Legal Business

Freshfields freezes associate pay bands – move puts firm behind Magic Circle peers’ NQ wages

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Salaries Freshfields Bruckhaus Deringer
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Within days of Clifford Chance (CC) announcing its pay bands in the associate salary race to match Magic Circle peers, Freshfields Bruckhaus Deringer has decided to freeze salaries for junior lawyers at 2014’s levels.

The firm is giving a small boost to its trainees with pay for first and second year rising £500 to £41,000 and £46,000 respectively, but pay for newly qualified’s (NQ) and one year post qualification experience (PQE) lawyers – cumulatively known as career milestone (CM) foundation – is being frozen at £67,500 – £77,500. The firm’s CM1 band, which covers lawyers with between two and four years’ PQE, will get £87,500 – £100,000 while CM2, which covers more than four years’ PQE, will get up to £115,000. Typically covering lawyers with around six years’ PQE, the CM3 band is still set at £120,000 or more.

The decision sees the firm paying NQs less than rivals, namely Slaughter and May, CC and Linklaters, who have all revealed what they will be paying their juniors, with Allen & Overy being the only Magic Circle firm yet to announce. However, the firm is still leading on pay for those lawyers with greater experience who have progressed up its CM bands. 

The pay freeze follows a previous hold in associate pay in 2013. The firm introduced the CM pay bands in 2012 to replace the previous system of pay based purely on PQE, claiming it was a more accurate way of reflecting both the lawyer and business roles that associates perform. Progress between each milestone is tracked using seven key elements, including technical skills, people and team skills and project management.

The pay bands for Magic Circle firms so far:

Freshfields Bruckhaus Deringer

Trainee Year 1: £41,000

Trainee Year 2: £46,000

CMF: £67,500 to £77,500

CM1: £87,500 – £100,000

CM2: £107,500 – 115,000

CM3: From £120,000

Clifford Chance

Trainee year 1: £42,000

Trainee year 2: £47,300

NQ: £70,000

PQE year 1: £75,500

PQE year 2: £88,000

PQE year 3: £98,500

Slaughter and May:

Trainee year 1: £41,000

Trainee year 2: £46,000

Newly qualified: £70,000

PQE year 1: £75,500

PQE year 2: £87,000

PQE year 3: £96,500

Linklaters:

NQ: £68,500

PQE year 1: £74,000

PQE year 2: £88,000

PQE year 3: £98,500

jaishree.kalia@legalease.co.uk

Legal Business

Freshfields’ Pugh and Braham form unity ticket as teams assemble in leadership election

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Leadership Freshfields Bruckhaus Deringer
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After Freshfields Bruckhaus Deringer veterans Edward Braham and Christopher Pugh (pictured) canvassed separately and were set to go head-to-head for the firm’s senior partner elections, the duo have united on a single platform and are campaigning to lead the firm together.

Corporate partner Braham is running for the firm’s senior partner role and, if elected, will have former disputes head Pugh serving as managing partner. The duo have been described as the ‘frontrunners’ in the race.

Against them are an Anglo-German duo, corporate partner Simon Marchant, who will be running against Braham for the senior partner seat, alongside Germany and Austria regional managing partner Klaus-Stefan Hohenstatt, who would take on the managing partner position. Another team comprising two German-based partners are also in the running.

All candidates attended hustings at the firm’s partner conference in Paris last week, where teams were pitched to the partnership and were required to receive a minimum 5% of a partnership vote to become an official nominee.

A full partnership vote is set to take place in the next two weeks with the new leadership replacing current senior partner Will Lawes and managing partner David Aitman who will both stand down at the end of this year. The management handover period will begin in October and will last three months.

jaishree.kalia@legalease.co.uk

Legal Business

Kirkland exits continue as high-yield heavyweight McKimm set to join Freshfields

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Strategic recruitment Freshfields Bruckhaus DeringerKirkland & Ellis
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Reversing the trend of partners departing Magic Circle firms for US rivals, Freshfields Bruckhaus Deringer, subject to a partnership vote, is set to hire high-yield heavyweight Ward McKimm from Kirkland & Ellis.

The move would be an unusual step for the acclaimed capital markets partner who has worked at Kirkland for the past four years. He joined the firm – which posted partner profits that surpassed the $3.5m mark in 2014 – in 2011 from Shearman & Sterling after 14 years, first as an associate in 1997 after which he became partner in 2005 and co-head of its corporate group in 2010.

McKimm represents both underwriters and issuers on international securities offerings with a particular focus on high-yield transactions. At Kirkland, McKimm has advised banking and sponsor clients including BNP Paribas, UBS, and in particular, CVC Capital Partners – which is also a key client of Freshfields.

The hire constitutes arguably the most impressive name a leading City firm has yet secured in high-yield bonds, an increasingly important financing line in European deal work but one that has for years remained dominated by a small band of US law firms. McKimm is established alongside Latham & Watkins’ Richard Trobman and Simpson Thacher & Bartlett’s Nick Shaw as one of the leading specialists in the area currently working in the City. Freshfields had in 2010 recruited Simpson Thacher counsel Gil Strauss at partner level to drive its high yield practice but Strauss departed two years later for Weil, Gotshal & Manges.

The move comes as Freshfields last year pushed through provisions to allow it to pay a small band of recruits over the top of its lockstep, primarily to back strategic recruitment in US law. The lateral hire is yet to go through a partnership vote at Freshfields, but this will be regarded as a formality.

Freshfields is ranked third tier for its high-yield capability in The Legal 500, whereas Kirkland currently sits above in the second tier with McKimm listed as a leading individual.

Kirkland saw the exit of a trio of funds partners last week, led by Mark Mifsud, to Fried, Frank, Harris, Shriver & Jacobson while on Monday (1 June) Proskauer Rose hired M&A partner James Howe. At the end of April, disputes partner Ulrich Payne departed for Ogier’s Cayman Islands office.

jaishree.kalia@legalease.co.uk

Legal Business

Dealwatch: Freshfields and Mayer Brown win roles on Blackstone’s Centre Parcs sale

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Corporate Freshfields Bruckhaus DeringerMayer BrownTravers Smith
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Freshfields Bruckhaus Deringer and Mayer Brown have won key spots on Blackstone’s sale of a majority stake in Centre Parcs UK to Brookfield Property Partners after the holiday-village operator had looked at carrying out an initial public offering (IPO).

The deal, which is reportedly worth around £2.4bn, saw Freshfields act for the leisure company’s owners Blackstone with a team led by corporate partner David Higgins and including Alex Watt on real estate, tax specialist Jill Gatehouse, pensions and employment partner Nick Squire and competition partner Winfred Knibbeler.

The Magic Circle firm also advised on financing with US securities partner Simone Bono and structured finance specialist Marcus Mackenzie leading. The duo previously advised RBS on a whole business securitisation for Centre Parcs which refinanced the company’s existing debt and raised funding for its Woburn village. Centre Parcs currently operates five destinations around the UK and is separate from the European brand.

Mayer Brown took the role advising the buyers, Canadian funds manager Brookfield, with a team led by corporate and securities partner Jeremy Kenley and including corporate duo Tim Nosworthy and Kate Ball-Dodd, tax partner Sandy Bhogal, real estate partners Jeremy Clay and Andrew Hepner, and environment and planning partner Michael Hutchinson.

The sale saw management retain a stake in the business with Travers Smith advising led by senior partner Chris Hale with support from Travers’ head of tax Kathleen Russ while, on the company’s aborted IPO process, corporate finance partner Adrian West took the lead.

michael.west@legalease.co.uk

Legal Business

Defendants shift advisers in favour of Quinn Emanuel in Arcadia $335m oil trading case

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Litigation Allen & OveryFreshfields Bruckhaus DeringerQuinn Emanuel Urquhart & Sullivan
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Quinn Emanuel Urquhart & Sullivan’s Ted Greeno has been brought in to defend ex-Arcadia Petroleum chief executive Peter Bosworth and former chief financial officer Colin Hurley against a $335m fraud suit at the High Court from their past employer after Allen & Overy (A&O) was dropped from the case.

Arcadia Petroleum, an oil trading-firm owned by Norwegian billionaire John Fredriksen, won a High Court ruling in April allowing it to proceed with claims against Bosworth, Hurley and two other former employees. The company, represented by Freshfields Bruckhaus Deringer partner Philip Croall, overcame the defendants argument that the English court doesn’t have jurisdiction over them as Swiss residents and an asset-freezing order was upheld.

On Friday (29 May), Bosworth and Hurley signed off a notice of change relieving A&O litigation partner Mona Vaswani of her duties and installing Quinn Emanuel heavyweight Ted Greeno as their legal representative. Greeno has brought in David Foxton QC of Essex Court Chambers to spearhead an appeal. Mark Howard QC of Brick Court Chambers continues to be instructed by the claimant via Freshfields.

The oil trading firm alleges that Bosworth and Hurley carried out a fraudulent chain of trades through companies they owned or controlled to divert profits away from Arcadia. It alleges conspiracy, breach of fiduciary duty and breach of employment contracts and is claiming $335m including interest and costs with the net figure standing at $287m.

The pair left Arcadia Petroleum in 2013 when the company began an investigation, with two-decade long employee Bosworth replaced by BP executive Paul Adams.

The decision in April held that where an employer brings a claim in tort rather than a contractual claim against an employee, the courts of the European country where the harmful event occurred will have jurisdiction.

Fredriksen, who is currently estimated to be worth $11.5bn, owns Arcadia through his investment vehicle Farahead Holdings.

tom.moore@legalease.co.uk

Legal Business

Dealwatch: Bakers wins role alongside Slaughters on Equinix’s £2.35bn takeover of Freshfields client Telecity

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Corporate Baker McKenzieFreshfields Bruckhaus DeringerSlaughter and May
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Slaughter and May teamed up with a Baker & McKenzie team led out of London to help US data giant Equinix in its £2.35bn takeover bid for UK rival and Freshfields Bruckhaus Deringer client Telecity.

Telecity, which was in talks to merge with Dutch peer Interxion before Equinix stepped in, instructed Freshfields’ Julian Makin and Ben Spiers to handle its sale. London-based Makin, a corporate partner who co-heads Freshfields’ mining and metals team, was heavily involved in the company’s listing on the main market of the London Stock Exchange and the firm was also advising on the company’s proposed Dutch takeover with Latham & Watkins acting for Interxion.

Meanwhile, Slaughters advised the Californian data company on the acquisition which involves paying 572.5p and issuing 0.0327 of new Equinix shares for each Telecity share – a 27% premium to Telecity’s closing price on 6 May. Its team was led by corporate partners Richard Smith and John Papanichola and included finance partner Matthew Tobin and competition specialist Philippe Chappatte. Cravath, Swaine & Moore acted for Equinix in the US, while De Brauw Blackstone Westbroek advised in the Netherlands and Hengeler Mueller in Germany.

For international due diligence and the corporate reorganisation work required, Equinix turned to Baker & McKenzie’s London-based global head of reorganisations, Kirsty Wilson, and finance partner Lynn Rosell Rowley.

Telecity has 39 data centres in 11 European countries and has customers including Spotify and Facebook. Equinix, whose in-house team consisted of general counsel Brandi Galvin Morandi and EMEA general counsel Peter Waters, said the deal, which comes amid growing demand for cloud storage in Europe and consolidation in the sector, would give it ‘increased network and cloud density to better serve customers’ and a footprint ‘to attract customers and pursue the emerging enterprise opportunity’.

tom.moore@legalease.co.uk

Legal Business

Significant mandates: JTI turns to Freshfields in latest tobacco challenge to plain cigarette packaging

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Litigation Freshfields Bruckhaus Deringer
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The latest firm to win work challenging the UK government’s decision to introduce plain cigarette packaging, Freshfields Bruckhaus Deringer’s Tom Snelling has launched High Court litigation on behalf of Japan Tobacco International, the maker of Camel, Benson & Hedges and Silk Cut.

The UK’s second biggest cigarette seller after its £9.4bn purchase in 2007 of Gallagher, whose brands included Mayfair, Silk Cut and Hamlet Cigars, Japan Tobacco International (JTI) follows its rivals British American Tobacco and Philip Morris International in filing a suit against the plans to ban branded packaging from May 2017. Snelling is being supported by IP partner Giles Pratt and has instructed David Anderson QC of Brick Court chambers to bring the case before the courts.

The company has so far failed in a similar suit against the Australian government, which became the first nation to implement plain packaging legislation in December 2012 with the Tobacco Plain Packaging Act. The legal battle has not stopped there, however, with Ukraine, Honduras and Dominican Republic bringing a dispute against Australia over its plain packaging rules at the World Trade Organization (WTO).

JTI argues that plain packaging is unlawful and infringes important principles of UK and EU law, and other fundamental rights, and goes against obligations under WTO rules.

Earlier this year, British American Tobacco (BAT) instructed Herbert Smith Freehills (HSF) for its challenge against the UK government’s plans, as well as Hogan Lovells to advise on intellectual property issues, while barristers brought in include 39 Essex Chambers’ Nigel Pleming QC and One Essex Court’s Geoffrey Hobbs QC.

MPs voted to back plain packaging legislation by 367 to 113 in March following an independent review by Sir Cyril Chantler that found the measure was ‘highly likely…to reduce the rate of children taking up smoking and implausible that it would increase the consumption of tobacco.’

tom.moore@legalease.co.uk

Legal Business

Moving to Manchester: Freshfields signs lease on Arndale House and appoints centre director

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Freshfields Bruckhaus Deringer
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Freshfields Bruckhaus Deringer has appointed Anup Kollanethu as centre director for its combined legal and business services centre in Manchester having signed a lease for space in Arndale House.

Kollanethu joins Freshfields after spending the last 12 years at Aviva Investors, where he was managing director of transformation and global shared services for the last three years, and chief operating officer of Asia Pacific and its director of global operations transformation from 2008 until 2011.

Corporate partner Gareth Stephenson, who is responsible for the Manchester launch and has been leading the pilot project in London for the past 18 months, will work closely with Kollanethu.

Freshfields will open its doors in Manchester in the second half of this year having signed a lease to take up 40,000 sq ft at Arndale House from July 2015. There are then plans to grow the centre further in 2016.

Freshfields’ managing partner David Aitman said in a release: ‘Anup’s extensive experience in building and managing shared services centres, together with his business and technology acumen will be of great value to us in establishing our Manchester office. We are delighted to have him on board.’

Anup Kollanethu added: ‘I am very excited to join Freshfields as the firm launches this project. Having the chance to demonstrate the value shared services operations can bring to an elite law firm is a fantastic opportunity. I am confident that the centre will enhance the quality of how we work for and with our clients globally.’

jaishree.kalia@legalease.co.uk

Legal Business

A&O, Freshfields and Slaughters land key roles on biggest-ever all-UK deal

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Corporate Allen & OveryFreshfields Bruckhaus DeringerSlaughter and May
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Shell offers £47bn for BG Group

The proposed £47bn acquisition of BG Group by fellow energy major Shell saw a trio of Magic Circle firms land leading roles, as Freshfields Bruckhaus Deringer, Slaughter and May and Allen & Overy (A&O) advising on what constitutes the largest UK-to-UK deal ever.

Slaughters is acting for Shell, supported by Cravath, Swaine & Moore on US corporate law and allied firm De Brauw Blackstone Westbroek on Dutch aspects of the deal. Corporate partners Roland Turnill, Hywel Davies and Rebecca Cousin are leading Slaughters’ team, which Turnill told Legal Business started ‘working in earnest’ on the transaction as far back as Christmas. Finance partner Matthew Tobin is also working on the deal alongside tax specialist Steve Edge, competition partners Bertrand Louveaux and Jordan Ellison and pensions and employment partners Jonathan Fenn and Roland Doughty.

Legal Business

Competing moves: Mayer Brown hires BLP’s competition head as CMA recruits from Freshfields

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Strategic recruitment Freshfields Bruckhaus DeringerMayer Brown
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Mayer Brown has hired Berwin Leighton Paisner’s (BLP) head of EU and competition, David Harrison, ten years after he joined the firm from Allen & Overy (A&O) to help start the stand-alone group. Meanwhile, Freshfields Bruckhaus Deringer City antitrust partner Andrea Gomes da Silva is leaving the firm after 14 years to join the Competition and Markets Authority (CMA).

Gomes da Silva will join the CMA as its senior legal director in July 2015. Having been seconded to the UK’s Office of Fair Trading, she was part of the team that set up the body in 2013/14 and led on creating guidance for business regarding its new legal powers. She was also part of Freshfields’ Brazil strategy group.

Gomes da Silva became a partner in Freshfields’ global antitrust, competition and trade group in 2008, after serving as an associate for seven years from 2001. Before this, she was an assistant at Slaughter and May for two years, having trained there from 1997 to 1999. At the CMA, she will report into general counsel Sarah Cardell.

Meanwhile, Mayer Brown has bolstered its antitrust and competition practice in London, hiring BLP’s head of EU and competition, David Harrison. He will co-lead the European antitrust and competition team at Mayer Brown, alongside Brussels-based Jens Peter Schmidt, as the firm aims to grow its antirust offering across Europe. Harrison will also become one of the group leaders of the wider global antitrust practice.

He had been a partner and head of BLP’s EU and competition team since 2005, after he was hired in to establish BLP’s antitrust offering as a stand-alone competition practice from A&O – Andrew Hockley has already been appointed to take over as head of the group at BLP from tomorrow (1 May). At A&O he had been a partner from 1998-2005 and spent ten years in the firm’s Brussels office.

Mayer Brown disputes leader David Allen said: ‘David is a considerably accomplished and experienced competition lawyer and his arrival will strengthen our ability to provide clients will the very best legal advice in this area. His appointment also signals an important step in our long term plans to further integrate our antitrust and competition capabilities across Europe.’

jaishree.kalia@legalease.co.uk