Clifford Chance (CC) has become the second Magic Circle firm to dish out competitive year-end bonuses to US associates, after Freshfields Bruckhaus Deringer matched US competitors’ rates last week.
Both firms will pay their junior lawyers a lump sum based on their year of qualification. At both CC and Freshfields, newly qualified (NQ) associates will receive a prorated bonus of $15,000, the 2021 class of associates will receive a $20,000 pay-out, while at the top-end, seven and eight-year associates will receive $105,000 and $115,000 respectively.
Freshfields first confirmed its bonus scheme in a memo sent on 1 December, while CC’s announcement also came in the form of a memo, sent by Americas managing partner Evan Cohen yesterday morning (6th December).
Baker McKenzie set the ball rolling earlier this year, announcing its bonus rates on 21 November. While Bakers’ NQs will miss out on a lump sum, its 2021 cohort will also receive $20,000 while those who qualified in 2015 will similarly pocket $115,000.
The Magic Circle firms’ new bonus schemes match the scales awarded by Wall Street stalwarts Cravath, Cleary Gottlieb, Davis Polk, Paul Weiss, Willkie Farr and Cadwalader, according to Above the Law.
The news comes as the Magic Circle firms continue their attempts to crack the US amidst a highly competitive market for talent. Both firms have made strides with high-profile US hires of late: Freshfields made the headline hire of former Cravath M&A partner Damien Zoubek in September 2021 and added private equity partner Allison Liff from Weil a month later. CC likewise hired Osler, Hoskin & Harcourt managing partner Paul Seraganian in New York in November 2021.
Partners at Clifford Chance (CC) have voted in head of capital markets Adrian Cartwright as the firm’s new senior partner, succeeding Jeroen Ouwehand, who will step down after four years in the role.
London-based Cartwright held off competition from Ouwehand and Dubai office managing partner Edmund Boyo in the recent election and will start his four-year term on 1 January 2023.
A partner at the firm since 2002, the well-respected Cartwright joined CC from Linklaters in 1999 and has led the capital markets practice since 2014. His work highlights include advising waste disposal giant Biffa on its IPO.
Charles Adams, CC’s global managing partner, said: ‘I congratulate Adrian, whose extensive leadership experience and global market knowledge is representative of our strong bench of talented leaders who play a critical role in ensuring Clifford Chance remains the firm of choice for the world’s leading businesses. I look forward to working with him to keep our focus on securing strong foundations for our future success.’
Cartwright (pictured) noted: ‘I am honoured to have been elected as senior partner and thank the partners for the opportunity to serve. I look forward to working with the partnership council, Charles, the partnership and all our talented colleagues across the firm to build on our strengths as one firm, providing the best service to our clients, and to champion our inclusive culture. I am optimistic and ambitious for the future and what we can achieve together.’
For his part, Ouwehand’s tenure has been notable in more ways than one. The Amsterdam-based disputes guru’s election in 2018 marked the first time the Magic Circle firm had chosen a candidate outside the City for the role. Since then, he has been the figurehead of CC’s ESG agenda, heading the firm’s responsible business board and creating a global Code of Conduct to clarify ESG expectations for partners.
In Legal Business’ ESG report this year, Ouwehand emerged as one of the few law firm leaders gaining widespread plaudits for being the real deal when it came to walking the walk on ESG, no small feat against the backdrop of ubiquitous greenwashing.
Adams thanked Ouwehand for his work in the role: ‘Many thanks to Jeroen, who has done an excellent job as our senior partner over the last four years, supporting the firm by providing deep insight and direction on fast changing global and economic realities. He has also made a significant contribution in strengthening client relationships and winning work by establishing our market leading ESG offering, and will continue to play a key role in advancing this work as part of our strategy for the future.’
Dubai partner Edmund Boyo and London partner Adrian Cartwright have stepped forward to challenge Clifford Chance’s (CC) incumbent senior partner Jeroen Ouwehand, three years into his four-year term.
Structured finance specialist Boyo is well-regarded for his successful role as managing partner of the firm’s Dubai office. A CC lifer, he trained in the London office and spent 16 years in Frankfurt before relocating to Dubai in 2017.
The second contender, Cartwright, heads the European equity capital markets group. He started his career at Linklaters, spending nine years between London and New York, before joining CC in 2002.
Prior to Amsterdam-based Ouwehand’s election in 2018, when he beat five partners to succeed Malcolm Sweeting, all previous CC senior partners had been based in the City. Since beginning his term in January 2019, Ouwehand has been credited for leading the firm’s ESG and sustainability push: establishing an ESG taskforce in 2020 and heading the firm’s responsible business board. During his term, the firm has also launched a global Code of Conduct which encompasses ESG expectations for partners.
Speaking to Legal Businessearlier this year Ouwehand said: ‘To anyone who says we’re becoming too political or that this is “woke”, which sometimes I hear, I can say it’s what clients need and expect so it’s also good for the bottom line and, at the end of the day, will be beneficial to our business.’
The first round of voting is expected to take place in the coming weeks with the successful candidate due to begin their four-year term in January 2023. Though one certainty, with an absence of any women vying for the role, is that CC will not be following Magic Circle competitor Freshfields Bruckhaus Deringer in appointing its first female senior partner anytime soon.
Clifford Chance has become the second Magic Circle firm to post encouraging 2021/22 financials, announcing today (19 July) an 8% rise in revenue to £1.969bn.
Partnership profit and profit per equity partner (PEP) were both similarly encouraging. Profit swelled by 9% to £783m, while PEP passed £2m for the first time, reaching £2.04m after a 10% increase.
At a regional level, all areas saw growth to varying degrees. APAC and the Middle East were the areas which that the biggest improvement, both posting a 14% increase in income, while Continental Europe and the Americas recorded a more modest 5%. The UK practice saw a solid 7% increase.
The figures will offer encouragement to global managing partner Charles Adams, who is still getting his feet under the table after being elected in December last year.
Adams credited his predecessor for the buoyant numbers, commenting: ‘Our team has delivered another outstanding year of results. We are seeing the positive outcome of our long-term strategic focus to diversify our client base, continually increase our market share and grow in priority geographies such as the Americas. These results are a testament to Matthew Layton’s leadership as the previous global managing partner, as well as the energy, dedication, teamwork and phenomenal expertise of all our colleagues. It is because of this that, profit per equity partner increased by 10% year on year to in excess of £2m.’
The long-term profitability figures are particular point of pride for the firm. Partnership profit has jumped by 74% since 2015, while PEP has spiked by 82%. Over the same period, revenues have increased by 42%. Chief financial officer Patrick Glydon expanded on the strategy that has seen long-term improvements in profitability, stating: ‘During Covid we adopted a very clear focus on discretionary cost management as well as staying very close to our clients. And we’ve continued maintaining that discipline. That’s been the key driver of that margin improvement.’
Looking to the future, a pragmatic Adams emphasised a need for vigilance: ‘As we observe the evolving geopolitics in a number of regions, the appalling Russian military aggression in Ukraine, as well as the global economic headwinds linked with the impact of inflation and supply chain fragility, it is critical we remain agile and ready to embrace change as well as act when needed.’
The financials come as the firm settles down following a shake-up of senior roles. Last week, Sarah Jones was promoted to global head of corporate, having previously led the corporate group in the Americas, while Emma Matebalavu became sole head of global financial markets. Steve Jacoby was also appointed regional managing partner for Continental Europe.
The re-shuffle also included the creation of two new leadership roles. Singapore projects specialist Nicholas Wong was appointed clients, markets and products partner and Jessica Littlewood has taken up a position as global operations and business transformation partner alongside her existing role as head of the European CLO practice.
The latest results make interesting reading when compared to those unveiled by Magic Circle peer Allen & Overy last week. CC was not quite able to match A&O’s revenue growth, which came in at 10%, though A&O’s overall revenue was a hair lower than its rival at £1.94bn. Both firms recorded a 9% profit rise, though A&O has the edge in absolute terms, reaching £900m.
Where CC was able to stride out in front is in the PEP figures. A&O could not match its rate of growth, posting a slower 3% rise to £1.95m.
Clifford Chance’s (CC) next cohort of newly qualified associates will take home £125,000 per year, after the firm bumped its starting salary by 16% to match that of Magic Circle rival Freshfields.
It is the first pay rise at the firm since November 2021, when a 7.5% increase brought salaries up to £107,500. Trainee rates have not been similarly altered however, with the first-year package staying at £50,000, rising to £55,000 in the second year.
The salary hike, which will take effect from the summer when the next batch of NQs are due to arrive, sees the firm match remuneration offered at Freshfields, which announced its own salary increase at the beginning of April.
The move means CC joins Freshfields at the head of the pack among the Magic Circle. Slaughter and May, having announced another 7% salary increase last month after three separate increases in 2021, sits in third place, offering novice lawyers £115,000. Allen & Overy and Linklaters bring up the rear, offering £107,500 packages.
Although it is now leading among its London-led peers, CC still has some way to go to match many of its rivals from across the pond. Akin Gump tops the list, having announced a new rate of £164,000 last month, ahead of Gibson Dunn (£161,700), Goodwin (£161,500), Davis Polk and Fried Frank (both £160,000).
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Clifford Chance (CC) has promoted 37 lawyers to the partnership including 17 in the City, making it the latest Magic Circle firm to announce increased partner rounds in 2022.
All of the Magic Circle firms saw a jump in partner promotions this year, including the typically conservative Slaughter and May, which made up eight lawyers, an increase from five in 2021. Meanwhile, Allen & Overy’s 39-strong promotion round globally – including 13 in London – marks a step up from 30 last year. Linklaters promoted 41, up from 35 in 2021 and Freshfields Bruckhaus Deringer minted 27 compared with 22 last year.
The investments will be viewed as a reaction to market forces which have seen many firms across the Square Mile struggle to keep up with ramped up client demand since the onset of the pandemic, as well as being a statement of intent as competition for star lawyers continues unabated.
At CC, the promotions, which take effect next month, reflect the firm’s sustained push in private equity, funds and real estate investors, with 34 of the cohort working with financial investor clients. In 2021, work for financial investor clients made up 33% (£612m) of the firm’s revenue, up from 26% (£355m) in 2015. Global senior partner Jeroen Ouwehand (pictured) claims that the new round is also the firm’s most diverse. Women made up 41% of the cohort while 23% of the 21 new partners across the UK and US who have disclosed ethnicity identify as non-white. Ouwehand said that the promotions ‘embody our uncompromising pursuit of excellence, and our ambitious goals to build a law firm where everyone can see they have a fair chance to reach the top of the profession.’
At Linklaters and Freshfields, women also made up 41% of the firms’ respective partner promotions for 2022. The percentage of incoming female partners at Allen & Overy was 36% while at Slaughter and May, litigator Megan Sandler was the only woman promoted.
Outside of the Magic Circle, Herbert Smith Freehills was among the other City firms which have announced bumper promotion rounds this week, with 34 added to the partnership across its global network — the largest cohort in the firm’s history.
Any message from the Magic Circle of such investment in the talent pipeline must of course be applauded, but one can’t help but feel vaguely disconcerted by the ever more frequent comparisons of 2022 with 2007.
Clifford Chance had a late flurry of transactional activity to thank for a respectable set of Covid financials, as profit per equity partner climbed 9% and revenue inched up by 1%.
The firm’s PEP reached £1.85m, up on last year’s £1.69m, while revenue hit £1.828bn from £1.803bn. There was also an 8% uptick in partnership profit, growing to £716m from £666m.
Managing partner Matthew Layton (pictured) attributed the growth to the firm’s ‘strongest-ever quarter’ at the tail end of the financial year. He told Legal Business: ‘We saw the transactional side come back very strongly at the end of the year. In terms of signs going forward, our deal pipeline for the first few months of next year is looking very good. Demand levels are very high, it’s more than just nine months of work squeezed into three months.’
Despite the promising buying activity, the firm’s contentious practices were less fruitful this year, which is somewhat unexpected given the often-countercyclical nature of disputes. Layton said: ‘It’s more just a timing issue. The pipeline looks strong at the moment. Investigations require people to travel, it’s a lot harder to do that remotely. In 2008 there was hiatus in disputes as people dealt with their immediate priorities and then litigation came out in the following 12 to 18 months. There will be pandemic-related disputes.’
While the firm’s UK revenue was up by a robust 9%, overall there were mixed results at an international level. Continental Europe was up 2% in local currency terms, but the Americas region suffered a 2% drop, while Asia Pacific and the Middle East were down 5% and 6% respectively. A standout from the firm’s previous set of results was a 13% uptick in US revenues, which makes this this year’s reverse all the more notable.
Layton reflected: ‘To some extent this was also a timing issue. We had a very robust performance in London with its strong financial sector, and this was the same in Continental Europe. America came off a very strong year last time, and there were a couple of areas impacted by the pandemic. There were restrictions on transport into the Latin America region and difficulty accessing government infrastructure, as well as a significant hit to the aviation sector.’
In terms of client work, a highlight was its role advising Pfizer on its agreement to co-develop a Covid vaccine with BioNTech. The firm also advised on a series of heavyweight tech IPOs, including the Hut Group’s £1.88bn float, the largest in London since 2015 at the time of listing.
The entries have been assessed, the shortlists have been drawn up and our panel of general counsel judges have had their say: we are now delighted to reveal the winner of Corporate Team of the Year for the 2020 Legal Business Awards.
The successful firm in this category demonstrated excellence during 2019 in M&A or corporate work, including disposals, joint ventures and equity capital markets listings. It was not so much the value of the deal that impressed judges as much as evidence of outstanding transactional advice and commitment to the client in the context of one exceptional piece of work
Sponsored by
Winner – Clifford Chance
Fortitude was the order of the day for Clifford Chance (CC)’s City corporate team as it defied the odds by successfully defending Provident Financial against an unsolicited offer by Non-Standard Finance (NSF), despite its shareholders holding more than 50% of Provident’s shares.
The 14-week defence was prompted by ‘an old school hostile approach’ in the form of a Friday morning voicemail to Provident’s chairman minutes before the surprise bid was launched.
CC rallied the troops across public M&A, finance, debt capital markets, antitrust, employment, incentives, pensions, forensic accountants and litigation. Twists and turns saw firm and client pick apart NSF’s strategy, developing and road-testing an aggressive Regulatory News Service campaign and engaging with stakeholders, including Woodford and Invesco, both of which supported the takeover. The team launched a comprehensive defence, anticipating and handling a litany of tricky code points and managing a white knight process.
NSF then announced it had formal acceptances of more than 50% enabling it to declare the offer unconditional. However, Provident persevered with a full-on counter-attack. Analysis of NSF’s business and accounts revealed some dividends and buy-backs were unlawful, which Provident announced to the market, undermining its attacker’s management.
Provident persuaded the Takeover Panel to extend the offer timetable to allow the Competition and Markets Authority (CMA) to complete its review and determine whether a Phase 2 referral was required. Without the extension, Provident shareholders risked the takeover closing and Provident and NSF businesses being held separate pending a CMA decision.
NSF set a drop-dead date of 5 June and Provident continued analysing NSF’s regulatory capital position and undermining it with announcements and engaging with regulators. The tide started to turn as institutional shareholders made the unusual move of publicising their opposition to the takeover.
Provident showed that NSF could be left with a significant non-assenting minority and the combined Provident-NSF group would be undercapitalised at closing. On the eve of the drop-dead date, NSF announced that the takeover offer would lapse as the regulator had not concluded its change of control approval.
Against what has been called the biggest hostile takeover since the financial crisis, the defence may go down in history as one of the best ever.
Highly Commended – Gibson, Dunn & Crutcher
Gibson, Dunn & Crutcher’s City team’s advising UK pharmaceuticals company Amryt Pharma on its highly complex acquisition of Boston-based Aegerion Pharmaceuticals out of Chapter 11 within a very tight timeframe.
The team, led by Nigel Stacey and Sian Williams, was mandated in March 2019 and the acquisition was announced just two months later. The transaction involved US Chapter 11 proceedings, a court-sanctioned scheme of arrangement to create a new holding company of the Amryt group and took the form of a reverse takeover under the AIM and Euronext Dublin rules. It required a UK Takeover Code Rule 9 whitewash, given the level of Aegerion creditor control over Amryt on completion of the deal. Aegerion emerged from bankruptcy in October 2019 at which stage the acquisition was completed.
Other nominations
Herbert Smith Freehills
Representing Virgin Atlantic on its much-publicised takeover of Flybe, the UK’s largest regional airliner at the time, as part of the Connect consortium with Cyrus Capital Partners and Stobart Group.
Mayer Brown
The firm’s London office represented Canada-based FTSE 250 company Entertainment One on its £3.3bn sale to the US toy maker Hasbro, a cross-border deal that encountered a number of hurdles.
McDermott Will & Emery
Advising Praxair on the divestment of certain North American and South American assets, which were ultimately acquired by Messer and CVC Capital Partners for $3.6bn, allowing Praxair and Linde to consummate their all-share merger of equals.
White & Case
Representing Energean Oil & Gas on the $750m acquisition of the upstream exploration and production assets of Italian utilities company Edison, Energean’s first major acquisition since being listed in London in 2018.
After much back-and-forth between the judges in a keenly contested category, we are now delighted to reveal the winner of Private Equity Team of the Year for the 2020 Legal Business Awards.
The winner in this category demonstrated an ability to land the most significant mandates in an incredibly competitive market for private equity-backed deals. Judges looked for evidence of an ability to move with the market and stand out from competitors in the most eye-catching transactions.
Sponsored by
Winner – Weil, Gotshal & Manges
Weil’s vaunted London private equity team won plaudits for advising Bain Capital on its £3.2bn acquisition from WPP of a 60% stake in global data, insights and consulting company Kantar.
The deal was symbolic of a market that saw US money pile into UK assets, with the weakness of sterling attracting continued interest from sponsors, even as Brexit threatened to put off investors.
In July 2019 the Weil team, led by partner Marco Compagnoni, advised Bain on the acquisition and financing, coordinating input from finance, IP/IT, tax, antitrust, and Weil lawyers in the US, Germany and France. The deal saw WPP retain a 40% equity stake in London-headquartered Kantar and called for the Weil team to offer strategic advice on all aspects of the deal, including due diligence, M&A, shareholder arrangements, carve-out and bank/bond financing.
Particularly complex was the carve-out and separation, legally and operationally, of Kantar from the WPP group.
Kantar has around 350 legal entities, many of which are not wholly-owned by WPP, meaning that various shareholder, regulatory and works council processes needed to be followed to extract them.
Kantar shares its IT infrastructure with WPP, which is outsourced to IBM under a long-term arrangement. The team was instrumental in negotiating the outsourcing arrangement required to continue this post-completion. Weil won accolades from WPP for its ‘approach and ability to see the real value issues’ and the ‘top tier advice, strategically as well as technically’ that it provided to Bain Capital.
The financing of around $3bn of EUR and USD loans and bonds required complex negotiations and bespoke provisions. The 11 banks started with a range of views and through lengthy negotiations, the Weil team brought them to a consensus on the approach that worked for Bain and WPP.
Highly Commended – Clifford Chance
Clifford Chance impressed the judges with its advice to longstanding client KIRKBI, the investment vehicle owned by Lego’s founding family, on its consortium with Blackstone and pension fund CPPIB to acquire Merlin Entertainments. The all-cash, £6bn deal involved KIRKBI becoming the largest shareholder in the consortium, with a 50% stake.
The offer valued Merlin, Europe’s number one and the world’s second-largest visitor attractions operator, at £4.77bn, with CC leading on the scheme of arrangement leading to the successful offer and shareholder arrangements, which took into account each consortium member’s investment objectives and strategic interests.
The CC London team was led by private equity partner Simon Tinkler and M&A partners Steven Fox and Tim Lewis. It also included antitrust partner Alex Nourry.
Other nominations
Debevoise & Plimpton
Acting for TPG on its takeover of the assets of the Abraaj Group’s $1bn Global Healthcare Fund, after the assets fell into limbo as the Middle East fund collapsed amid mismanagement and corruption allegations.
Freshfields Bruckhaus Deringer
Advising CVC on its £200m minority equity investment in Premiership Rugby, a deal crucial to top-tier English rugby clubs, many of which are unprofitable, and which came under intense scrutiny from numerous stakeholders.
Fried, Frank, Harris, Shriver & Jacobson
An active fund formation team that helped raise over $150bn in 2018 alone, representing 30% of all private capital funds raised globally. It recently advised Permira on the launch of Permira VII, which closed with €11bn of commitments.
Kirkland & Ellis
Representing a consortium consisting of Apax, Warburg Pincus, Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan, on the $3.4bn take-private of the British satellite operator, Inmarsat.
Taylor Wessing
Advice to Standard Chartered Bank on divesting its private equity business via a £790m MBO to Affirma Capital, a new PE firm set up for the purposes of the disposal, backed by ICG Strategic Equity.
