Legal Business

‘A critical first step’: WLG sets sights on global stage with Canadian tie-up

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Wragge Lawrence Graham & Co (WLG) has set out its global ambitions, following the announcement in July of its union with Canadian firm Gowlings. Gowling WLG will create a 622-partner law firm across 18 cities, and is billed as a new Global 100 practice with revenues estimated at over £400m.

Although some peers have expressed surprise at WLG’s decision to go into the Canadian market, the combination is being pitched by management as a platform to reboot the combined firm as truly global.

Legal Business

Financials 2014/15: Wragge reveals £181m turnover for first full year post-merger

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Ahead of its recently announced tie-up in Canada, Wragge Lawrence Graham & Co has posted turnover of £181m for its first full financial year post-merger, a moderate revenue increase of 5% over the combined results of the legacy firms Wragge & Co and Lawrence Graham.

At the time of their merger on 1 May last year, Wragges and Lawrence Graham had created a firm with £172m in revenue for the financial year 2013/14. Profit at the firm is down 3%, from £58.7m to £57m, with the firm operating at a margin of 32% down from 34% last year due, according to the firm, to ‘one-off costs related to merger integration and UKGAAP accounting requirements related to the firm’s new premises in Birmingham’.

The firm has not yet revealed PEP or confirmed the number of full equity partners at the combined firm but using the combined 139 equity partners at the legacy firms from the Legal Business 100 last year, would give a PEP figure of £410,000.

Speaking to Legal Business magazine, Wragge’s chief executive David Fennell (pictured) said the figures represent a strong platform for the firm to go into its combination with Canadian firm Gowlings, which the firm announced earlier this week.

‘We are really pleased with the results given it is our first year of merger and there was quite a lot of consolidation and integration work to do that in that period,’ he said. ‘The standout performance in the firm last year was our real estate group. For that group, turnover rose to £61m in addition to £11m for the firm’s construction and real estate finance team – a significant success story for us.’

The firm was also named Real Estate Team of Year at this year’s Legal Business Awards for its work on the Nine Elms regeneration project.

The firm’s corporate, finance and private capital group also delivered a strong year, with UK revenues of £36m. Highlights included acting for Formation Capital on its £477.7m acquisition of NHP Group and advising Birmingham City Council on the £307m sale of the NEC Group.

In life sciences, the firm advised AstraZeneca on its $1.275bn collaboration agreement with Innate Pharma to develop new cancer treatments, while the technology sector team secured a Court of Appeal judgment in favour of ASSIA in its high-profile IP dispute with BT Infinity broadband. The energy team advised Grid Essence on the sale and £40m re-financing of a portfolio of solar PV parks, and supported the first ever solar farm project in Sierra Leone.

According to Fennell, the firm’s offices in Paris and Munich also performed well, with the Paris office growing to €12m, an increase of 38% year-on-year, while Munich has seen growth of 58% year-on-year. ‘Those are very good performances if you think about what is happening in the wider European economy,’ he added.

kathryn.mccann@legalease.co.uk

Legal Business

Wragges in surprise union with mid-pack Canada firm to create 600-partner global player

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There has been plenty of speculation about US and UK firms moving into Canada, but until now UK stalwart Wragge Lawrence Graham & Co (WLG) had not been high up the list of suitors in the profession’s mind. Nevertheless, WLG this week made the surprise announcement that it is to combine with the sizeable Canadian practice Gowlings in a move that will create a 622-partner law firm across 18 cities.

The move, which is billed as creating a Global 100 practice in revenue terms, is also by far the most ambitious international move by WLG and puts flesh on the UK firm’s stated plans to secure a string of tie-ups globally.

The combined firm, which will be branded as Gowling WLG, will launch in January 2016 and will be structured as a UK company limited by guarantee (CLG), with both profits and partnerships kept separate. The deal comes after Wragge & Co and Lawrence Graham merged on 1 May 2014.

The full service Ottawa-bred Gowlings had been through a series of domestic mergers to build a national network before launching in the UK in 2008. It has been previously linked speculatively as a potential partner for several other foreign law firms.

The firm will be governed by a joint CLG board with three representatives from each firm, including WLG chief executive David Fennell and Gowlings’ chief executive and chairman Scott Jolliffe. There will be an additional two representatives from both firms, although these positions have yet to be filled. WLG’s current chairman, Andrew Witts, will remain in his role for WLG offices in the UK, Europe and Asia.

Both firms have around 700 lawyers, which will bring the total combined headcount to 1,400. Though Gowlings does not officially release financial information, WLG said the tie-up would create a combined practice with revenues of over £400m. WLG in 2013/14 generated around £170m between its two legacy firms.

Speaking to Legal Business magazine, Fennell (pictured) said the combination was a result of a best-friend relationship that has spanned the last 20 years. ‘We have been talking more closely to Gowlings for the last six to 12 months. Both of us undertook strategic reviews in that period and both firms developed very similar strategies, which meant that Gowlings made absolutely perfect sense to us. The talks were led by senior management from both firms. Myself, Andrew Witts, Quentin Poole and Jenny Hardy on the Wragges side and Scott Jolliffe, Lorne Segal and Peter Lukasiewicz on the Gowlings side. We had a very strong endorsement from our partnership for this combination.’

The combination will hand WLG a presence in a host of Canadian cities, including Montreal, Ottawa, Toronto and Vancouver, as well as an office in Beijing, while the majority of Gowlings’ seven-partner London arm will join WLG at Four More London before January 2016.

There is also an intention to add more firms to Gowling WLG in the future, with Germany singled out by Fennell as a key priority. He added: ‘We are not in active talks with other firms at the moment. But it is our intention to continue to develop this combination further, so to that end we are interested in talking to other law firms particularly in those areas that our clients are telling us that are of most interest to them – Europe and Asia Pacific.’

kathryn.mccann@legalease.co.uk

Legal Business

WLG’s Poole changes retirement plans to take on international head role

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As Wragge Lawrence Graham & Co continues its post-merger integration, stalwart Quentin Poole (pictured) has taken on a new role as the firm’s international head in a bid to strengthen its overseas offering.

With his senior partner position being phased out, Poole will now devote all of his time to Wragge’s international business with responsibility for strengthening the firm’s current international offering and best friend networks, as well as considering new opportunities. Poole was appointed by the firm’s board without a time limit on the role.

Speaking to Legal Business, Poole said: ‘Our international business has become such a crucial part of what we do. In the last five or six years it has increased from 10% to 30% of our business. If you want to keep pace with your clients, you’ve got to internationalise. We really felt that somebody needed to devote a lot of time and attention to our international strategy and how that plays out. Its development is a major focus of the firm.’

The plan to phase out the senior partner role was approved by legacy Wragge & Co before its 2013 merger with Lawrence Graham in an attempt to clarify responsibilities of the two full time senior and managing partners at the firm.

Chairman Andrew Witts and chief executive David Fennel will carry on their respective roles, and over the last 12 months have taken on most of the non-international senior partner responsibilities.

‘I had actually planned to stand down and retire on 30 April, so from my point of view it was very exciting to be offered this opportunity and from the firm’s point of view it works well because it very much matches my skillset and I think there would have been some sort of gap if I had just bailed out,’ Poole added.

kathryn.mccann@legalease.co.uk

Legal Business

Partner promotions: Wragge Lawrence Graham promotes six to partner

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One year on from its merger, Wragge Lawrence Graham & Co (WLG) has promoted six new partners across the firm’s corporate, energy, dispute resolution and real estate sectors.

The firm’s real estate practice was the greatest beneficiary with housing and regeneration specialist Richard Beckingsale, real estate and energy lawyer Helen Emmerson and Nisha Jassal all being made up in the practice which will now house 45 partners.

Gareth Baker was the only corporate lawyer to join the partnership while disputes was bolstered by commercial litigator Andrew Nugent Smith and Tom Price, who focuses on international arbitration.

In 2014, Lawrence Graham made up nearly the same number as this round by itself with five partners promoted in its real estate, corporate and disputes practices.

WLG’s chief executive David Fennell said: ‘We look for something special in our prospective partners – outstanding technical skills, the ability to give clients a truly distinctive experience and the creative energy to help clients solve their problems. These individuals have all three in spades and I am very pleased to welcome them into our partnership.’

The real estate team at Wragge’s, which won real estate team of the year at the Legal Business Awards 2015, recently worked on the sale of the National Exhibition Centre (NEC) to Lloyds Banking Group’s private equity arm LDC, in one of the biggest ever sales agreed by Birmingham City Council.

Wragge’s team was led by corporate partner David Vaughan, who advised on all aspects of the sale including the pre-sale structuring, pensions, leases and other property arrangements, sale process and preferred bidder negotiations. Wragge’s Robert Caddick, commercial development and investment chairman, led on the real estate aspects of the transaction.

Full list of partner promotions:

Gareth Baker, London, corporate

Richard Beckingsale, Birmingham, real estate

Helen Emmerson, Birmingham, real estate

Nisha Jassal, Birmingham, real estate

Andrew Nugent Smith, Birmingham, disputes

Tom Price, Birmingham, disputes

kathryn.mccann@legalease.co.uk

Legal Business

Listing in London: WLG and Travers advise as Gabelli Value Plus raises £100m in IPO

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Wragge Lawrence Graham & Co (WLG) has advised new investment trust Gabelli Value Plus on its £100m initial public offering (IPO) on the London Stock Exchange as it targets further work from US fund manager GAMCO Investors.

Investment funds head Nick Heather led WLG’s team, assisted by fellow funds partner John Reed and tax partner Michael Murphy. Travers Smith advised Investec Bank, as sponsor, sole global co-ordinator and bookrunner to the transaction with a team led by partner Aaron Stocks.

The trust is managed by New York-based investment manager Gabelli Funds – a wholly-owned subsidiary of GAMCO which has assets under management of approximately $46.9bn.

Commenting on the IPO, Heather said: ‘We are very pleased to have acted on the launch of Gabelli Value Plus, which we hope will be the first of many transactions for significant US fund manager GAMCO. I am also pleased that from first instruction to launch was a period of just under two months (with Christmas intervening) which is a considerable achievement on a deal of this complexity.’

Stocks added: ‘It is fantastic to see a new US equities fund being raised on the London market. This demonstrates the strength of the UK listed investment funds market and its capacity to accept a wide variety of investment strategies.’

The funds team at WLG also recently acted on two sizeable real estate transactions over the last month. The first saw the team advise on the formation, fund raise and initial deployment of £30m in capital for Horizon Long Lease Housing, while the second saw the team act for AEW UK South East Office Fund LP (AEW SEOF) on a £75m secondary fund raise.

kathryn.mccann@legalease.co.uk

Legal Business

Birmingham’s £307m NEC sale puts the limelight on Eversheds, WLG and Gateley

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Lloyds’ private equity arm acquires landmark event venue

Birmingham City Council brought in the New Year with one of its largest ever sales with Eversheds, Wragge Lawrence Graham & Co (WLG) and Gateley all winning mandates on the sale of the National Exhibition Centre (NEC) to Lloyds Banking Group’s private equity arm LDC.

WLG acted for the council on the £307m deal, which is for all NEC Group businesses except the leases of the Hilton Metropole and Crowne Plaza hotels. That included a 125-year lease for the NEC site itself plus a 25-year leasehold interest in the International Convention Centre and Barclaycard Arena. The transaction involved a substantial amount of property work as well as corporate aspects and saw Eversheds act for LDC, with Gateley for the management.

Legal Business

Financials 2013/14: Wragges last accounts show rise in profit as number of staff falls

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Wragge & Co’s last limited liability partnership (LLP) accounts before it merged with Lawrence Graham show that profit before remuneration grew by 8%, climbing from £39.5m to £42.6m as the number of staff employed fell by 106.

Turnover at the firm grew by 0.5%, from £120.5m to £121.2m, but profitability was supported by a drop in headcount by more than 100 employees (a combination of 28 legal staff and 78 support staff) with overall staff costs falling by 7%, from £47.4m in the same period last year to £44.4m for 2014. The firm’s cash in hand and at bank also fell, dropping by more than half from £25.5m in 2013 to £12m in 2014.

The average profits per equity partner increased by nearly 14.2% from £339,000 to £386,000, while the profit share paid to the highest member went up by nearly 73% from £560,000 to £967,000.

In July 2014, the firm merged with Lawrence Graham and unveiled the results of its legacy firms, creating a firm with £172m in revenues and £58.7m in profit, operating at a margin of 34%.

Lawrence Graham achieved a significant reversal of a double digit fall in profits in 2012/13 by posting a net profit of £17.2m. Its PEP subsequently increased by 60% on the £260,000 posted in 2012/13 to £419,000.

The reversal in fortunes was in part explained by the fall in profits experienced by Lawrence Graham in 2012/13, which the firm attributed to significant property costs from its More London HQ. This expense was addressed in the last financial year, with Bond Dickinson subletting 20,000 sq ft of space.

kathryn.mccann@legalease.co.uk

Legal Business

Selling the NEC: Eversheds, Wragge Lawrence Graham and Gateley on Birmingham’s £307m deal

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Eversheds, Wragge Lawrence Graham & Co, and Gateley have all led on the sale of the National Exhibition Centre (NEC) to Lloyds Banking Group’s private equity arm LDC, one of the biggest ever sales agreed by Birmingham City Council.

Wragge Lawrence Graham and financial adviser Gleacher Shacklock acted for the council on the £307m deal, while Eversheds acted for LDC and Gateley for management. The transaction is for all NEC Group businesses including a 125-year lease for the NEC site and a 25-year leasehold interest in the International Convention Centre and Barclaycard Arena. However, the council is retaining the leases of the Hilton Metropole and Crowne Plaza hotels on the NEC site.

Wragge’s team was led by corporate partner David Vaughan, who advised on all aspects of the sale including the pre-sale structuring, pensions, leases and other property arrangements, sale process and preferred bidder negotiations. Wragge’s Robert Caddick, commercial development and investment chairman, led on the real estate aspects of the transaction.

Eversheds partner Sue Lewis led the team acting on the LDC side alongside partner Patrick Davis while Gateley’s private equity head Paul Hayward acted for management. Lewis said: ‘We had a large team from Eversheds and although it’s a corporate transaction it is substantially property led as you can tell from the assets included within it. In the Birmingham office we have a strong and longstanding relationship with LDC locally.’

She added: ‘We have been working on this for quite a long time – since late spring/early summer last year. It’s been a long process with lots of time and effort put into it.’

kathryn.mccann@legalease.co.uk

Legal Business

‘The costs have been managed hard’ – LG profits in sharp rebound as two parts of Wragge Lawrence Graham confirm 2013/14 results

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Recently formed national player Wragge Lawrence Graham & Co has unveiled the combined results of its legacy firms for the last financial year, having created a firm with £172m in revenues and £58.7m in profit, operating at a margin of 34%.

Revenue growth of the legacy firms was below average last year. Wragge & Co posted £121.2m in turnover for 2013/14, an increase of 1% on the £120.5m of 2012/13. Lawrence Graham, meanwhile, saw a 2% fall in turnover from £51.8m to £50.8m.

Profit performance was much stronger. Wragges’ net profit of £41.5m equated to a 9% increase in profits per equity partner from £338,000 to £367,000. Lawrence Graham achieved a significant reversal of a double digit fall in profits in 2012/13 by posting a net profit of £17.2m. Its PEP has subsequently increased by 60% on the £260,000 posted in 2012/13 to £419,000.

Commenting on the startling turnaround to its bottom line, Hugh Maule, former managing partner of Lawrence Graham but now head of corporate, finance and private capital at the new firm, told Legal Business: ‘The costs have been managed hard. That’s helped a significant reversal in terms of the profitability of the business during the year. There wasn’t any single item that dominated – in terms of operating to budget, we had better figures on every single line and the cost line from people, to IT, to HR – that accumulative effect was quite significant. Real estate was the driver for this year’s performance.’

The reversal is in part explained by the fall in profits experienced by Lawrence Graham in 2012/13, which the firm attributed to significant property costs from its More London HQ. This expense was addressed in the last financial year, with Bond Dickinson subletting 20,000 sq ft of space.

The renaissance of real estate work has also helped, with turnover across both legacy firms in this practice area increasing 15%. It now accounts for a third of the merged firm’s turnover, around £56m.

The firm’s chairman, Andrew Witts, said: ‘We have made a strong start to life as Wragge Lawrence Graham & Co and will continue to invest in the people, practices, sectors and locations that will take us forward. Both clients and our people are already experiencing the benefits that being a bigger and better firm can offer.’

mark.mcateer@legalease.co.uk