Legal Business

Revolving Doors: HSF and SJ Berwin hire finance management team as Covington and Cleary bring in litigation partners

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Strategic recruitment Herbert Smith Freehills
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Herbert Smith Freehills (HSF) has filled its two most senior finance slots with the hire of Kirkland and Ellis finance chief Nick Willmott as its new chief financial officer (CFO) and Paul Roberts from BDO as its finance director.

Wilmott, who will join HSF in September, will be responsible for overseeing integration at the recently merged firm from the perspective of the global business finance function. He has been at Chicago-based Kirkland since 2004, before which he held senior finance positions at Pepsi and real estate services firm Jones Lang LaSalle, where much of his work was focused on merger integration.

Joint CEO David Willis said: ‘We are very pleased to have secured someone of Nick’s calibre to this important position. He has the skill set and experience we are looking for and will play a critical role in the firm’s on-going integration work.’

Roberts, meanwhile, will be finance director for the UK, EMEA and Asia regions. He previously held the same role at BDO and will start at HSF’s London office later in the month.

The appointments follow the hire last week by SJ Berwin of Rick Baumgartner from global management consultants McKinsey & Company as its first-ever chief operating officer.

As litigation practices thrive in the current market, Covington & Burling notably took on CMS Cameron McKenna London energy disputes partners Ben Holland and Jeremy Wilson following an increase in demand from energy clients.

London-based co-chair of the firm’s global arbitration practice, Gaëtan Verhoosel, said: ‘Ben and Jeremy are two extremely talented arbitration practitioners who will add deep energy industry expertise to our global arbitration practice. Their integration into our existing senior capability in London, which has seen a steady increase in instructions from energy clients over the years, will significantly expand our diverse and multi-jurisdictional offering.’

Wilson started at the firm on 1 July while Holland will begin later in the month.

Also boosting its litigation capability is US Cleary Gottlieb Steen & Hamilton, which has hired Frankfurt litigation partner Richard Kreindler from Shearman & Sterling; the latest German exit after Shearman announced in April this year that it was closing its Dusseldorf and Munich offices in order to refocus its German strategyon Frankfurt.

Cleary Gottlieb’s managing partner Mark Leddy said; ‘Richard brings nearly three decades of arbitration experience as an advocate and arbitrator in some of the world’s most significant commercial and investment treaty disputes, including extensive experience in German and German-language matters.’

Other recent exits have seen Shearman’s German partners leave for firms including Allen & Overy, Skadden Arps, Slate Meagher & Flom and Glade Michel Wirtz. Latham and Watkins also took a team from Shearman to launch an office in Dusseldorf in May this year.

Meanwhile in neighbouring France, Birmingham-based Wragge & Co has seen the departure of a seven-strong team from their Paris office to French law firm Franklin.

Real estate partner Henry Ranchon and finance partner David Blondelbring with them of counsel Juliette Bril and associates Charles Amar, Nadia Genisio, Suzy Lasro and Sébastien Séhili.

The appointment of Blondel comes a year after the firm recruited a five-lawyer real estate team from legacy Salans, including partner François Verdot.

According to a statement by the firm, Blondel’s hire ‘signals the firm’s commitment to the establishment of a fully-fledged bank finance capability to meet the substantial increase in demand from clients for top flight acquisition, real estate and project finance advice as well as in the key area of restructuring.’

 

francesca.fanshawe@legalease.co.uk

Legal Business

All or nothing: Only a handful of DBAs entered into as confusion reigns over hybrid model

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Litigation Calunius CapitalHerbert Smith Freehills
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‘It’s an extraordinary thing – hundreds of lawyers should have entered into Damages-Based Agreements (DBAs) by now.’

So says Leslie Perrin, former managing partner and senior partner of Osborne Clarke who is now chairman of litigation funding group Calnius Capital, with around £40m of capital to invest in litigation.

Instead, DBAs, which came into force under the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and entitle a lawyer to claim a percentage of their client’s damages by way of fees, have failed to take off at all and Perrin adds: ‘The confusion around the regulations has been such that I don’t think more than a handful of DBAs have been entered into all across the country.

‘There’s so much ambiguity and grief for the first people going down that road and I think disputes lawyers are unanimous in holding this position.’

DBAs, brought in as the government banned the recoverability of success fees, have been plagued since their inception with concerns over whether the existing rules permit a hybrid, reduced fee model or are straight no-win-no-fee.

Law firms including Herbert Smith Freehills and a number of the Magic Circle have submitted lengthy submissions to the Ministry of Justice calling for a hybrid version of the DBA to be brought in, including the option to blend fixed fees or hourly billing with a DBA.

Law firms say that without some means of generating revenue along the way the current model is unworkable, as firms will face serious cash flow issues.

According to Professor Dominic Regan, a solicitor and special adviser to Lord Justice Jackson, changes are already underway and hybrid DBAs can be expected by April 2014.

The situation is an embarrassment for the government, which according to one insider was aware of the need to provide for hybrids and failed to do so in error. Immediately after LASPO came into force a spokesperson for the MoJ confirmed that it was looking at ways to improve the system.

‘There is no doubt they have completely screwed up. They know that hybrid DBAs were absolutely central to the whole concept of DBAs that was consulted on and subject to the Civil Justice Council working party chaired by Michael Napier QC. They knew they were supposed to produce regulations that would permit hybrid DBAs,’ one City litigator comments.

Meanwhile, law firms continue to explain to clients that they are waiting for the issue to be cleared up, as Lewis Silkin explains in its DBA marketing material: ‘As an alternative to receiving no fee, it may be possible for us to agree terms of a DBA with you which allow us to charge a discounted fee in the event of a loss (possibly in conjunction with third party funding). However, the regulations governing DBAs are currently unclear as to whether lawyers are permitted to charge a discounted fee, or whether the DBA must be ‘no-win-no-fee’. It is hoped that this grey area will be cleared up soon.’

sarah.downey@legalease.co.uk

Legal Business

Hogan Lovells hires rated HSF tax partner in another post merger exit for the firm

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Strategic recruitment Herbert Smith FreehillsHogan Lovells
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Rated Herbert Smith Freehills (HSF) City tax disputes lawyer Rupert Shiers is set to join Hogan Lovells to head its direct tax disputes practice.

Shiers will start in his new role on Monday (24 June), working alongside indirect tax disputes head Michael Conlon QC. He focuses on disputes with HM Revenue & Customs and has led appeals to the First-tier tribunal, Upper Tribunal, Court of Appeal and Supreme Court, as well as references to the European Court of Justice. His clients have included Cadbury Schweppes and BMW Holding.

HSF is a first-tier tax litigation firm, according to Legal 500, where Shiers is said to be ‘very intelligent with a wide-ranging knowledge of tax law, whilst also being a rigorous litigator’.

Commenting on Rupert’s arrival, Fulvia Astolfi, global co-head of Hogan Lovells tax group said: ‘Hiring Rupert reflects our continuing commitment to grow and strengthen this team. Rupert’s skills and experience in conducting tax disputes speaks for themselves and he is a great fit with our practice, complementing perfectly our indirect tax disputes practice led by Michael Conlon QC.

‘With the high level of scrutiny of tax arrangements in the UK, the demand for tax disputes advice is set to increase. In addition, the ever-growing legal structure to tribunal appeals means the role played by tax disputes lawyers is increasingly significant.’

Shiers added: ‘Hogan Lovells offers both a top performing global litigation practice and first class tax advisory practice which, combined, make the firm a perfect fit for my tax disputes expertise and provide an excellent global platform to really develop a direct tax disputes practice.’

His departure is the latest in a series of high profile exits from HSF, including co-head of global arbitration Charles Kaplan to Orrick, Herrington & Sutcliffe in May, and veteran litigator Ted Greeno to Quinn Emanuel Urquhart & Sullivan in March.

sarah.downey@legalease.co.uk

Legal Business

Global Expansion: Bingham continues recruitment drive with hire of HSF London funds partner

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Strategic recruitment Bingham McCutchenHerbert Smith Freehills
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Bingham McCutchen has expanded its transatlantic offering to European fund managers with the hire of Herbert Smith Freehills (HSF) rated partner Thiha Tun, only weeks after seven White & Case funds lawyers joined in Tokyo.

Tun, who works with private equity, real estate, infrastructure and hedge funds, will join Bingham’s investment management practice in September, in line with the top 30 Legal Business Global 100’s firm’s stated ambition to bolster its international funds and financial regulatory capabilities.Tun will work closely with partner John Holton, who relocated his international funds practice to the London office from Boston in 2011, as well as partners John Clark in listed funds, Helen Marshall in UK regulation and enforcement and Chris Leonard in UK regulation and funds.

London managing partner James Roome said: ‘Thiha’s arrival will bolster our capabilities to offer the combined US and UK funds and regulatory advice that many European fund managers require.’

Tun will also work alongside the firm’s investment management team in the US and Asia and, according to Roome, his Asian and emerging market funds practice meshes well with Bingham’s global financial regulatory practice.

Tun’s move comes within weeks of the firm adding seven White & Case lawyers  to its investment funds team in Tokyo, led by partners Christopher Wells and Tomoko Fuminaga. 

Furthermore, both expansions come within a year of Bingham adding 13 lawyers to its Washington investment funds team, after Thomas Harman, John McGuire and Christopher Menconi joined from Morgan Lewis & Bockius last July.

For HSF, meanwhile, the departure is the latest of a series of exits, including co-head of global arbitration Charles Kaplan to Orrick, Herrington & Sutcliffe in May, and veteran litigator Ted Greeno to Quinn Emanuel Urquhart & Sullivan in March, as the firm beds down its recent merger.

jaishree.kalia@legalease.co.uk

Legal Business

HSF merger throws up partnership issues as Herbert Smith issues cash call

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Legal mergers Herbert Smith Freehills
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Global giant raises capital and shakes up corporate as HSF moves through merger integration

The merger between Herbert Smith and Freehills continues to give rise to growing pains as last month saw the UK half of the firm issue a multimillion pound cash call to its equity partners in preparation for financial integration.

The cash call was issued in a memo sent earlier this year to all equity partners. It is understood that they have been asked to contribute £2,000 per equity point. Herbert Smith’s lockstep ladder runs from 43 to 100, meaning those at the top of equity, around 65 individuals, are liable to pay around £200,000 each.

Legal Business

Cinven gifts Freshfields with IPO while HSF defends Severn Trent

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Corporate CinvenFreshfields Bruckhaus DeringerHerbert Smith FreehillsSevern Trent
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A handful of major corporate mandates were unveiled last month as private equity house Cinven kicked off its £1.4bn proposed initial public offering (IPO) of annuity provider Partnership Assurance Group and Severn Trent rejected a preliminary takeover offer by an international consortium.

Amid signs of renewed confidence in the IPO market, Cinven instructed Freshfields Bruckhaus Deringer – led by corporate partners Mark Austin and Adrian Maguire – to advise on the float of Partnership, which Cinven acquired for €200m in 2008.

Legal Business

Corporate stirrings: Cinven gifts Freshfields with IPO while HSF defends Severn Trent

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Corporate Freshfields Bruckhaus DeringerHerbert Smith Freehills
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A handful of major corporate mandates were unveiled this week as private equity house Cinven kicked off its £1.4bn proposed initial public offering (IPO) of annuity provider Partnership Assurance Group and Severn Trent rejected a preliminary takeover offer by an international consortium.

Amidst signs of renewed confidence in the IPO market, Cinven has instructed Freshfields Bruckhaus Deringer – led by corporate partners Mark Austin and Adrian Maguire – to advise on the float of Partnership Assurance, which Cinven acquired for €200m in 2008.

Corporate partners Sarah Murphy and David Higgins are also advising on the deal, together with employment and benefits partner Simon Evans. The Magic Circle firm is acting as US and English counsel.

Freshfields has instructed offshore firm Ogier to advise Partnership Assurance on matters in Jersey, while Magic Circle rival Clifford Chance is advising the co-ordinators Bank of America, Merrill Lynch and Morgan Stanley, led by equity capital markets partner Adrian Cartwright and City-based US securities partner John Connolly. Travers Smith has scored a role advising Partnership Assurance led by private equity partner Edmund Reed and tax partner Kathleen Russ.

Freshfields has been acting for Cinven for the last two decades so the firm was an obvious selection for the private equity house, Maguire told Legal Business. Earlier this year, Freshfields advised Cinven and Spire Healthcare on the partial refinancing of its loan facilities through a sale of 12 of its 38 hospital properties, raising approximately £700m.

Austin said: ‘This IPO demonstrates the increasing trend of the financial sponsor community to look to the equity capital markets, which have been more stable recently, as a route to exit.’

Maguire added: ‘With the reduced M&A activity, our financial sponsor clients with assets close to maturity are now seeing an IPO exit as a very viable alternative to a traditional sale process.’

The firm has been working on the deal since the end of last year and expects it to be completed by June this year.

Elsewhere, Herbert Smith Freehills (HSF) led by City corporate partners Stephen Wilkinson and Robert Moore has taken the lead role for longstanding client Severn Trent on a potential bid from a Canadian, Kuwaiti and UK consortium, reportedly valuing the target at £5bn.

Allen & Overy led by corporate partner Richard Evans is advising the consortium, made up of Borealis Infrastructure Management, the Kuwait Investment Office and Universities Superannuation Scheme.

The deal was confirmed on 14 May by Severn Trent and following a meeting with the consortium yesterday (16 May), the FTSE 100 water and waste company announced its rejection, commenting: ‘The board of Severn Trent has reviewed the proposal with its advisers and concluded that it completely fails to recognise the existing and potential value of Severn Trent. Accordingly the board has informed the consortium that it has rejected the proposal.’

 

jaishree.kalia@legalease.co.uk

Legal Business

Legacy Herbert Smith equity partners on hook for capital boost

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Financial management Herbert Smith Freehills
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Legacy Herbert Smith has become the latest UK firm to ask partners to bolster its capital levels, issuing a multi-million pound cash call in preparation for financial integration with Australia’s Freehills.

The call – thought to be worth up to around £20m – was issued in a memo sent weeks ago to all 170 equity partners. It is thought that the equity partners have been asked to contribute £2000 per equity point. Herbert Smith’s lockstep ladder runs from 43 to 100, meaning those at the top of equity, around 65, are liable to pay around £200,000 each.

The cash call only applies to equity partners at Herbert Smith, bringing the firm in line with Freehills capitalisation levels. Salaried partners and fixed share partners will not have to pay into the cash pot.

The firm confirmed that that the cash call was contained within the merger memorandum but would not confirm the amount. The merger went live in October 2012.

According to two former partners, Herbert Smith has until now made minimum capital demands of its equity partners, in contrast with the growing trend among law firms to make capital calls instead of taking on bank debt. At the end of 2011/12 Herbert Smith had around £50m net debt – up from £41m the previous year – amounting to around 10% of its annual turnover of £485m for that period.

This is not the first time a UK firm has asked its equity partners to pay capital into the firm to bring it in line with its new Australian partner. Ashurst took the same step in September last year following its merger with Blake Dawson.

david.stevenson@legalease.co.uk

Legal Business

Recent spate of lateral hires a blip in a quiet year so far

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Strategic recruitment Allen & OveryHerbert Smith Freehills
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Despite the City lateral hire market recently showing few signs of returning to its pre-credit crunch peak, yesterday (1 May) saw a string of key partner hires announced by Allen & Overy (A&O), DLA Piper, Orrick Herrington & Sutcliffe and Olswang.

A&O announced the hire of Fried Frank partner Alasdair Balfour to join its City antitrust group, while DLA Piper expanded its London corporate group with the hire of Berwin Leighton Paisner partner Rob Salter and Kirkland & Ellis partner Anu Balasubramanian.

Meanwhile, Herbert Smith Freehills has seen the departure of another high-profile disputes partner with global co-head of arbitration Charles Kaplan leaving to join Orrick.

In a further announcement, Olswang revealed it has boosted its IP practice with the hire of McDermott Will & Emery’s former head of European IP prosecution and opposition practices, Justin Hill. Notable London hires earlier this month include Shearman & Sterling’s global head of project development and finance, Tim Pick, who joined Freshfields Bruckhaus Deringer’s City office at the start of May.

The hires come despite recent data revealing that London lateral hires in the first quarter of 2013 stood at an almost record low. According to Motive Legal Consulting’s London Lateral Hiring Trends Bulletin for January to March 2013 , ‘Q1 2013 was the second-worst Q1 for seven years, ‘beaten’ only by the depths of the recession.’

Just 101 hires were announced during this period, dominated by litigation (20%), closely followed by corporate (16%).

These latest announcements are likely to be the culmination of a spike in firms looking to make strategic hires at the start of the year, although few firms are interested in hiring purely for growth’s sake. At recruiter First Counsel, head of the private practice group William Cock said: ‘The start of this year was quite buoyant and we were starting to get to a situation where there was more strategic hiring -firms wanting to grow and making strategic hires to achieve that.’

This is demonstrated among hires including DLA’s Balasubramanian, who said: ‘In addition to its strong global private equity practice, DLA Piper has a keen interest in India, and offers me an excellent platform on which to build my practice in the region and increase the firm’s penetration of India-related transactions.’

As firms focus on their year-ends there has once again been a predictable dip in interest in lateral hires, although with a slew of results expected this week – Forsters yesterday reported a rise in fee income of 16% – firms may shortly be in the position to execute their next London move.

caroline.hill@legalease.co.uk

Legal Business

Lateral push sees key UK players switch to US firms

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Strategic recruitment Clifford ChanceHerbert Smith FreehillsQuinn Emanuel Urquhart & Sullivan
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US firms in the City continue to demonstrate their appetite for big name lateral hires from leading UK firms, with Latham & Watkins and Reed Smith picking up experienced partners from Clifford Chance (CC) recently, while Quinn Emanuel Urquhart & Sullivan announced the hire of disputes expert Ted Greeno from Herbert Smith Freehills (HSF).

Latham & Watkins’ acquisition of CC’s global head of private equity, David Walker, particularly caught the eye last month. This is one of the most significant blows to CC’s corporate practice since the departure of Adam Signy to Simpson Thacher & Bartlett in 2009.