Legal Business

CMS cites ‘19%’ UK profitability hike as turnover tops £500m in first post-merger results

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Financial results 2017/18 CMS UK

CMS Cameron McKenna Nabarro Olswang has released a selection of financial highlights for the year following its three-way merger but disappointingly kept some key metrics under wrap.

The firm revealed today (14 June) that the 25 offices in its UK LLP turned over £518m in the year to April 2018, £29m up on the consolidated results of the three legacy firms Cameron McKenna, Nabarro and Olswang, which merged in May last year.

It said like-for-like profitability was up 19%, but did not disclose profit or profit per equity partner (PEP). Like-for-like comparisons are difficult, however, because Nabarro and Olswang did not release their financials in the year before the merger.

‘Collectively we have achieved a tremendous result in our first year together as a combined firm,’ UK senior partner Penelope Warne said. ‘It has been a transformational year for our people, filled with new opportunities and challenges and I’m very proud of what we’ve achieved together.’

LLP books published in January provide some light. They revealed revenue at Olswang plummeted 14% to £99.96m in 2016/17, were marginally up 1% at Nabarro to £131.14m and up 4% to £273.2m at CMS Cameron McKenna. This year’s combined turnover is therefore up about 3% from last year’s £504m.

The LLP accounts also showed operating profits fell at all three legacy firms in the pre-merger year. They were down an eye-catching 76% to £8.36m at Olswang, while Nabarro saw a more modest decrease from £47.9m to £42.6m and Cameron McKenna fell from £74.1m to £71.5m. The combined operating profits were therefore about £122m in 2016/17.

This year’s highlights include advising HP on its $1.05bn acquisition of Samsung’s printer division and LandSec on the £1.28bn disposal of its joint venture interest holding in 20 Fenchurch Street to LKK Health Products Group. The firm also picked up a sole legal provider mandate for the Crown Estate’s £2.5bn regional retail portfolio.

The firm also released today global revenue for the broader CMS international group, which hit €1.3bn in the 2017 calendar year, up 31% from last year’s €999m. It means the alliance, which includes 74 offices in 42 countries combined together under a European Economic Interest Grouping, returned to growth after a flat 2016.

The firm was busy expanding globally last year, striking an alliance in Saudi Arabia and opening a new office in Monaco.

marco.cillario@legalbusiness.co.uk

Legal Business

Looking east: Linklaters gets long-awaited Shanghai approval as CMS launches Hong Kong association

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Asia CMS UKLinklaters

Linklaters and CMS Cameron McKenna Nabarro Olswang have shown Asia is still high on the agenda of global law firms after each made moves to expand their presence in the region.

The Magic Circle firm announced today (21 May) its lawyers will be able to practise local law in the Shanghai Free Trade Zone (FTZ) through a joint operations agreement with local firm Zhao Sheng. FTZ rules allow international players to tie-up with domestic firms and practise local law.

The announcement has been on the cards for some time after the two firms formed a ‘best friends’ alliance in April last year, which saw three partners and a team of lawyers move from Linklaters to Zhao Sheng.

‘Market shifts indicate that outbound work and high-end domestic transactions will become ever more important for our business,’ said Linklaters head of China William Liu. ‘The joint operations will help us to protect our competitive advantage both in China and globally.’

Other firms to have entered the FTZ include Hogan Lovells, through its association with Fidelity Law in October 2016 and Baker McKenzie, which a year earlier became the first international firm to launch a joint office in the area with Beijing firm FenXun Partners. Holman Fenwick Willan, meanwhile, formalised a local partnership with Wintell & Co in April 2016.

The move follows CMS announcing last Friday (18 May) it had formed an alliance with Hong Kong firm Shirley Lau & Co, again with a view to practice local law.

CMS partner Tim Elliott will move across to the newly established firm to become its office managing director alongside three other lawyers. The firm was launched by former Troutman Sanders M&A veteran partner Shirley Lau, who brought a six-strong corporate and litigation team with him from the US firm’s local operations.

CMS Hong Kong managing partner Nicolas Wiegand said: ‘Since our launch in 2016, we have been steadily growing the team and developing our practice in a number of strategic areas including dispute resolution, particularly international arbitration, banking and finance, as well as energy.’

Hong Kong made legal headlines recently as the location of Slaughter and May’s third ever lateral hire. In April, the Magic Circle firm recruited former Hong Kong Securities and Futures Commission director of enforcement Wynne Mok to its investigations and litigation team.

marco.cillario@legalbusiness.co.uk

Legal Business

CMS, Fieldfisher and NRF among firms awarded spots on social housing regulator’s panel amid regime shake-up

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Adviser reviews CMS UKFieldfisherNorton Rose Fulbright

CMS Cameron McKenna Nabarro Olswang, Norton Rose Fulbright (NRF) and Fieldfisher have been appointed to the Regulator of Social Housing’s (RSH) inaugural legal panel.

Trowers & Hamlins, Devonshires and Mills & Reeve will also be in the roster of firms advising the government body, announced today (18 May), for a four-year term.

The RSH started life in January, when the Homes and Communities Agency branched into a development and regulatory entity as the government tried to expedite the delivery of affordable housing.

The new entity, Homes England, will work on the delivery side, while the RSH will assist on commercial law and regulation, as well as a new special administration regime for social housing providers.

Under the new regime, if a registered provider is insolvent the administrator will try to keep its assets for use in the social housing sector.

Fieldfisher and Devonshires will advise specifically on regulatory, corporate and financial law, while CMS and NRF will work on insolvency and special administration law, with the other firms on the panel advising on both.

‘As a firm, we have extensive experience of advising on special administrations and in the social housing sector, and we look forward to deploying this in helping RSH,’ said CMS’ Glen Flannery, member of Restructuring Team of the Year at the latest Legal Business Awards. The firm’s real estate partner Candice Blackwood will also be part of the team advising the RSH.

This is the second panel appointment this week for Fieldfisher, which was among a group of seven firms appointed by Co-Op on Monday (14 May) to work alongside primary advised Allen & Overy.

marco.cillario@legalease.co.uk

Legal Business

CMS dismisses Singapore head and reports to SRA amid ‘confidential matters’

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Legal regulation CMS UK

CMS’ Singapore head has been dismissed from the firm and the matter reported to the Solicitors Regulation Authority (SRA), Legal Business has established.

Former legacy Olswang corporate partner Andrew Stott has left the firm after his dismissal in late February was recommended by senior partner Penelope Warne and managing partner Stephen Millar and unanimously approved by the firm’s 20-partner board.

The reasons for the departure remain unclear. Stott confirmed to Legal Business that he has left the firm but declined to comment further citing confidentiality provisions. A spokesperson for CMS, however, noted that there was not a non-disclosure agreement drawn up as part of the process.

CMS said in a statement to Legal Business: ‘CMS does not normally comment publicly on confidential partner matters. We are mindful of the SRA process and serious sensitivities and will not be commenting further at this time.’

A spokesperson for the SRA said: ‘Now that we are aware, we will look at all relevant information before deciding on any next steps.’

Stott had previously led legacy Olswang Singapore operations until its three-way union with Nabarro and CMS in May 2017, after which he continued as CMS’ local head.

He was first made partner in 2012 when he relocated to the city-state as Olswang launched its local base. Two years ago he took over as the office managing partner after telecoms, media and tech partner Rob Bratby relocated to London.

CMS’ 28-lawyer Singapore base, part of its UK LLP, was created through the merger with Nabarro and Olswang. M&A partner Toby Grainger, also a former legacy Olswang partner, has now taken over as Singapore managing partner from Stott.

Nabarro had previously opened its own local base in 2010. CMS recently expanded its operations into local law in September 2017 through a formal law alliance with boutique Holborn Law, legacy Olswang former best friend. Other offices in the region include Beijing, Hong Kong and Shanghai.

Marco.cillario@legalbusiness.co.uk

Legal Business

In-house: CMS breaks new Crown Estate ground as Heineken UK and DLA toast another two years

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In-house CMS UKDLA Piper

The legal adviser overhaul of £13bn real estate business The Crown Estate by general counsel (GC) Rob Booth continues with CMS Cameron McKenna Nabarro Olswang picking up a sole legal provider mandate for the estate’s £2.5bn regional retail portfolio. Meanwhile, DLA Piper has won another two years as principal legal adviser to Heineken UK.

CMS’s appointment with The Crown Estate, announced Monday (March 12), covers work including asset management, development, sales and purchases for its regional portfolio, which comprises 14 shopping and retail parks, three shopping centres and one leisure destination. It is the first time the firm has secured a role on the panel.

CMS partners Ciaran Carvalho, John Cumpson, Sarah Meldrum, Marie Scott, Karen Clarke and Marcus Barclay led the pitch on behalf of the firm’s teams in London and Sheffield. Carvalho said: ‘We are absolutely thrilled to have won this significant mandate after a highly competitive pitch. The Crown Estate takes a long-term view of real estate, and we see this as the start of a strong and lasting relationship, extending over the course of this mandate and, we hope, well beyond.’

The Crown Estate is governed by an Act of Parliament and returns all of its profits to Treasury, worth £2.6bn in the last decade. Booth told Legal Business legal spend is worth between £10m and £15m annually. On CMS’ appointment, Booth (pictured) commented: ‘We were impressed with the offering CMS put together. There is a strong sense of innovation and collaboration in the future of our partnership with them.’

Booth’s appointment to GC in May 2016, replacing Vivienne King, was coupled with an announcement the estate would overhaul its sets of legal advisers. Since then, LB 100 firms Hogan Lovells  and Womble Bond Dickinson  were awarded the mandate for the energy, minerals and infrastructure portfolio in February last year, while Berwin Leighton Paisner (BLP) secured the jewel-in-the-crown £7bn central London property mandate a month earlier.

Elsewhere, a principal legal adviser relationship between DLA Piper and the UK arm of global beer and cider producer Heineken has been extended another two years. DLA was first appointed to the role in 2015 on an initial three-year term, covering property, litigation, IP, corporate and employment law.

DLA IP and technology partner John McKinlay, who is based in Edinburgh and manages the relationship, said the renewal is the best testament to the success of the arrangement. The firm is advising on a broader range of work and has gained a better understanding of Heineken UK through secondees and other investments.

‘That’s the great win-win of these relationships… it’s a very significant account for the firm.’

A key piece of work was advising on Heineken’s £403m acquisition of a portfolio of around 1,900 UK pubs owned by Punch Taverns last summer, which the beer giant bid for alongside Patron Capital.

DLA also has a similar agreement with Merlin Entertainments, following its appointment as primary supplier for global construction as well as UK commercial, property and HR work in January last year.

Last week, listed infrastructure group Balfour Beatty extended and revamped its sole supplier partnership with Pinsent Masons, which also has a single-supplier mandate with energy giant E.ON for a five-year term. Other high-profile sole-supplier deals include Eversheds Sutherland with Tyco and Turkish Airlines.

hamish.mcnicol@legalease.co.uk

Legal Business

LLP latest: Olswang profit fell 76% before 2017 CMS merger as legacy firms’ final accounts revealed

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Financial results 2016/17 CMS UK

Profits at all three CMS Cameron McKenna Nabarro Olswang legacy firms fell in the last financial year before their three-way union went live, LLP accounts for each firm reveal.

As the first evidence of the 2016/17 financial performance for Nabarro and Olswang in particular -which did not release their financials in the summer – the accounts also show revenue at Olswang plummeted 14% from £116.47m to £99.96m. The top line was marginally up 1% at Nabarro to £131.14m and up 4% to £273.2m at CMS Cameron McKenna.

Operating profits fell by an eye-catching 76% from £35.24m to £8.36m at Olswang before the tie-up went live on 1 May 2017, while Nabarro saw a more modest decrease from £47.9m to £42.6m and Cameron McKenna from £74.1m to £71.5m.

The accounts also show that legacy Nabarro had a £17.2m deficit in its pension scheme at the end of April 2017, up 41% from £12.2m the previous year. This means the firm’s pension deficit had started to increase again after falling 61% from £31.8m in 2014/15.

Speaking to Legal Business, CMS managing partner Stephen Millar stressed that merger costs played a significant role when when looking at the numbers.

‘These accounts were prepared on a different basis,’ he said. ‘We have merger costs that we knew about and we budgeted for. We wanted to have a fully integrated business on day one. None of this is a surprise and it does not affect what we are doing on a management level.’

He pointed to the fact that the accounts included onerous lease provisions for vacated office space as Olswang and Nabarro teams moved under one roof at CMS’ premises at Cannon Place .

The firms also incurred redundancy costs for staff who were let go as a result of the merger , the write off of furniture and IT equipment no longer required by the combined business and professional fees in preparation of the merger.

While the accounts for Olswang show costs of £8.6m for onerous lease provisions and £8.8m of fixed-asset impairments, the documents do not specify other exceptional costs costs at the three firms.

Millar also pointed to the fact that Olswang’s accounts could not be assessed on a like-for-like basis because the firm had a ‘quite discontinuous operation’ in the months leading up to the merger. Olswang lost several teams across Europe before the merger went live.

Millar concluded: ‘These are good, profitable businesses performing as we anticipated.’

Marco.cillario@legalbusiness.co.uk

For more on the CMS Cameron McKenna Nabarro Olswang merger in 2017, read ‘Sale of the century – Has Camerons picked up a bargain with Olswang and Nabarro?’

 

Legal Business

Financials 2017/18: CMS claims 25% profit hike post-merger as DWF’s top line grows 23%

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Financial results 2017 CMS UKDWF

CMS UK has today (20 November) claimed profits have grown 25% in the six months since its three-way merger with Nabarro and Olswang. Meanwhile, DWF’s unrelenting push internationally has seen turnover grow 23% at the H1 2017/18 stage.

Following its tripartite merger on 1 May this year, CMS said H1 turnover for its UK business was more than 50% of its full-year budget, at £253m.

However, the firm did not provide an actual figure for net profit, save to comment it was up 25% on the figure last year. This renders a like-for-like comparison meaningless, as it includes combined profit with legacy firms Nabarro and Olswang, with Olswang not providing H1 results in 2016.

The firm said disputes and TMT have been key drivers of the firm’s performance this year, while it brought about significant savings by subletting most of legacy Nabarro and Olswang former premises after all staff moved into CMS UK’s offices at Cannon Place. The three firms also cut 300 support staff roles in the Spring ahead of the merger.

Managing partner Stephen Millar described the latest financial results as ‘fantastic’, saying it was ‘a direct consequence of the momentum and confidence we are experiencing throughout the business’.

‘We have been working extremely hard on integration, and although there is more to be done, we are in a strong position. The fundamental systems integration is in place and strong working relationships have formed across the firm.’

Speaking to Legal Business in the autumn , Millar said financial measures were ‘crude but important’ in assessing the success of the firm in the first 18 months after the merger and noted the firm was performing ‘ahead of expectations’.

Elsewhere today, top 25 firm DWF has also posted strong results for H1 2017/18, with revenue up 23% and net profit increasing by ‘circa 33%’. Turnover for H1 2017/18 was £113.5m in a period marked by a spate of office openings in Europe, North America and Asia Pacific.

‘Particularly in a year that has already seen us put a significant amount of investment into our expansion, this is a good set of results which indicate there is huge potential for us to achieve further growth through the rest of the year,’ said the firm’s managing partner and chief executive Andrew Leaitherland.

Most recently DWF opened in Milan with a 16-strong team hire from local independent Pavia & Ansaldo. The firm also launched in Australia last month  and in Singapore in July with a four-lawyer team from Eversheds Sutherland.

In July the firm entered South America through a number of associations   in Argentina, Panama and Colombia.

marco.cillario@legalbusiness.co.uk

Legal Business

‘Rationalisation and upgrade’: CMS UK sublets legacy Nabarro and Olswang headquarters

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Leadership CMS UK

Six months into the UK’s largest ever legal merger, CMS has signed deals to sublet most of legacy Nabarro and Olswang’s London offices.

Lloyds Bank has today moved into Nabarro’s former premises at 125 London Wall, while University College London (UCL) and US law firm Quinn Emanuel Urquhart & Sullivan have taken four of Olswang’s five floors at 90 High Holborn.

CMS said the deals mean the firm will have no ongoing financial obligations on the sublet spaces. The firm’s lease for 120,000 sq ft on London Wall and 91,000 sq ft at High Holborn run until 2025 and 2022 respectively.

While UCL and Quinn Emanuel have taken up about two thirds of Olswang’s former premises, one floor at the building is still to be sublet, although CMS said there was ‘positive interest’ in it.

A spokesperson for the firm told Legal Business discussions with Lloyds started in August, while negotiations for 90 High Holborn had been under way since the beginning of the year.

CMS UK managing partner Stephen Millar said the ‘rationalisation and upgrade’ of the firm’s property portfolio was one of its strategic objectives. ‘It is a remarkable achievement to complete such an extensive amount of rationalisation and improvement in this short space of time, and a credit to the teams involved who have worked hard to deliver this project on time and well within budget.’

He added there will be no redundancies as a result of these agreements and the firm was recruiting.

Staff of legacy Nabarro and Olswang agreed to move into CMS UK’s offices at Cannon Place in November 2016 after the firm agreed a deal to take further space in the building.

The move was completed within days of the merger going live in May 2017 , with Nabarro staff leaving the premises they had occupied for the previous two years and Olswang people moving out of the building where the firm had been since 2002.

Staff have also moved in together under one roof in Dubai and Singapore, meaning all CMS employees across the world now work together.

In UAE, CMS and Nabarro teams moved to a new office at the Burj Daman building in the Dubai International Financial Centre in October, while in Singapore 28 lawyers from Nabarro and Olswang have joined forces in the Marina One complex in the Marina Bay financial district.

marco.cillario@legalbusiness.co.uk

For an analysis of the three-way merger, see ‘Sale of the century – Has Camerons picked up a bargain with Olswang and Nabarro?’ (£) 

Legal Business

Sainsburys appoints eleven firms including Linklaters, Addleshaws, CMS and Dentons to new roster

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Adviser reviews Addleshaw GoddardCMS UKLinklaters

UK supermarket and retailer Sainsbury’s Group has appointed eleven firms to its new legal panel, including Linklaters, Addleshaw Goddard, Dentonsand CMS Cameron McKenna Nabarro Oslwang.

The other firms on the roster are TLT, Cleaver Fulton Rankin, Lewis Silkin, Winckworth Sherwood, BLM, Mason Hayes Curran and Shepherd & Wedderburn.

The panel, which was last reviewed in 2014, previously included Bond Dickinson, Croner, King & Wood Mallesons, DWF and Gowling WLG.

The legal panel, known internally as the ‘Sainsbury’s Legal Community’, will cover jurisdictions in England, Wales, Northern Ireland, Scotland and the Republic of Ireland – which is a new jurisdiction following the Group’s acquisition of Argos. The panel is typically reviewed every three years.

In a press statement, Nick Grant, head of group legal services for Sainsburys said: ‘As we continue to integrate Argos with Sainsbury’s we’ve selected a panel that provides the right combination of experience and fresh thinking.’

He said the firms were chosen to ensure that the Sainsbury’s Group obtained the legal support for the range of markets and jurisdictions in which it now operated.

Grant created the Sainsbury’s Legal Community in 2011, which involves multiple firms collaborating to provide advice. The change allowed the in-house team to present its objectives more openly and let firms that are stronger in certain areas collaborate to produce better advice.

Recent completed panels include HSBC, which appointed around ten firms to its UK legal banking panel. Addleshaw Goddard, Eversheds Sutherland and Simmons & Simmons were among those which made the cut.

CMS, Dentons and Pinsent Masons are also among the roster which was reduced in size.

kathryn.mccann@legalease.co.uk

Legal Business

Mayer Brown, RPC and CMS and five other firms win roles on QBE UK panel review completion

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Adviser reviews CMS UKMayer BrownRPC

Eight firms including Mayer Brown, Clyde & Co, CMS Cameron McKenna Nabarro Olswang, DAC Beachcroft and RPC have won places on Australian insurer QBE’s UK panel review.

Berrymans Lace Mawer, DWF and Plexus have also been selected to provide legal advice across England, Wales and Scotland.

Motor and casualty will be provided exclusively by DWF and Plexus for claims under £250,000.

Commenting on the panel review, Alan Brownlee, head of claims procurement for QBE European Operations said: ‘ We are confident that these appointments will allow us to further develop the strategic partnerships with our panel that are critical in enabling us to deliver truly excellent service, innovation, outcomes and value to our customers in the years to come.’

Earlier this month, Legal Business reported that Bond Dickinson made up to five voluntary redundancies in its Bristol office after the firm lost out on a panel spot with QBE.

In a statement, the firm said: ‘Earlier this year following on from a panel loss we had to undertake a restructuring exercise with our professional risks team which resulted in voluntary redundancies. Fortunately, all of those solicitors who have now left the firm are moving on to new roles.’

Last October, Legal Business revealed that QBE was launching a review of its UK claims panel, following the appointment of Carol Scobie as group general counsel and company secretary in January 2016.

The UK panel, which was last reviewed in 2014, is responsible for carrying out a large amount of disputes work for the insurer.

The last UK review was overseen by then European claims director Dominic Clayden, now group chief claims officer, with firms including BLM, Mayer Brown, Plexus Law and RPC making the final list.

kathryn.mccann@legalease.co.uk