Legal Business

Clifford Chance underperforms Magic Circle with 9% drop in PEP

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Financial results 2013 Clifford ChanceFreshfields Bruckhaus Deringer
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Clifford Chance (CC) has underperformed its Magic Circle rivals in its 2012/13 results as the firm today announced a 2.5% decline in revenue to £1,271m and a 9% drop in profit per equity partner (PEP) to £1m.

The firm, which has expanded the number of equity partners year-on-year from 379 in 2010-11 to 411 in the past financial year, pointed to factors including the predicted Eurozone crisis together with a slowdown in the Asia-Pacific market and a change of political leadership in China as having a negative impact on its bottom line.

Managing partner David Childs said: ‘We are living through an extended period of choppy conditions in global markets. However, our continued investment across geographies and practices have given us a broad-based business with the resilience to weather this volatility, as shown by our results over recent years as well as the major mandates and awards that we have been proud to win.’

Last year CC posted a 7% increase in revenue to $2,048m and 12% increase in PEP to $1.66m, as reflected in Legal Business Global 100 for 2011-12.

The past year has seen the 3,017-lawyer global firm open an office in Seoul as well as winning approval to enter into the first ever mixed partnership arrangement with a Saudi Arabian firm, Al-Jadaan & Partners Law Firm, in March this year.

CC also entered into an alliance in Singapore with litigation boutique Cavenagh law, giving it access to the lucrative Singapore litigation market. ‘We are the first full service firm in Singapore offering litigation advice,’ said Childs.

Deals highlighted by the firm include acting for the sponsors and financial advisers on Glencore International’s acquisition of Xstrata and Anheuser-Busch InBev on the bank financing of its $20.1bn acquisition of Mexican brewer Grupo Modelo.

Childs singled out litigation and banking and finance as having a good year, commenting: ‘Our global litigation and dispute resolution practice put in another excellent performance, with roles on some of the most high-profile and complex matters around.’

But despite Clifford Chance remaining as the leading Magic Circle firm in this year’s Legal Business Global 100 in revenue terms, in fifth place behind DLA Piper, Baker & McKenzie, Laham & Watkins, and Skadden, Arps, Slate, Meagher & Flom, the firm underperformed Freshfields Bruckhaus Deringer in seventh position. Freshfields last week reported a 7.2% increase in turnover from £1.139bn to £1.22bn and PEP rose by 7.6% to £1.398m.

Linklaters, in eighth place in the Global 100 2012-13 saw its revenue drop by 1% to £1,195bn but its PEP was up by 6% to £1.260m. Allen & Overy, meanwhile, in ninth place, reported a 0.6% increase in revenue to £1.19bn and flat PEP of £1.1m for 2012/13.

david.stevenson@legalease.co.uk

Click here to see the Global 100 results

Legal Business

Back at the gate: US invaders raise fresh questions over private equity status of CC and Linklaters

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Corporate Clifford ChanceLinklaters
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David Stevenson surveys a fast-changing buyout landscape to find US ‘barbarians’ once again pressing in on City leaders

Unfortunately for top City firms looking to defend their position in private equity, it takes more than a five-year freeze in credit markets and a sustained downturn in leveraged buyouts to stop foreign rivals trying to move in on their patch.

Such a dynamic has once again thrown scrutiny on Linklaters’ now decade-long effort to carve a credible position in the private equity market and the position of Clifford Chance (CC), by contrast traditionally established as the market leader in Europe’s buyout scene.

In the former case, the debate continues among peers (and some internally at Silk Street) over the extent to which Linklaters has forged a practice worthy of its much-vaunted general corporate team. In CC’s case, a purple patch in public M&A last year arguably did not extend to private equity, while the firm has had to contend with the resignation in April of global head of private equity David Walker for Latham & Watkins.

Legal Business

CC to boost London corporate and regulatory insurance capability with hire of NRF’s Ashley Prebble

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Strategic recruitment Clifford ChanceNorton Rose Fulbright
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Clifford Chance (CC) has hired Norton Rose Fulbright (NRF) corporate insurance partner Ashley Prebble as the Magic Circle firm aims to boost its Lloyds and London market and general insurance capability.

Prebble, who will work closely with the firm’s private equity and regulatory teams, specialises in corporate and regulatory insurance work including initial public offerings (IPOs), mergers and acquisitions, Part VII transfers, distribution agreements and regulatory matters.

While at NRF, Prebble advised on a number of high profile insurance transactions including the Part VII transfer of Royal Bank of Scotland’s Churchill, Direct Line and NIG businesses into UK Insurance last year, said at the time to be the largest general insurance portfolio transfer ever completed in the UK, with the four insurance business together worth in excess of 20 million policies.

Other headline deals he has advised on include the £135m sale of HSBC Insurance Brokers to Marsh, Admiral Group’s £711 million IPO and Brit Insurance Holdings’ $300m sale of Brit Insurance Limited to Riverstone Holdings.

Katherine Coates, head of the corporate insurance practice at CC, said: ‘Ashley joins us at a key time for the insurance industry, which faces unprecedented challenges and uncertainty due to market and regulatory pressures.

‘Ashley’s particular experience of the London market and general insurance operations will be a valuable addition to our current team, which is uniquely placed to support our clients across the sector on a wide range key strategic projects and transactions in both mature and growth markets.’

CC’s global insurance industry sector group comprises over 180 lawyers from its corporate, banking & finance, capital markets, M&A, regulatory, dispute resolution, antitrust, tax, real estate, pensions and employment teams.

Prebble added: ‘Joining Clifford Chance is the perfect opportunity to develop my practice in the London market and internationally, working as part of a leading global insurance sector team. I look forward to working closely with the firm’s pre-eminent private equity and regulatory teams, as financial investors are playing an increasing important role in the sector and sweeping changes in regulation and regulator approach pose new challenges for clients.’

caroline.hill@legalease.co.uk

Legal Business

CC bumps starting pay to £63,500 with bonuses giving junior associates chance to earn over £100,000

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Salaries Clifford Chance
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Despite generally gloomy market conditions there were renewed signs of underlying confidence at top London firms with Clifford Chance (CC) joining its peers today (4 June) in announcing rises in associate and trainee pay and bonuses for the year ahead.

The firm is the last of the Magic Circle to announce pay changes across the board, adding an extra £2,000 to newly-qualified (NQ) lawyers’ pay packets, up to £63,500 from last year’s £61,500, a rise of 3%.

The next largest rise was made to second-year post-qualified experience (PQE) lawyers, who will take home £1,900 more, totalling £78,200. The firm also increased first-year PQE pay by £500 to £69,500 and third-year PQE by £800 to £87,800.

CC was the only City firm to detail its associate bonuses for 2013/14, awarding maximum total compensation of £76,200 to NQ lawyers and £90,350, £101,660 and £114,140 for first, second and third–year associates respectively. Trainee pay also rose to match its peers, increasing first and second-year salaries by £1,000 to £39,000 and £44,000.

The firm’s increase to NQ pay puts it just behind Freshfields Bruckhaus Deringer, which is offering NQ associates £65,000-£72,500, and Linklaters on £64,000. Slaughter and May is offering NQ associates £63,000 while Allen & Overy currently pays £61,500 after taking the decision to freeze base salaries at last year’s level.

CC London managing partner David Bickerton said: ‘The London office has had another successful year. We continue to win great mandates from our clients and, again, have been more highly ranked by the directories than any other firm in the UK, Europe and globally.

‘It’s important to invest in our future trainees and we hope that by providing enhanced maintenance support, those individuals will be able to focus fully on their studies and develop the skills to become the outstanding lawyers that we require for our business. This is part of our overall commitment to breaking down any perceived barriers to entering our profession.’

The firm also substantially raised its maintenance grants for future trainees on its legal practice course (LPC) and graduate diploma in law (GDL), hiking the LPC grant from £4,900 to £7,000 while the latter rises from £5,000 to £7,000.

CC’s unusual decision to set out its bonus packages in detail will be seen as part of a bid to position itself as a choice recruiter of aspiring lawyers against City peers and US rivals.

Despite a run of job cuts at major UK law firms in recent weeks, the Magic Circle has so far avoided such measures and this year announced the first notable rises in underlying pay rates for associates since the boom. Despite this, real term pay for junior lawyers in the City has generally fallen by more than 15% since 2008 due to a combination of inflation and cuts made in 2009 by many firms to associate pay bands.

 

Jaishree.Kalia@legalease.co.uk

Legal Business

Lateral push sees key UK players switch to US firms

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Strategic recruitment Clifford ChanceHerbert Smith FreehillsQuinn Emanuel Urquhart & Sullivan
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US firms in the City continue to demonstrate their appetite for big name lateral hires from leading UK firms, with Latham & Watkins and Reed Smith picking up experienced partners from Clifford Chance (CC) recently, while Quinn Emanuel Urquhart & Sullivan announced the hire of disputes expert Ted Greeno from Herbert Smith Freehills (HSF).

Latham & Watkins’ acquisition of CC’s global head of private equity, David Walker, particularly caught the eye last month. This is one of the most significant blows to CC’s corporate practice since the departure of Adam Signy to Simpson Thacher & Bartlett in 2009.

Legal Business

HSF ends exclusive association in Saudi Arabia

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Middle East and Africa Al-Ghazzawi Professional AssociationClifford ChanceHerbert Smith Freehills
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Herbert Smith Freehills (HSF) is to end its five-year exclusive tie-up with Saudi Arabia’s Al-Ghazzawi Professional Association (GPA), as international activity in the region shows no sign of slowing down.

The two firms’ association formally ends on 1 August, but HSF will continue to co-operate with GPA on a non-exclusive basis. Neither firm has plans to enter into another exclusive association at this time.

Legal Business

HSF becomes third UK firm to open its doors in Seoul

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Asia Clifford ChanceDLA PiperHerbert Smith Freehills
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Herbert Smith Freehills (HSF) opened in Seoul last month, becoming the third UK firm to open in Korea, after Clifford Chance and DLA Piper.

The office will be co-headed by London disputes partner Tony Dymond and Singapore corporate partner Lewis McDonald, both of whom are relocating to the region.

The Seoul office will primarily focus on outbound work. It opens with two partners, three associates and a paralegal.

Legal Business

Clifford Chance and Linklaters make most of their partner promotions in Europe

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Partnership promotions Clifford ChanceLinklaters
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Partner promotions continue apace with Magic Circle firms Clifford Chance (CC) and Linklaters the latest to announce their numbers, the majority of which are in Europe.

CC welcomed 20 new lawyers to its partnership, with three-quarters of those promotions spread across Europe, while Linklaters promoted 24 partners, of which 19 were in Europe.

CC announced five London based promotions, namely corporate lawyers Tom Evans and Nick Hughes, finance partners Peter Dahlen and Oliver Hipperson and litigator Maxine Mossman.

Half of CC’s total promotions were spread across the firm’s central European offices with three in Paris, two each in Madrid and Frankfurt and one apiece in Düsseldorf, Milan and Amsterdam. Three lawyers were made up in Asia, one in the US and one in Saudi Arabia.

The number of promotions is down from 27 in 2012, bringing the total to 589 partners.

CC managing partner David Childs said: ‘Many of this year’s new partners have demonstrated a strong commitment to supporting the growth of the firm’s offering internationally, including leading development efforts in a wide range of markets beyond their “home” office, into Scandinavia, the Middle East, Latin America and South East Asia.

‘This international mindset is at the heart of our firm’s culture and it is very pleasing to see our principles so clearly embodied in these individuals.’

Linklaters, meanwhile elected six new London partners – Stuart Boyd and Savi Hebbur in mainstream corporate, litigators Ben Carroll and Harriet Ellis, Edward Aldred in banking and Timothy Lowe in tax.

In Europe promotions were spread across Paris, Düsseldorf, Frankfurt, Brussels, Amsterdam, Madrid, Warsaw, Lisbon and Moscow. The remaining five were in Beijing, Hong Kong and Dubai, with two in New York.

Linklaters’ chairman and senior partner Robert Elliott said: ‘These promotions underline our commitment to invest in our global practices in order to enhance the breadth and depth of expertise we offer our clients.’

Promotions at both firms will take effect from 1 May 2013.

Meanwhile, Lawrence Graham has announced three partner promotions – the same as last year – with two in London and one in Monaco. Since March 2012 nine new partners have joined the firm from Bird & Bird, Herbert Smith, Linklaters and Stephenson Harwood. Most recently private capital partner Zac Lucas joined the Singapore office in February from Ogier.

Elsewhere Watson Farley & Williams has promoted four partners, Jahnavi Ramachandran and Kavita Shah in asset finance in London, and Ahmad Khonsari and Daniel Marhewka in the corporate department in Munich.

jaishree.kalia@legalease.co.uk

Legal Business

Dentons wins spot as Network Rail announces panel revamp

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Adviser reviews Clifford ChanceDentonsKennedysNetwork Rail
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Network Rail has cut its legal roster from 12 to five core firms in a review that sees newly merged firm Dentons appointed to the panel.

Other firms awarded full service contracts for work in England and Wales are Bond Pearce (Bond Dickinson on 1 May), Eversheds and Addleshaw Goddard. Maclay Murray & Spens has been awarded the contract for Scottish law matters. All four were reappointed from the previous panel.

The firms will provide legal support to Network Rail’s entire business but with a particular focus on corporate projects, commercial contracts, dispute resolution, employment and property work.

Network Rail has also awarded three further contracts for work in specialist areas – to Clifford Chance for treasury and capital markets work; Kennedys for health & safety and regulatory enforcement; and Winckworth Sherwood for public law matters.

As of April 2012 Network Rail had a legal spend of around £15m per year.

Firms not re-appointed to the full panel are Simmons & Simmons, Berrymans Lace Mawer, Bircham Dyson Bell, MacRoberts, Schofield Sweeney and Winckworth Sherwood.

The tender, which was kicked off at a launch presentation in December, was put out to 20 firms, with a further seven unsuccessful.

The rail company’s review of its advisers, led by group general counsel Suzanne Wise, has centred on developing stronger relationships with its advisers and obtaining better value services.

Wise said: ‘This has not been about dissatisfaction with any of the company’s current suppliers. The decision to significantly reduce the size of the panel will drive efficiencies in line with the company’s business objectives. I wanted to develop deeper, more strategic relationships with fewer firms to drive better value and a more integrated approach to our work.’

A statement issued by Network Rail further explained: ‘Network Rail had found its legal spend spread too thinly across a panel of 12 firms making it difficult to develop a close strategic relationship whilst at the same time eroding the company’s ability to gain maximum benefit from the value added offered by many law firms in the market.’

Before joining Network Rail, Wise was general counsel and company secretary of Premier Foods, where she set up the FTSE 100 company’s first formal panel, appointing Eversheds, Slaughter and May and Wragge & Co.

She joined Network Rail in January 2012, with a brief to complete a wholesale review of the strategic objectives of the legal team, including a strategic vision for legal services.

caroline.hill@legalease.co.uk

Legal Business

Clifford Chance partner takes up governance role at Deutsche Bank

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Leadership Clifford ChanceDeutsche Bank
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Deutsche Bank today (17 April) announced the appointment of Clifford Chance partner Daniela Weber-Rey as chief governance officer and deputy global head compliance in its Frankfurt office.

Weber-Rey, who is a long-serving corporate partner at Clifford Chance, will join Europe’s biggest bank by assets in June, overseeing corporate governance globally and acting as adviser to the management board on the governance structures and processes of the bank.

She will report to Deutsche Bank management board and group executive committee member Stephan Leithner in her governance role and serve as deputy to compliance chief Andrew Procter.

Weber-Rey has been a partner at Clifford Chance and legacy firm Pünder Volhard Weber & Axster for over 20 years. She was also a member of the Magic Circle firm’s partnership council until earlier this year and continues to be a member of the Commission of the German Corporate Governance Code. She regularly advises German and multinational corporates and banks on corporate governance and general boardroom issues.

According to a statement from Deutsche, Weber-Rey’s hire forms an ‘important component’ of the bank’s cultural change initiative in ensuring good decision-making and clear accountabilities across the bank.

Leithner said: ‘We are pleased that Daniela Weber-Rey will be joining Deutsche Bank. Staying at the forefront on governance structures and processes, an area where the bank is traditionally strong, will be critical in the context of significant market and regulatory change.’

Weber-Rey becomes the second partner from a Magic Circle firm in Germany to announce a role in a financial institution this week. Former Freshfields Bruckhaus Deringer senior partner Konstantin Mettenheimer is set to join asset manager Edmond de Rothschild Group this summer as chairman for the Franco-Swiss bank’s businesses in Germany, including its asset management, private banking and advisory services. He will be based in Frankfurt.

francesca.fanshawe@legalease.co.uk