Legal Business

Freshfields earns £1.8m advising government on Royal Mail privatisation

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Magic Circle firm Freshfields Bruckhaus Deringer accumulated £1.8m in legal fees for its advice to the UK government on the controversial privatisation of Royal Mail last year, a report out today (1 April) from the National Audit Office (NAO) has revealed.

The NAO’s detailed report shows that Freshfields recovered a large part of its advisory fees from Royal Mail, except for £211,000 paid to the firm in respect of shares sold to the UK Armed Forces.

The investment banking syndicate led by Goldman Sachs and UBS was paid £12.7m.

The government notified the London Stock Exchange in September 2013 that the Royal Mail initial public offering was imminent, with corporate partner Tim Jones leading for the Department for Business Innovation and Skills (BIS) on the IPO, backed by a team including pensions partner Charles Magoffin. Freshfields has been the department’s adviser since 2009.

Linklaters advised the underwriters, Goldman Sachs and UBS, while Slaughter and May led by equity capital markets (ECM) partner John Papanichola alongside corporate finance partner William Underhill advised Royal Mail.

The float in October saw the Shareholder Executive, part of BIS, sell 60% of the government’s shares for 330p, generating £1.98bn. A further 10% stake was given to Royal Mail employees and 30% retained in public ownership.

Today’s report from the NAO found that the government did not achieve the best value for the taxpayer in its float of Royal Mail, in which shares are now over 70% higher than the 330p sale price.

The report concluded that the BIS placed significant reliance on financial advisers to prioritise completing the sale, concluding ‘Government should consider ways to reduce reliance on professional advisers, and ensure that where it does use advisers it seeks to optimise overall value for the taxpayer.’ However, legal advisers were not included in this statement and there was no criticism directed at the Magic Circle firm.

The Government has responded to the NAO’s report by saying that it welcomed the NAO’s conclusions that it had achieved its key objectives, including securing the future of the postal service through a successful sale of a majority stake, and protecting taxpayers from the risk of needing to offer ongoing support to the company.

It also highlighted a finding of the NAO report that Government ‘was right to appoint expert advisers, while the fees paid to the advisers were low compared to the market average and to government precedents.’

Jaishree.kalia@legalease.co.uk

Legal Business

Dwindling partner promotions at A&O and Freshfields fail to maintain current partnership levels

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The UK’s elite law firms often point to their rigorous partnership promotion process as a natural selector of the best talent but at Freshfields Bruckhaus Deringer and Allen & Overy (A&O) the promotion of just 15 and 16 partners respectively in recent weeks is insufficient even to maintain the partnerships at their current levels.

For Freshfields, the latest promotions round is a marginal increase on the 14 promoted in 2013, but is a significant decline when compared with the 20 partners promoted in 2011 and 2012.

Legal Business

Freshfields remains bullish in wake of heavyweight arbitration departures

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Magic Circle firm will continue to work with Three Crowns spin off

An undisputed leader in the field of arbitration, Freshfields Bruckhaus Deringer has nonetheless been hit by the recent departures of London heavyweights Constantine Partasides and Paris-based partner Georgios Petrochilos, together with a team out of its German offices, bringing the latest exits to five.

Legal Business

With an external legal spend in excess of $1bn since 2010, BP launches panel review

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Energy giant BP, which has paid around $1bn in external legal fees in relation to the Gulf of Mexico oil spill in 2010, has announced a review of its UK law firm adviser line-up.

Law firms have been asked to tender for a place on the FTSE 100 company’s new roster, pending the expiry in May of a three-year panel put in place in 2011. The review will be completed towards the middle of 2014.

The current panel includes Magic Circle firms Linklaters and Freshfields Bruckhaus Deringer, as well as Norton Rose Fulbright, Olswang, Herbert Smith Freehills, CMS Cameron McKenna and Scottish firm McGrigors.

The review is being led by high-profile group general counsel Rupert Bondy (pictured), who also oversaw the 2011 review.

Linklaters is a longstanding adviser to BP, with corporate partner Stephen Griffin having advised on BP’s $27bn sale of a 50% share in TNK-BP to Rosneft, the major Russian integrated oil and gas company, as well as the dual-track IPO and $9bn private sale process of its chemicals business Innovene.

At Freshfields, meanwhile, ex-corporate head Mark Rawlinson prepared BP’s defence against a potential bid in the wake of the oil disaster.

The panel review follows the announcement in February that a further $150m of external legal costs can be expected in relation to the spill.

Sarah.downey@legalease.co.uk

Legal Business

Freshfields arbitration practice sees more exits as trio set up boutique in Germany

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Disputes partner Christian Borris is leaving Freshfields Bruckhaus Deringer‘s Cologne office at the end of April to set up a local arbitration boutique.

His former two associates, Rudolph Hennecke who left the firm a month ago, and Sebastian Kneisel who relocated from its Cologne office to Frankfurt last year, will be joining Borris as partners to set up the new practice, Borris Hennecke Kneisel, which will launch on 1 May.

This is the second team to depart the firm’s global arbitration practice in recent weeks, following the exit of Constantine Partasides QC, consultant and former arbitration head Jan Paulsson and Paris arbitration head Georgios Petrochilos, who are leaving to set up arbitration boutique Three Crowns, alongside Jones Day’s Luke Sobota, Shearman & Sterling’s Todd Wetmore and global co-chair of Covington & Burling’s international arbitration group Gaetan Verhoosel.

Borris told Legal Business that the new venture comes as a result of the increasing conflict of interest issues between the firm’s arbitration and corporate group. ‘It became impossible for me to accept any mandates because of there were too many conflicts of interest,’ he added.

The new boutique will specialise in dispute resolution with a focus on arbitration, consisting of joint ventures, corporate, energy and investment disputes and general commercial arbitration.

jaishree.kalia@legalease.co.uk

Legal Business

Numbers game – Freshfields awards 15 partner promotions across Europe, Tokyo and New York

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In the latest round of partnership promotions, Freshfields Bruckhaus Deringer has made up 15 new partners to its ranks. While that figure does not represent a return to 2011 and 2012 levels, when 20 partners were made up, it is a slight increase on last year, when the number fell to 14.

Out of the 15 promotions, 13 have been promoted across Europe with five in London; three in Frankfurt; two each in Hamburg and Amsterdam; and one in Brussels. The remaining two lawyers were promoted to partner in the firm’s Tokyo and New York offices.

In terms of practice breakdown, the largest beneficiary was the Magic Circle firm’s disputes practice, where there were five promotions, following by finance (four); corporate (three); and one each in real estate, employments pensions and benefits; and antitrust, competition and trade. The appointments will take effect from 1 May 2014.

Freshfields senior partner Will Lawes said: ‘We are delighted that these outstanding young partners are joining the firm. They are all highly talented lawyers with a strong track record of client success. As a group, they will add significantly to the depth of our market-leading client offering around our firm.’

The news follows Allen & Overy’s (A&O’s) 16 partnership promotions, which the 2,700-lawyer firm announced earlier than expected in February to enable new partners to attend its partnership conference in March. That figure represents a 16% drop on 2013 promotion numbers, when 19 partners were made up.

Across A&O’s practice groups, international capital markets received the largest intake of new partners, with six promotions in total. This was followed by litigation and banking with four promotions each, and two in the corporate department. The firm made most of its promotions in London (five), followed by three each in Dubai and Hong Kong, and one in Perth, Sydney, Frankfurt, Amsterdam and New York.

jaishree.kalia@legalease.co.uk

Legal Business

Freshfields lifer Julian Long takes over from Rawlinson as London managing partner

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Freshfields Bruckhaus Deringer has named current London corporate head and Freshfields lifer Julian Long as its new London managing partner, taking over from incumbent Mark Rawlinson, who is returning to client work.

Long, an M&A partner, has earned his stripes having been at Freshfields for his entire career, making partner in 1995 and being promoted to head of London corporate in June 2011. His former roles include sector group leader for the consumer, health and retail group.

Long will continue some client work in the complex domestic and cross-border M&A space but will stand down from his current role as head of the London corporate department in ‘due course’. The London head appointment is a three-year term.

Freshfields senior partner Will Lawes said: ‘We are hugely grateful to Mark for all that he has done as London managing partner. Under his stewardship, London has performed extremely well in challenging markets. On the people side, he has been an excellent champion of our people engagement initiatives and taken a major role in driving forward our very important inclusion and diversity agenda. We are lucky to have him now concentrating fully on his client work as the transactional markets recover.

‘We are fortunate to have a strong successor in Julian. The London corporate practice has continued to perform well under his wise leadership. His outstanding client relationship and people skills will help us to get the most out of the excellent capabilities of the London office.’

Long added: ‘At a time when our clients face so many challenges, and at the same time significant opportunities, I genuinely believe that we can support them with a remarkable level of consistency and breadth of client offering across our London office. We will continue to listen to and learn from our clients to ensure that we are providing the services that they most value.’

jaishree.kalia@legalease.co.uk

See Life during law: Mark Rawlinson for an in depth interview with Rawlinson

Legal Business

Making a splash – partners from Shearman, Covington and Jones Day join breakaway Freshfields arbitration boutique

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As brand new start-ups go, the Freshfields Bruckhaus Deringer-breakaway arbitration boutique set up by heavyweight arbitrators Constantine Partasides, Paris-based Georgias Petrochilos and former arbitration co-chair Jan Paulsson earlier this month is making quite a splash.

Following news of its launch on 17 February, the latest announcement today (26 February), less than ten days later, is that Shearman & Sterling Paris international arbitration partner Todd Wetmore, Covington & Burling’s London-based international arbitration co-chair Gaetan Verhoosel, and Washington-based Jones Day litigation partner Luke Sobota have all resigned to co-found the new venture.

To say the boutique is making a name for itself already would be somewhere between hyperbole and irony, not least because it has yet to be given a name, however, the weight of the partners behind it means it has already been noticed by FTSE 100 companies, with a spokesperson for one major energy company recently remarking in an unofficial capacity that the boutique is of interest for being free of the conflicts that often dog established private practice arbitration practices.

All six named partners will be co-founders of the new firm, which will be run out of three major financial hubs: London, Washington and Paris.

Timothy Hester, chair of Covington’s management committee said: ‘We thank him [Verhoosel] for his contributions to our award-winning international arbitration practice, and wish him well in this next chapter of his career. We expect to continue to work closely with Gaëtan on existing as well as new matters, and we see a bright future for this practice.’

Shearman & Sterling’s head of international arbitration Emmanuel Gaillard added: ‘I have enjoyed working with Todd and seeing him develop into a great arbitration specialist. I have great respect for his work and have no doubt that he will continue to be successful in his new practice. I am thankful for his contribution and I am sure that we will continue working together in the years to come.’

Jones Day declined to comment.

jaishree.kalia@legalease.co.uk

Legal Business

Arbitration heavyweights resign to form boutique

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Partasides and Petrochilos to join former colleague Jan Paulsson

Breakaway arbitration boutiques are increasingly common but they rarely have the gravitas of the latest entrant, as Freshfields Bruckhaus Deringer’s London international arbitration group head Constantine Partasides last month resigned alongside Paris-based partner Georgios Petrochilos, to form a heavyweight trio alongside former co-arbitration head Jan Paulsson.

Dispute resolution partner Partasides spent ten years practising in the Magic Circle firm’s Paris office before returning to the UK in 2007 to head up its top-tier arbitration team. He is listed as a leading individual in The Legal 500 and recent arbitrations he has led include acting for a telecoms operator in a treaty claim regarding an expropriation of a multibillion-dollar business in North Africa.

Legal Business

Arbitration heavyweights – Freshfields group head Partasides and Paris partner Petrochilos resign to form boutique

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Breakaway arbitration boutiques are increasingly common but they rarely have the gravitas of the latest entrant, as Freshfields Bruckhaus Deringer’s London arbitration group head Constantine Partasides resigns alongside Paris-based partner Georgias Petrochilos, to form a heavyweight trio alongside former co-arbitration chair Jan Paulsson.

Dispute resolution partner Partasides spent 10 years practising in the Magic Circle firm’s Paris office before returning to the UK in 2007 to head up the top-tier arbitration team.The Legal 500 describes him as ‘quick to master complex subjects’ and recent arbitrations he has led include advising a telecoms operator in a treaty claim regarding an expropriation of a multi-billion dollar business in North Africa.

Petrochilos, along with Paulsson, has served as adviser to international trade regulatory body The United Nations Commission on International Trade Law (Uncitral) in connection with the revision of the Uncitral arbitration rules, and he now represents Greece as a delegate to Uncitral.

Meanwhile, Paulsson retired last year from the 2,332-lawyer firm, having joined in 1988 and had been head of its international arbitration group for 20 years. As president of the London Court of International Arbitration (LCIA), Paulsson helped Dubai develop its own arbitration centre in 2008.

The breakaway boutique follows recent examples including former Shearman & Sterling colleagues Christophe Dugue and William Kirtley, who late last year formed Dugue & Kirtley; and Hogan Lovells partner Jean-Georges Betto, who along with White & Case’s Christophe Seraglini, formed Betto Seraglini in November 2012.

Lucy Reed, Freshfields’ head of the international arbitration group, said: ‘We can confirm that partners Constantine Partasides and Georgios Petrochilos have decided to leave the firm and start an independent arbitration practice. As valued friends and colleagues we will be sorry to see them leave and we thank them for their contribution to the development of Freshfields’ world-leading arbitration practice. We wish them well in their new endeavour.’

David.stevenson@legalease.co.uk