Legal Business

Ashurst misses out as Gibson Dunn and Pinsents take front row seats on $1.2bn Odeon deal

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Corporate Gibson, Dunn & CrutcherPinsent MasonsWeil, Gotshal & Manges
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City firm Ashurst has missed out to former partners at Gibson, Dunn & Crutcher on the $1.2bn sale of London-based Odeon & UCI Cinemas Group by private equity owner Terra Firma.

Wanda-owned American cinema chain AMC Theatres resurrected a deal for Odeon & UCI, having previously stated the deal would be off if the UK voted to leave the EU, in one of the biggest European deals following the Brexit vote. The deal makes AMC Theatres the largest cinema operator in the world, with 627 theatres and 7,600 movie screens in eight countries.

Terra Firma, which had long been an Ashurst client, instructed former Ashurst partners Charlie Geffen and Nigel Stacey on the sale.

The corporate partners, who both joined Gibson in 2014, acted for Guy Hands’ Terra Firma on its original deal for Odeon back in 2004 and merged it with rival UCI.

Pinsent Masons acted for AMC Theatres, with a team led by private equity partner Tom Leman with partners John Tyerman and Tom Johnson.

Pinsents worked with Husch Blackwell which advised on US elements of the transaction with a team including partners Jim Ash and Kirstin Salzman.

Weil, Gotshal & Manges advised on financing aspects of the deal with a team lead by Courtney Marcus in Dallas. Weil partner Corey Chivers in New York also acted on the deal.

Osborne Clarke acted for the management of Odeon & UCI cinemas.

Leman said: ‘It was a short and intense process with the small hiccup of a Brexit vote along the way. After that we had to work hard to deliver a deal that worked for both parties, however the evidence is there that the UK remains open for business.’

The deal is subject to competition clearances.

tom.moore@legalease.co.uk

Legal Business

Gibson Dunn continues Germany push, launching in Frankfurt with double Latham hire

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Germany Gibson, Dunn & Crutcher
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The renewed interest in Germany’s legal market continues apace with US firm Gibson, Dunn & Crutcher to launch in Frankfurt after hiring Latham & Watkins corporate partners Dirk Oberbracht and Wilhelm Reinhardt.

Cited as a leading individual in Germany’s private equity market by The Legal 500, Oberbracht served as head of Latham’s Frankfurt office where the firm houses a tier one practice for transactions. Reinhardt was a partner in the corporate department and also chaired its industrials and manufacturing industry group.

The pair will lead Gibson Dunn’s new office and continue their M&A and corporate law practices.

Earlier this year the firm enhanced its German offering with Munich corporate partner Ferdinand Fromholzer from Freshfields Bruckhaus Deringer. His departure from the Magic Circle firm was followed by competition partner Michael Esser, who joined Latham’s Duesseldorf office in May.

Chair and managing partner Ken Doran said the duo’s experience in M&A, private equity, corporate and securities law will ‘significantly enhance our practice in Germany and complement our Munich corporate practice.’

Michael Walther, partner-in-charge of the firm’s German offices said the hires will ‘increase the depth of our corporate offering and is a perfect start for our further expansion plans in Germany. The combined strength of our Munich and Frankfurt offices will enlarge and broaden our German corporate practice, as well as expand other practice areas.’

Other firms to establish a presence in the region included Greenberg Traurig which launched in Germany last July with the hire of Olswang’s entire Berlin team while Dentons is launching in Munich with six partners from Norton Rose Fulbright.

Going the other way, Freshfields decided to shut its doors in Cologne with all 18 partners transferring to other offices.

sarah.downey@legalease.co.uk

Legal Business

The last word – Charlie says

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The Last Word Gibson, Dunn & Crutcher
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In response to an opinion piece from Gibson Dunn’s Charlie Geffen in our last issue, we ask management if firms must decide whether they are advisory or legal process driven

 

US PITCH

‘Geffen is right, but I wonder if he would have said it if he’d been at his old firm [Ashurst] as it’s a pitch for US firms in London. Clients are increasingly separating what is strategic and what is process-driven. I don’t agree that the UK firms aren’t capable of giving both, and no client out there will go to law firm A for their strategic work then take it off them and give law firm B the process work. Clients are looking to us to ensure the process end is done efficiently.’

Colin Passmore, senior partner, Simmons & Simmons

 

Legal Business

Ashurst loses another partner to Gibson Dunn as Perry quits

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Strategic recruitment AshurstGibson, Dunn & Crutcher
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Gibson, Dunn & Crutcher has revisited Ashurst for yet another lateral hire, appointing financial institutions partner James Perry.

Perry joins fellow ex-Ashurst colleagues Charlie Geffen, Jonathan Earle, Mark Sperotto, Nigel Stacey and James Cox, who previously quit Ashurst to join the US firm in London as it aims to build a full-service platform in the City.

With clients like Skandia, Royal & Sun Alliance, Credit Agricole, Société Générale under his belt, Perry will continue his regulatory and transactional practice with a focus on the financial services and insurance industries.

Jeffrey Trinklein, co-partner in charge of the London office said: ‘Our London office already has a strong contentious regulatory practice. Jim’s [Perry’s] focus on non-contentious financial services regulation strengthens our position as a leading global law firm that is able to interact with multiple regulators and allows us to continue to build a top US and English dual regulatory capability that few firms can match.’

Perry had practiced with Ashurst since 1987 and became a partner in 1998.

Gibson Dunn chairman and managing partner Ken Doran commented: ‘Jim [Perry] has a uniquely broad background with deep experience in both financial services regulation and M&A for financial institutions, including insurance companies.’

The news comes within weeks of Stephenson Harwood’s hire of Ashurst corporate partner and board member Anthony Clare who is leaving the firm after 14 years. In his new role, he will work closely with Stephenson Harwood’s corporate head Andrew Edge, who trained and qualified alongside Clare at Ashurst.

jaishree.kalia@legalease.co.uk

Legal Business

Freshfields and Gibson Dunn lead on $1.4bn Canadian miner battle with Venezuela

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Litigation Freshfields Bruckhaus DeringerGibson, Dunn & Crutcher
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Ranked as seasoned players on the most lucrative cases, Freshfields Bruckhaus Deringer and Gibson, Dunn & Crutcher have landed key instructions on a $1.38bn bilateral treaty arbitration taken against Venezuela by Canadian miner Crystallex International at the International Centre for Settlement of Investment Disputes (ICSID).

Toronto-headquartered Crystallex instigated the claim at ICSID in 2011 after the country denied an environmental permit for the Las Cristinas mining project, located in the south east region, despite Crystallex’s $1.2bn investment at that stage.

Crystallex is represented by Freshfields partner Nigel Blackaby, while the company is represented in a separate Delaware action by Gibson Dunn partner Robert Weigel, as well as Raymond DiCamillo, Jeffrey Moyer and Travis Hunter of Richards Layton & Finger. Venezuela was represented by US firm Foley Hoag.

In early April, an arbitral tribunal presided over by arbitrator Laurent Levy found the country had violated a bilateral treaty with Canada when it reneged on the expected mining permits and subsequently breached two articles of the investment treaty with its unfair and inequitable treatment and unlawful expropriation of the company’s investments. The court awarded the claimant roughly $1.38bn in damages which comprises $1.2bn for damages, plus pre and post-award interest.

The tribunal criticised Venezuela’s Ministry of the Environment for its ‘arbitrary’ and ‘non-transparent and inconsistent conduct’ in connection with its denial of an environmental permit.

The court further held it ‘cannot but conclude that the permit denial letter and [a report] on which the first appears to be based are so fundamentally deficient that, to the eyes of a reasonable third person, they surprise a sense of juridical propriety.’

The tribunal concluded the State had ‘frustrated Crystallex’s legitimate expectations and concluded Venezuela’s ‘overall conduct vis-à-vis Crystallex, thus violated the [Treaty] standard … and caused all of the investments made by Crystallex to become worthless.’

sarah.downey@legalease.co.uk

Legal Business

Comment: Gibson Dunn’s Geffen argues law firms can sell judgement or process but few can excel at both

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Comment Gibson, Dunn & Crutcher
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A few years ago the general counsel of one of the big banks told me that they only went to outside law firms for three reasons. First to get advice on what to do. That could be on a deal, a dispute or some other objective of the bank. It requires senior time and is not particularly price sensitive. Let’s call that ‘advisory work’.

The second reason is to find out what the law is. Despite having a sizeable team, sometimes they didn’t have the expertise they needed. They just wanted to know the black-letter legal position. Not particularly difficult and nowadays largely available for free on law firm websites or on the internet.

Thirdly for resource and execution. They know what they want to do and how to do it and now need the resource required to get it done. Let’s call this ‘execution work’.

It was apparent, even then, that it made no sense for law firms to charge the same rate for all three types of work. Advisory work is high value and requires lots of senior time. It suits advisers that have a low partner/associate ratio and the hourly rate is rightly high. These firms tend to be more lightly managed with a strong entrepreneurial culture.

Execution work in comparison requires a lot more associate time, supervised by partners. It requires a high number of associates per partner, the price is lower than for advisory work and is often susceptible to a fixed fee. Having a high associate leverage means there needs to be more management, a high focus on process and systems, lots of key performance indicators, project leaders and, increasingly, professional managers who have not grown up as fee-earners.

Of course, even for advisory-focused law firms, execution will always be important but their model allows them to be more efficient because senior lawyers can work more quickly than less experienced associates. These firms are also increasingly subcontracting elements of execution to cheaper firms, for example confirmatory due diligence, specialised areas such as pensions, environmental, real estate title and local law issues.

The top global English firms have historically driven their profitability through associate leverage. But the world is now changing. Low-cost providers are emerging, US law firms are offering an attractive low leverage model to clients and mid-size and regional firms are becoming stronger, fuelled in part by the US firms that turn to them for support. The impact of technology is also growing fast and will be significant.

As a result the global English firms have been left with a high leverage structure which is poorly suited to advisory work. While there are plenty of examples of pockets of high-quality advisory teams in these firms, they are sitting in an organisation pulling them in a different direction.

Senior and mid-level partners are under pressure to push work down to younger partners, let alone associates. And the lockstep model forces these firms to retire more senior partners in their early 50s just when they are seasoned enough to offer the judgement at the core of true advisory work.

There is plenty of anecdotal evidence supporting this with one of the greatest complaints of clients being that they don’t get enough partner time from some of the English firms. Clients also complain that being too exposed to associates, or even younger partners, for advisory work is inefficient because their relative lack of experience means they run up more time than more senior partners and lack the experience to advise on ‘what to do’ as opposed to ‘what the law is’.

Low leverage firms have a further advantage which is attractive to Millennials. These firms provide their trainees and associates with more face time with partners, they get more interesting work earlier in their careers and enjoy a more lightly managed and entrepreneurial culture.

The English global firms are responding by opening low-cost centres in Belfast, Glasgow and Manchester. But they are having to tackle this challenge just as the US firms are getting stronger in London, with a lower leverage model, the US law capability the English firms are struggling to match, a later retirement age for partners, access to US clients and higher profits.

The global English firms have substantial brands outside the US and an extensive network, which brings many advantages. They are certainly not going to disappear anytime soon but they face an increasing challenge in securing their previously pre-eminent position as strategic counsel.

It may be that the debate about consolidation in legal services needs to recognise that increasingly there will be firms that tend towards advisory work with a stronger partnership culture and firms that focus on execution work, which will be more corporate in their nature. They will need to be judged by different criteria and will in truth be deploying increasingly divergent business models.

Charlie Geffen (pictured) is chair of the London corporate practice at Gibson, Dunn & Crutcher.

Legal Business

Are you selling judgement or process? Few modern law firms can excel at both

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Comment Gibson, Dunn & Crutcher
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Charlie Geffen argues the legal market is segmenting between two diverging arenas

A few years ago the general counsel of one of the big banks told me that they only went to outside law firms for three reasons.

First to get advice on what to do. That could be on a deal, a dispute or some other objective of the bank. It requires senior time and is not particularly price sensitive. Let’s call that ‘advisory work’.

Legal Business

Cravath and Skadden check-in as Starwood derails Marriott merger to seal Chinese hotel takeover

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Dealwatch Cravath, Swaine & MooreGibson, Dunn & CrutcherSkadden, Arps, Slate, Meagher & Flom
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Cravath, Swaine & Moore, Skadden, Arps, Slate, Meagher & Flom and Gibson, Dunn & Crutcher are advising as Westin owner Starwood Hotels & Resorts Worldwide has called off its $12.2bn buyout agreement with Marriott in favour of a $13.2bn offer from a group of investors led by China’s Anbang Insurance Group.

The consortium, which comprises Anbang, J.C. Flowers & Co. and China’s Primavera Capital, are offering to acquire all of the outstanding shares of common stock of Starwood for a $78 per share in cash, an increase from the $76 per share proposal made by the consortium’s previous bid earlier this month.

According to the Starwood board, Anbang’s proposal constitutes a ‘superior offer’ and ‘the binding and fully financed proposal from the consortium provides a high degree of closing certainty’.

Cravath is representing Starwood with a team led by corporate partner Scott Barshay. The firm is also representing Starwood in connection with its existing agreement with Marriott.

Anbang has instructed Skadden as its legal adviser in the takeover bid with New York-based M&A partner Eileen Nugent, who is also the firm’s global co-head of transactions.

Advising Marriott is Gibson Dunn & Crutcher co-chair of the M&A practice group Stephen Glover. Marriott’s earlier deal with Starwood worth $12.2bn, would have catapulted it to become the world’s largest hotelier by a wide margin, adding 50% more rooms to Marriott’s portfolio.

The Chinese firm has been an aggressive buyer of US hotel properties of late and already owns New York’s iconic Waldorf Astoria.

jaishree.kalia@legalease.co.uk

Legal Business

US financials: Shearman & Sterling recovery falters as Gibson Dunn’s star rises higher

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Financial results 2015 Gibson, Dunn & CrutcherShearman & Sterling
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The two-year rebound at New York-headquartered Shearman & Sterling came to an abrupt end last year as profits per equity partner (PEP) sunk back below what partners achieved in 2007, outpaced by West Coast rival Gibson, Dunn & Crutcher which put in another strong performance as it continues its run as one of the country’s fastest growing firms.

Revenue rose slightly at Shearman, up 2% to $860m, with the firm’s M&A group putting in a strong performance.

PEP dropped by more than $60,000 at the firm last year, dropping 4% from $1.9m in 2014 to $1.84m last year. This puts PEP below what it achieved in 2007, with revenue still $61m below what it generated that year.

Shearman’s London office again outperformed the rest of the firm, though only by a small margin this year, with revenue up 3% to $149m. Deals carried out by the London office last year include two mandates for cable company Liberty Global, advising on its $8.2bn purchase of Cable & Wireless Communications and its investment in Lions Gate Entertainment, and a role advising the underwriters on ABN Amro’s €3.8bn IPO at the end of the year, the largest ever Dutch privatisation. Over the past five years the City office has grown by 43% and accounted for 17% of the firm’s global revenue last year.

Nick Buckworth (pictured), managing partner of Shearman’s London office told Legal Business: ‘The business is on track, we’re making the investments, we have the deals and we have quality partners that will help us drive the business. We experienced at the end of 2015 a softening of the market. We saw a lot of slippage on deals.’

While Shearman has been one of the slowest growing firms in the US, Gibson has been one of the fastest. It notched a 20th straight year of revenue growth in 2015, with revenue up 5% to $1.54bn. PEP was up 5% to $3.19m, while revenue per lawyer grew 4% to $1.27m.

tom.moore@legalease.co.uk

Legal Business

Taking silk: Quinn, Gibson and Freshfields heavyweights among new QCs in 107-strong round

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The Bar Freshfields Bruckhaus DeringerGibson, Dunn & CrutcherQuinn Emanuel Urquhart & Sullivan
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A trio of City heavyweights has been appointed among 107 new Queen’s Counsel (QC) announced today (11 January), an increase on last year’s round of 93. 

Of the nine solicitor advocates who applied, there were three successful candidates, a drop on 2014/15 when five solicitor advocates were appointed. This year’s appointments include Quinn Emanuel Urquhart & Sullivan arbitration head Stephen Jagusch (pictured), Gibson, Dunn & Crutcher international arbitration group co-chair Penny Madden, and Freshfields Bruckhaus Deringer London arbitration head Nigel Rawding.

However the Queen’s Counsel Selection Panel has said the number of females applicants taking silk remains ‘stubbornly low’.

A report on the 2015/16 competition showed there were 25 successful women applicants of the 48 who applied – the same amount as last year when 25 out of 43 female applicants were successful.

Nine applicants aged over 50 were appointed, the same as last year and the youngest successful applicant is 34 years old and the oldest is 57. One of the four applicants who declared a disability was successful. In 2014-15 three applicants who declared a disability were appointed. There were nine successful applicants who declared an ethnic origin other than white out of the 32 who applied, a dip on last year in which 10 applicants out of 24 were appointed.

Figures recorded since 1995 show that while applications have fallen, the success rate of those applying has vastly improved – two decades ago only 14% of all allocations for QC were successful while today the figure stands at 45%.

Justice Secretary Michael Gove will preside over an appointment ceremony at Westminster Hall on 22 February.

Chairman of the selection panel Helen Pitcher said: ‘We remain concerned that the number of female applicants remains stubbornly low, but I am pleased that of those women who did apply, 52% were successful. While I was pleased to note a rise in BAME applicants to 14% of applications it is disappointing that the success rate for BAME applicants was lower than that for applicants as a whole.’

Other high profile names to take silk include One Crown Office Row human rights barrister Marina Wheeler, the wife of Boris Johnson, public law barrister, Shaheed Fatima from Blackstone Chambers, 39 Essex Chambers’ Justine Thornton, and Wilberforce Chambers’ Tim Penny, who recently moved to the set from the now-dissolved 11 Stone Buildings.

Roche general counsel and company secretary, Funke Abimbola, who recently published a paper on social mobility and diversity in the profession with Byfield Consultancy, tells Legal Business: ‘The talent pool of those awarded silk is generally made up of the elitist of the profession. The process of application is biased towards to those with great networks and weighty referees – and not everyone will have the time to invest in the application process. Also, the blending of the roles of solicitor-advocate and the barrister hasn’t gone far enough – there are few differences between both roles now.’

‘As for the female diversity stats, this is just evident of stats at the senior end of the Bar generally. The Bar is, however, trying a lot to improve but such improvement in the next few years will continue to be marginal.’

sarah.downey@legalease.co.uk

The full list of Queen’s Counsel, by order of seniority:

Simon Paul Steven Cairnes

Jayne Margaret Adams

Kim Franklin

Kennedy Vernon Talbot

Michael Charles Anthony Bedford

Terence Edward Bergin

Peter Anthony Makepeace

Marina Wheeler

James Michael Scott Ramsden

Paul David Ozin

Steven Suppiah Perian

Timothy Charles Penny

Andrew John Moran

Henry James Witcomb

Jonathan Charles Ashley-Norman

Derek Anthony O’Sullivan

Ian James Clarke

Ian Francis Henderson

Sarah Joanne Lee

Cathryn Margaret McGahey

Michael Joseph Ivers

Kerry Louise Bretherton

Michael Andrew Horne

Andrew David Norton

Cyrus Rais Larizadeh

Aidan Patrick Casey

Douglas James Campbell

Richard Julian Henshaw Edwards

Nicholas John Grundy

Mark Eliot George Harper

Emma Rebecca Deacon

Adam John Weitzman

Katharine Susannah Gollop

Adam Sebastian Feest

Justine Thornton

Caroline Mary Shea

Siobhan Grey

Richard William Scott Ground

John Foster Harrison

Alan Grant Johns

Louise June Sweet

Gemma White

Nicholas James Johnson

Catrin Miranda Evans

Simon James Fox

Daniel Nicholas Tatton-Brown

Richard Duncan Atkinson

Philip Evans

Simon Charles Kilvington

William Laurence Latimer-Sayer

Daniel Lightman

William Owain Thomas

Aidan Vine

Thomas Charles Weekes

Jeremy Rupert Daniel Hyam

Oliver Edwin James Glasgow

Alexander Frederick Hickey

James Herbert Maxwell-Scott

Thomas Moody-Stuart

Tobias Augustine William Riley-Smith

Ben Matthew Valentin

Stephen Richard Jagusch

Giles Francis Sacheveral Cockings

Clodagh Maria Bradley

Richard Colin Wilson

Benjamin Roger Collins

James Ewins

James Abrahams

Bridget Maura Dolan

Thomas Richard Hinchliffe

Simon Spiro Malynicz

Kama Louise Melly

Peter Skelton

Clare Adele Sibson

David Ian Head

Stephen Moses

Harry David Glyn Steinberg

Julian Hector Marriott Kenny

Sudhanshu Swaroop

Richard Thomas Kimblin

Hannah Markham

Adam Charles Prest

Daniel Bayfield

Salim Abdool Hamid Moollan

Anya, Lucie, Victoria Proops

Rosalind Jayne Phelps

Daniel Benjamin Squires

David Niaz Mohyuddin

Jonathan Michael Cohen

Brian Anthony Kennelly

Paul Stuart Mitchell

John Dempster McKendrick

Guy Luke Vassall-Adams

Maya Elizabeth Jane Lester

David Stewart Mumford

Alexander Henry Spencer Booth

Lisa Virginia Busch

Riaz Hussain

Gerald Carlo Facenna

Shaheed Fatima

Laurent Charles Sykes

Jonathan Michael Davey

Jonathan Adam Hilliard

Andrew Smith

Nigel Kenneth Rawding

Thomas Plewman

Penelope Jane Madden