Legal Business

Leadership: Hogan Lovells shakes up international management committee as it ends co-head structure

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Leadership Hogan Lovells
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Hogan Lovells has re-shuffled its international management committee (IMC), with incoming CEO Steve Immelt stepping down as co-head of litigation, arbitration and employment as he succeeds outgoing chiefs David Harris and Warren Gorrell.

Announced today (15 May), the IMC is responsible for setting and implementing the strategic direction and business operations of the firm. City-based finance partner David Hudd will also cease leading the finance practice group to become the firm’s deputy CEO, and will be replaced by Paris-based finance partner Sharon Lewis.

Other changes include Andrew Skipper and Stuart Stein finishing their tenures as corporate practice group co-heads, replaced solely by Baltimore-based partner David Gibbons. Denver-based Cole Finegan will become regional managing partner for the Americas, replacing Dennis Tracey. Finegan is currently a board member and the firm has confirmed there will be an election for his replacement.

Lastly, Christoph Kueppers will step down from the role of Continental Europe regional managing partner, handing the reigns over to Madrid-based Burkhart Goebel.

Led by the heads of the firm’s five practice groups across five administrative regions, several of the committee’s current members will remain in their roles, representing either their practice group or region. This includes government regulatory head Anges Dover; IP, media and technology head Andreas von Flack; Asia and Middle East head Patrick Sherrington; UK and Africa head Susan Bright; and Washington DC head Emily Yinger.

With the roles set to take effect from 1 July, the revamp signals further management streamlining by the firm since it decided to move towards a single leadership model.

Immelt (pictured) said: ‘The changes that I am making are designed to build on what we have achieved under the leadership of David and Warren. They are designed to reinforce the foundations for the continued growth and development of the firm.’

sarah.downey@legalease.co.uk

 

Upcoming IMC line up:

CEO – Steve Immelt

Deputy CEO – David Hudd

Corporate practice group leader (PGL) – David Gibbons

Finance PGL – Sharon Lewis

Government regulatory PGL – Agnes Dover

IP, media and technology PGL – Andreas von Falck

Litigation, arbitration and employment PGL – Michael Davison

Americas regional managing partner (RMP) – Cole Finegan

Asia/Middle East RMP – Patrick Sherrington

Continental Europe RMP – Burkhart Goebel

UK and Africa RMP – Susan Bright

Washington, DC RMP – Emily Yinger

Legal Business

Hogan Lovells second top 10 firm to exit Prague in under a month

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Europe Hogan Lovells
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Transatlantic firm Hogan Lovells has become the second top ten LB 100 firm in recent weeks to announce it is withdrawing from Prague, blaming difficult market conditions.

Following a ‘strategic review of the market’ undertaken by the international management committee, the 2,527-lawyer firm is aiming to complete its exit from Prague over the summer, with the exact date still to be decided.

Having operated in the Czech Republic since 1991, the local office currently has two partners, 12 fee-earners and a total of 14 secretarial and support staff. Prague office managing partner Miroslav Dubovsky is now considering operating in the region as an independent local firm while maintaining an informal referral relationship with Hogan Lovells.

Outgoing co-CEO David Harris, said: ‘We have taken the decision to close the Prague office following a review of the market and our investment priorities. The partners in Prague understand the decision and are considering the possibility of the office becoming an independent local firm with an informal referral relationship with Hogan Lovells. We are very grateful to all of our people in Prague for their hard work over the years.’

Prague office managing partner Dubovsky said: ‘Hogan Lovells has operated in the Czech Republic since 1991 working for both domestic and international clients.

‘Obviously, global and local markets and priorities have changed since then. We firmly believe that we have a good practice and that there are market opportunities that we can take advantage of, including working with Hogan Lovells in the future. We look forward to the new challenges.’

The move comes after Norton Rose Fulbright (NRF) announced in April that it was moving out of the Prague market due to ‘difficult market conditions’ with effect from 1 May. NRF’s Prague head Milana Chamberlain returned to London, where she took up a senior position within the London business, ethics and anti-corruption practice, while Prague partner Pavel Kvíčala joined Czech-Slovak law firm Havel, Holásek & Partners along with his immediate team on 1 May.

It is the second time legacy City firm NRF has exited the Czech capital, having previously closed its doors in the region in 1996.

Other international firms still operating in the region include Magic Circle duo Allen & Overy and Clifford Chance, as well as DLA Piper, Dentons, CMS Cameron McKenna and Bird & Bird.

Sarah.downey@legalease.co.uk

Legal Business

Hogan Lovells gives voice to partners under 45 with new board level role

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Higson elected ahead of move to single global CEO

Hogan Lovells has taken a step towards giving its younger partners a high level representative voice with the announcement in April that it has created a position on its 12-strong board for an equity partner aged 45 and under.

London corporate partner Ben Higson has been elected to the role and the firm has also chosen German IP and technology partner Leopold von Gerlach to take over from José María Balañá as the representative for Continental Europe on the board, which has supervisory responsibility in overseeing the affairs of the firm but without executive responsibility for strategy, management, and operational decisions.

Legal Business

Hogan Lovells gives voice to partners under 45 with new board level role

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Hogan Lovells has taken a clear step towards giving its younger partners a high level representative voice with the announcement today (14 April) that it has created a position on the 12-strong board for an equity partner age 45 and under.

London corporate partner Ben Higson has been elected to the role and the firm has also elected German IP and technology partner Leopold von Gerlach to take over from Jose Maria Balana as the representative for Continental Europe on the board, which has supervisory responsibility in overseeing the affairs of the firm but without executive responsibility for strategy, management, and operating decisions.

Higson, who was promoted to partner in 2009 and previously identified as a ‘corporate rising star’ in the London market by Legal Business in November 2013, won the role as board member in a contested election to serve for equity partners aged 45 and under.

The board appointment comes as joint chief executives Warren Gorrell and David Harris prepare to stand down in June, with Washington DC-based partner Stephen Immelt set to take over as sole chief executive officer (CEO), in a move away from the UK/US joint leadership structure put in place after the merger of Hogan & Hartson and Lovells in 2010. London-based partner David Hudd will become deputy CEO, with Harris set to retire from the firm, while Gorrell will return to full-time fee-earning.

Firm chair Nicholas Cheffings, said: ‘The board plays an important role in the governance of Hogan Lovells in its relationship with our management team and in listening to, and representing, the views of partners. The high level of participation in this election process is testament to that.

‘As we move from co-CEOs to a single global CEO, we have kept the total number of board members at 12 with the introduction of a new board role for an equity partner age 45 and under. This is a post designed to ensure that we have broad representation from across the partnership.

sarah.downey@legalease.co.uk

The Board in full:

Chair: Nicholas Cheffings

Co-CEOs: Warren Gorrell and David Harris (From 1 July 2014, Steve Immelt)

Asia/Middle East: Jun Wei

Continental Europe: Leopold von Gerlach

Washington, D.C. area: Helen Trilling

London: Emily Reid

The Americas: Bill Curtin

The Americas (Except D.C.): Cole Finegan

45 and under: Ben Higson

‘At large’ representatives: Daniel González, Craig Hoover, and Michael Silver

Legal Business

Hogan Lovells calls on non-equity partners to inject £60k to £100k in response to HMRC shake-up

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Financial management Hogan Lovells
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Hogan Lovells has called on its non-equity partners to make a significant capital contribution in light of HM Revenue & Customs’ (HMRC’s) decision to overhaul the way salaried partners are taxed, which is set to kick in this month.

Around 65 non-equity members will contribute capital of around £60,000 to £100,000 each, after the HMRC found, following a lengthy review of limited liability partnerships (LLPs), that partners with less than 25% of their salary attached to the equity would be viewed as having a ‘disguised salary’ and taxed as an employee.

Capital investment by salaried partners – which will total between £3.9m and £6.5m – will save the firm having to pay more in tax in respect of national insurance, and the firm said today (3 April) that loans will be available to salaried partners from the firm’s banks on the same terms as those available to equity members.

A spokesperson for the firm said: ‘We are having to act in anticipation of the final rules, which come into effect from 6 April.

‘Our approach is to ensure that the terms for non-equity members are fair to both them and the firm and that our non-equity members are treated by HMRC as the partners that they are. The capital itself doesn’t need to be paid until early July.’

The decision comes as a number of LB100 firms have confirmed that they are reviewing their capital contribution arrangements or have already made changes. TLT recently requested that each of its 60 fixed-share partners contribute £20,000, a move that will boost its funds by a minimum of £1.2m.

National firms Trowers & Hamlins and Weightmans are both expected to require fixed-share partners to inject capital following a consultation.

Hogan Lovells has no net debt, as reflected in the most recent set of LLP accounts. The transatlantic firm recently unveiled its highest post-merger global financial results, posting a fee-income increase of 5.2% while profit per equity partner (PEP) and revenue per lawyer (RPL) increased by 10% and 3.7% respectively.

Fee-income increased to $1.72bn, while PEP rose to $1.21m and RPL was up to $742,613. Across the regions, the Americas represented approximately 46% of total billings, while London and Continental Europe together equalled 47%, and the Asia & Middle East region totalled 7%.

Sarah.downey@legalease.co.uk

Legal Business

Those thoroughly fashionable provinces – vogue for City players to hit low-cost regions becomes the new black

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Leadership Berwin Leighton PaisnerHogan Lovells
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Sarah Downey reports on how a regional arm became the hottest accessory for London firms

How the fashions in professional services can change. Having long disdained moving into lower-cost regions, March saw another two top 20 City players announce ‘northshoring’ ventures, with Hogan Lovells and Berwin Leighton Paisner (BLP) confirming moves respectively into Birmingham and Manchester.

Legal Business

Hogan Lovells, CC, Simpson Thacher and Ashurst secure roles on Investindustrial’s €2bn sale of Avincis

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Corporate AshurstClifford ChanceHogan LovellsSimpson Thacher & Bartlett
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Hogan Lovells and Clifford Chance (CC) have secured leading corporate roles on European investment group Investindustrial’s €2bn disposal of aerial service provider Avincis to Babcock International, with Simpson Thacher & Bartlett and Ashurst also advising on the deal.

The Hogan Lovells team advising Investindustrial was led by private equity partner Ed Harris, with senior associates Leanne Moezi and David Harrison.

For former SJ Berwin partner Harris, who departed the firm prior to the merger with King & Wood Mallesons going live in early November, the deal is the corporate heavyweight’s first major mandate for Hogan Lovells since joining in the New Year.

Meanwhile, CC corporate partners Lee Coney and Caroline Sherrell advised Babcock International.

A team from Simpson Thacher advised Avincis’ stakeholder KKR, led by former CC corporate partner Adam Signy.

Ashurst advised JP Morgan Cazenove, Jefferies, Barclays and HSBC in relation to the £1.1bn rights issue by FTSE 100 engineering group Babcock International. The rights issue will be used to fund the acquisition of Avincis Group, a leading supplier of helicopter and fixed-wing services and helicopter services to the oil and gas industry. Leading the team was corporate partner Nicholas Holmes, who was assisted by senior associate Simon Bullock while corporate partner Jennifer Schneck advised on the US aspects of the transaction, assisted by senior associate Jeffrey Johnson. Australia-based senior associate Alex Eyre and associate Ben Langford also advised.

Holmes said: ‘We were delighted that these key banking clients turned to us for this high profile and significant transaction. Following our success in 2013, when we advised on more than a third of all main market IPOs in London, and the Kennedy Wilson IPO last month, which is one of the largest IPO capital raises of recent times, this deal is further evidence of the strength and profile of our equity capital markets practice.’

Sarah.downey@legalease.co.uk

Legal Business

‘We have always been committed to growing our presence there’ – Trowers expands lower cost Birmingham site

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Only shortly in the wake of the announcement that Hogan Lovells is to launch a low-cost nearshoring venture in Birmingham, Trowers & Hamlins has said it is to build up its existing Birmingham base with the relocation of three public sector City lawyers.

Partner Amardeep Gill will relocate from the firm’s London office to Birmingham to lead the team, which includes projects and construction partner Andrew Vickery and associate Louis Sebastian, who will all relocate in April, growing the West Midlands team by 23%.

Gill specialises in advising local authorities on major transactions and projects, while Vickery has experience of advising on construction contracts, framework structures, public procurement and asset management contracts.

Trowers & Hamlins senior partner Jennie Gubbins says: ‘Birmingham is an important base for us, and we have always been committed to growing our presence there as the needs of our clients evolve. Much of the firm’s work is spread across national teams located in our network of offices, and these moves will enable us to more efficiently and cost-effectively service clients directly from our Midlands base.’

The top 50 firm launched its Birmingham office in the summer of 2011, adding to its national network of offices in Manchester and Exeter.

The expansion follows the announcement from transatlantic firm Hogan Lovells at the start of March that it is to launch a new legal services centre in Birmingham to undertake low-level legal work as a cost-effective extension of its London office.

The nearshoring venture, called the Legal Service Centre, will be developed over time in response to client demand but it is expected to comprise up to 20 lawyers initially. London partner Alan Greenough will be moving to Birmingham to manage the office, which is expected to be established by autumn this year.

Trowers’ most recent LLP filings showed the firm’s net income fell from £26.2m to £16.1m while operating profit was down from £28.4m to £18.8m in 2013. The firm said the sharp fall in profits was largely due to the cost of moving into its new London headquarters.

Its expansion in Birmingham comes after it scaled back internationally this year, closing its Cairo office in January, citing uncertainty over the long-term outlook for Egypt.

jaishree.kalia@legalease.co.uk

Legal Business

Further BLP banking departures as real estate finance duo set to join Hogan Lovells

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Finance Berwin Leighton PaisnerHogan Lovells
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Berwin Leighton Paisner (BLP) has lost another two City banking partners, with real estate finance duo Andrew Flemming and Jo Solomon set to join top 10 LB100 firm Hogan Lovells.

BLP today (24 March) announced the departures internally, leaving a depleted real estate finance team, which is acknowledged by the Legal 500 as first tier and one that ‘combines knowledge and experience with unending enthusiasm and strong commercial understanding.’

The news comes just weeks after BLP’s head of real estate finance Laurence Rogers joined DLA Piper alongside commercial real estate partner Richard Hopkinson-Woolley and corporate tax partner Neville Wright.

Other recent departures from the top 20 UK firm include banking and capital markets partner Paul Simcock and former head of restructuring Ben Larkin, who joined Jones Day in March and February respectively; acquisition finance partner Marcus Jamson, who joined Wedlake Bell in January; finance and restructuring partner Trevor Wood, who left for Mayer Brown in October last year; and head of banking and finance Matthew Kellett, whose resignation also in October prompted the 786-lawyer firm to launch an independent review of its finance practice.

Flemming acts for banks, private equity funds, listed corporates, private companies, insolvency practitioners and other senior and mezzanine funders. He has previously spent time on secondment with Barclays Bank, Royal Bank of Scotland, and the European finance team within the Morgan Stanley Real Estate funds.

Fellow real estate finance partner Solomon, who specialises in joint ventures and cross-border real estate finance transactions, also has experience in-house, having been seconded to major banks including Barclays Capital.

BLP confirmed that Flemming and Solomon have resigned, while Hogan Lovells declined to comment on the hires.

sarah.downey@legalease.co.uk

With additional reporting by david.stevenson@legalease.co.uk

Legal Business

After South Africa, Hogan Lovells launches nearshoring venture in Birmingham

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Innovation Hogan Lovells
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Following Hogan Lovells announcement at the start of February that it is setting up a business process outsourcing centre in South Africa, the top 15 LB100 law firm has launched a new legal services centre in Birmingham to undertake low level legal work as a cost effective extension of its London office.

The nearshoring venture, called the Legal Service Centre, will be developed over time in response to client demand but it is expected to comprise up to 20 lawyers initially. London partner Alan Greenough will be moving to Birmingham to manage the office, which is expected to be established by autumn this year.

The office aims to use flexible contract or locum junior lawyers as the firm ‘adapt[s] how we deliver legal services in a way that meets the changing needs of clients and also of our people.’

The new Birmingham office will cover due diligence and document reviews for litigation, corporate, finance and real estate projects, aspects of real estate work such as leasing and licensing of premises, and the preparation of formal documentation for the completion of transactions, some intragroup reorganisations and minor contract amendments.

It follows the announcement in early February that the transatlantic firm has put South Africa at the centre of its cost savings plans for clients, setting up a business support services function that will see new vacancies from Europe and Asia evaluated in terms of whether they could as easily be done from the lower cost site.

The centre, which has been set up in the same building as recent South African merger partner Routledge Modise, follows a strategic review of how the firm provides business services support, and will initially provide a reasonably low-level range of services including conflict checking, client due diligence and research.

Hogan Lovells regional managing partner for the UK and Africa, Susan Bright said of its latest venture: ‘We are constantly looking for cost-effective solutions for our clients in relation to fee arrangements and the provision of legal advice. Hogan Lovells has for many years been a leader in this area, with initiatives such as our real estate outsourcing service, our Alicante office for Europe-wide trademark portfolio work, our bespoke offshoring arrangements for certain litigation projects and our use of alumni, contract lawyers and paralegals for a range of work including document reviews for litigation and corporate projects. The Legal Services Centre will extend the range of options we already offer. We are delighted to be establishing the centre in Birmingham which has a significant and high quality legal community.’

The move echoes previous initiatives from firms including Ashurst, which set up a 150-strong unit in Glasgow to support its practice in June last year, as well as Allen & Overy and Herbert Smith Freehills that lauched sizeable support operations in Belfast as a means of lowering costs.

 

jaishree.kalia@legalease.co.uk