with his existing clients as well as those of the firm. We couldn’t be more pleased to welcome him to our team,’ said Brozman.

Deutsch added: ‘Clifford Chance shares my strong commitment to clients and provides me with an incredible global platform to grow my practice. It’s a great fit for me.’

CC also added to the New York office with the hire of Rice as partner earlier this week, strengthening its litigation and dispute resolution practice. Rice brings 25 years of white-collar experience in government and the private sector to the firm.

The Magic Circle heavyweight recently recruited a new chief financial officer, hiring Patrick Glydon from advertising agency Dentsu Aegis Network following the retirement of Stephen Purse, who stepped down after 11 years in the role.

Revenue at the firm for 2015/16 increased 3% to £1.39bn, while profit per equity partner has jumped to its highest level to date, increasing 10% to £1.23m.

matthew.field@legalease.co.uk

 

Legal Business

In-house: Hogan Lovells, Clifford Chance and Linklaters pick up spots on new EU banking panel

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Magic Circle firms Clifford Chance and Linklaters have been joined by Hogan Lovells and PwC on a new panel created by the new EU authority responsible for winding up banks.

The EU’s Single Resolution Board (SRB) tendered for legal advisers earlier this year, for contracts worth an estimated maximum total value of €15m.

The SRB was established at the start of 2016 with the role of winding up failed Eurozone banks as the key decision making body within the EU’s Single Resolution Mechanism.

According to tender documents seen by Legal Business, the three law firms and PwC’s EU services division will provide advice. The contracts last for two years, with options to renew for up to two 12 month periods.

The documents describe the board as ‘one of the cornerstones of a new architecture in banking supervision and resolution’. It aims to end ‘the toxic cycle of too-big-to-fail’ that led to previous banking crashes.

The SRB serves as the resolution authority within Europe’s banking union to prevent banking failures spilling into a full-blown financial crisis, like those that hastened the collapse of the Greek banking system in 2008 and the Cypriot financial crisis in 2012-13.

The contracted firms will provide advice on areas including corporate law, banking law, capital markets, labour law, real estate and intellectual property.

The SRB’s invitation to tender called for firms to submit CVs of advisers from at least four EU member states and demonstrate significant cross-border experience.

Hogan Lovells Frankfurt-based corporate partner Tim Brandi said: ‘We are proud of our appointment to the legal panel of the Single Resolution Board. We consider this appointment as recognition of our unique bank restructuring experience.’

The SRB was fully operational as of January 2016 as the new regulations on EU banking came into force. It is chaired by the former president of the German financial regulator BaFin, Elke König.

matthew.field@legalease.co.uk

Legal Business

Clifford Chance recruits new CFO as Purse retires after 11 years

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Clifford Chance has hired Patrick Glydon, the global director of commercial initiatives from advertising agency Dentsu Aegis Network (DAN), to succeed its current chief financial officer Stephen Purse, who is set to retire.

Set to start in the role in early September, Glydon will become a member of the firm’s executive leadership group. Chaired by Matthew Layton the group includes three global business units to cover financial markets, M&A and corporate transactions, and risk management and disputes. The group sets firm strategy and oversees its implementation.

In his current role at DAN Glydon is a member of the global finance executive team and responsible for driving change programmes and helping to improve its cash performance around the world. He was also involved in programmes to transform the commercial performance of the finance division and to establish professional standards to support the company’s values.

Glydon previously served as EMEA CFO of Aegis Media, working across 36 markets. He began his career at Guinness, before moving to Granada Group’s Le Meridien hotel business, Hilton Group and Clear Channel Entertainment.

Meanwhile, Purse steps down after 11 years in the role of CFO. He was recruited in 2005 from his role as finance director of Management Consulting Group and has been at the helm through turbulent times at the Magic Circle firm, including a turbulent period post-Lehman where it was the worst affected of leading firms in London and New York due to heavy reliance on banks, private equity houses and a larger property team than its City peers.

Purse leaves the firm in good stead however as its financial results for the 2015/16 year showed revenues went up 3% to £1.39m while profit per equity partner has leapt by 10% to £1.23m, the firm’s highest to date.

Layton said: ‘Patrick’s experience of delivering high performance in demanding client-facing service industries undergoing significant change means he brings a valuable appreciation of the challenges facing the legal sector. Clifford Chance is committed to being the global law firm of choice and that increasingly requires that we embrace change and are open to new ideas, new technologies and new ways of working.’

On the retirement of Purse, Layton added: ‘During some challenging periods of market instability, [Stephen] has ensured that our finances have remained robust throughout.’

sarah.downey@legalease.co.uk

Legal Business

Revolving doors: K&L Gates and CC make key appointments as Pinsent Masons makes Magic Circle hire for new Düsseldorf office

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In this week’s appointment round-up, Clifford Chance (CC) has added muscle to its New York office and K&L Gates has recruited in London, while Pinsent Masons has hired in Germany from CC.

Pittsburgh-based K&L Gates has added muscle to its City finance practice, bringing in former Mayer Brown partner Mayank Gupta.

Gupta joins as a partner with experience in leveraged finance, real estate, energy, and telecoms, and multijurisdictional experience in Hong Kong and Australia. K&L London administrative partner Tony Griffiths said: ‘Maynak’s focus on cutting-edge international finance transactions and high-end advice is perfectly aligned with the direction our practice has been heading.’

CC continues to expand its US practice, bringing in Eddie Frastai from Dentons to join its New York real estate team. Frastai has more than a decade of experience advising real estate owners, developers and financial institutions across the US. According to CC’s recently announced financial results, American revenues at the Magic Circle firm grew by a substantial 13%.

‘We have built a strong offering of leading real estate sector products in the US,’ said CC Americas managing partner Evan Cohen. ‘Eddie’s arrival further strengthens an area of strategic focus for us in the US and we couldn’t be happier to welcome him to our firm.’

Going the other way, CC partner Peter Christ is joining Pinsent Masons in Düsseldorf.

Pinsents has invested in its recently opened Düsseldorf practice, bringing the number of lawyers in its German offices to 70 lawyers including 22 partners. The Düsseldorf office launched in February with a focus on energy, with Christ providing added experience to this sector and to life sciences.

Pinsents Germany managing partner Rainer Kreifels said: ‘Peter’s appointment reflects the firm’s continued strategic investment into its international markets and is an important addition to our office in Düsseldorf. His expertise will make a valuable contribution to our employment law practice and strengthens our ability to serve the market internationally.’

In China, Allen & Overy head of IP Benjamin Bai left the Magic Circle firm after nearly six years. Bai moves in-house to join Ant Financial, an affiliate of Chinese e-commerce firm Alibaba.

Ant Financial also recently recruited Simpson Thacher & Bartlett Hong Kong-based partner Leiming Chen as general counsel and senior vice president in March.

matthew.field@legalease.co.uk

Legal Business

‘Obviously some headwinds’: Clifford Chance revenue up 3% while PEP leaps by 10%

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Clifford Chance (CC) has become the second Magic Circle firm to announce its financial results for the 2015/16 year, with revenues up 3% to £1.39bn while profit per equity partner has leapt by 10% to £1.23m, the firm’s highest to date.

Partnership profit rose by 10% to £494m, while the firm saw America revenues grow by a substantial 13% while Asia Pacific revenues increased by 9%. These regions now make up 13% and 16% of total turnover respectively. Managing partner Matthew Layton said in 2015 his aspiration was to grow both revenues to 20% and 25% respectively of firmwide turnover over five years while also maintaining the firm’s position in the UK and Europe.

Key financial decisions which have had a positive impact on profits include subletting 400,000 sq ft of its Canary Wharf office space to Deutsche Bank last year, while the firm also increased efficiencies by moving 400 back-office staff from its Canary Wharf headquarters to a new location five minutes’ walk away. The changes, amongst others including what the firm calls ‘continuous improvement techniques’ amongst its lawyers, has enabled operational savings last year of more than £7m.

Layton (pictured) told Legal Business he was delighted with the results, having introduced new strategy just 18 months ago. He added: ‘There’s obviously been some headwinds in the markets with commodities, China and the Brexit referendum but we saw growth across all the regions. The Euro denominated the Sterling however.’

Key transactional work included advising the key Anheuser-Busch InBev shareholders in relation to financing its bid for SAB Miller, the biggest brewing takeover in history, and advising EDF on proposals for China General Nuclear Power Corporation to invest £6bn in the Hinkley Point C nuclear power project.

The firm was involved in advising the joint global coordinators on Bank of China’s $3.55bn four currency multi-tranche bond issuance, where a multiple series of notes were issued under Bank of China Limited’s $20bn Medium Term Note Programme.

CC also increased investment in artificial intelligence tools, announcing yesterday (5 July) that it has entered into partnership with artificial intelligence (AI) provider, Kira Systems, in a bid to provide greater cost efficiencies to clients.

While he denied talk of merger discussion in Asia and the Americas, Layton now points towards further growth in the latter, particularly within its Washington DC and New York offices. ‘We’re seeing good opportunities for lateral growth.’

Other major changes last year included a move towards a more meritocratic system. Last May, Legal Business revealed the partnership voted through a stretching of the top of its lockstep – from 100 to 115 or 130 – in a bid to retain and recruit star partners. While the firm has yet to offer extra points to partners, Layton said: ‘Lockstep means a lot of different things. Our results this year showed it can be very successful. It’s how it’s applied – we’re a global profit pool and there are no barriers to operating as a truly integrated global firm. We’ve now got greater flexibility from stretching the lockstep.’

‘I’m very focused on team success and a balance across all the practice. It does take time to build a strategy like this but its building momentum. I want people to be engaged in the dialogue and I don’t feel a resistance to the direction of travel we’re going in.’

Nearly two years into his role, Layton doesn’t rule out the possibility of running for the top management job at CC again. His term ends in the summer of 2018.

Earlier today (6 July) Allen & Overy was the first of the Magic Circle to announce financial results, with revenue up by £29m (2.3%) to £1.31bn while PEP remained stable at £1.2m. the firm said it was a strong year for global disputes and M&A while alternative delivery models, such as its Peerpoint, contributed toward growth.

sarah.downey@legalease.co.uk

Read our wrap of big four 2015/16 financial results here.

Read more in the feature: ‘Clifford Chance: On the shoulders of giants’

Legal Business

Clifford Chance latest to partner with tech firm Kira as major players make AI push

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Clifford Chance (CC) has become the latest firm to increase its investment in technology initiatives, announcing this morning (5 July) that it has entered into partnership with artificial intelligence (AI) provider, Kira Systems.

The Canadian tech firm provides software that searches and analyses text in contracts to deliver improved levels of speed, efficiency and quality to processes. Firms can utilise this to better add value to clients under continuous cost pressures.

The Magic Circle firm said it selected Kira as it works ‘out of the box’ with little set up time and because it can be easily trained by lawyers to learn specialist expertise.

The firm aims to reduce the time spent on traditional due diligence methods and potentially expand qualitative analysis. Examples include having the ability to review a higher number of documents.

CC’s chief information officer Paul Greenwood said: ‘The legal industry must adapt if it is to deliver what clients value most – whether that is about speed, accuracy or risk management.’

He added: ‘There are increasing numbers of intelligent tools on the market that can help law firms service clients and we want to be at the forefront of identifying and deploying those systems that will make a real difference to our clients. We are showing our commitment to emerging technology by integrating Kira into our processes and building its knowledge through teaching and training.’

CC’s head of innovation and business change, Bas Boris Visser, added: ‘Clients are under substantial pressure to reduce legal spend. At the same time, they need more support to manage the increasing risks and complex issues that their companies are facing. Deploying Kira is an exciting next step in helping our clients address this demand for greater value.’

Visser was appointed to the innovation role by managing partner Matthew Layton in January 2015, and tasked to revitalise the firm’s pioneering streak alongside chief operations officer Caroline Firstbrook. Part of that saw Visser holding a series of meetings in New York last February, where he was working with IBM Watson to assess how the firm can use technology for carrying out e-discovery and investigations work.

Also intent on driving automation throughout the business is DLA Piper which in June signed up with Kira to launch an artificial intelligence tool for document review during M&A transactions.

The deal came just three months after Kira Systems secured a similar deal with Big Four accountant Deloitte.

sarah.downey@legalease.co.uk

Legal Business

Remuneration revamp: Clifford Chance hikes NQ salaries

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Clifford Chance (CC) is the latest Magic Circle firm to reveal its 2016/17 pay bands for newly-qualified (NQ) lawyers. Having taken effect last month (1 May), the inclusion of bonuses sees a rise in NQ pay at £85,000 compared to £70,000 before bonuses in 2015.

The move follows Freshfields Bruckhaus Deringer folding a discretionary bonus into salaries so NQs have an extra £17,500 in their pay packets this year. The Magic Circle firm lifted NQ salaries by 26% to £85,000.

At CC year one trainees will receive a £1,500 boost to £43,500 while year two trainees will see an increase to £49,000 from £47,300.

CC London managing partner David Bickerton said the firm rewards total compensation based on  ‘contribution to the firm’s success over the course of the financial year. This is made up of a fixed salary and a bonus which varies according to contribution made.’

In the early years (NQ and post qualified equivalent (PQE) year one lawyers) individuals’ contribution is assessed on the basis of whether or not they are acquiring certain skills and habits, what CC has dubbed being an ‘exceptional’ lawyer.

Bickerton said: ‘If the lawyer is developing the skills and habits they will require they will receive the binary bonus, so the vast majority of junior lawyers will receive it.

For lawyers above PQE 2, total compensation ‘reflects an individual’s contribution to the firm.’

The firm published expected average compensation levels for those who have made a ‘good’ contribution and for those who have made an ‘exceptional’ contribution.

2PQE salaries, which were at £88,000 last year, are averaged at £100,000 and £119,000 for ‘good’ and ‘excellent’ performance respectively. For 3PQEs salaries for ‘good’ contributors average at £111,000, while ‘excellent’ performers may receive about £130,000.

Last month, Shearman & Sterling boosted salaries for newly-qualified UK lawyers £7,000 to £95,000 for this year. Rises of between 7% and 10% have been dished out across the associate ranks, with more experienced associates set to trouser up to £12,000 extra a year. The salary increases took effect from 1 May, 2016.

In March, Linklaters announced its NQs could take home at least £81,000 including bonus, with high performers on average earning £91,000. This is up on the basic £68,500 salary newly-qualified lawyers at Linklaters earned last year.

sarah.downey@legalease.co.uk

CC’s new salary bands are as follows:

Trainee year 1: £43,500

Trainee year 2: £49,000

NQ: £85,000

PQE year 1 total compensation £95,000

PQE year 2 average: £100,000 – good contribution

PQE year 2 average: £119,000 – excellent contribution

PQE year 3 average: £111,000 – good contribution

PQE year 3 average: £130,000 – excellent contribution

Legal Business

Partner promotions: Clifford Chance appoints 24 new partners, with nine in the City

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Clifford Chance (CC) has appointed 24 new partners globally, with promotions across the US, Asia Pacific, continental Europe and nine in London.

The new partners’ practices cover a wide range such as M&A and IPOs, commercial litigation, funds and trusts and leveraged, acquisition, asset and project financing and are based across 13 of the firm’s offices including Barcelona, New York and Tokyo. They take effect from 1 May 2016 and will bring the total number of partners in the firm to 577.

The round is a decrease on last year’s promotions, when the firm made up 25 lawyers with six associates making the cut in London.

This year in London, the promotions are across four practice areas: capital markets, corporate, finance and litigation and dispute resolution.

Commenting on the promotions, CC’s managing partner Matthew Layton said they recognise talent, commitment and entrepreneurialism.

‘Each of these new partners has already made their mark: by virtue of the quality of their expertise and service delivery, they are seen as ‘go-to’ advisors by their clients; they are role models for our teams; and they play a critical part in delivering the firm’s strategy.

Earlier this week fellow magic circle firm Linklaters also announced that it was appointing 24 new partners, with ten from its Silk Street headquarters.

London accounted for 42% of the firm’s enlarged promotions round this year, compared to just 35% in 2015. Last year the firm promoted eight City associates to partner, with just seven London lawyers making the cut in 2014.

kathryn.mccann@legalease.co.uk

The full list of partner promotions is as follows:

Yusuke Abe, finance, Tokyo

Luis Alonso, corporate, Madrid

Fabian Böhm, real estate, Frankfurt

Alexandra Davidson, corporate, London

Paul Deakins, capital markets, London

Niek De Pauw, corporate, Brussels

Timothy Democratis, finance, Beijing

Jake Farquharson, capital markets, New York

Miloš Felgr, finance, Prague

Guillermo Guardia, corporate, Barcelona

Andrew Husdan, finance, London

Louise Keary, capital markets, London

Edith Leung, finance, Hong Kong

Michael Lyons, litigation & dispute resolution, London

Katherine Moir, corporate, London

Alexandre Ooms, tax, pensions & employment, Brussels

Patrick O’Reilly, finance, New York

Michael Pearson, finance, London

Marianne Pezant, corporate, Paris

Christopher Sullivan, corporate, London

Ioana Talnaru, corporate, Bucharest

Daniel Winick, finance, New York

Floris van de Bult, tax, pensions & employment, Amsterdam

Christopher Yates, litigation & dispute resolution, London

Legal Business

Clifford Chance rebuilds competition team with plum hire from the CMA

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Just one week after losing star competition partner Alastair Mordaunt to Magic Circle rival Freshfields Bruckhaus Deringer, Clifford Chance has hired the UK Competition and Markets Authority’s (CMA) director of mergers Nelson Jung as a City partner.

Jung (pictured) returns to Clifford Chance six years after leaving the Magic Circle firm to join the Office of Fair Trading (OFT). He became a director of mergers at the OFT in 2013, leading the growth of regulator’s merger control function, before assuming the same role when the OFT was replaced with the CMA a year later.

The exit means the CMA has lost its two directors of mergers in just two months, with US firm Latham & Watkins having hired Jung’s colleague Jonathan Parker in February as it builds out its full service offering. The competition watchdog has been plagued by high staff turnover since it launched, and the granting of competition powers to the Financial Conduct Authority last year has not helped matters, with the City regulator bringing in a string of big names from the lower paying CMA.

Nelson has overseen the CMA’s merger caseload during his time at the CMA and has led on its position on EU merger policy. He also represented the CMA in significant mergers going through the European Commission, including GE on its $14bn purchase of French power support Alstom, and has played a lead role in the CMA’s contributions to the European Commission’s Digital Single Market agenda.

Most recently, Nelson took the lead role in the CMA’s assessment of Muller’s acquisition of Dairy Crest, a case that had originally been notified with the European Commission. He also oversaw the CMA’s recent conditional merger control clearance of the InterCity East Coast rail franchise award and led the merger control assessment of Greene King’s acquisition of Spirit Pub Company.

Clifford Chance global head of corporate Guy Norman said: ‘As antitrust regimes across the world become more challenging, a well-executed merger control strategy can be critical to the success of an M&A transaction. Nelson’s deep understanding of the UK and European regulators will further strengthen our leading team as we help our corporate clients to navigate the risks and opportunities this new landscape brings.’

As well as Mordaunt, Clifford Chance lost several high-profile competition partners over the last few years, with global antitrust head Oliver Bretz and Brussels-based Johan Ysewyn exiting in 2014 to start a boutique practice and join Covington & Burling respectively.

tom.moore@legalease.co.uk