Legal Business

Hogan Lovells’ ambitious capital expansion draws in second HSF partner

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Strategic recruitment Herbert Smith FreehillsHogan Lovells
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As Herbert Smith Freehills (HSF) continues to lose London partners so Hogan Lovells is in the midst of aggressively bulking up in the capital and today (5 November) announced internally that HSF environmental partner Louise Moore will re-join the firm.

Moore – who focuses on M&A and private equity and has advised high profile clients including Energy Capital Partners, Chevron, BP and EDF – will re-join the transatlantic firm’s London office in early 2014, having trained with legacy Lovells and become an environmental partner before moving to HSF in 2007.

Commenting on Moore’s arrival, Andrew Skipper, global co-head of Hogan Lovells’ corporate practice said: ‘Louise has a strong global reputation for environmental work and we are delighted to have her back. Her skills and experience in the field speak for themselves and she is a great fit with our practice, complementing perfectly our corporate, disputes and energy and infrastructure teams.’

Moore added: ‘Hogan Lovells offers an exceptional international platform to really develop an unparalleled global environmental team which is integrated with its market-leading transactional and disputes practices.’

Hogan Lovells has made a number of significant hires into its London office this year, and is expected to make more. This is its second raid on HSF’s London office in under six months, after it hired tax litigation partner Rupert Shiers as head of direct tax disputes in June, and more recently brought on Field Fisher Waterhouse’s privacy and information group head Eduardo Ustaran. Ustaran is notably being held to a 19-month notice period, keeping him at Field Fisher until May 2015. Elsewhere, SJ Berwin private equity partner Ed Harris also quit for Hogan Lovells in late October.

Meanwhile, for HSF, Moore’s move follows disputes star Ted Greeno’s departure for Quinn Emanuel Urquhart & Sullivan earlier this year; London corporate fraud and asset tracing head Simon Bushell’s move to Latham & Watkins in February; and financial services duo Martyn Hopper and Nikunj Kiri arrival at Linklaters in January.

sarah.downey@legalease.co.uk

Legal Business

Going nuclear – Herbert Smith advises EDF on £16bn power plant deal

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Corporate Herbert Smith Freehills
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The UK government’s game-changing decision to build the first nuclear power plant for a generation has seen Herbert Smith Freehills advise longstanding client EDF Energy on the deal.

The £16bn agreement to build two European pressurised reactors at the Hinkley Point C site in Somerset is the culmination of two and a half years of negotiations between the two parties and Julia Pyke (pictured), a Herbert Smith partner and co-head of the firm’s nuclear group, told Legal Business ‘It has been immensely satisfying to reach this milestone.

‘The UK Government’s policy of encouraging low carbon power sources and greater self-sufficiency in energy generation will be bolstered by the agreement of this contract.’

Herbert Smith has advised EDF on all aspects of its nuclear plans since 2006, including energy, regulatory and corporate law, planning, real estate, environment, construction, finance, EU/State aid, competition and public law.

The Herbert Smith cross practice team was led by Pyke and also included Brussels-based competition partner Lode Van Den Hende who advised EDF on state aid.

The deal is worth around £16bn over 10 years, with investment also coming from the energy company alongside its two Chinese partners, China National Nuclear Corporation, and China General Nuclear Power Corporation in return for a guaranteed rate of £92.50 for every megawatt hour of power produced by the Somerset plant for 35 years.

Mark Newbery, global head of energy at Herbert Smith, said: ‘We are delighted to have advised EDF on the latest phase of this high-profile and strategically-important project. Today’s announcement marks a significant step forward for both the project and the wider industry, while showcasing the strength and breadth of HSF’s offering for international energy companies such as EDF.’

david.stevenson@legalease.co.uk

Legal Business

Regulatory upheaval: MoJ reshuffle leaves reforms uncertain as LSB drops Herbert Smith for judicial review

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Legal affairs FieldfisherHerbert Smith Freehills
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The future of regulatory reform of the legal sector appears to be hanging in the balance as justice minister Helen Grant, who announced the review in June, is replaced by former solicitor Shailesh Vara and further announcements over changes to the Ministry of Justice (MoJ) team are awaited.

The review, which has seen regulators and representative bodies including the Solicitors Regulation Authority, the Law Society, the Bar Standards Board (BSB), the Bar Council and the Legal Services Board (LSB) submit proposals for reform to the MoJ, is currently one of a number of issues being considered as the MoJ decides what the revamped team’s ‘portfolio’ will include.

A spokesperson for the MoJ said: ‘There may be changes, there may not be, we will know more by the end of the week.’

The submissions saw the BSB and the Bar Council call for the abolition of the LSB, which is also currently embroiled in a dispute with the Criminal Bar Association (CBA) over its decision to go ahead with the highly unpopular Quality Assurance Scheme for Advocates (QASA).

The CBA issued a legal challenge in September when CBA chairman Nigel Lithman QC claimed: ‘The well-argued submissions of the criminal bar on the problems inherent in the proposed QASA scheme fell on deaf ears as our regulators determined to plough ahead and impose it in its entirety.’

The LSB today (9 October) confirmed to Legal Business that Herbert Smith Freehills, the panel firm which it has instructed to defend against its decision to introduce the four level grading system for criminal advocates, has been taken off the defence after the firm rejected a Protective Costs Order that would have led to its fees being capped. Fellow panel firm Field Fisher Waterhouse has been instructed, led by senior partner Matthew Lohn.

A spokesman for the LSB told Legal Business: ‘We are constantly managing our expenses and costs.’

11 KBW’s Nigel Giffin QC, who was instructed by Herbert Smith, will continue to represent the LSB.

Baker & McKenzie is representing the CBA, led by partner Joanna Ludlam who is instructing counsel Blackstone Chambers’ Dinah Rose QC and Tom De La Mare QC. CBA members Rufus Taylor, David Howker QC, Christopher Hewertson and Katherine Lumsdon, are also working for the claimant on a pro bono basis.

The LSB’s legal panel consists of Eversheds, Field Fisher, Herbert Smith, Bates Wells & Braithwaite, Bircham Dyson Bell and Hogan Lovells.

The case is due to be heard later this year. Herbert Smith declined to comment.

david.stevenson@legalease.co.uk

Legal Business

US/UK hires: Mayer Brown boosts London securitisation team as Herbert Smith hires New York financial services litigator

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Strategic recruitment Herbert Smith FreehillsMayer Brown
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Mayer Brown is boosting its English law securitisation capability with the hire of former Mayer Brown lawyer Richard Todd, who re-joins the firm from Berwin Leighton Paisner (BLP) alongside Allen & Overy banking associate David O’Connor.

Todd will work on domestic and international structured financings alongside former colleague and head of the banking and finance division Dominic Griffiths, as well as senior securitisation partner Kevin Hawken.

Todd joins from BLP’s banking and capital markets department, where he has been since February last year. Prior to BLP, Todd worked as an in-house lawyer at Lloyds Banking Group from September 2010, where he was director of structured capital markets focussing primarily on providing legal support to the bank’s conduit securitisation areas.

Todd joins alongside Allen & Overy’s O’Connor, an ex-banker at Deutsche Bank. In his new role, O’Connor will be working closely with recently recruited Ashley Katz, Devi Shah and litigation partner Alistair Graham, who joined in January 2013, on CMBS restructurings.

Griffiths said: ‘We are a core adviser to a number of clients in the securitisation sector and for some time now we have been keen to further expand our English law team to meet client demand.’

While US firms progress in London is overshadowing City firms’ performance across the Atlantic, Herbert Smith Freehills also today (7 October) announced it has boosted its dispute resolution practice in New York with the hire of Cooley’s head of financial services litigation, Scott Balber. Balber will head the 2323-lawyer firm’s investigations and financial services litigation for the US and establish its corporate crime and investigations practice.

Scott also specialises in white collar defence, regulatory matters and securities and commercial litigation. Before Cooley, he was co-head of the commercial litigation practice at Chadbourne & Parke.

The hire comes as the firm focuses on expanding its global corporate crime practice across its network. It launched the New York office in September 2012 and the office also includes an international arbitration team led by Larry Shore and a litigation team led by Thomas Riley, which handles US and cross-border litigation for network clients.

Herbert Smith’s global disputes practice head Sonya Leydecker said: ‘Establishing an on the ground corporate crime and investigations capability in New York has been a cornerstone of our disputes US strategy. In Scott, we have found a perfect combination – a market-leading expert, who is also a dynamic business developer with an impressive track record of developing long-standing client relationships.’

jaishree.kalia@legalease.co.uk

Legal Business

Great bright hopes – searching out the City rainmakers of 2020

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Magic Circle AshurstHerbert Smith FreehillsHogan Lovells
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Who will be the next generation of corporate heavyweights that top City firms will rely on to drive their businesses in the decade ahead? Legal Business canvassed a wide group of deal veterans to identify the ones to watch.

It is often said that the best of the City’s M&A partners were battled-hardened and defined by the early 1990s recession. That formative experience is often argued to have helped refine the skills and ethos of the select band of M&A heavyweights that dominated the City legal market through the last 15 years.

Legal Business

Herbert Smith Freehills to have a new CEO next year as Bell and Willis step down

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Leadership Herbert Smith Freehills
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David Willis and Gavin Bell, joint chief executive officers at Herbert Smith Freehills (HSF), have announced today (24 September) that they will step down from their roles next Spring.

Willis’ term as managing partner was expected to end in April this year but he agreed to a one-year extension following the merger of Herbert Smith and Freehills last autumn. Bell has been managing partner of Freehills since 1995 but due to serious health issues earlier this year, from which he has fully recovered, he has decided to step down and spend more time with his family.

‘David and Gavin are two of the principal architects of the merger. We are hugely appreciative of their outstanding work in the period leading up to the merger and they have been very successful and effective joint CEOs. That the transitional management structure more broadly has worked well is in no small way down to their contributions,’ said Jonathan Scott, senior partner of HSF.

The HSF global council, the firm’s governance body, will decide whether Willis and Bell will be replaced by a single CEO or whether the role will continue to be undertaken jointly. The decision is then subject to partner ratification in a process that will be completed by the end of 2014. The firm would not speculate on potential candidates for the role, although one of the names mentioned to Legal Business at this early stage is intellectual property partner Mark Shillito.

There is still plenty for Willis and Bell to do before handing over the reins. HSF is currently in the middle of a significant transitional phase post-merger and has seen a string of high-profile exits in recent months, including Ted Greeno to Quinn Emanuel Urquhart & Sullivan, Will Pearce to Davis Polk and Kevin Lloyd to Debevoise & Plimpton.

The firm is also reviewing its remuneration system in order to comprehensively integrate the financial systems at the two legacy firms. This process should be completed by the start of the next financial year, in time for the new CEO(s) to take over the firm’s leadership.

David.stevenson@legalease.co.uk

Legal Business

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

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Litigation Freshfields Bruckhaus DeringerHerbert Smith Freehills
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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

Real estate round up: Macfarlanes, HSF, Slaughter and May and Hengeler Mueller each win key commercial property mandates

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Property Herbert Smith FreehillsMacfarlanesSlaughter and May
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It’s been a week for the traditional corporate bluebloods to shine in real estate-related work, with Macfarlanes, Slaughter and May and German royalty Hengeler Mueller individually winning significant transactions.

Macfarlanes secured a key role advising CBRE Britannica on the sale of its shopping centre portfolio for £250m to US investor Kennedy Wilson, advised by Herbert Smith Freehills.

The firm directly advised Malcolm Shierson and Daniel Smith of Grant Thornton – who were appointed as administrators when CBRE Retail Property Fund became insolvent – as well as ING, Deutsche Hypothekenbank and Hypothekenbank Frankfurt, the lenders to the shopping centre fund.

The team, led by partners Jat Bains and Dominic Cunliffe, the firm first acted for ING over the financing of the Britannica retail property investment fund in 2004, having been called to advise the lenders when it fell into covenant breach. Once Britannica went into administration, the firm was further called upon by the administrators to assist with the sale of the property portfolio.

The Herbert Smith team for Kennedy Wilson comprised real estate partners James Barnes and Jeremy Walden, finance partner Simon Chadney and tax partner Will Arrenberg.

Macfarlanes real estate partner Cunliffe said: ‘The asset sale required a phenomenal effort from our team, particularly given the vast amount of information which had to be pulled together and disseminated in a very short space of time as part of the due diligence process. Given the constant threat of further tenant insolvencies potentially disrupting the sale process, we had to move quickly. We are pleased to have met the challenges presented by this particular transaction.’

The 312-lawyer firm has made efforts to boost its commercial real estate practice of late, recently hiring Ashurst’s head of construction Ann Minogue, who moved after 20 years at the top 15 rival firm, as well as commercial real estate partner Clare Breeze, who joined from Shearman & Sterling in June.

Herbert Smith Freehills, meanwhile, has also added the UK’s largest supplier to the building and construction market, Travis Perkins, as a client and was recently instructed on the sale and leaseback of its new 630,000 square foot regional distribution centre located at the Omega North in Warrington, Cheshire from Standard Life Investments Long Lease Property Fund in a deal worth £52.8m.

The team was led by real estate partner Shelagh McKibbin alongside Arrenberg.

Slaughter and May advised Legal & General Property on its £200m purchase of a City of London office and retail building of over 200,000 square feet, structured through the acquisition of the entire issued share capital of the undisclosed holding company of the property-owning vehicle. The team was led by a four-partner team including Jane Edwarde, Robert Chaplin, Jeanette Zaman and Marc Hutchinson specialised in real estate, corporate, tax and finance respectively.

Finally, in a market-leading corporate deal in the German real estate market, Hengeler Mueller is advising Berlin’s largest residential landlord by market value, GSW Immobilien, over rival Deutsche Wohnen’s public tender offer of €1.75bn to acquire the company.

Deutsche Wohnen is being advised by Sullivan & Cromwell’s Frankfurt office, with a team comprising partners Carsten Berrar, York Schnorbus, Konstantin Technau and Krystian Czerniecki.

The Hengeler Mueller team includes partners Maximilian Schiessl (corporate), Dirk Busch (capital markets), Christof Jackle (M&A), Gerd Krieger (corporate), and Christoph Stadler (antitrust) from the firm’s Duesseldorf and Frankfurt offices.

In another impressive win under Schiessl’s leadership, the German firm also scored a significant role this summer when it was appointed to advise Kabel Deutschland over Vodafone’s acquisition of the company, which offered Kabel shareholders €87 per share in cash.

sarah.downey@legalease.co.uk

Legal Business

Revolving Doors: Linklaters hires former Herbert Smith Asia head as Clayton Utz and Norton Rose make key hires

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Strategic recruitment Clayton UtzHerbert Smith FreehillsLinklatersNorton Rose Fulbright
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Herbert Smith Freehills recent internal confidence that its run of post-merger exits had come to an end has been dashed after Friday (16 August) saw former Asia disputes head Gavin Lewis leave to join Linklaters.

A ‘solid and experienced litigator’, Lewis is ‘among the best in Hong Kong’ according to The Legal 500 and his departure is a blow to the firm in the wake of the exodus of other high profile litigators such as Ted Greeno to Quinn Emanuel Urquhart & Sullivan earlier this year and Kevin Lloyd to Debevoise & Plimpton last year.

Lewis joined Herbert Smith in 1996 and after spending two years as managing director at UBS in Hong Kong, returned to the firm in 2008, becoming head of the firm’s first-tier Asia disputes practice in 2011.

His departure follows that of Hong Kong colleague and financial services regulatory partner Tim Mak, who left for Freshfields Bruckhaus Deringer in April this year. Meanwhile, Lewis is Linklaters’ third raid on Herbert Smith in less than a year, after contentious financial regulation partners Martyn Hopper and Nikunj Kiri joined in September and January respectively.

A spokesman for Herbert Smith said: ‘We’re grateful for Gavin’s contribution and wish him all the best for the future.’

The fallout of largely legacy Herbert Smith partners have been attributed to a number of factors, all related to its merger with Australia’s Freehills, including the resistance of many of Herbert Smith’s more conservative partners to operating as a global merit driven business.

Elsewhere, the ink had only just dried on SJ Berwin’s market changing tie-up with Asia-Pacific firm King & Wood Mallesons (KWM) when Clayton Utz last week announced the hire of KWM Australia real estate partner Andrew Norman.

Norman had been with legacy Mallesons for 22 years and has been involved in projects including the leasing and development of National Australia Bank’s Commercial office headquarters in Docklands, Melbourne, and the sale of GE Real Estate’s Australian property portfolio to Mirvac, valued at over Aus$1.4bn.

Clayton Utz, one of the big six Australian firms which has made clear its strategy to remain independent, is looking to boost its property practice as the country suffers from a dip in transactional activity.

A spokesperson for the firm told Legal Business: ‘It’s a strategic lateral hire in an area where we’re anticipating strong future growth.’

Meanwhile, Norton Rose Fulbright has boosted its dispute resolution practice with the hire of Elisabeth Bremner from DLA Piper in London.

Bremner’s broad ranging practice includes investigating allegations of insider dealing, market abuse and trader mis-marking in the investment banking and hedge fund sectors.

‘Our litigation team continues to grow with the appointment of Elisabeth and recent hires including Kirsty Hick. In addition, through our recent combination we have expanded our global offering to include over 1000 dispute resolution lawyers,’ said Deirdre Walker, head of dispute resolution and litigation for Europe, Middle East and Asia.

Legal Business

Benchmarking global law firms is getting harder – HSF issues partial post-merger results suggesting PEP down to £750k

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Pity the reporters covering the legal industry as the rash of international mergers and differing profit structures has seen law firms increasingly attempt an ad hoc approach to disclosing their financial performance.

Very much in this spirit, Herbert Smith Freehills (HSF) today (17 July) took the unusual step of releasing its financial performance for just seven months – the period since the union between Herbert Smith and Australian leader Freehills went live on 1 October – but refused to disclose the proceeding five months of the legacy City firm’s financial year.

The issued seven-month figures appear to support claims that the firm has seen an effective 10% fall in its profitability, at least judged by the rough ‘n’ ready formula of a pro-rata reading of the results over a 12-month period.

The seven-month results show revenues of £471.2m, with net profits of £137.2m, to be shared across 316 equity partners. On a 12-month extrapolation – admittedly a very rough guide – this equates to a profit per equity partner (PEP) of £753,000, against a legacy figure for Herbert Smith of £840,000 for the 2011/12 year. The legacy Herbert Smith PEP figure is on the basis of 131 equity partners.

The same calculation would give the combined 450-partner firm an income of £812m, though that is likely a modest over-statement given the pronounced weakness most corporate law firms saw in the market during the summer of 2012. Herbert Smith generated revenues of £480m during the 2011/12 financial year. Legacy financial results for Freehills for 2012 equate to roughly £360m – suggesting HSF has seen a modest contraction in revenue since the union went live.

David Willis, managing partner of HSF, told Legal Business that a straight financial comparison is not realistic. ‘You’re not really comparing like-for-like with the old firm. We’ve bought together two firms,’ he said.

Announcing the results, Willis highlighted the firm’s post-merger achievements, including office launches in New York, Seoul, Frankfurt and Berlin.

HSF UK managing partner Ian Cox commented: ‘We haven’t been able to fully take advantage of the merged firms because we are still in the process of the merger. The achievement we’ll look back on most favourably is putting the two firms together as seamlessly as we have done.’

The post-merger performance of HSF is being watched closely by rivals, in part due to the number of senior departures that have been seen in the UK since the deal was agreed.

General sensitivity about the yardstick by which law firms are judged has been increasingly notable over the last five years thanks to a run of international mergers, which has made comparisons more difficult, and the sustained pressure on the global economy.

A number of law firms have attempted to resist providing standardised measures of financial performance in favour of partial or selective disclosure, a development that has arguably put transparency in the legal industry backwards.

David.stevenson@legalease.co.uk