Legal Business

KWM competition trio defects to Macfarlanes in rare lateral play by City thoroughbred

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Strategic recruitment King & Wood MallesonsMacfarlanes
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City firm Macfarlanes has made a rare triple lateral hire with three partners from King & Wood Mallesons‘ (KWM) European practice. The firm is taking on Tom Usher, Cameron Firth and Christoph Humpe as partners, and will also take on KWM’s former European senior partner Stephen Kon as a consultant.

Kon had resigned earlier in the week, having stepped down from the senior partner position earlier in the year. Partners have been peeling away from the legacy SJ Berwin practice after the partnership, which is carrying more than £30m in debt, failed to agree to a recapitalisation plan in November.

Usher, who billed almost £4m last year, had led the firm’s dispute resolution and regulation division and joined SJ Berwin in 1989.

Meanwhile, KWM China is understood to have bid for an out-of-administration purchase of certain legacy SJ Berwin offices including Dubai, Germany, Italy and Spain. It is also talking with partners to keep an outpost in London.

If a deal is agreed, the acquisition will remain within a verein structure, and the business will take on a significant number of lawyers but without any of legacy SJ Berwin’s liabilities.

While the Chinese arm is interested in these parts of the business, it is not yet clear what will happen to other outposts in France, Belgium and Luxembourg.

Last week the firm registered a new LLP in the UK under the name KWM Deutschland, which may include part or all of the new European entity which the Asian arm is keen to retain.

K&L Gates and Orrick, Herrington & Sutcliffe have also taken on a number of lawyers from KWM’s Munich office, while one of KWM’s top billers Craig Pollack and part of his team are to join Covington & Burling pending a partnership vote.

DLA Piper will take on real estate partner William Naunton and several members of his team including partners Cornelius Medvei, Bryan Pickup, Ed Page, George Burrha and Jeremy Brooks. Managing associate Omer Maroof will also join as a partner, alongside eight other lawyers and three trainees.

Tax partner Clive Jones will join Greenberg Traurig, alongside top biller Steve Cowins and Marc Snell, M&A partners Michael Goldberg and David Fitzgerald and partner Matthew Priday along with their teams.

victoria.young@legalease.co.uk

Read more: ‘This is a gritty place’: Macfarlanes’ leaders on the hustle it takes to look effortless

For more on King & Wood Mallesons, subscribers can read ‘Branded’ for an in-depth look at the firm.

Legal Business

KWM China in talks with selected legacy SJ Berwin offices to secure European presence

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Restructuring King & Wood Mallesons
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King & Wood Mallesons (KWM) China is understood to have bid for an out-of-administration purchase of certain legacy SJ Berwin offices including Dubai, Germany, Italy and Spain. It is also talking with partners to keep an outpost in London.

If a deal is agreed, the acquisition will remain within a verein structure, and the business will take on a significant number of lawyers but without any of legacy SJ Berwin’s liabilities.

While the Chinese arm is interested in these parts of the business, it is not yet clear what will happen to other outposts in France, Belgium and Luxembourg.

KWM’s European practice is carrying more than £30m in debt and after plans to recapitalise the business failed in November, it is expected to move into administration in January.

Last week the firm registered a new LLP in the UK under the name KWM Deutschland, which may include part or all of the new European entity which the Asian arm is keen to retain.

Yesterday (19 December) it was revealed that K&L Gates and Orrick, Herrington & Sutcliffe have also taken on a number of lawyers from KWM’s Munich office, while one of KWM’s top billers Craig Pollack and part of his team are to join Covington & Burling pending a partnership vote.

DLA Piper will take on real estate partner William Naunton and several members of his team including partners Cornelius Medvei, Bryan Pickup, Ed Page, George Burrha and Jeremy Brooks. Managing associate Omer Maroof will also join as a partner, alongside eight other lawyers and three trainees.

Tax partner Clive Jones will join Greenberg Traurig, alongside top biller Steve Cowins and Marc Snell, M&A partners Michael Goldberg and David Fitzgerald and partner Matthew Priday along with their teams.

These are the latest in a long line of defects from KWM’s European business; heavyweight biller Michael Halford has last month joined Goodwin Procter with other funds partners Ajay Pathak, Ed Hall, Shawn D’Aguiar and Patrick Deasy.

Former KWM managing partner William Boss was hired earlier this month by Addleshaw Goddard, alongside Simon Tager and Michael Scott. Meanwhile former senior partner Stephen Kon confirmed last week he would retire from the law.

Reed Smith is another firm in talks with several partners, while Dentons had expressed interest in a merger deal, but has since pulled out of discussions.

Corporate finance partner Andrew Wingfield and former managing partner Rob Day also joined Proskauer Rose. The pair’s resignation, along with Halford and Jonathan Pittal’s exits caused KWM to halt its recapitalisation plans in October. Since, the Asian arm had offered to inject the necessary cash into the business but the deal, subject to approval from a majority of partners, did not go through.

georgiana.tudor@legalease.co.uk

Read more on KWM in ‘Comment: The moment of truth arrives in the SJ Berwin saga’

For an in-depth assessment of KWM, subscribers can see our July cover feature ‘Branded’


Legal Business

KWM latest: K&L Gates and Orrick take Munich partners as Covington poised to take top litigator Pollack and team

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Strategic recruitment Covington & BurlingK&L GatesKing & Wood MallesonsOrrick, Herrington & Sutcliffe
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US firms K&L Gates, Covington & Burling and Orrick, Herrington & Sutcliffe are the latest to take on partners from the beleaguered European practice of King & Wood Mallesons (KWM).

K&L Gates has hired corporate partner Franz Schaefer, alongside counsel Martina Ortner and associate Christoph Kuster from KWM’s Munich office.

Schaefer is dual-qualified in Germany and New York, and specialises in M&A and corporate law. Among his client base he counts printing press manufacturer Koenig & Bauer AG which he has counselled for more than 10 years, Sino-German Ecopark Group and the Nasdaq-listed Monotype group, a leading provider of typefaces. The move follows K&L’s hire of KWM’s investment management partner Hilger von Livonius in July as a founding member of K&L’s Munich office.

Orrick also confirmed it has hired partner Christoph Brenner, who is currently head of corporate in Germany. Brenner will also join from KWM’s Munich office.

Meanwhile KWM head of litigation Craig Pollack (pictured) has agreed to join Covington & Burling, and will take partner Louise Freeman and a group of associates with him. It is understood Covington’s partnership will vote on Pollack’s hire later this week.

Pollack was one of the biggest billers at KWM’s City office and advises investment banks, hedge funds, public companies and high net worth individuals.

DLA Piper and Greenberg Traurig have also taken on teams from the legacy SJ Berwin practice, which is carrying more than £30m in debt and is expected to enter administration in January.

DLA Piper will take on real estate partner William Naunton and several members of his team including partners Cornelius Medvei, Bryan Pickup, Ed Page, George Burrha and Jeremy Brooks. Managing associate Omer Maroof will also join as a partner. They join alongside eight other lawyers and three trainees, and are expected to join DLA mid-January.

Naunton is a significant biller for KWM, having billed almost £4m for the firm in the last year. When he joined KWM alongside Clive Jones and former Eversheds partner Cornelius Medvei in late 2014, the team was seen as key to KWM’s aim to expand its structured, high-end real estate offering. On joining DLA, he will become co-head of the UK real estate group.

However, Jones will join Greenberg Traurig. Alongside Jones the US firm also hired private equity funds partners Steven Cowins and Marc Snell, M&A partners Michael Goldberg and David Fitzgerald and partner Matthew Priday along with their teams.

Cowins is one of KWM’s top billers, having joined SJ Berwin in 2005. He specialises in real estate funds and joint ventures and counts Crown Estate among his clients. Goldberg and Priday focus on commercial real estate investment and have British Land on their client roster.

These are the latest in a long line of defects from KWM’s European business; heavyweight biller Michael Halford has last month joined Goodwin Procter with the other funds partners Ajay Pathak, Ed Hall, Shawn D’Aguiar and Patrick Deasy.

Corporate finance partner Andrew Wingfield and former managing partner Rob Day joined Proskauer Rose. The pair’s resignation, along with Halford’s exit and Jonathan Pittal also handing in his notice caused KWM to halt its recapitalisation plans in October.

Former KWM managing partner William Boss was hired earlier this month by Addleshaw Goddard, alongside Simon Tager and Michael Scott. Meanwhile former senior partner Stephen Kon confirmed last week he would retire from the law.

Reed Smith is another firm in talks with several partners, while KWM’s own Asian arm is trying to secure a European presence through an office spin-off. Although it had expressed interest in a merger deal, Dentons has since pulled out of discussions.

georgiana.tudor@legalease.co.uk

For more on King & Wood Mallesons, subscribers can read ‘Branded’ for an in-depth look at the firm

Legal Business

KWM exits continue as DLA and Greenberg pick up teams

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Strategic recruitment DLA PiperGreenberg TraurigKing & Wood Mallesons
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DLA Piper and Greenberg Traurig are the latest to benefit from a swathe of exits at King & Wood Mallesons (KWM) European arm.

DLA Piper will take on real estate partner William Naunton (pictured) and several members of his team including partners Cornelius Medvei, Bryan Pickup, Ed Page, George Burrha and Jeremy Brooks. Managing associate Omer Maroof will also join as a partner. They join alongside eight other lawyers and three trainees, and are expected to join DLA mid-January.

Naunton is a significant biller for KWM, having billed almost £4m for the firm in the last year. When he joined KWM alongside Clive Jones and former Eversheds partner Cornelius Medvei in late 2014, the team was seen as key to KWM’s aim to expand its structured, high-end real estate offering. On joining DLA, he will become co-head of the UK real estate group.

However, Jones will join Greenberg Traurig. Alongside Jones the US firm also hired private equity funds partners Steven Cowins and Marc Snell, M&A partners Michael Goldberg and David Fitzgerald and partner Matthew Priday along with their teams.

Cowins is one of KWM’s top billers, having joined SJ Berwin in 2005. He specialises in real estate funds and joint ventures and counts Crown Estate among his clients. Goldberg and Priday focus on commercial real estate investment and have British Land on their client roster.

These are the latest in a long line of defects from KWM’s European business; heavyweight biller Michael Halford has last month joined Goodwin Procter with the other funds partners Ajay Pathak, Ed Hall, Shawn D’Aguiar and Patrick Deasy.

Corporate finance partner Andrew Wingfield and former managing partner Rob Day joined Proskauer Rose. The pair’s resignation, along with Halford’s exit and Jonathan Pittal also handing in his notice caused KWM to halt its recapitalisation plans in October. The firm has since failed in its plans to restabilise the business, and is expected to enter administration in January 2017.

Former KWM managing partner William Boss was hired earlier this month by Addleshaw Goddard, alongside Simon Tager and Michael Scott. Meanwhile former senior partner Stephen Kon confirmed last week he would retire from the law.

Another firm in talks with a number of partners is Reed Smith, while KWM’s own Asian arm is trying to secure a European presence through an office spin-off. Although it had expressed interest in a merger deal, Dentons has since pulled out of discussions.

georgiana.tudor@legalease.co.uk

For more on King & Wood Mallesons, subscribers can read ‘Branded’ for an in-depth look at the firm. 

Legal Business

KWM moves to secure European presence with ‘KWM Deutschland’ spin off

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Restructuring King & Wood Mallesons
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King & Wood Mallesons has incorporated a new limited liability partnership on Companies House called ‘KWM Deutschland’.

Legal Business understands the new entity, registered on December 12, will be a part of KWM’s European presence alongside other offices.

It is understood the firm was registered as part of KWM China’s efforts to maintain a presence in Europe. It is not clear how many legacy SJ Berwin partners will be part of the new entity.

Listed as officers of the new LLP are managing partner Tim Bednall and senior partner Michael Cziesla.

KWM’s legacy SJ Berwin practice is listed as ‘person with significant control’ with more than 25% but not more than 50% voting rights, more than 25% but not more than 50% rights to surplus assets and the right to appoint and remove members.

The move comes during a turbulent time for the practice as partners have peeled away since the firm failed to recapitalise its business in November.

Since then the firm had been looking for a merger suitor, and earlier this week management told partners it will be moved into administration on January 16. Dentons, which had originally signaled its intent to merge with the legacy practice, quit talks.

At the earlier meeting staff were told if they did not already have a new offer of employment they would no longer need to give notice to leave the firm. It is also understood that employees will be paid weekly in the new year.

Lawyers were also told not to take on any new work or clients, unless they had an offer to move to another firm.

As revealed by Legal Business, Reed Smith is the latest Global 100 firm in discussions to take on partners from King & Wood Mallesons’ European partnership. Since then it has emerged that Gareth Amdor, London head of tax and former contender in the managing partner race earlier this year, is one of the partners in talks with Reed Smith.

KWM declined to comment.

georgiana.tudor@legalease.co.uk

Legal Business

January deadline looms as KWM Europe sets administration date

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Financial management King & Wood Mallesons
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Staff at the European arm of King & Wood Mallesons (KWM) have been told the firm is expected to move into administration on 16 January.

The firm is currently carrying more than £30m in debt and efforts to recapitalise the business failed in November.

Management held a meeting earlier this week where staff were told if they did not already have a new offer of employment they would no longer need to give notice to leave the firm. It is also understood that employees will be paid weekly in the new year.

Lawyers were also told not to take on any new work or clients, unless they had an offer to move to another firm.

While KWM declined to comment on any specifics, a spokesperson for the firm said: ‘Our priority is to secure the best possible outcome for our clients and people. We continue to work with our financial advisers to explore all available options and, in the interim, speculation and rumour serve no positive purpose.’

As revealed by Legal Business yesterday, Reed Smith is the latest Global 100 firm in discussions to take on partners from King & Wood Mallesons’ European partnership. Since then it has emerged that Gareth Amdor, London head of tax and former contender in the managing partner race earlier this year, is one of the partners in talks with Reed Smith.

It has been a difficult period for KWM’s European partnership since its recapitalisation plan with Barclays failed in November after a number of key partners left. Since then, the firm has been exploring its options for a merger or a pre-pack administration deal with a variety of firms.

georgiana.tudor@legalease.co.uk

For more on King & Wood Mallesons, subscribers can read ‘Branded’ for an in-depth look at the firm.

Legal Business

KWM latest: More US firms in play as crunch time approaches for legacy SJ Berwin

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US firms King & Wood Mallesons
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A conclusion to the sorry saga which has been the European partnership woes of King & Wood Mallesons (KWM) is expected to come to an end this week, while staff have been told they will continue to be paid throughout the process of finding a merger partner.

Last week KWM said it was holding deeper discussions with merger candidates, having received a number of offers. Dentons and KWM’s Asian arm are among the candidates for the remainder of the business, which is carrying more than £30m in debt.

It is understood staff at the firm have been told this week they will continue to be paid throughout the process of finding a suitor. This month the firm also has a deadline for a rent payment on KWM’s headquarters in London, while in January the firm will face a yearly tax payment.

Several sources have indicated to Legal Business Winston & Strawn, which last year made a major play for 15 Pillsbury Winthrop Shaw Pittman partners, is not looking to take the entire legacy SJ Berwin partnership but is in talks to take on 25-30 partners.

Meanwhile it is understood US heavyweight Greenberg Traurig, which last year had merger talks with Berwin Leighton Paisner, is eyeing up a handful of partners, from three separate practice areas.

Other firms Legal Business understands to have been in discussions to take individual partners from the legacy SJ Berwin practice include DLA Piper and Mayer Brown.

A KWM spokeswoman said last week that the firm ‘is pleased to confirm that it has received a number of indicative purchase offers. The management team and its financial advisers have reviewed these and are now entering into detailed discussions with a small number of parties.’

Earlier last week, Barclays moved to take extra security over KWM assets with a second debenture, following a string of high-profile departures from the firm.

It emerged former KWM managing partner William Boss was hired by Addleshaw Goddard, alongside property partner Simon Tager and commercial real estate partner Michael Scott.

Meanwhile, KWM’s head of litigation Craig Pollack is in talks to move to US firm Covington & Burling, while heavyweight biller Michael Halford has confirmed his move to Goodwin Procter and former managing partner Rob Day and Andrew Wingfield started their new jobs at Proskauer Rose.

KWM declined to comment.

georgiana.tudor@legalease.co.uk

For more on King & Wood Mallesons, subscribers can read ‘Branded’ for an in-depth look at the firm.

Legal Business

‘Detailed discussions’: KWM enters formal talks with shortlist of merger suitors

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US firms King & Wood Mallesons
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Partners at King & Wood Mallesons (KWM) have been told at a partnership meeting today (9 December) of a shortlist of potential suitors as the European partnership enters deeper discussions for a rescue deal.

A spokeswoman said: ‘King & Wood Mallesons EUME is pleased to confirm that it has received a number of indicative purchase offers. The management team and its financial advisers have reviewed these and are now entering into detailed discussions with a small number of parties.’

She added: ‘This is a significant step forward for King & Wood Mallesons EUME but, as you would expect, the firm will not be commenting further given the confidential nature of these important discussions. A further announcement will be made once discussions have been completed.’

As revealed by Legal Business, Dentons has already emerged as a suitor for the entire business.

The news emerges after earlier this week Barclays moved to take extra security over KWM assets with a second debenture, following a string of high-profile departures from the firm.

Former KWM managing partner William Boss was hired earlier this week by Addleshaw Goddard, alongside property partner Simon Tager and commercial real estate partner Michael Scott.

Last week, it was reported that KWM’s head of litigation Craig Pollack is in talks to move to US firm Covington & Burling. Heavyweight biller Michael Halford has also confirmed his move to Goodwin Procter, with funds partners Ajay Pathak, Ed Hall, Shawn D’Aguiar and Patrick Deasy also expected to join.

Corporate finance partner Andrew Wingfield and former managing partner Rob Day have also quit for Proskauer Rose, the pair giving notice alongside Halford and Jonathan Pittal and causing the firm to halt its recapitalisation plan back in October.

Following the quartet’s resignations in October and failed merger talks with Morgan, Lewis & Bockius last month, the European partnership looked to its Chinese and Australian arm for a rescue deal. The deal required around 60% of the European partnership to commit to a 12 month lock-in and a contribution of around £14m in capital.

This meant that around 70 of 120 partners had to agree. However, this was not successful, as only 21 partners agreed to the deal.

KWM will not comment further until a new statement is released.

georgiana.tudor@legalease.co.uk

For more on King & Wood Mallesons, subscribers can read ‘Branded’ for an in-depth look at the firm.

Legal Business

Barclays takes more security over KWM assets with second debenture

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Financial management BarclaysKing & Wood Mallesons
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Barclays has moved to take extra security over King & Wood Mallesons‘ assets with a second debenture, Companies House records show.

Dated 5 December, the charge details Barclays as first in line for more of KWM’s assets covered by the charge, including secured liabilities, interest and charges (land, shares, securities, intellectual property, existing accounts, equipment and goodwill among others).

The debenture puts further financial pressure on the firm’s EUME arm, which has suffered many high-profile partner exits and  is carrying more than £30m in debt.

A KWM spokeswoman said: ‘We continue to work closely alongside our financial advisers with the full support of Barclays Bank and have no further comment to make.’

Yesterday (6 January), Legal Business revealed Addleshaw Goddard has hired KWM’s former managing partner William Boss, as well as property partner Simon Tager and commercial real estate partner Michael Scott, alongside associate Luke Harvey who joins as partner.

Last week it was also reported that KWM’s head of litigation Craig Pollack is in talks to move to US firm Covington & Burling. If he leaves he will be the latest in a long line of defects from KWM’s European business, following heavyweight biller Michael Halford who has recently joined Goodwin Procter alongside funds partners Ajay Pathak, Ed Hall, Shawn D’Aguiar and Patrick Deasy.

Corporate finance partner Andrew Wingfield and former managing partner Rob Day have also recently been confirmed to have joined Proskauer Rose, the pair giving notice alongside Halford and Jonathan Pittal. Their notice caused KWM to halt its recapitalisation plans back in October.

Following the quartet’s resignations and failed merger talks with Morgan, Lewis & Bockius, the European partnership looked to its Chinese and Australian arm for a rescue deal. The deal required around 60% of the European partnership to commit to a 12 month lock-in and a contribution of around £14m in capital.

This meant around 70 of 120 partners had to agree. However, this was not successful, as only 21 partners agreed to the deal. The firm is now exploring its options, with a merger or pre-pack administration reported as two of these options. Since then, Dentons emerged as a suitor to take the entire European partnership.

georgiana.tudor@legalease.co.uk

For more on King & Wood Mallesons, subscribers can read ‘Branded’ for an in-depth look at the firm.

Legal Business

Comment: Buck-passing and buyers’ remorse as KWM saga nears end

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Comment King & Wood Mallesons
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Though it will be outdated by the time this issue hits desks, I am professionally obligated I suppose to return to the subject of King & Wood Mallesons (KWM) as the firm’s troubled European business reaches what must be the decisive chapter of its post-merger tale.

With the recapitalisation deal having failed to secure the required backing from the legacy SJ Berwin partnership that would have seen its Australian and Chinese counterparts offer much-needed support, the only obvious next step in Europe if the firm is to stay in anything like a coherent whole appears to be a transfer to another firm. With debts over £30m and partners peeling away, the chances of that outcome do not look great. That is even before you address the complications of shifting part of a business contained within a multi-profit centre verein.

It did not have to come to this. The legacy SJ Berwin was a decent asset, albeit one badly mis-sold to its Asia-Pacific suitors three years ago. If there is one lesson from decades of law firm mergers, it is that you need to be honest about what is on the table. Once you have sold a practice to your partnership that turns out to be different, it is near impossible to constructively adjust course.

The result is the worst of both worlds – partners in perpetual buyers’ remorse, unable to accept the value of what they actually have. KWM wanted a firm with institutional muscle in Europe – not a bunch of world-weary mavericks. It was always going to struggle to secure such a suitor and KWM should have been more realistic on the point.

But the legacy SJ Berwin partnership bears more of the responsibility, right to the end. The firm was under-capitalised for years and various figures, among them former managing partner Rob Day, had tried to get its finances in order.

Certain influential figures in the firm resisted any such move. SJ Berwin had also for years attempted to modernise the business’ operations, strategy and governance. They were half measures that ended up diluting its entrepreneurial culture without putting anything coherent in its place. There have been a series of mis-steps at SJ Berwin spanning at least a decade. Its unflappable former leader David Harrel used to warn the firm was unable to critically consider its own culture and the collateral damage of partners’ ‘sharp elbows and insecurities’.

Even at the latter stages the old SJ Berwin culture surfaced, with the joint ticket bid for managing and senior partner of Gareth Amdor and Michael Halford apparently derailed by the attempt to get partners to accept the pair as a non-negotiable duo. Instead Amdor was defeated by Tim Bednall and Halford – the point man for KWM’s profitable funds teams – pulled out of the senior partner contest, resigning several weeks later.

The collective result of all this? The cost and consequence of such discord will be felt more by staff than partners. Let us hope new managing partner Bednall lives up to expectations and can salvage something from this mess.

alex.novarese@legalease.co.uk

Read the latest: ‘Another blow for KWM as Addleshaws hires former European head Boss along with two other partners’

For more analysis see: ‘Global 100: Branded – Inside the troubled takeover of SJ Berwin’