Legal Business

Clifford Chance executive committee group pay falls by 7% amid revenue and profit dip, LLP accounts reveal

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Financial results 2014/15 Clifford Chance
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Clifford Chance‘s (CC) 12-strong executive leadership group saw an average 7% decrease in pay packets in the last financial year while the firm’s revenue and profit fell, according to accounts filed at Companies House.

The management committee, which was reduced to 12 members in 2014/15 from 16 members in 2013/14 as part of managing partner Matthew Layton’s election manifesto, pocketed £14m compared with £20m the previous year, constituting an average pay of £1.16m in 2014/15 from £1.25m the previous financial year.

Revenue dipped 1% to £1.35bn from £1.359bn while CC’s profit for distribution among members fell 4% from £377m to £363m. The firm also has available undrawn committed borrowing facilities of £150m (£200m in 2014) which expire in August this year.

A geographical breakdown of revenue showed the UK and Continental Europe generated £477m and £469m in revenues respectively, while Asia Pacific brought in £205m, the Americas took £156m and the Middle East constituted £43m. All regional revenues increased except Continental Europe where revenues dropped significantly from £503m in 2014.

The average number of partners fell slightly from 573 to 569 and the number of administrative and support staff rose from 2,714 to 2,774. Total staff figures were up by 2.3% from 6,072 to 6,217.

Last year the Magic Circle firm held a remuneration review following key departures, after which Legal Business revealed CC had voted through proposed changes to its lockstep in late April, creating a more flexible lockstep by stretching the top of the ladder in a bid to retain star partners.

Other law firm accounts revealed today included Stephenson Harwood, which reported its highest-paid LLP member took home £1.3m last year, an increase of nearly 30% on what was paid in 2013/14, while Fieldfisher’s highest-paid LLP member took home £1.24m last year, almost twice as much as last year.

sarah.downey@legalease.co.uk

Legal Business

Weapons down: CC settles high profile Excalibur negligence case

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Litigation Clifford Chance
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Avoiding the prospect of a costly and public trial, Clifford Chance (CC) has settled a professional negligence claim against it over the high-profile Excalibur dispute brought by the case’s funders and Greek shipping tycoons, the Lemos family, for an undisclosed sum.

The long-running Excalibur saga involved a $1.6bn energy battle in London’s High Court over oil rights in Iraqi Kurdistan, and was one of the biggest cases of 2013. Taken against Gulf Keystone Petroleum by Excalibur Ventures, the litigation was bankrolled by a consortium of investors, including brothers Adonis and Filippos Lemos, who became involved in the case with the help of CC disputes partner Alex Panayides.

Lord Justice Clarke criticised and dismissed the claim, awarding the defendants their costs on an indemnity basis in 2014, stating it had been ‘an elaborate and artificial construct… replete with defects, illogicalities and inherent improbabilities’.

It also emerged that Panayides had family ties to the funders, with his brother an employee of Lemos and his father a former chairman of one of their ship management companies. CC was also criticised by the court for apportioning a high rate of success to the claim alongside a ‘voluminous’ and ‘heavy-handed’ correspondence.

Last year Legal Business reported that the Lemos brothers had instructed Withers, which had notified CC that a legal action was being prepared, with litigation and arbitration partner Christopher Coffin acting for the family. 

Withers did not provide detail on the terms of the settlement, citing confidentiality, but confirmed the matter had been resolved.

Resolving the matter will be welcome for CC, bringing an end to a saga that has generated a string of unfavourable headlines for one of the UK’s leading commercial litigation teams.

CC also became involved in a separate professional negligence claim last year, in a £130m derivatives dispute between JP Morgan and German public transport provider BVG, during which CC was brought in as a third-party defendant over allegations its German operation gave negligent advice. That case also settled.

CC declined to comment.

sarah.downey@legalease.co.uk

For more litigation coverage see our 2015 Disputes Yearbook. 

Legal Business

Avoiding nearshoring: Clifford Chance to move 400 staff to Canary Wharf low-cost hub

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Innovation Clifford Chance
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While peers have chosen low-cost hubs farther afield in the UK, Clifford Chance (CC) is moving its back-office staff from its Canary Wharf headquarters to a new location five minutes’ walk away.

The firm will transfer 400 operational staff to an open-plan office in a building occupied by State Street Bank & Trust at Churchill Place in a bid to cut back on costs.

With Freshfields Bruckhaus Deringer and Allen & Overy having opened low-cost bases in Manchester and Belfast respectively, CC chief operating officer (COO) Caroline Firstbrook said: ‘When we looked at opportunities for where to move operations, we had a debate and concluded that, to the extent we could move people, the lawyers that we have in the CC headquarters need to be in close contact with operations. Moving them out of Canary Wharf was not an option.’

The new no-frills office space will be open-plan with no individual desk allocation, and teams in large part will be given the task of creating their own work policies on issues including timekeeping and flexible working.

Firstbrook, who arrived as COO earlier this year from Accenture, said the 400 staff will include ‘anyone that doesn’t need to be in close contact with fee-earners on a day-to-day basis’. The firm, which has already made £6m in operational savings this year, has signed a lease for nearly two floors at a cost of £37.50 per sq ft.

Having long struggled with property overheads eating into profits, in July CC announced a substantial shake-up of operations at Canary Wharf, with its current premises housing over 1,500 permanent staff. It secured a substantial deal to reduce costs, after subletting 400,000 sq ft of office space to Deutsche Bank.

CC has around one million sq ft of office space at Canary Wharf, though it already has a number of sublets in the 33-storey building at 10 Upper Bank Street.

Firstbrook added the firm had ‘no immediate plans’ to extend beyond its current offshore centre in India, a New Delhi-based project designed to give the firm better control of costs and tighter central co-ordination of administration services, but for language reasons the firm could develop a small resource in China with Mandarin speakers.

sarah.downey@legalease.co.uk

Legal Business

Clifford Chance avoids nearshoring with plans for low-cost hub in Canary Wharf

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Innovation Clifford Chance
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400 support staff to be housed five minutes away from HQ

While peers have chosen low-cost hubs farther afield in the UK, Clifford Chance (CC) is moving its back-office staff from its Canary Wharf headquarters to a new location five minutes’ walk away.

The firm will transfer 400 operational staff to an open-plan office in a building occupied by State Street Bank & Trust at Churchill Place in a bid to cut back on costs.

Legal Business

Dealwatch: Magic Circle trio and Travers Smith advise as Carlyle sells RAC stake to new investors

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Corporate Clifford ChanceFreshfields Bruckhaus DeringerLinklatersTravers Smith
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Clifford Chance (CC), Linklaters and Freshfields Bruckhaus Deringer have all landed advisory roles alongside Travers Smith on a deal which will see CVC Capital Partners form a partnership with Singapore sovereign wealth fund GIC to invest in the roadside assistance provider RAC through the purchase of Carlyle’s stake in the latter.

The RAC is the second-largest roadside assistance provider across the UK and has approximately 8.6m members as of 30 September, 2015. During Carlyle’s ownership, revenues grew from £417m in 2010 to £498m in 2014.

CC advised longstanding client CVC with a team led by corporate partner David Pearson. The firm also recently advised CVC, which holds $60bn in funds under management, on its $150m acquisition of a 50% stake in Arteria Networks Corporation, a Japan-based telecoms carrier focused on enterprise customers.

Linklaters advised Carlyle on the exit with relationship partner Alex Woodward leading, while Freshfields advised GIC with global financial investors group co-head David Higgins leading a team.

Travers Smith advised RAC management on the transaction with senior partner Chris Hale leading a team alongside corporate partner Adam Orr.

Last year Freshfields, Linklaters and Travers combined for the same clients as Carlyle sold half its majority stake in RAC to GIC.

The transaction is subject to approvals and is expected to close in early 2016.

sarah.downey@legalease.co.uk

For more on deal activity subscribers can read: ‘Private equity ABC – the brutally simple world of a private equity lawyer’

Legal Business

Third lateral hire of the week: Paul Hastings appoints Clifford Chance corporate partner in Frankfurt

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Strategic recruitment Clifford ChancePaul Hastings
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Following two major hires in the City this week, US firm Paul Hastings has turned its attentions to Frankfurt with the addition of Clifford Chance corporate partner Bernd Meyer-Witting.

Meyer-Witting specialises in M&A work involving telecoms, media and energy companies and has a long history of acting for private equity firms making German acquisitions in this space.

He has been a senior figure in Clifford Chance’s German practice, sitting on the firm’s partnership council during the 2000s, but departs to become the seventh partner at Paul Hastings’ Frankfurt office.

With plans in place to double the size of its London office to 50 partners by 2020, Paul Hastings has ramped up recruitment as it targets finance and corporate work in Europe. Meyer-Witting’s arrival follows that of Linklaters’ finance veteran David Ereira and Berwin Leighton Paisner’s head of structured debt and capital markets Paul Severs this week alone.

Other arrivals this year include Duncan Woollard from King & Wood Mallesons in May to head Paul Hastings’ private equity practice in London and Ashurst banking partner Luke McDougall in April to expand its leveraged finance team in the City.

Fresh from crossing the $1bn revenue barrier in 2014, Paul Hastings has ramped up its recruitment of lateral partners across the network. Fried, Frank, Harris, Shriver & Jacobson’s former head of Asia, Douglas Freeman, joined with corporate colleague Victor Chen in Hong Kong; a nine-lawyer finance team from Ashurst led by US managing partner Eugene Ferrer arrived in the US; and heavyweight white-collar partner Robert Luskin led a five-lawyer team over to its Washington DC office from Squire Patton Boggs.

Meyer-Witting moves at a time of flux in the German market. Magic Circle rival Freshfields Bruckhaus Deringer is mulling the closure of either Cologne or Düsseldorf and White & Case is closing its Munich office. 

The number of partners across Clifford Chance’s German network has shrunk in the past two years following several high profile exits. In the first three months of 2015, private equity co-head Oliver Felsenstein and his colleague Burc Hesse quit to join Latham & Watkins, former German corporate head Arndt Stendel exited for Milbank Tweed Hadley & McCloy in March and energy partners Peter Rosin and Thomas Burmeister departed for White & Case.

Last month, Clifford Chance announced the appointment of Freshfields Bruckhaus Deringer partner Anselm Raddatz, who started working in the firm’s Düsseldorf office this week as co-head of the firm’s German corporate practice alongside Thomas Krecek.

tom.moore@legalease.co.uk

Legal Business

Clifford Chance Libor briefings privileged, High Court rules

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Litigation Clifford Chance
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Documents drawn up by Clifford Chance for a special RBS committee dealing with the Libor scandal are protected by legal privilege, the High Court has ruled, holding that lawyers must be able to give their client candid factual briefings as well as legal advice secure in the knowledge it will not be disclosed without client consent.

The issue arose in a dispute where the Property Alliance Group (PAG), alleged RBS induced it to enter four interest swap rate agreements between 2004 and 2008 that employed sterling Libor as a reference rate and ‘implicitly misrepresented that it was not rigging the relevant Libor rate’. RBS has admitted it was involved in rigging the Japanese Yen and Swiss Franc Libor rates and consequently paid fines of about £700m but has denied misconduct in the setting of any sterling Libor rates.

In June, Justice Birss ordered disclosure relating to all Libor currencies rather than just sterling Libor, around 25 million documents. He asked that a higher court decide whether RBS’s claim to legal privilege should be upheld.  

In order to focus the disclosure exercise, it was suggested that RBS disclose ‘high level’ internal reports, relating to the allegations of Libor misconduct. These included documents produced by CC for RBS’s Executive Steering Group (ESG) which was advised by the firm which would sometimes take the lead on the group’s meetings.

RBS said all high-level documents produced by CC were expressly marked ‘privileged and confidential’ and therefore not subject to disclosure.

Justice Snowden agreed, and ruled in this case that ‘Clifford Chance did not organise or attend the ESG meetings simply, or even primarily, to provide administrative support to the ESG.’

‘The ESG meetings all had a very substantial legal content and it is no surprise that the lawyers present led the discussions. They were doing so because they were handling the many regulatory investigations and claims in different jurisdictions on behalf of RBS, and the ESG meetings were being held so that the lawyers concerned could give information and legal advice to the members of the ESG.’

‘The lawyer must be able freely to communicate that information to his client to enable the client to make a fully informed decision as to what further legal advice to obtain, and what to do. If the lawyer was concerned that his communications might be disclosable to third parties without the client’s consent, he would be most unlikely to commit such matters to paper, with the inevitable risk of misunderstandings as to the facts, the legal advice given, and the decisions taken.’

Cooke, Young & Keidan instructed Brick Court Chambers barrister Tim Lord QC who acted for PAG alongside XXIV Old Buildings barrister Adam Cloherty, while Fountain Court Chambers Queen’s Counsel David Railton was instructed by Dentons for RBS.

sarah.downey@legalease.co.uk

Legal Business

Dealwatch: Magic Circle firms lead on major City broking merger

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Corporate Allen & OveryAshurstClifford ChanceSimmons & Simmons
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Clifford Chance and Allen & Overy (A&O) are orchestrating a tie-up between two of the City’s most storied brokers, Icap and Tullett Prebon, as the market consolidates in response to low trading volumes and tougher regulations.

Icap, which was founded by Michael Spencer in 1986, is in talks to sell its traditional voice-broking business to rival Tullett Prebon. If the deal completes, it would be the second major shakeup in the industry this year, with Howard Lutnick’s New York firm BGC Partners winning a bidding war to pay £519m for GFI Group earlier this year.

Icap, which remained the largest interdealer broker in the world after BGC’s takeover of GFI, is in talks to transfer its global broking business to Tullett Prebon in a deal which would see Tullett Prebon issue shares to Icap’s investors to pay for it. The deal, which would make Icap a minority shareholder in the new company, is understood to be worth over £1bn and would see around 1,500 brokers move to Tullett Prebon.

The brokers have instructed Magic Circle law firms, with Clifford Chance advising Icap and A&O advising Tullett Prebon. A&O corporate partner Richard Hough is leading the advice to Tullett Prebon, acting opposite Clifford Chance’s Steven Fox, who was instructed by Icap.

Simmons & Simmons corporate partner Colin Bole is acting for Icap’s team of advisers JP Morgan and Evercore, while Ashurst duo Jonathan Parry and Dominic Ross were instructed by Tullett Prebon’s adviser Rothschild.

Interdealer brokers, which match buyers and sellers in currency, bond, share and other trades, have struggled with stricter regulation forcing banks to cut back on trading. Tullett Prebon cut 200 jobs in March in response to difficult market conditions and falling profits.

If Icap’s deal to offload its traditional broker business to Tullett goes through, the FTSE 250 company will be left as a technology-focused business made up of electronic broking and risk management services. Tullett Prebon, meanwhile, would replace Icap as the world’s largest interdealer broker.

tom.moore@legalease.co.uk

Legal Business

Revolving doors: key hires at Ropes & Gray and Clifford Chance while White & Case loses Polish disputes head

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Strategic recruitment Clifford ChanceRopes & GrayWhite & Case
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Global 100 heavyweights Ropes & Gray and Clifford Chance announced key lateral hires last week, while White & Case saw the head of its Polish disputes practice leave the firm.

Boston-based Ropes & Gray expanded its global antitrust practice with the addition of Ruchit Patel. Joining from Cleary Gottlieb Steen & Hamilton’s highly rated competition team, Patel will be the first antitrust partner in Ropes’ City office and continues the push by the London practice to broaden its offering, following the hire of its first London disputes specialist Thomas Ross from K&L Gates in April.  

In France, Clifford Chance has improved its real estate practice team with the recruitment of King & Spalding partner Alexandre Couturier. With more than ten years’ experience in real estate, Couturier has particular expertise in the formation of real estate investment funds. He joins as a partner to the firm’s Paris office.

In Warsaw, White & Case was dealt a blow as its head of litigation and arbitration Paweł Pietkiewicz is leaving to join Greenberg Traurig. He will join as head of the 10-lawyer strong litigation and arbitration team as it splits from the banking and finance team.

The senior partner of Greenberg Traurig’s Warsaw office Lejb Fogelman said the recent successes of the firm’s banking and financial practices led to the decision to separate the leadership of the banking and finance practice from that of the litigation and arbitration practice. Former co-head of litigation and arbitration Andrzej Wysokiński will continue to develop the banking and finance practice.

Meanwhile at the Bar, 39 Essex Chambers has announced public law specialist Adam Fullwood will join the set. With more than 20 years’ experience, Fullwood joins from Kings Chambers. 39 Essex Chambers chief executive David Barnes said Fullwood had an ‘outstanding reputation’ in the public law arena and would be an excellent addition to its thriving team.

On the regulatory side, The Legal Services Board has appointed Ofcom director of investigations Neil Buckley as chief executive. Buckley replaces Richard Moriarty who departs in February 2016 to join the Civil Aviation Authority as deputy chief executive and group director for consumers and markets. 

victoria.young@legalease.co.uk

Legal Business

Clifford Chance acts for UEFA head Platini in Blatter payment dispute

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Litigation Clifford Chance
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Clifford Chance Paris-based litigation partner Thibaud d’Alès is acting for FIFA presidential hopeful and current head of UEFA Michel Platini in a dispute over a payment Platini received from FIFA president Sepp Blatter in 2011.

D’Alès represented Platini last week in front of both the UEFA’s executive committee and the National Association after proceedings were launched against its chief regarding new information surrounding the £1.35m payment.

Following this, the English Football Association (FA) suspended its support for Platini’s presidential candidacy on Friday [16 October].

In a statement the FA said it supported the statement issued by UEFA concerning the ethics case against Platini, in that he is afforded due process in contesting the charges and that any relevant bodies involved reach a final decision on the merits of the case by mid-November.

The magic circle firm has led on a number of recent high profile investigations, including advising the Co-operative Bank as the high street lender avoided a substantial fine following an investigation by the Financial Conduct Authority and the Prudential Regulation Authority for breaching listing rules.

Clifford Chance has also won work advising in the Middle East to develop a FIFA World Cup stadium for Qatar’s organising committee, the Supreme Committee for Qatar 2022.

kathryn.mccann@legalease.co.uk