Legal Business

‘A curious atmosphere of consensus’ – the dangers of groupthink

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Comment Herbert Smith Freehills
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HSF fraud veteran Robert Hunter on how smart teams can make bad decisions

Many admire John Kennedy and his advisers’ deft handling of the Cuban missile crisis. It is generally thought to result from some of the best-judged decisions of the era. Yet a year earlier, much the same group of people decided to support the Bay of Pigs invasion (a crackpot scheme for the invasion of Cuba in which the US pitted 1,600 men against 200,000), conversely thought of as one of the most idiotic.

Legal Business

HSF brings in two senior non-execs amid shake-up to governance board

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Leadership Herbert Smith Freehills
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Herbert Smith Freehills (HSF) has shaken up its global council to bring in two non-executives. The move sees Commonwealth Bank of Australia director Jane Hemstritch and senior independent director of insurer at RSA Johanna Waterous become the first external members on HSF’s main oversight body.

In a reshuffle that sees the global council expand to 15 members, the HSF partnership has voted to appoint the experienced professional services sector duo, as London head of litigation Tim Parkes and Melbourne-based projects partner Jane Hodder are replaced by corporate partners Al Donald and Nigel Farr. All four new members join the council on 1 May, with Donald and Farr handed three-year terms.

The Melbourne-based Hemstritch made her name at bluechip consultancy Accenture, where she served as Asia Pacific managing director before retiring in 2007. Since then she has taken on non-executive director posts at a host of Australia’s largest companies, including the Commonwealth Bank of Australia, construction giant Lend Lease and oil major Santos.

London-based Waterous made her name at McKinsey, where she co-led the consultant’s European retail and global consumer marketing practices. Since leaving McKinsey in 2007 after more than 20 years, Waterous took on a non-executive directorship at insurer RSA. Since then she has become a senior independent director at British drinks can maker Rexam, recently acquired by US rival Ball for $6.7bn, a non-executive director at UK supermarket Morrisons and an operating partner at private equity houses Duke Street and Tri-Artisan Capital Partners.

The drive to appoint two non-executive members initially came from former HSF senior partner Jonathan Scott, and was completed under his successor James Palmer. The appointments take the number of women on the 15-member council to five, representing a third of the body. The council meets on a quarterly basis, with one annual review.

Moves to refine governance comes as HSF moves to secure the initiative in the wake of the 2012 tie-up between Herbert Smith and Australian leader Freehills.

Palmer (pictured) told Legal Business: ‘I am confident that Jane and Johanna will provide fresh insights and perspective that will add to the quality of our thinking about our strategy and its implementation and will do so very effectively.’

Waterous said: ‘I am delighted to be joining Herbert Smith Freehills at a time when professional service firms and the legal industry, in particular, are facing unprecedented change.’

tom.moore@legalease.co.uk

Click here to read Consumed, Legal Business’s in-depth analysis of the post-merger prospects of HSF

Legal Business

Revolving doors: European hires as HSF recruits in Germany and Bird & Bird focuses on Denmark while Ogier hires from Kirkland

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Strategic recruitment Bird & BirdHerbert Smith FreehillsOgier
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King & Wood Mallesons real estate team hire from Eversheds may have made the headlines last week, but there were plenty of notable hires elsewhere. Herbert Smith Freehills (HSF) bolstered its Frankfurt office which it launched in 2013 with a finance partner from K&L Gates while Bird & Bird welcomed a new partner in Denmark and Ogier added to its dispute resolution team in the Cayman Islands with a hire from Kirkland & Ellis’ London office.

Julia Mueller joined HSF’s Frankfurt office as its ninth lateral since opening in the city in April 2013. She is dual qualified in English and German law and specialises in corporate, leveraged and acquisition finance. Before joining K&L Gates in May 2012 she had worked at White & Case, helping to establish its acquisition finance group in Germany and before then was at Allen & Overy.

Ralf Thaeter, HSF’s German head, said: ‘Germany is a very important market for the firm and in Julia we have recruited someone with the reputation, quality and experience that will enable us to build the high quality finance practice we need to continue to compete for high value cross-border and domestic transactional work.’

Also in Europe, Bird & Bird boosted its corporate and M&A practice in Denmark, with the hire of Morton Brehm Jensen from Delacour, who specialises in company and tax law.

Meanwhile, Ogier has appointed Kirkland & Ellis’ Ulrich Payne as a partner in its Cayman Islands dispute resolution team. Payne, who also previously worked at Simmons & Simmons and Hogan Llovells, joins from Kirkland’s London office. His background is in international disputes, usually with a financial aspect, and has worked in the UK, France, Germany and Belgium, and has advised on disputes in Russia, the Middle East and the US.

Payne has joined Ogier’s Cayman Islands team which is led by partner Rachael Reynolds. Reynolds said: ‘Ulrich is a great addition to the team. His practice as a partner at Kirkland & Ellis focused on complex international financial disputes and arbitration, and he has many years’ experience advising banks and other financial institutions, accountants and high net worth individuals on complex financial products and transactional issues. The Cayman Dispute Resolution team is in an expansion phase and Ulrich’s appointment further strengthens our offering, particularly in the area of complex financial services litigation.’

Meanwhile at home, DAC Beachcroft bolstered its professional liability team in Bristol, while Leigh Day boosted its Manchester team with a hire from Irwin Mitchell.

Pensions specialist Rebecca Smith joins DAC from RPC, where she was a legal director, prior to that she was a partner with CMS Cameron McKenna. Smith primarily acts for pension trustees and administrators, benefit consultants and actuaries, and will be based in Bristol.

Further north, claimant law firm Leigh Day has appointed industrial diseases partner Helen Ashton to its Manchester team. Aston joins from Irwin Mitchell’s London office where she has more than 15-years’ experience.

kathryn.mccann@legalease.co.uk

Legal Business

Dealwatch: Travers, HSF and Paul Weiss advise on $2.1bn Pace sale

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Corporate Herbert Smith FreehillsPaul, Weiss, Rifkind, Wharton & GarrisonTravers Smith
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Travers Smith, Herbert Smith Freehills and Paul, Weiss, Rifkind, Wharton & Garrison have all landed roles on the $2.1bn sale of Pace to Arris as another UK company gets acquired by the US.

UK provider of broadband and pay TV technology Pace has been brought by US-based broadband media technology company Arris Group for $2.1bn.

Travers’ team is advising longstanding client Pace on the transaction having previously acted for Pace on the purchase of broadband developer Aurora in 2013 and on its 2010 acquisition of broadband company 2Wire. This time around the firm’s team was led by head of corporate Spencer Summerfield, with additional specialist advice provided by competition partner Nigel Seay and employee incentives partner Mahesh Varia. Paul Weiss advised Pace on US matters.

Arris turned to a Herbert Smith Freehills team in the UK led by corporate partners Gavin Davies and Alex Kay, while in the US it used Troutman Sanders.

Travers’ Summerfield said: ‘We are delighted to have assisted our long-standing client Pace on the transaction, which provides a significant platform for their future growth and creates a major new player in the global broadband media technology market.’

Under the terms, Pace shareholders will receive cash and stock in the new holding company at 132.5 pence in cash for each Pace share and 0.1455 of new Arris shares. The deal is being done through a scheme of arrangement with the new holding company listed on the NASDAQ stock exchange. The transaction is subject to a number of conditions and is expected to close in late 2015.

The sale came in a bid to expand Pace’s international presence and expand its product portfolio across software and services. The combination will create a broadband media technology company with estimated revenue of US $8bn and 8,500 employees worldwide.

jaishree.kalia@legalease.co.uk

Legal Business

Partner promotions: Herbert Smith Freehills makes up 21 to partner in 43% female round

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Partnership promotions Herbert Smith Freehills
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For the second time since its UK-Australia merger in 2012, the bulk of partner promotions at Herbert Smith Freehills have come from Asia Pacific, while a record 43% of those being made up are women.

Just over half of the 21 lawyers promoted to the partnership came in Asia Pacific, with the firm investing heavily in Tokyo, where three associates join the partnership in the disputes and corporate groups. Six of the 11 new partners in the Asia Pacific came in Australia, the home of legacy Freehills, as Melbourne trio Joanne Draper (projects), Stefanie Wilkinson (corporate) and Jacqueline Wootton (disputes) all made the grade.

Nine lawyers were made up in the City, two down on last year, and the firm again swerved continental Europe as it made up just one new partner in the form of Madrid-based private equity M&A specialist Pablo Garcia-Nieto. Seeking to establish a stronger footing in continental Europe, the firm has instead turned to the lateral market over the past 12 months, hiring the likes of Dirk Hamann from Freshfields Bruckhaus Deringer, with Europe making up half of the firm’s 12 lateral hires in that period.

However, building on last year’s 35% female round, this year’s round will boost gender diversity after the firm publically committed to a 25% female partnership by May 2017 and 30% by May 2019. Having introduced targeted career development, mentoring and coaching, unconscious bias training for partners and inclusive leadership development, nine of the 21 new partners are women, representing 43% of the 2015 promotions round.

Mark Rigotti, joint chief executive, said: ‘I’m delighted that nearly half of our new partners are women. This is a clear demonstration of the firm’s commitment to gender diversity within the legal profession and a further step towards our stated target of a 30% female partnership by 2019.’

Herbert Smith Freehills’ 2015 partner promotions in full:

UK and EMEA

Dinesh Banani – Corporate (US Securities), London

Neil Blake – Disputes, London

Heather Culshaw – Finance, London

Harry Edwards – Disputes, London

Pablo Garcia-Nieto – Corporate (M&A/Private Equity), Madrid

Tim Healey – Real Estate (Construction), London

Catherine Howard – Real Estate (Planning), London

Sarah McNally – Disputes, London

Alice Rogers – Real Estate, London

Aurell Taussig – Corporate (Tax), London

Asia-Pacific

Bryony Adams – Disputes, Sydney

Paul Apathy – Finance, Sydney

Joanne Draper – Projects, Melbourne

Christopher Hunt – Disputes, Tokyo

Andrew McLean – Finance, Perth

Richard Norridge – Disputes, Hong Kong

Alexis Papasolomontos – Corporate (M&A), Tokyo

Mark Robinson – Corporate (TMT), Singapore

Stefanie Wilkinson – Corporate, Melbourne

Elaine Wong – Disputes, Tokyo

Jacqueline Wootton – Disputes, Melbourne

tom.moore@legalease.co.uk

Legal Business

Links, A&O and HSF win roles on Sabadell’s £1.7bn TSB takeover

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Corporate Allen & OveryHerbert Smith FreehillsLinklaters
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Less than a year after Lloyds floated TSB Bank, Linklaters, Allen & Overy (A&O) and Herbert Smith Freehills (HSF) all secured instructions on its high-profile takeover by Spain’s Banco Sabadell.

Taxpayer-backed lender Lloyds Banking Group formalised the 340p-a-share offer in March and agreed to sell its 50% stake in TSB. The deal values TSB, which is already the UK’s seventh-largest retail bank with 4.5 million customers, at £1.7bn.

Legal Business

Protecting the brand: British American Tobacco instructs Herbert Smith Freehills for plain packaging challenge

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Litigation Herbert Smith FreehillsHogan Lovells
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British American Tobacco (BAT) has gifted Herbert Smith Freehills (HSF) with a major disputes mandate, and instructed the firm as the tobacco giant challenges the UK government’s plans to bring in plain cigarette packaging.

The London-headquartered BAT has further instructed Hogan Lovells to advise on intellectual property issues, while barristers brought in includes 39 Essex Chambers’ Nigel Pleming QC and One Essex Court’s Geoffrey Hobbs QC.

BAT constitutes a longstanding client of HSF, with City partner Philip Pfeffer advising on numerous judicial challenges to tobacco control regulatory measures including plain packaging, graphic health warnings, and ingredient bans. New York partner Benjamin Rubinstein also successfully represented the tobacco major in a decade-long civil racketeering lawsuit, filed by the US justice department against multiple US tobacco companies, seeking $280bn in disgorgement of past profits.

BAT is one of several tobacco giants vowing to fight the UK government in court, after Parliament approved the Standardised Packaging of Tobacco Products Regulations 2015 which includes a ban on cigarette packet branding. Set to come into force in May next year, tobacco manufacturers will be forced to sell cigarettes in plain packets with uniform size, shape and design featuring only brand name and health warnings.

Prior to a debate in the House of Lords, BAT confirmed it would ‘commence a legal challenge against the UK Government, if the House of Lords supports MPs who voted to implement plain packaging for tobacco products’.

BAT’s corporate and regulatory affairs director Jerome Abelman said: ‘This legislation is a case of the UK Government taking property from a UK business without paying for it. That is illegal under both UK and European law.’

‘Legal action is not something we want to undertake, nor is it something we enter into lightly – but the UK Government has left us with no other choice after running what can only be described as a flawed consultation process. Any business that has property taken away from it by the state would inevitably want to challenge and seek compensation.’

BAT intends to argue that plain packaging violates a number of UK, European Union (EU) and international laws, including EU trademark laws, as well as World Trade Organisation rules regarding international trade.

In December 2012 Australia became the first country to introduce plain packaging while last month Ireland’s president signed into law the Public Health (Standardised Packaging of Tobacco) Bill.

Other firms acting on behalf of Big Tobacco include Arthur Cox which is currently representing Japan Tobacco in its dispute over plain packaging legislation against the Irish government.

sarah.downey@legalease.co.uk

Legal Business

Dealwatch: Linklaters, A&O and HSF win places on Sabadell’s £1.7bn TSB offer

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Corporate Allen & OveryHerbert Smith FreehillsLinklaters
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Linklaters, Allen & Overy (A&O) and Herbert Smith Freehills (HSF) have all been instructed on the high profile £1.7bn takeover offer for TSB by Spain’s Banco Sabadell, in a bid made less than a year after Lloyds floated the bank.

HSF is acting for TSB with a team led by senior partner James Palmer and corporate partner Mike Flockhart. Palmer has been advising TSB, alongside fellow corporate partner Nick Moore and outsourcing partner Nick Pantlin, and worked closely with general counsel Susan Crichton, on its initial public offering (IPO) and all aspects of its separation of Lloyds Bank, including on the material business and IT services arrangements required for TSB to operate as a standalone bank post-IPO.

Linklaters heavyweight corporate partner Matthew Bland, who led on the initial £1.5bn IPO of TSB for its longstanding client Lloyds, is understood to be leading on talks with Sabadell for the lender as well. Bland has represented Lloyds Bank for nearly a decade. His position as adviser on the £1.5bn IPO follows lead roles on Lloyds TSB’s takeover of HBOS in 2008 and related £5.5bn recapitalisation, as well as a £22.6bn combined rights issue in 2009. A&O partner Richard Browne, meanwhile, is leading a team advising Sabadell.

TSB, which is already the UK’s seventh largest retail bank with 4.5 million customers, is being spun off by Lloyds through a gradual sell-down of its stake in the business following an IPO in June 2014. The bank’s board has indicated it is willing to recommend the offer should agreement be reached on other terms and conditions.

sarah.downey@legalease.co.uk

Legal Business

Deal watch: Corporate activity in February 2015

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Corporate Herbert Smith Freehills
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SKADDEN, FRESHFIELDS AND SLAUGHTERS LAND KEY ROLES ON £4.3BN CAN MAKER TIE-UP

Skadden, Arps, Slate, Meagher & Flom advised Ball Corporation on its £4.3bn acquisition of UK-based Rexam, while Slaughter and May covered EU competition aspects. Freshfields Bruckhaus Deringer advised Rexam, which boasts Coca-Cola, Red Bull and Heineken among its clients, on the deal.

 

Legal Business

Relying on friends: HSF gives up local law licence as it teams up with Singapore outfit

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Singapore Herbert Smith Freehills
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Herbert Smith Freehills (HSF) has entered into a best friend agreement with Singapore law firm Prolegis after giving up its Qualifying Foreign Law Practice in the city-state.

The decision means HSF can no longer practice Singapore law with its 11-partner office, led by arbitration specialist Alastair Henderson, which is now streamlining its operation to focus on UK, Australian and US law used in finance, M&A and international arbitration. The firm, which was awarded its local licence in 2008, will now send local law advice to three-lawyer Prolegis.

Prolegis, which was established in 2012, is run by a single partner Ban Leong Oo, a former HSF lawyer in London who served a seven-year stint as partner at Drew & Napier and was more recently a consultant at Allen & Overy.

Even with this model in place, the move reduces HSF’s Singapore law capability, having formerly had five lawyers able to practice local law compared to the three lawyers at Prolegis. One of Prolegis’ three lawyers was recently hired from HSF, corporate of counsel Kwok-Hon Lee, who is known for his work with insurer Prudential. HSF’s existing office will now revert to being a Foreign Law Practice.

Ban Leong commented: ‘South East Asia is going through unprecedented growth and a significant amount of regional legal work is being run out of Singapore and governed by Singapore law. Prolegis and Herbert Smith Freehills share a strong working relationship; I know the partners well and look forward to working alongside them.’

Henderson, South East Asia managing partner, added: ‘I am delighted that our clients will have access to high quality Singapore law advice from Prolegis. Both firms are strongly committed to this relationship and to an effective and efficient collaboration. We expect to be working very closely with Prolegis given its specialties in corporate and commercial law related to M&A and strategic investments.’

tom.moore@legalease.co.uk