Legal Business

Guest post: ‘Chasing short term profits is the enemy of long-term success’ – A conversation with Freshfields’ Ted Burke

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I recently had the chance to sit down with Ted Burke, outgoing managing partner of Freshfields Bruckhaus Deringer. I’ve known Ted for years and with the recent announcement that he would be stepping down at Freshfields to join Arclight Capital Partners as COO and general counsel it was time to catch up.

When we sat down, I asked Ted to reflect on his years at Freshfields (head of the firm since 2005). He opened: ‘It’s the oldest great firm in the world.’ Founded in 1743 with the Bank of England as a client, which remains a client today. The firm has been successful over 270 years, Ted observed, but not at all times, and it has had to change repeatedly. ‘No business can last more than a generation without changing.’

Yet there’s a core set of values that have existed across Freshfields for generations. Ted described them as:

* to be the best—this requires rigour and commitment

* to always behave decently and honorably—with everyone

* the ability to recognise when fundamental change is taking place in the market

* to assess the firm with unblinking honesty, and to undertake change; and

* to know that as a partner you hold this firm in trust for future generations.

As an example of change, Ted went back to the firm’s origins in the 18th century. The prestige of its work for the Bank of England led it in turn to representing the aristocracy, who then held much of Britain’s wealth. But the mid-18th century saw the rise of the modern corporation and the concentration of wealth and power in those entities. Freshfields had to adapt to maintain success and it did, albeit slowly.

Freshfields had to adapt again in the 1960s and 1970s. The firm didn’t think that its corporate practice was on a par with some of its peers so the partners re-invented the firm by targeting new clients and de-emphasising its family practice. How did it achieve this? The answer: ‘Align your client strategy with your people strategy.’ Simple, profound, honored in the breach.

A more recent example of a ‘pivot’ came with the Big Bang in the 1980s and the deregulation of UK securities market: Freshfields realised it would have to go after new organisations as clients, including US investment banks. And yet more recently, in 2000, came the three-way merger between Freshfields/UK, Deringer Tessin (Germany) and Bruckhaus Westrick (Germany/Austria) – a move that was quite risky, Ted reminded me, for all three firms.

BM: How do you manage lawyers?

TB: ‘Well, we would probably not admit to managing lawyers at Freshfields. That wouldn’t be consistent with our culture. We would instead just talk about how we try to get the best out of each other.’

BM: Culture can be a tricky word; every firm likes to talk about it, but in my experience surprisingly few managing partners can define what it means for their firm. What do you mean?

TB: ‘Culture is the way things are done. It’s different than values, which are aspirational. Culture is the reality. If you sit in the reception area of any corporation for half an hour, you can work out the culture. The way people talk to each other, their energy level, how fast they walk, the way they welcome clients, job candidates, everyone. The language they use.

In our case, culture would include how we work together, our approach to client service and to community responsibility, the degree of our ambition, the way we talk to each other, the way we treat everyone in the firm and outside the firm, the way we elect partners, the way we recruit people, the way we value contribution. It’s everything, really, and goes beyond the conventional view of systems, which may reinforce culture but are not proxies for culture. Culture evolves over time, and it should evolve, but it can’t be microwaved. It’s more like a very slow crockpot dish.’

BM: So tell me how you make decisions.

TB: ‘Our decision-making processes must be in tune with our culture and must also reinforce it. We place a premium on partnership and consensus-building. We think that’s the best form of governance for lawyers. Lawyers are inclined to be highly autonomous and want to have a real say in their professional future. That’s best achieved in a real partnership and by that I mean a partnership in spirit not just in form.

‘With more than 400 partners in 20 countries, it’s a lot different animal than when everyone could gather in one conference room. Lawyers are highly autonomous and that’s why I believe the partnership structure is the best model for a professional service firm – speaking of the cultural dimension of partnership, not the technical legal form of the enterprise.’

BM: So how do you preserve partnership spirit at Freshfields?

TB: ‘First, we get together a lot. That can be expensive but it’s worth it. Partnerships require mutual trust and trust in turn requires familiarity. And eventually something more than professional respect emerges. Friendships around the world are formed and it can be incredibly rewarding.

Second, we spend a lot of time on consensus-building and put just about all material decisions in front of the partnership. Does that mean we’re slow to make decisions? Yes, but only to some extent. We pride ourselves on acting extremely quickly in our client service. That’s important. But there have been few internal decisions that have required very fast responses, though this is probably changing. In any event, when we need the partnership to respond very fast, they have done so. You just have to pick your spots and not ask them to do that on a regular basis.

‘Lastly, we do think that our lockstep remuneration system also contributes to our partnership ethos.’

BM: Is all of that work worth it?

TB: ‘We think so. By preserving partnership, you get the hearts of your partners not just their wallets. I have heard some law firm leaders say that the corporatisation of law firms is inevitable so don’t bother avoiding it. I disagree with that. I want our partners to regard our firm as more than a good professional platform and a good paycheck. I want their long-term commitment. I want them to be willing to invest in something that may not pay dividends until after their retirement. I want them to embrace the concept of holding the firm in trust. You might be able to get that in a corporation but I think it’s most easily achieved in a partnership.

‘We might be the largest business in the City of London [over 2,000 employees] to go through the financial meltdown without laying off more than a single digit number of people and we’re proud of that. Could we have improved profitability by doing so? To be sure. Would it be the right thing to do? Releasing loyal people into a horrible job market? No. Would the partners think better of themselves and of the firm to let people go? No. Would it make a material difference to their take-home pay? Not really. So that was our approach and none of our partners disagreed. They were looking beyond the economics.

‘The key is to get hearts on board, not just minds; this is the only route to sustainable success.

‘I heard someone from another firm say recently, perhaps with some hyperbole, that his partners only care about their pay this year and next and will leave if it’s not enough. That’s incredibly depressing! I would be the first to say that financial success is very important; you neglect that at your peril. But too much of a focus on short-term profitability is the enemy of sustainable success and strategy. I hope that will never be the case at Freshfields.’

BM: But you mention that the need to respond quickly is probably growing. What is changing?

TB: ‘Well, you have described it yourself. The clients have more choices.’

BM: So how has Law Land evolved since 2008?

TB: ‘I think of it in terms of the concept from evolutionary biology of “punctuated equilibria”; the idea that there are long periods of stasis punctuated by brief crisis periods of intense speciation. This is what we’re going through, prompted of course by the financial crisis and, perhaps more importantly, by technological advances.

‘Law firms didn’t change immediately after the crisis. In the first couple of years, many firms were swamped with crisis work or were hunkered down dealing with serious over-capacity. But starting a couple of years ago many firms began to emerge from their caves, blinking into the light and thinking hard about their strategies and business models. We’re seeing some of these firms start to go in different directions and take pretty bold steps.

‘Of course, there isn’t a single right strategy or model for any firm and we clearly see multiple strategies and models succeeding in the legal sector. But I do think that some firms are facing a strategic trap. Many seem to want to shrink and that seems the right answer if you want to preserve or enhance profitability and if you believe that the demand for high-end legal services has shrunk. But shrinking in size may also mean that you can’t adequately meet your clients’ global needs. That creates a strategic dilemma.’

BM: One impetus for periods of intense speciation, if I recall Stephen Jay Gould accurately, is the abrupt entry into the ecosystem of foreign invaders – like the Asian carp in the Great Lakes. You surely know about how firms like Kirkland & Ellis are coming into the New York and offering top-of-market compensation to marquee partners, which is antithetical to lockstep. How does this play out?

TB: ‘We have this model of a hierarchy of needs for every law firm partner, and no, it’s not Maslow’s. The elements are:

Platform: What’s the brand name, how good are the associates, what’s your position in the practice group;

Culture: Is it a fit?

Financial issues: The obvious. Not just current pay, but capital contributions, pensions, etc.

Security: Lawyers want to work; they don’t want to retire at 45. Security to lawyers means a steady stream of work., and that’s really important to them. And:

Friendships. These can keep people at, or keep them out of, firms.

‘So new firms can change the market, without question, but it won’t just be about pay packages. It will have to be about meeting all the needs of potential partners.’

BM: So how do you think, strategically, about the future of a complex law firm today?

TB: ‘All firms have had to redefine their market. It used to be all about their traditional local competitors who more or less operated with the same business model; now it’s much more difficult for firms such as ours to concisely describe the competition because we’re competing with different firms in different countries and practices. That, in turn, means strategy has become more complex.

‘But there will be loads of other changes. The employment model will change – it will get more complex. Business services will get increasingly professionalised. And firms will be required to make significantly greater capital expenditures as technology becomes more and more important.

‘I look five to seven years out; that seems to me to be about the right time frame. What sort of firm do you want to be in 2020?’

BM: What’s the future? What next for Freshfields, after you’ve moved on?

TB: ‘Freshfields has a tremendous amount going for it. A really cohesive partnership with a strong, friendly, positive culture. A great reputation for quality. A diverse mix of practices and a great, global footprint. A commitment to intergenerational equity. Stewardship. Leaving the place better than you found it. And a very large profit pool, which together with the culture, enables the firm to make significant long-term investments. I think that the firm will continue to adapt to changing client demands and I think that they will focus in particular on growth in the US and in Asia. And they will succeed!’

270 years. And counting.

Bruce MacEwen is president of Adam Smith Esq the legal research and consulting company

Legal Business

UK IPO uptick forecast for 2014 as Freshfields secures Poundland float

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Partners are forecasting a further uptick in UK initial public offerings (IPOs) in 2014 with Freshfields Bruckhaus Deringer emerging as the latest major firm to win a role on a company looking for a London listing, as discount retailer Poundland puts together a team to advise it on the company’s next steps.

Poundland’s private equity owner Warburg Pincus – Freshfields’ client – has lined up financial advisers JP Morgan and Credit Suisse to look for a route to market. The deal is understood to be being led by Freshfields corporate partner Adrian Maguire, with the company currently valued at between £400-£500m and expected to float early next year. It is thought that Allen & Overy is advising the underwriters on the deal.

Freshfields is a longterm adviser to Warburg Pincus and this year advised the private equity group on its multi-million investment in shopping malls in Vietnam.

This year so far has seen a major uptick in London initial public offerings (IPO), of which a large proportion have been private equity exits such as Countrywide, Esure, Infinis and Stock Spirits Group.

Slaughter and May has led on a significant number of the highest profile IPOs including Royal Mail, which floated in October for £3.3bn and was 20 times over-subscribed but in which bankers involved in the deal from Goldman Sachs and UBS were called before the Business Innovation and Skills committee this week to explain their valuation of the company.

The first half of 2013 saw 48 European IPOs according to Mergermarket and the second half of the year is expected to exceed that figure, with one private equity partner at a Magic Circle firm commenting to Legal Business: ‘There has been a thawing of a mini ice age for IPOs. I think a lot of the deals will come to market in the first half of next year. It’s a good place for investors to put their money.’

Other companies named in the financial press as considering a London float include Travelex and Saga.

Both Freshfields and A&O declined to comment.

david.stevenson@legalease.com

Legal Business

Freshfields claims victory for DB in defending $8bn claim as global institutions continue to fight fires

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A week ago Deutsche Bank announced it was setting aside a €1.2bn provision to cover its legal costs but in better news today (8 November), the German banking giant and advisers Freshfields Bruckhaus Deringer claimed victory in fighting off an $8bn claim.

The claim was brought by Sebastian Holdings Inc. (SHI) – the Monaco-based investment firm wholly owned and controlled by Norwegian billionaire Alexander Vik – which alleged that Deutsche Bank put through unauthorised trades on its behalf.

Following a hard fought four month trial, judge Jeremy Cooke sitting in the High Court’s Queen’s Bench division today dismissed SHI’s entire claim, handing down an 800 page judgement and ordering SHI to pay the bank around $240m in compensation for unpaid margin calls from 2008.

Freshfields dispute resolution partners Andrew Hart, Tom Snelling and Christopher Robinson led the case alongside David Foxton QC at Essex Court Chambers.

Travers Smith advised Sebastian Holdings.

Snelling said: ‘We are exceptionally proud to have represented DB, one of the firm’s most important clients, in one of the most significant pieces of post-credit crunch litigation to hit the courts in 2013. It has been an extremely complicated case, with concurrent proceedings here and in New York following DB successfully resisting SHI’s attempt to move the proceedings from England.

‘A long series of case management conferences was necessary to ensure that the trial took place on time. The trial itself involved complex evidence from approximately 20 factual and 16 expert witnesses from the US, Switzerland, Asia and the UK, together with a gargantuan number of documents.’

However, in an insight into the daily fire fighting still undertaken by global financial institutions, Deutsche Bank and Barclays also today failed to prevent allegations of LIBOR rigging from being included in two on-going lawsuits, in a Court of Appeal decision seen as potentially opening the floodgates to further high value claims.

Last month Deutsche Bank reported a 98% fall in quarterly profits after setting aside additional funds to cover its liabilities, reflecting the mounting regulatory burden facing the financial institution. The bank’s group income before taxes dropped for the third quarter to €18m, against last year’s figure of €747m for the same period in 2012.

The bank’s litigation reserves now stand at €4.1bn, while general and administrative expenses increased by €872m due to higher litigation related expenses.

 

Jaishree.kalia@legalease.co.uk

Legal Business

Homeward bound: Burke hands Freshfields’ reins to Aitman as he leaves for Boston-based ArcLight Capital

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‘I’ve held a number of management roles in the firm, which, together with having recently chaired our supervisory body, should help me take on the new role and ensure a smooth transition,’ says Freshfields Bruckhaus Deringer’s new global managing partner David Aitman, as he steps into the sizeable shoes of veteran Ted Burke, following his recent decision to stand down.

Aitman was said to be the standout candidate, having previously chaired Freshfields’ partnership election committee and currently acting as senior elected member of the partnership council.

The competition partner, who will stand as managing partner until the role goes to a vote in 2015, will come off the council to avoid a conflict of interest as a vote on his replacement takes place at the end of this year.

Legal Business

Bind and drive: Freshfields’ Tim Jones to join England Rugby 2015 as GC

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Freshfields Bruckhaus Deringer corporate partner and former City head Tim Jones has been hired as general counsel to England Rugby 2015 ahead of next year’s Rugby World Cup.

Established by the Rugby Football Union, whose current legal and governance director is Karena Vleck, England Rugby 2015 will employ the corporate heavyweight three days a week, beginning on 1 November. Jones, however, will also continue to work on a part-time basis for the Magic Circle firm, and carry on with client matters.

Jones has been a corporate lawyer at Freshfields his entire career, and ran the firm’s Madrid office before taking up the role as London managing partner in 2007 until 2011. He also previously held positions as global co-head of capital markets, and was head of the London corporate group. He is well suited to his new role, having played rugby for Oxford University, London Welsh, Wales B and the Barbarians.

Jones’ recent hefty workload included leading the firm’s effort during its time as official legal services provider to the London Organising Committee of the Olympic Games (Locog), and advising the Department for Business Innovation & Skills on the Royal Mail IPO, alongside pensions partner Charles Magoffin.

A spokesperson for England Rugby 2015 confirmed the move, stating the company was ‘really pleased’ with Jones’ appointment.

The Rugby World Cup, which hosts England kick off on 18 September 2015 at Twickenham, is the third-largest sporting event in the world following the Olympics and the FIFA Football World Cup.

Freshfields’ Magic Circle peer Clifford Chance has made inroads of its own with the event, having been appointed as the official law firm of the Rugby World Cup following a competitive pitch process, in a team led by head of media and partner Daniel Sandelson.

sarah.downey@legalease.co.uk

Legal Business

Sailing for Boston – Freshfields’ managing partner quits to join US buyout house

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One of the most respected law firm leaders in the City has called it a day ahead of time with Freshfields Bruckhaus Deringer’s managing partner Ted Burke today (30 September) confirming his decision to leave the Magic Circle firm. The move, which sees Burke stand down a year early, was announced internally today.

The US lawyer will depart the City giant after 15 years to return to his native Boston as general counsel and chief operating officer of US private equity house ArcLight Capital. Burke’s role as managing partner will be assumed by competition partner David Aitman until the managing partner role goes to a vote again in 2015.

Burke will leave Freshfields early in the New Year, depriving the firm of one of the most highly rated law firm leaders in the business. Burke’s near eight years in Freshfields’ C-suite saw the firm through a major partnership shake-up and a controversial overhaul of its pension scheme. The firm was the only one of London’s ‘big four’ magic circle firms to avoid a major restructuring during 2009 and is regarded by many as the most strongly positioned of the four elite firms.

Burke joined Freshfields in 1998 from Milbank Tweed Hadley & McCloy and became the firm’s US managing partner in 2002, becoming chief executive in 2006.

Burke had stood as senior partner in 2010 in a contested election against the ultimate victor Will Lawes but went on to take on the managing partner role, recasting the chief executive brief he had held.

The increasingly cosmopolitan Freshfields is maintaining its form for being headed by ‘outsiders’ with Aitman himself having joined the firm from Denton Wilde Sapte in 2001. He has previously held prominent roles in the firm having co-headed its global antitrust practice between 2006 and 2010. Aitman, who was appointed following a nomination from Lawes, is also currently the senior elected member of Freshfields’ partnership council – its primary oversight body.

Lawes in a statement commented: ‘I am obviously personally very sad that [Burke] is returning to the US. The firm owes much of its recent success to his strategic guidance and courageous leadership. In David Aitman we have a hugely respected and wise partner, with a deep understanding of our business and culture.’

Burke told Legal Business: ‘I’ve known the people at ArcLight for 20 years and this was just a fantastic opportunity.’

Alex.novarese@legalease.co.uk

Legal Business

Close to the wire: Freshfields and Herbert Smith settle £142m London Underground negligence claim

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Freshfields Bruckhaus Deringer and Herbert Smith Freehills have reached an eleventh hour settlement of the £142m professional negligence claim brought against them by London Underground (LUL).

Due to be heard over a four week period in October, the case is arguably the largest ever filed against a City firm.

LUL was represented by Ince & Co partner Charlotte Davies, who instructed 4 New Court Square’s Justin Fenwick QC, while Freshfields drafted in bar heavyweight Tony Grabiner QC of One Essex Court to defend it, and Herbert Smith fielded Fountain Court’s Tim Dutton QC.

The initial High Court claim was issued against 2332-lawyer Freshfields by LUL in January 2011, in relation to the company’s public-private partnership (PPP) with now-defunct transport company Metronet, which was responsible for the maintenance, renewal and upgrade of the infrastructure on nine LUL lines between 2003 and 2008 under the PPP arrangement.

Following a turbulent period during which Metronet was implicated in the May 2004 derailment at White City, the company went into administration in 2007, leaving LUL liable under the PPP agreement to purchase its debt, eventually becoming liable to pay around £1.74bn.

Magic Circle firm Freshfields was served with a £178.5m claim in July 2011 while legacy Herbert Smith was named as second defendant in the dispute in 2012. That sum was subsequently reduced after LUL managed to recoup some of its losses.

The precise terms of the settlement are confidential but a statement from Herbert Smith said: ‘Transport for London, Freshfields Bruckhaus Deringer LLP and Herbert Smith Freehills LLP have agreed to end the litigation concerning legal advice relating to Metronet’s borrowings under the PPP. All parties involved are pleased to have resolved this dispute without the need to go to trial. The terms of settlement are commercially confidential.’

sarah.downey@legalease.co.uk

Legal Business

Barclays £5.8bn rights issue sees Clifford Chance, Sullivan & Cromwell and Freshfields in the lead

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Barclays has begun the biggest capital raising by a UK bank since 2009 under which Clifford Chance (CC), Sullivan & Cromwell and Freshfields Bruckhaus Deringer will lead on its initial £5.8bn rights issue, as the global financial institution moves to plug a £12.8bn funding gap.

A team from 3017-lawyer Magic Circle firm CC led by London corporate partner Patrick Sarch and capital markets partner Simon Thomas is advising on English law for Barclays, while a Sullivan & Cromwell team in London is advising the bank on US law, led by client relationship partners George White and John O’Connor.

Deputy general counsel Michael Shaw is leading the Barclays team.

At 2332-lawyer Magic Circle rival Freshfields, US capital markets partner Sarah Murphy heads the team providing English and US legal advice to the sponsor, joint bookrunners and underwriters including Credit Suisse, BofA Merrill Lynch, Deutsche Bank, ABN Amro, J.P Morgan Securities, BNP Paribas and ING Bank.

The prospectus was published on Tuesday (16 September) and forms part of the capital raising first announced in July, after the Prudential Regulation Authority (PRA) revealed the results of its review on the capital adequacy of major UK banks and building societies and a leverage ratio target of 3%. Barclays was found to have a PRA leverage ratio of 2.2%, leaving it with a shortfall of £12.8bn.

Shaw told Legal Business: ‘The most eye-catching piece of the leverage plan is, of course, the rights issue – the biggest equity raising in the UK since the crisis. Normally when a company carries out a rights issue or a similar capital raising, it would expect to announce and publish the prospectus simultaneously. The preparation of a prospectus takes a number of weeks of intense effort to ensure, once published, it contains the information needed by shareholders and investors for their investment decision.

‘However, Barclays needed to announce the leverage plan as soon as it was agreed with the PRA on 30 July, and there wasn’t time before then to prepare a prospectus. Unusually, the underwriting had to be done based just on the announcement and using a small group of initial underwriters. Once the rights issue was public, it was possible to expand the underwriting syndicate and then prepare the necessary prospectus. It really has been a great team effort to achieve everything in the time available.’

According to the prospectus, the bank will contest a £50m fine from the Financial Conduct Authority (FCA), which said the bank had ‘acted recklessly’ in breaching rules over disclosing the value of a deal with Qatari Holdings during a cash call in 2008. The FCA issued Barclays a warning notice on Friday 13 September.

francesca.fanshawe@legalease.co.uk

Legal Business

First limb of Lloyds privatisation sees Slaughters and Freshfields win lead roles

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Five years on from the collapse of Lehman Brothers, Slaughter and May and Freshfields Bruckhaus Deringer have won the leading roles on the first limb of the government’s privatisation of Lloyds Banking Group, which was rescued by the UK taxpayer in 2008.

Slaughters is advising UK Financial Investments Limited (UKFI) on the HM Treasury’s disposal of a 6% stake in Lloyds Banking Group, worth around £3.3bn.

The Slaughters team is being led by corporate and commercial partner and head of the equity capital markets group, Nilufer von Bismarck, supported by associates Jonathan Wiseman and Liam Townson. The team also includes tax partner Tony Beare who is supported by associate Michael Ringer.

Freshfields is representing Bank of America Merrill Lynch, J.P. Morgan Cazenove and UBS as joint bookrunners in relation to the sale, led by corporate partners Will Lawes, Julian Makin, Sarah Murphy and Mark Austin, while UK tax advice is being provided by partner David Haworth.

Cravath Swaine & Moore is advising UKFI on US law aspects, led by corporate partner Alyssa Caples, who is supported by associate Jonathan Coleman.

Today’s share placing to institutional investors will raise proceeds of £3.2bn and reduce the government’s 38.7% stake in Lloyds to 32.7%.

In what represents a potential windfall instruction for the Magic Circle firms, the second limb of the privatisation will see the government sell Lloyds stock to retail investors, although potential institutional buyers have been promised that the Treasury will not sell any more Lloyds shares for at least 90 days.

jaishree.kalia@legalease.co.uk

Legal Business

Line up, line up: Twitter, Royal Mail and Foxtons go to market

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After a flurry of initial public offerings (IPOs) earlier in the year, with Esure, Countrywide and Partnership Assurance among the UK companies to go public, a new wave of IPOs are lining up to go to market, including Royal Mail, Foxtons and, most recently in the US, Twitter.

Twitter rather aptly tweeted its intentions to float on the stock market yesterday (12 September) with leading technology IPO specialists Wilson Sonsini Goodrich & Rosati tipped for the role.

The social media giant, estimated by the Wall Street Journal to be worth around $10bn, took advantage of a rule adopted last year by the Securities and Exchange Commission, which allows growth companies with under $1bn in revenues to keep their financial details confidential until closer to the float.

According to Reuters, Twitter’s lead adviser will be Wilson Sonsini Goodrich & Rosati, famous in Silicon Valley for taking public big names such as Apple, Netscape and Google.

Yesterday also saw the UK government notify the London Stock Exchange that the long running Royal Mail IPO is imminent, with lead advisers Slaughter and May, Freshfields Bruckhaus Deringer and Linklaters now gearing up to do a deal that has been in the pipeline for over a year. Royal Mail is being advised by Slaughters, led by equity capital markets (ECM) partner John Papanichola alongside corporate finance partner William Underhill.

The past year has seen the Slaughters team assisting Royal Mail in its preparations for float, advising on numerous thorny issues including its employee share scheme, which will see the postal group’s employees take 10% of the shares and the remainder go to institutional investors and the public. ‘It is a slow process and is not expected to go to market before November,’ one ECM partner said of the IPO.

Freshfields is advising the government, with corporate partner Tim Jones leading for the Department for Business Innovation and Skills on the IPO, backed by a team including pensions partner Charles Magoffin. Linklaters are advising the underwriters, Goldman Sachs and UBS.

Meanwhile, Foxtons IPO, also a private equity exit in which Dickson Minto is representing long-term clients BC Partners, which bought Foxtons in 2007 for £360m with £300m of bank debt, is expected this September. The company was badly hit by the financial crisis and lenders Bank of America and Mizuho stepped in in 2010 in a debt-for-equity swap after BC Partners breached its bank covenants, however, the private equity house kept its minority stake and regained control last year.

More recent estimates place the value of Foxtons’ IPO above £700,000 and, given the success of earlier IPO’s, there is a renewed buzz in the market, underlined by cautious optimism. ‘It’s a general question of confidence, the backdrop of the last few years consisted of private equity exits performing badly at market. There was talk of the pricing mechanism breaking down. But with the success of Crest Nicholson earlier this year, there is a renewed appetite for IPOs,’ said one corporate partner at a US firm based in London.

david.stevenson@legalease.co.uk