Legal Business

Trainee retention: Freshfields keeps on 82% of junior lawyers

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Freshfields Bruckhaus Deringer has become the second Magic Circle firm to post a high retention rate keeping on 82% of junior lawyers.

The firm made offers to 38 qualifying trainees out of the total August 2012 intake of 45, of which 37 lawyers accepted.

The figure is slightly higher than the spring 2014 retention rate, when Freshfields kept 80% of junior lawyers, totalling 35 out of 44. In 2013, the firm posted an 81% retention rate, down eight percentage points on 2012, keeping 39 of its 48 trainees.

Freshfields’ most recent trainee retention rates follow solid rates at Linklaters, which kept on 93% of qualifying trainees in its summer cohort, up on the 86% spring 2014 retention rate. The Magic Circle firm made offers to 54 of 57 qualifying trainees, with 53 lawyers accepting a position, up on the 50 trainees in a 56 lawyer cohort that were kept on earlier this year.

Of the spring 2014 qualifying trainees, Clifford Chance retained the highest number of trainees, offering roles to 45 of 48 lawyers, or 94%.

Jaishree.kalia@legalease.co.uk

Legal Business

Ashurst, Clifford Chance, Freshfields and Linklaters advise banks on competition inquiry

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Adviser reviews AshurstClifford ChanceFreshfields Bruckhaus DeringerLinklaters
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International firm Ashurst and Magic Circle trio Clifford Chance, Freshfields and Linklaters are advising the UK’s biggest banks over an inquiry into competition in the banking sector, following an investigation launched by the Competition and Markets Authority (CMA) in mid-July.

Ashurst’s global head of competition and EU law Nigel Parr is leading a team advising Lloyds Banking Group, while Freshfields is acting for HSBC, CC is acting for longstanding client Barclays, and Linklaters for the Royal Bank of Scotland (RBS).

Freshfields has previously taken on heavyweight mandates for HSBC including advising the banking giant on its record $1.9bn fine from US authorities in a settlement over money laundering. CC has previously won large-scale finance work from Barclays, having led on the bank’s £5.8bn rights issue alongside US firm Sullivan & Cromwell, and has also advised on its £59.5m settlement with the Financial Services Authority (FSA) over the fallout from the Libor scandal.

Linklaters also counts RBS as a regular client, and sits on the banking giant’s panel alongside Freshfields and CC. RBS did, however, appoint CC to conduct an independent inquiry into the treatment received by small business customers in financial distress, after allegations that the bank deliberately drove them to collapse for its own gain.

Britain’s new competition watchdog recommended the inquiry after an investigation into the supply of SME banking services found that high street banks had market shares of over 90%. Further competition concerns raised included limited switching between providers and high barriers to entry.

Sarah.downey@legalease.co.uk

Legal Business

Freshfields wins Deutsche Bank $243m pay out from Sebastian Holdings

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Litigation Deutsche BankFreshfields Bruckhaus DeringerTravers Smith
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The UK Court of Appeal has ruled that investment fund Sebastian Holdings must pay Germany’s Deutsche Bank $243m after losing a case at the High Court last year, or risk its appeal being struck out.

Norwegian businessman Alexander Vik’s Sebastian Holdings will have its appeal against the decision, which awarded the German bank damages for forcing Deutsche to make large margin calls to cover Lehman Brothers in 2008, stayed for the next 28 days and has been warned that case will be struck out if payment is not made in that time frame.

The decision is a further blow to Sebastian Holdings, which is being advised by Travers Smith partner Andrew King, after failing with an $8bn counter-claim against the German bank last year.

Freshfields Bruckhaus Deringer litigation duo Andrew Hart and Tom Snelling, who instructed David Foxton QC of Essex Court Chambers and Sonia Tolaney QC of 3VB as counsel, succeeded in enforcing payment of the $243m together with accrued interested, along with an order that Sebastian Holdings pay £34.5m in costs and £1.9m as security for DB’s costs of the investment bank’s proposed appeal. Travers Smith instructed David Railton QC of Fountain Court Chambers.

The decision was handed down by Lord Justice Longmore and Lord Justice Tomlinson, both of whom agreed with Deutsche’s concern over how Sebastian Holdings had sought to dissipate its assets in order to avoid paying a judgment it knew the German Bank would have to seek.

Lord Justice Tomlinson said in the judgment: ‘Standing back from the arguments, it is in my judgment difficult to think of a case which could present more compelling reason for making the order sought.’

‘Accordingly I would order SHI to pay into court the judgment sum, together with interest accrued to the date of this judgment, as a condition of further pursuit of the application for permission to appeal and, if permission is granted, the appeal.  I would further direct that SHI’s Appellant’s Notice and its application for permission to appeal be struck out if payment is not made within 28 days.’

Should it succeed in its appeal, SHI intends to pursue its counterclaim in an amount of up to about US$600m. It does not pursue the entirety of the counterclaim which was advanced, without success, at trial in the sum of about $8bn.

Snelling said: ‘By forcing SHI to pay over $250 million into court to continue its appeal, today’s judgment rightly reinforces to parties litigating in the UK that orders of its Courts are to be respected. The Court of Appeal has said that it is unacceptable for SHI to try and pursue an appeal whilst at the same time continuing to disobey the orders of the court to pay the judgment debt and costs. The Court of Appeal considered it difficult to think of a case which could present a more compelling reason for making today’s decision.’

Tom.moore@legalease.co.uk

For more on key banking litigation landscape, see Hunting titans – the disputes outlook as watchdogs and claimants target banking giants

Legal Business

Deal Watch: Freshfields and HSF lead on Liberty Global’s £481m acquisition of stake in ITV

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Corporate Freshfields Bruckhaus DeringerHerbert Smith Freehills
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Freshfields Bruckhaus Deringer’s London managing partner Julian Long has advised Liberty Global on the US media group’s £481m purchase of BSkyB’s 6.4% stake in UK broadcaster ITV, with Herbert Smith Freehills acting for BSkyB.

Freshfields lifer Long, who was elected as London managing partner in March after a three-year stint as the office’s head of corporate, worked alongside corporate partner David Sonter. Sonter was also instructed in May by Liberty Global on its £550m joint-purchase with Discovery of All3media, the maker of Midsomer Murders and The Only Way is Essex.

Herbert Smith Freehills’ global head of M&A, Stephen Wilkinson advised BSkyB on the deal, alongside M&A partner Malcolm Lombers and corporate partner Charles Howarth.

A longstanding client, Wilkinson also led on BSkyB’s £160m acquisition of Virgin Media Television from Virgin Media. Lombers, perhaps best known for his advisory role for Qatar Investment Authority and UBS on their £8bn consortium bid for RWE Thames Water last year, was previously instructed by BSkyB on News Corporation’s attempt to take full control of the broadcaster for £7.7bn in 2010. 

Mike Fries, Liberty Global’s CEO, said: ‘This is an opportunistic and attractive investment for us in our largest cable market. ITV is the leading commercial broadcaster in the U.K. and we’re excited to be shareholders.’

As required by the UK Takeover Code, Liberty Global confirmed that it does not intend to make an offer to acquire ITV.

Tom.moore@legalease.co.uk

Legal Business

CC edges ahead in growth as Linklaters and Freshfields unveil financial results

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Financial results 2014 Clifford ChanceFreshfields Bruckhaus DeringerLinklaters
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Clifford Chance has emerged as the strongest-performing Magic Circle firm financially for 2013/14, as the UK elite all unveiled unaudited sterling figures to coincide with the launch of the Global 100 this month.

The 3,000-lawyer firm has revealed a 7% rise in revenues to £1.36bn, up from £1.27bn in 2013. Profit per equity partner (PEP) has increased significantly to push average partner drawings back to over £1m after a blip last year, up a trend-busting 16% to £1.14m from £983,000.

Senior partner Malcolm Sweeting told Legal Business that a revitalised domestic market was a key component of the firm’s success: ‘We had a very strong year in London, which is connected to the EMEA region. The idea that growth is dead in the original key territories is wrong. Performance this year for the firm would suggest that.’

This was a point echoed by Allen & Overy (A&O) global managing partner Wim Dejonghe, whose firm has performed the strongest of the Magic Circle firms over a five-year period. A&O has announced a 2% revenue increase for 2013/14 to £1.23bn, while PEP was up 7% to £1.12m. A factor in the increase in profitability has been the success of A&O’s Belfast office, opened in 2011, which Dejonghe said contributed seven-figure costs savings during the last financial year.

‘We expect further growth in London – there was a nice pick-up in revenues there over the last year,’ he added. ‘Banking and litigation are very strong; corporate is recovering. Capital markets was busy up until the end of 2013 and softer in the first quarter of 2014, but has now picked up again.’

Meanwhile, Linklaters turned in a much stronger performance in 2013/14, revealing solid 5% turnover growth to £1.26bn, while PEP increased by 6% to £1.39m. Managing partner Simon Davies also attributed the success to a revitalised European market, particularly in Germany and the UK.

Freshfields Bruckhaus Deringer, last year’s leading Magic Circle performer, experienced a slightly muted year in 2013/14. Its turnover increased by 1% to £1.23bn and PEP increased by 6% to £1.48m.

A renaissance in domestic markets, particularly for corporate work, is a prevailing theme of this year’s Global 100 report, published on pages 29-81. And while the UK Magic Circle performed impressively in their home currencies, in dollar terms – thanks to a weaker pound in 2013 and a dominant US market – these firms continue to be outpaced by US rivals. The Wall Street elite have seen an impressive return to form on the back of big-ticket M&A mandates, with Simpson Thacher & Bartlett the most impressive performer of all in 2013 with turnover increasing 15% to $1.13bn, alongside double-digit profit increases with profit per lawyer up 18% to $701,000 and PEP up 19% to $3.17m.

The Global 100 as a whole managed 4% growth in total revenues to $88.63bn, a figure somewhat flattered by a number of transformative mergers coming online, such as Norton Rose Fulbright, the tripartite combination that created Dentons a year ago and the full integration of Ashurst with its Australian business in 2013.

Total profit was $33.95bn, an increase of 5%.

mark.mcateer@legalease.co.uk

Legal Business

Freshfields and Linklaters lead on SSP Group’s float

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Corporate Freshfields Bruckhaus DeringerLinklaters
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Freshfields Bruckhaus Deringer and Linklaters are advising on the float of SSP Group, the owner of Millie’s Cookies and Uppercrust, on the London Stock Exchange.

Corporate partner Mark Austin, who earlier this year advised high street retailer Poundland on its £750m float, is representing SSP alongside the Magic Circle firm’s co-head of international capital markets Sarah Murphy.

Corporate partners at Linklaters, David Avery-Gee and Patrick Sheil, are advising the joint sponsors and bookrunners Goldman Sachs International and Morgan Stanley.

London-headquartered SSP, which operates almost 2,000 food outlets across 30 countries – largely at airports and railway stations, is looking to raise £500 million from the float. Despite volatility in the London IPO market, with low cost airline Wizz Air and clothes retailer Fat Face having both pulled out of listings in the last two months, SPP’s recently installed chief executive Kate Swann, who ran stationery chain WH Smith for 10 years until 2013, is looking to fund expansion at transport hub redevelopments across Europe.

Swann said in a statement: ‘SSP is a leader in the fast growing international travel food and beverage market and is focused on the more rapidly growing sectors of air and rail.

‘An IPO is the appropriate next step for a business of SSP’s calibre, size and international scale and we believe that we are well-placed for life as a listed company.’

SPP’s partner brands include Starbucks, Burger King and M&S Simply Food.

tom.moore@legalease.co.uk

Legal Business

UK big six energy giant SSE announces seven-strong inaugural legal panel

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Big six energy giant SSE has set up an inaugural seven-strong law firm panel following an ‘extensive selection process’.

Freshfields Bruckhaus Deringer, Addleshaw Goddard, CMS, Osborne Clarke, Gillespie Macandrew, Thorntons and Kennedys have been appointed to advise across various legal disciplines, including but not limited to construction, property, finance, litigation and corporate.Osborne Clarke’s real estate partner Shane Toal will act as a client relationship manager for the firm.

Kennedys will cover the sub-division of personal injury litigation and Gillespie Macandrew and Thorntons will focus exclusively on Scottish property work.

In a statement, SSE’s head of legal, Liz Tanner, said: ‘Previously SSE had no formal panel but worked with a number of external agencies to provide legal support.

‘The new panel will provide renewed focus and help us in delivering legal services to business areas right across SSE more efficiently.’

The panel in the Irish and Northern Irish jurisdictions are still to be finalised.

Kathryn.mccann@legalease.co.uk

Legal Business

Zoopla! Freshfields and Slaughter and May line up for £1bn float of the UK’s second biggest property website

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Corporate Freshfields Bruckhaus DeringerSlaughter and May
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The anticipated £1bn initial public offering (IPO) of the UK’s second largest online property website has seen Magic Circle firms Freshfields Bruckhaus Deringer and Slaughter and May retained to advise as Zoopla prepares to list on the main market later this month.

Advising Zoopla is a Freshfields team led by corporate partners Mark Austin and Adrian Maguire, supported by relationship partner Martin Taylor.

Slaughter and May’s Jeff Twentyman is advising Zoopla’s majority shareholder Daily Mail and General Trust (DMGT), while fellow corporate partner Richard Smith is adviser to minority shareholders LSL Property Services, Countrywide and Connells.

Both Freshfields and Slaughters have been involved in some of the most high profile IPO mandates in the past few months, including most recently Freshfields’ role as adviser to the underwriters JP Morgan, Citigroup, UBS and Investec on Lloyds’ 25% TSB float for £1.5bn, led by London-based corporate partner Julian Makin.

In April, capital markets partners were attesting to an end to the jitters that have until now dogged the IPO market, with retailers including Poundland, Pets at Home and AO World in recent weeks making their debut on the London Stock Exchange.

Pets at Home listed in mid-March at a value of £1.2bn, gifting Simpson Thacher & Bartlett, Clifford Chance and Travers Smith with lead mandates.

However, recent pricings have showed signs of market fatigue, with floats such as Saga listing at the bottom of their range.

In mid-May Patisserie Valerie listed on the AIM market at the bottom of its £170-200p range, raising proceeds of £33m and leading to commentary in the financial press that there has been a softening of the IPO market.

However, corporate partner Jonathan King, who led on the float, told Legal Business: ‘The range was at the top end anyway so this is still a good price.’

Sarah.downey@legalease.co.uk

Legal Business

EY hires Freshfields’ Richard Norbruis to head global transaction group

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EY has made its third senior private practice hire in three months months with the announcement that Freshfields Bruckhaus Deringer partner Richard Norbruis is to lead the accountancy giant’s global transaction law practice.

The Amsterdam-based corporate and M&A lawyer has been a partner at Freshfields for nearly 15 years, after joining from the New York office of NautaDutilh where he was managing partner. Since May 2011, he has acted as Freshfields’ global people partner with responsibility for recruitment, retention, diversity, partner development and leadership.

The hire constitutes the third high profile lateral EY has made in recent months, most recently following the appointment of Berwin Leighton Paisner’s (BLP’s) former head of finance Matthew Kellett to spearhead EY’s financial services legal work. Kellett, who resigned from the top 20 firm last October, is due to start at EY in September.

In March it recruited Addleshaw Goddard’s corporate managing partner Philip Goodstone in one of the first steps towards boosting its UK legal capability via lateral hiring.

The appointment of longstanding Addleshaws partner Goodstone, whose previous clients include Admiral Taverns, Accrue Capital, The Cooperative Group, and Standard Life Investments, marked a step change by the Big Four accountant, which since last year has been considering its options for expansion under the Legal Services Act 2007, including acquiring an alternative business structure (ABS) licence.

Last year also saw EY hire the former managing partner of Freehills’ Singapore office, John Dick; a precursor to its expansion plans in the region, as in March EY formally announced plans to expand its legal services business throughout Asia over the coming year.

EY has previously said it is looking to expand its offering across Singapore, Vietnam, Hong Kong, Korea and Indonesia, subject to regulatory requirements.

Sarah.downey@legalease.co.uk

Legal Business

Freshfields increases associate pay across the board

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Salaries Freshfields Bruckhaus Deringer
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Freshfields Bruckhaus Deringer today (29 May) unveiled a significant pay hike for its newly qualified (NQ) and junior ranks, with trainees also in line to take home £1,500 more, following a pay freeze in 2013.

The Magic Circle firm upped pay packets for first and second year trainees to £40,500 and £45,500 respectively.

NQ and one year post qualification experience (PQE) lawyers – known as career milestone (CM) foundation – will see their pay bracket rise from 2012’s level of £65,000 – £72,000 to £67,500 – £77,500.

Associates of between two and four years’ PQE (CM1) will now receive between £87,500 – £100,000, compared to £80,000 – £92,500 in the last two years, while associates with over four years’ PQE (CM2) will take home between £107,500 – £115,000, up from £100,000 – £107,500.

Associates that have six years’ PQE (CM3) will be paid between £120,000 – £135,000, an increase from last year’s starting point of £115,000, although no upper limit was specified.

Freshfields’ increases this year puts the firm ahead of Linklaters, which has been leading the pack, paying its NQ lawyers £65,000; one-year PQE associates £70,500; two-years PQE £82,000; and three-years PQE £93,500.

A&O, in comparison, lags behind its peer group after choosing to stick to last year’s pay levels. NQ lawyers will receive £64,000, while one-year PQE will take home £69,500, and second and third years will receive £78,500 and £89,000 respectively.

Despite the firm freezing its pay bands last year, Freshfields still led the pack with its high 2012 rates in comparison to its Magic Circle peers. Clifford Chance is the last to announce its trainee/associate pay bands with an announcement expected in the next few weeks.

Freshfields’ London managing partner Julian Long said: ‘We make sure we offer the most talented individuals a combination of great work, great training – and market leading levels of compensation. We have maintained our leading reward position for a number of years. We are now making a further significant investment in our people to recognise and reward outstanding performance…and we our investing further in bonuses. This move is part of our strategy to attract and retain the most talented individuals in the market and secures our position as a leading investor in exceptional people.’

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 milestone pay bands are being used by the firm’s London and Asia offices, with the firm’s other network offices currently at different stages in implementing the career milestones. ‘Most offices introduced them as part of last year’s appraisal process either to support personal development planning or when assessing performance,’ the firm said in a statement. The firm also confirmed it will be investing further in the bonuses it offers.

All pay increases went into effect May 1, 2014.

jaishree.kalia@legalease.co.uk