Legal Business

Revolving doors: Ince appoints London managing partner duo as City players hire globally

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Strategic recruitment Allen & OveryDLA PiperInce

After an eventful few months following its acquisition by Gordon Dadds, Ince has put down some roots with the appointment of Nick Goldstone and Michael Volikas as joint managing partners of the London office.

The move came after Gordon Dadds last month posted a 69% revenue hike from to £52.6m and a 73% rise in profit to £15.2m on the back of its £43m acquisition of Ince.

Ince’s former head of dispute resolution, Goldstone specialises in media-related disputes, reputation management and human rights. Volikas was previously global managing partner for the Ince & Co shipping group where he acted mainly on dispute resolution matters.

Goldstone told Legal Business: ‘We intend to be one of the go-to firms, not just for law, but for professional advice. We think we offer a fairly unique offering and intend to keep growing our sectors.’

He said he intends to move the firm forward and work through all the opportunities that have been created by last year’s merger. The firm aims to build out its core areas of strength in shipping, energy and insurance as well as its corporate, commercial and property sectors.

Goldstone is confident the current political and economic climate will bring in more work. ‘So far as the Strait of Hormuz is concerned and the trade war that’s potentially building up between the United States, China and the sanction issues with Iran – these create problems and opportunities. We are well-equipped to help our existing client base and new clients deal with these issues.’ Goldstone said.

Adrian Biles, the chief executive of both Ince and Gordon Dadds, will focus on the firm’s international outlook.

Meanwhile in Frankfurt, DLA Piper bolstered its tax practice with the hire of Ulf Andresen from PwC where he headed the Frankfurt transfer pricing group and the German financial services transfer pricing group.

Andresen has experience in structuring and implementing cross-border activities, evaluating tax accounting impact and defending these structures in audits. The move is part of DLA’s plan to expand its capabilities in transfer pricing, an area of law which is becoming increasingly important due to changes in the international tax landscape.

Co-managing partner Konrad Rohde told Legal Business: ‘We have a transfer pricing practice already in the UK and China. We’re very strong in terms of transfer pricing in the US and we also have capabilities in Italy. We have a lot of clients that do international reorganisations and transfer pricing is a huge driver for that. We also see a lot of opportunities to interface with other areas we practice in, in particular intellectual property, corporate and also white collar crime.’

‘We think that it will help us grow the practice but also give us an edge in comparison to other firms. If you look at law firms in Germany, very few typically cover transfer pricing. This will really give us a good footprint in the German legal market’ Rohde added.

Elsewhere, in Hong Kong, Allen & Overy appointed restructuring lawyer Ian Chapman to the partnership and its Asia Pa00cific restructuring and recovery group. Chapman has over 30 years of experience advising publicly-owned and private companies on complex and high profile restructurings and insolvencies in Asia.

Meanwhile, Burness Paull, has enhanced its tech sector capabilities with the hire of IP, commercial and competition partner Colin Miller from DWF.  He has acted for clients including C-Trip/Skyscanner, Expedia Group, Zoopla, uSwitch and Administrate, as well as the Oil & Gas Technology Centre.

Finally in China, Linklaters’ Shanghai free trade zone joint operation partner Zhao Sheng has hired Vivian Cao to its Beijing competition practice and corporate M&A lawyer Colette Pan to it Shanghai office. Cao has international and domestic competition law experience while Pan specialises in China-facing financial institution, tech and fintech M&A and financial regulation. Both partners join from Fangda Partners and are PRC and New York State qualified.

muna.abdi@legalease.co.uk

Legal Business

Comment: Too much jam today for partners yet the future of law will need long-term investment

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Comment DLA Piper

A little over five years ago Legal Business produced a cover feature dubbed ‘How to improve a law firm in 17 easy steps’. The piece – intended as a series of practical proposals to improve the working of law firms – has aged as well as anything printed in these pages.

And while point one – on overhauling lockstep partnerships for the age of global law – has been borne out, it is the second proposal, to phase out full profit distribution models, that is more pressing to the profession. Problems with lockstep are a peculiar challenge for London’s elite. In contrast, the historic model that has prevailed in legal partnerships of distributing the near-entirety of profits to partners annually speaks to an entire industry in danger of tipping itself over a cliff.

We have reached a stage where no-one seriously doubts there are structural challenges looming over major law firms, notably the question of whether legal practices of the future should be primarily investing in the platform or the people. For the firms we chronicle in these pages, people are still winning hands down.

New technology and a rising compliance burden on a global scale raise the likelihood that large markets will emerge for legal providers that can automate much of their service and potentially remake more of their products with more varied groups of professionals.

While many top or boutique law firms can conceivably continue with the current partner-led model, it is less clear whether the great swathe of the mid-market will thrive without considerable reinvention. And as we address this month in our interview with DLA Piper leader Simon Levine and a discussion on new business models, these scenarios suggest many firms will have substantial needs for capital in future. Capital they keep flushing out.

The truth is that it is very rare to find a law firm leader who believes full distribution makes a lick of sense for the industry as a whole or their institution. They simply fear that if they try to change their model – even with relatively modest levels of retention – they will lose core partners to rivals offering jam today. Good for recruiters and mobile prima donnas. Less good for the profession and long-term vision.

If this direct tension between the interests of key talent and the institution sounds familiar, it bears more than a passing resemblance to the conflicts that built up in the investment banking industry ahead of the credit crunch.

That’s not to forecast a comparable fate to the banking crisis – law and banking obviously have as many contrasts as comparisons. But it does speak to a danger that many law firms that could credibly evolve into potent professional services giants (of which DLA tops the list) may not only miss their shot for lack of investment and rigid structures, they could be left behind by new entrants with deeper products.

To squander the many admirable qualities of the legal industry in such circumstances would be bitter. For many law firms, even if initial moves in this direction are modest, ending the quirk of paying out all their profits annually will not only be good for business, it may just unleash their potential.

alex.novarese@legalease.co.uk

See ‘The DLA interview: On this rock I build…’

Legal Business

‘Great synergies’: Mayer Brown adds long-awaited restructuring hires with DLA duo

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Strategic recruitment DLA PiperMayer Brown

Chicago-bred Mayer Brown has bolstered its restructuring, bankruptcy and insolvency (RBI) practice with a double hire from DLA Piper in London.

DLA veterans Michael Fiddy and Amy Jacks join Mayer Brown as co-head of the firm’s global RBI practice and co-head of the firm’s UK RBI practice respectively. Fiddy will lead the global group alongside New York partner Brian Trust and Hong Kong-based partner John Marsden, while Jacks takes on her leadership role alongside partner Devi Shah.

‘We have been looking to strengthen our RBI capability for a long time,’ Mayer Brown London senior partner Sally Davies told Legal Business. ‘Team hires are more successful than individual hires and Michael and Amy have great synergies between them.’

Fiddy built his reputation at DLA Piper as global co-chair of the restructuring group while acting for a number of financial institutions, funds, debtors and creditors. He also served as managing director of Fulham Football Club between 2000 and 2002. Jacks, meanwhile, has advised funds, investment and clearing banks, corporates and insolvency practitioners, while also spearheading DLA Piper’s UK restructuring practice.

Fiddy and Jacks are reunited with former DLA partner Alex Dell, who joined Mayer Brown in 2015 in a bid to enhance the firm’s cross border asset-based lending offering. Dell was one of the pull factors for the pair, while Mayer Brown was familiar with Fiddy and Jacks after being on the other side of the table to the two on various mandates.

‘We have been aware of the reputation of these two in the market for a while and we share a number of clients with them,’ Davies added. ‘We’re continuing to look at strengthening our RBI practice to ensure we’re fully joined up globally.’

It is yet to be confirmed when the pair will start at Mayer Brown.

DLA UK managing partner Liam Cowell commented: ‘Both Michael and Amy have made a significant contribution to our team over the years, and we wish them well for the future. We continue to have a very strong Restructuring practice and are regularly involved in some of the UK’s most high profile and complex restructuring matters reflecting the breadth and quality of our practice.’

thomas.alan@legalease.co.uk

Legal Business

DLA global turnover surpasses $2.8bn in second year of growth

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Financial results 2018/19 DLA Piper

DLA Piper added 8% to its global top line in 2018, making for consecutive years of growth following a dip in 2016.

The firm’s global revenue rose to $2.84bn, up on last year’s $2.63bn and continuing a bounce back from when the firm’s total turnover dipped below $2.5bn in 2016 because of exchange rate fluctuations across its international business, which is divided between an international LLP and a US LLP.

Profits per equity partner also rose in 2018, up 7% to $1.87m. Total lawyer numbers rose slightly to 3,702, following drops in each of the previous years, while revenue per lawyer rose 5% to $766,124. Net profit was up 6% to $751m.

DLA’s strong global performance follows growth in the firm’s international LLP, in which growth in the UK business pushed revenue to £919m even as 2017’s cyber-attack took its toll on profit.

The firm’s international (non-US) revenue for the year to 30 April 2018, announced in February, grew £42.2m, or 5%, of which £29m related to the UK business. Stripping out the impact of foreign exchange, however, fee income was up £33.1m, or about 4%.

Growth in UK fee income of about 10% was one of the strongest performances in the firm’s international regions, while Europe and Asia-Pacific saw more modest, single-digit growth. Profit at the international LLP, meanwhile, was up £11.4m to £315.8m.

In February, DLA chief financial officer Paul Edwards told Legal Business the firm’s 2017 cyber incident, which occurred during this year’s results period, had impacted profit. ‘I couldn’t even give you a number on this but I do know it cost us,’ he commented. ‘Had that not happened we’d be talking about, I believe, an even stronger year.’

DLA’s global results follow a slew of US firms announcing strong financial results recently. Last week, Latham & Watkins posted 11% revenue growth to hit £3.386bn in the year after becoming the first law firm to break the $3bn barrier.

hamish.mcnicol@legalbusiness.co.uk

For more on DLA’s ambitions, read Legal Business’ interview with co-chief executive Simon Levine, ‘On this rock I build…’ 

Legal Business

The future of law will need long-term investment

Posted on |
Pritchard DLA Piper

A little over five years ago Legal Business produced a cover feature dubbed ‘How to improve a law firm in 17 easy steps’. The piece – intended as a series of practical proposals to improve the working of law firms – has aged as well as anything printed in these pages.

And while point one – on overhauling lockstep partnerships for the age of global law – has been borne out, it is the second proposal, to phase out full profit distribution models, that is more pressing to the profession. Problems with lockstep are a peculiar challenge for London’s elite. In contrast, the historic model that has prevailed in legal partnerships of distributing the near-entirety of profits to partners annually speaks to an entire industry in danger of tipping itself over a cliff.

Legal Business

The DLA interview: On this rock I build…

Posted on | and
Interview DLA Piper

Simon Levine (SL), co-chief executive, DLA Piper: I had a bit of fun and looked at the article you wrote on me when I first started [as DLA Piper’s co-chief executive, published in March 2015].

Legal Business (LB): Are you trying to catch us out? Because we got into this job to be inconsistent.

Legal Business

Deal watch: Healthy pickings for Travers and DLA on Unilever’s £150m graze buyout as firms navigate Interserve rescue saga

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Dealwatch AshurstDLA PiperSlaughter and MayTravers Smith

Travers Smith and DLA Piper have sated their appetites on The Carlyle Group’s £150m disposal of graze while a raft of advisers sat tight as a further twist in the Interserve saga unfolded.

Unilever last Tuesday (5 February) sealed the deal to acquire ubiquitous healthy snack brand graze, having fended of competition from rival bidders Pepsi and Kellogg in an auction launched in the latter part of last year by Harris Williams.

The buyer, which also owns Marmite, mustard maker Colman’s and Wall’s ice-cream, was reputed to have paid exactly half the £300m asking price for the snack company.

Private equity house Carlyle, which sold graze via its Carlyle European Technology Partners fund, turned to longstanding relationship firm Travers and a team led by partners Ian Shawyer (pictured) and George Weavil. While not an obvious asset to be owned by a tech fund, Shawyer notes that graze, having started life in 2008 as a direct to consumer snack box delivery service, has a tech-based flavour in that it is based on data strategy and uses tech to mine customer preferences of its products.

The company has evolved to stocking the shelves of more than 30,000 UK retailers as well as US shops including Target, Walgreens and 7-Eleven.

Carlyle last year started sounding out the market for a successor fund – Carlyle European Technology Partners IV – with a view to raising €1.3bn to invest in companies with significant growth potential.

While Latham & Watkins is the firm most associated with Carlyle Group for international work, Travers has carved a niche advising the group on European deals.

Bob Bishop, DLA’s global co-chair of corporate, led the team advising Unilever, while Phil Hails-Smith, corporate and commercial partner at Joelson, advised graze’s management.

Meanwhile, the rescue of beleaguered UK construction plc Interserve has encountered a snag. Coinciding last Wednesday (6 February) with Interserve’s agreement in principle of a deleveraging plan that could save it from a Carillion-style collapse, hedge fund investor Coltrane Master Fund sought to leverage its 17% stake to requisition a general meeting that could see most of its directors ousted.

The latest example of shareholder activists making their presence felt on this side of the Atlantic, Coltrane has called for Interserve’s entire board, apart from chief executive Debbie White, to stand down and that David Frauman and Stuart Ross be appointed as directors.

The rescue mission has kept firms including Ashurst, Slaughter and May, Allen & Overy and Akin Gump Strauss Hauer & Feld busy for several months. If approved by shareholders, it would involve £480m of new shares issued to lenders in a debt for equity deal aimed at reducing debt from £600m to £275m.

Advising Interserve are an Ashurst corporate team led by Tom Mercer and a Slaughters team led by restructuring partner Ian Johnson. A&O is advising the lenders with a team led by Trevor Borthwick, while Akin Gump, led by Barry Russell, is advising the noteholders.

Freshfields Bruckhaus Deringer restructuring partner Adam Gallagher is advising the pension trustees of Interserve.

While there are clear parallels with fellow UK construction company Carillion, which fell into liquidation in January 2018, advisers are quick to note that the underlying business of Interserve does not suffer from such severe liquidity shortfalls and has not been subject to the same mismanagement.

‘A similar rescue plan was being considered for Carillion but didn’t work because that business was in far worse shape. This is what it looks like if it is possible to save the company’, said one partner of the Interserve restructuring.

Howard Kennedy and Browne Jacobson also last week won mandates acting on HMV’s rescue buyout by Canadian record company Sunrise Records & Entertainment Limited.

The move follows the music retailer’s demise into administration at the end of last year when Addleshaw Goddard partners Fraser Ritson and Alison Goldthorp were drafted in to advise the administrator KPMG.

The transaction will see Sunrise Records acquire 100 HMV stores across the UK while 27 stores were not included in the deal and have now shut down.

Howard Kennedy is advising KPMG, with a team led by corporate partner Jonathan Polin while Browne Jacobson corporate finance partner Roger Birchall is advising Sunrise Records.

High street cake purveyor Patisserie Valerie last month called in KPMG after it was unable to shake off significant fraud plaguing the business, with Gateley advising the administrator.

nathalie.tidman@legalease.co.uk

Legal Business

Cyber-attack hacks at DLA profit as strong UK performance lifts revenue 5%

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Financial results 2017/18 DLA Piper

Growth in DLA Piper’s UK business has pushed the firm’s international LLP top line to £919m, but 2017’s cyber-attack has weighed on profit.

The firm’s international (non-US) revenue for the year to 30 April 2018 grew £42.2m, or 5%, of which £29m related to the UK business. Stripping out the impact of foreign exchange, however, which the previous financial year added an enormous £75.5m to revenue, fee income was up £33.1m, or about 4%.

Profit was up £11.4m to £315.8m, even as operating costs increased £31.9m to £600.5m. DLA chief financial officer Paul Edwards told Legal Business it had been a strong year of underlying growth, particularly as currency movements had much less impact than the previous year.

But he said the firm’s 2017 cyber incident, which occurred during this year’s results period, had impacted profit.

‘I couldn’t even give you a number on this but I do know it cost us,’ he commented. ‘Had that not happened we’d be talking about, I believe, an even stronger year.’

Edwards said growth in UK fee income of about 10% was one of the strongest performances in the firm’s international regions, while Europe and Asia-Pacific saw more modest, single-digit growth. He was particularly pleased with the firm’s performance in Africa, which more than doubled during the period.

‘It’s a rounding number in the big picture of the whole firm but for us it’s a complete endorsement of our strategy: our Johannesburg office really did see some big growth.’

The firm’s borrowings increased to £32.6m from £14.4m in the year, ahead of a big period of investment which has included moving into new London offices and rolling out new IT equipment across the firm worldwide.

Key management personnel, which includes the senior partner, managing partner, members of the executive committee, international practice group heads, country managing partners and service directors took home a 22% pay increase, up to £44m from £36.1m.

Total staff numbers at the firm rose to 5,120 from 4,955, while fee earner numbers recovered from a slight dip the previous year to reach 2,135 from 2,026. Staff costs increased 6% to £329.2m.

Edwards said the firm was pleased with the first nine months of this year but economic uncertainty was front of mind.

‘We’re now reporting to the board on a month-by-month basis, there’s the shadow of Brexit,’ he commented. ‘The world’s not in a great place.’

hamish.mcnicol@legalease.co.uk

Legal Business

‘A global solution’: Pinsents hires six partners for Frankfurt launch as DLA expands in Dublin

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Strategic recruitment DLA PiperPinsent Masons

Pinsent Masons has hired six partners from a range of firms for a new Frankfurt office, the firm’s third opening in Germany since 2012.

Frankfurt follows moves into Munich and Düsseldorf for Pinsents in 2012 and 2016 respectively. The new office will focus on the technology, energy and real estate sectors initially with an eye to developing in financial services.

A founding team of six partners has been hired from multiple firms for the launch. Volker Balda joins from KPMG Law, where he was M&A head for Germany and co-head of the global corporate law practice, M&A partners Markus Friedel and Sven Shculte-Hillen join from Dechert, M&A partner Ronald Meissner joins from Oppenhoff & Partners, real estate partner Tobias Nuss joins from Beiten Burkhardt, and intellectual property partner Nils Rauer was hired from Hogan Lovells.

Pinsents’ Germany head Rainer Kreifels commented: ‘Establishing a presence in Frankfurt has been part of our vision for Germany from the outset. The new office in addition to our Munich and Düsseldorf locations will increase the strength and depth of our offering for clients locally and internationally.’

The firm has grown to 38 partners and more than 100 lawyers in Germany over the last six years, including five lateral hires in the past 12 months. Key mandates have included advising German tech company About You on a $300m funding deal and completing three Frankfurt Stock Exchange initial public offerings.

Last year, Fieldfisher and Covington & Burling also opened offices in Frankfurt.

Elsewhere, DLA Piper has hired four partners from different firms to join its Dublin office, which recently launched with the hire of David Carthy from William Fry.

Conor Houlihan joins from Dillon Eustace to lead DLA’s finance and projects practice in Ireland, Éanna Mellett joins as a corporate partner from Matheson, while former A&L Goodbody partners Mark Rasdale and Ciara McLoughlin join the intellectual property and technology and employment practices respectively.

Carthy, DLA’s Ireland managing partner, told Legal Business the firm intended to build a substantial practice in Ireland. He joined DLA in July to help refine the strategy and said the Irish market was ‘ripe for change’.

‘Clients are looking for a global solution and want more choice. DLA works differently from a lot of the Irish players. Clients are increasingly asking, “Can you help me in different jurisdictions?”’

Carthy expected to make further hires and saw the practice growing to at least 100 lawyers over the next couple of years. Financial services, technology and life sciences are a particular focus for the office, with Dublin seen as a key global hub in those sectors.

Carthy added: ‘The Irish economy is doing very well at the moment. Obviously Brexit has added major uncertainty, but there’s still plenty of activity.’

DLA was the fifth firm to open in Dublin after the Brexit vote, following in the footsteps of Lewis Silkin, Simmons & Simmons, Covington & Burling and Pinsents.

hamish.mcnicol@legalease.co.uk

Legal Business

Levine goes unopposed to win second DLA managing partner term

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Leadership DLA Piper

DLA Piper international managing partner Simon Levine has been re-elected for another four years following an uncontested election.

Levine’s reappointment was confirmed today (8 October) after nominations for any challengers closed on Friday (5 October).

A contested election would have seen hustings begin this week before the managing partner was confirmed a month later.

The firm’s board had said it was pleased Levine (pictured) sought a second term. Earlier this year, eight partners had competed in DLA’s first contested senior partner election in a decade, sparked by Juan Picón’s shock departure for Latham & Watkins less than two years into his term. Firm stalwart Andrew Darwin was ultimately elected senior partner.

On his re-election, Levine commented: ‘DLA Piper is a fantastic firm with ambitious plans for the future. I look forward to continuing to work with Andrew and US leadership to achieve our goals and provide our clients with a high quality service that enables them to deliver, accelerate and grow.’

Darwin commented: ‘The board is pleased that Simon has been re-appointed for a further four years after a successful first term. On a personal level, I am also delighted that we will continue to work together in what has already become an effective team.’

Levine assumed the top job in 2015 from the man who led the firm’s rapid globalisation over 18 years, Sir Nigel Knowles. DLA was transformed into one of the world’s largest law firms under Knowles’ watch and his standing down was referred to as the firm’s ‘Sir Alex Ferguson moment’.

In April this year, DLA bounced back from the previous year’s global turnover drop with double-digit percentage growth in net profit. The firm’s global revenue rose to $2.63bn in 2017, up 7% on last year, while the firm added £75.5m to its international LLP’s top line on the back of exchange rate movement – accounting for 69% of the international revenue improvement for the year ending 30 April 2017.

DLA’s recent history has seen some other high-profile exits following Picón’s departure. Three significant contributors in real estate left this year for McDermott Will & Emery, followed by Anu Balasubramanian, a young private equity partner making a strong impression, to Paul Hastings.

Conversely, the firm recently bolstered its corporate practice with the hires of Freshfields Bruckhaus Deringer veteran Martin Nelson-Jones to its corporate practice and former Serious Fraud Office (SFO) division head Patrick Rappo from Steptoe & Johnson.

hamish.mcnicol@legalease.co.uk