Legal Business

Another blow for KWM as Addleshaws hires former European head Boss along with two other partners

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Strategic recruitment Addleshaw GoddardKing & Wood Mallesons
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Addleshaw Goddard has made a play for King & Wood Mallesons (KWM) partners, taking on the firm’s former managing partner William Boss, as well as property partner Simon Tager and commercial real estate partner Michael Scott. Addleshaws has also hired commercial real estate managing associate Luke Harvey who joins as a partner.

The combined fee earning potential of the group is almost £5m, with real estate heavyweight Boss (pictured) the operational partner for the Crown Estate in relation to its Regent Street Portfolio, which is currently undergoing review.

Meanwhile Tager also acts for the Crown Estate in relation to its Regent Street portfolio as well as acting for Marks & Spencer on key developments across the UK, such as the development of the M&S head office at Paddington Basin.

Scott acts for quoted property companies, institutional investors, developers, lenders and occupiers with recent transactions including advising British Land.

Addleshaws may also take some associates from KWM to support these hires.

Addleshaws head of real estate Leona Ahmed said: ‘This latest investment is very much a part of our significant commitment to the real estate sector and consistent with Addleshaw Goddard’s wider strategic goals. We have for some time been looking to augment our team and the skills and profile of these partners are massively complementary to the existing team, as well as bringing new opportunities for the combined group.’

Last week it was reported that KWM’s head of litigation Craig Pollack was in talks to move to US firm Covington & Burling. 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.

Should he sign the dotted line, he will join a spate of partners to depart KWM for Covington since last year, including Alex Leitch, Greg Lascelles, and Elaine Whiteford.

If he leaves he will be the latest in a long line of defects from KWM’s European business; heavyweight biller Michael Halford has recently joined Goodwin Procter and will be joined by funds partners Ajay Pathak, Ed Hall, Shawn D’Aguiar and Patrick Deasy.

Corporate finance partner Andrew Wingfield joined Proskauer Rose, while former managing partner Rob Day is also to move to Proskauer. 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.

Following the quartet’s resignations the European partnership looked to its Chinese and Australian counterparts for a rescue deal.

The tabled 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 the entire European partnership.

KWM declined to comment.

kathryn.mccann@legalease.co.uk

Read more: ‘Four more years: Addleshaws Joyce to run again as leadership election kicks off’

Legal Business

‘A combination of poor decisions’: KWM’s plan to recapitalise European business fails

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Financial management King & Wood Mallesons
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Legacy SJ Berwin on the brink as global managing partner stands down

Persistent troubles at King & Wood Mallesons’ (KWM) beleaguered European arm came to a head in November as the partnership, which is carrying more than £30m in debt, failed to get a deal over the line to recapitalise its business. As Legal Business went to press, the firm was assessing its options for a merger or pre-pack administration deal. It was understood that a shortlist of potential suitors had been drawn up.

Legal Business

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

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Financial management 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.

Legal Business

‘Nobody left’: KWM expected to close Munich as lease ends

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Germany DentonsKing & Wood Mallesons
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King & Wood Mallesons (KWM) is expected to close its Munich office after failing to find support to recapitalise its European business.

The lease for KWM’s Munich office is expected to run out at the end 2017, and a number of partners and associates are understood to have left or handed in their resignations. In addition, at least one US firm is in talks to take on KWM’s office space.

Last month, Legal Business Euro Elite firm Flick Gocke Schaumburg hired two key private equity partners from KWM, including former Munich managing partner Christian Schatz and Martin Brockhausen. Their exits will leave the firm with just six partners in the city.

One former KWM partner told Legal Business: ‘Look at who has left, I’d be very surprised if they kept it going, given that the lease is due to run out shortly.’

Another former partner said: ‘They lost a few funds partners and IP partners. There is nobody left in Munich.’

In August KWM’s high-billing Munich-based funds partner Sonya Pauls left the firm for Clifford Chance, while in July K&L Gates launched an office in Munich with the hire of three lawyers from KWM, including investment management partner Hilger von Livonius. A number of associates are also understood to be moving to other international firms in the city.

KWM’s legacy SJ Berwin partnership is currently in discussions with a number of firms including Dentons. US outfit Orrick, Herrington & Sutcliffe is also thought to be interested in parts of the European grouping.

A former KWM partner said: ‘At one point Orrick were in the frame as a merger partner. Dentons would fit – the major practice they have in London is real estate and they could fill out in that – and KWM are their competitor on the worldwide China legal market.’

US firm Greenberg Traurig had also been linked to KWM’s European arm. However, executive chair Richard Rosenbaum took to Twitter to deny the firm had any interest in taking the entire EUME partnership. He said: ‘[It’s] not our style … they have great lawyers, some would be perfect fits with our culture and business strategies but nothing to say at the moment.’

A KWM spokeswoman said: ‘The views of former partners are not based on current or accurate information and should not be relied on. The firm has no plans to close its Munich office.’

matthew.field@legalease.co.uk

 

Legal Business

A giant rescue: Dentons enters fray to take over bulk of KWM’s European practice

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Europe DentonsKing & Wood Mallesons
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Dentons has emerged as a potential suitor to save the beleaguered European arm of King & Wood Mallesons (KWM), Legal Business can reveal, with management at both firms understood to be in merger discussions.

US firm Orrick, Herrington & Sutcliffe has also been touted as a potential merger partner – and the main contender bidding against Dentons for KWM’s London office.

Dentons – the world’s largest firm by lawyer headcount – is said to be making a strategic play to take Chinese rival firm KWM out of the London market. Having merged in 2015 with China’s largest law firm, Dacheng, the move would give Dentons a significant competitive advantage in London.

Joe Andrew, global chair at Dentons, said: ‘While we would never comment on whether we are in combination conversations or not with any firm, we admire the many European/UK partners of KWM that our partners work with regularly and believe this is a very high-quality group of impressive lawyers.’

Dentons moved from a $1.28bn firm to a $2.12bn business by virtue of its incredibly expansive 2015 – a deal adding on the European business of KWM could add roughly £180m to its top line.

West Coast US firm Orrick has been mooted as another potential suitor and has also been in expansion mode this year, focusing on boosting its real estate, energy, technology and finance sectors. The firm declined to comment and said it was not interested in KWM’s London office.

One former KWM partner said: ‘Orrick has been mentioned that it might be a good suitor for them. At the least partners have been looking to move there. I don’t think the link with China and the London office has ever been there for the firm.’

Last week it emerged that KWM’s legacy European practice had failed to complete its planned recapitalisation programme, which was paused last month after a number of partner departures.

In a statement, the firm added that the EUME partnership board and management were ‘considering a range of strategic options, including mergers, in conjunction with the firm’s bankers and financial advisers’.

KWM’s rescue deal on offer by Chinese and Australian management in recent weeks 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. Salaried partners were also asked to contribute £60,000.

This would have guaranteed the remaining partners at least £11,000 per equity point, against a current figure of £14,000. The new value would see partners on the lockstep earn between £220,000 and £660,000, depending on their position.

sarah.downey@legalease.co.uk

matthew.field@legalease.co.uk

Legal Business

KWM head of litigation and major biller Pollack in talks to join Covington

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Strategic recruitment Covington & BurlingKing & Wood Mallesons
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King & Wood Mallesons‘ head of litigation Craig Pollack is in talks to move to US firm Covington & Burling.

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

Major mandates include advising a major Russian telecoms provider in post-LCIA arbitration enforcement proceedings across various jurisdictions, and defending a star hedge fund manager in a Financial Conduct Authority investigation into regulatory breaches.

Should he sign the dotted line, he will join a spate of partners to depart KWM for Covington since last year, including Alex Leitch, Greg Lascelles, and Elaine Whiteford.

If he leaves he will be the latest in a long line of defects from KWM’s European business; heavyweight biller Michael Halford has recently joined Goodwin Procter and will be joined by funds partners Ajay Pathak, Ed Hall, Shawn D’Aguiar and Patrick Deasy.

Corporate finance partner Andrew Wingfield joined Proskauer Rose, while former managing partner Rob Day is also to move to Proskauer. 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. 

Following the quartet’s resignations the European partnership looked to its Chinese and Australian counterparts for a rescue deal.

The tabled 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.

sarah.downey@legalease.co.uk

Read more analysis in the comment piece: ‘Comment: The moment of truth arrives in the SJ Berwin saga’ or our cover feature: ‘Branded: Inside the troubled takeover of SJ Berwin’

Legal Business

Goodwin Procter poised to take majority of KWM’s prized funds team

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Strategic recruitment Goodwin ProcterKing & Wood Mallesons
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Four King & Wood Mallesons partners, the majority of the firm’s influential funds team, are in talks to join Goodwin Procter, following their former group head Michael Halford’s decision to join the US firm.

Legal Business understands major billers Ajay Pathak, Patrick Deasy, Ed Hall and Shawn D’Aguiar are set to sign with Goodwin. Part of the firm’s prized funds team, Pathak, Deasy and Hall were worth roughly £8m in billings.

Halford’s exit along with three other influential legacy SJ Berwin partners, Jonathan Pittal, Andrew Wingfield and Rob Day caused the firm to halt and ultimately fail in its plans to recapitalise the business, which is carrying more than £30m in debt.

Earlier this week Goodwin said Halford (pictured) was joining and that ‘certain other London-based KWM partners’ were also given offers. The offers are subject to a partnership vote which is expected to take place in the coming weeks.

A KWM spokeswoman confirmed on Tuesday (22 November) that a revised plan to recapitalise the business had failed. The rescue 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. Salaried partners were also asked to contribute £60,000.

Halford specialises in private equity and investment fund structuring, his portfolio also includes real estate funds and infrastructure funds for institutional and private investors. Among the investment houses he counts as clients are Triton, Macquarie, Deutsche, Invesco and BNP Paribas.

KWM filed a lawsuit back in May against former partner Richard Lever and his new firm Goodwin on the basis of the firm hiring a six-partner private equity team from KWM in Paris. Lever left KWM in April 2015, closely followed by private equity partner Simon Fulbrook.

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

Goodwin Procter to take Halford and other KWM partners as recap fails

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Strategic recruitment Goodwin ProcterKing & Wood Mallesons
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After resigning last month, King & Wood Mallesons’ (KWM) influential head of investment funds and major biller Michael Halford will be joining Goodwin Procter and has taken several other partners with him.

Halford’s exit along with three other influential legacy SJ Berwin partners, Jonathan Pittal, Andrew Wingfield and Rob Day caused the firm to halt and ultimately fail in its plans to recapitalise the business, which is carrying more than £30m in debt.

Goodwin said Halford (pictured) was joining and that ‘certain other London-based KWM partners’ were also given offers. The offers are subject to a partnership vote which is expected to take place in the coming weeks.

A KWM spokeswoman confirmed today (22 November) that a revised plan to recapitalise the business had failed. The rescue 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. Salaried partners were also asked to contribute £60,000.

Halford specialises in private equity and investment fund structuring, his portfolio also includes real estate funds and infrastructure funds for institutional and private investors. Among the investment houses he counts as clients are Triton, Macquarie, Deutsche, Invesco and BNP Paribas.

The exit was a major hit for KWM, as he was the key figure in the firm’s funds team, a practice seen as the firm’s crown jewel.

KWM filed a lawsuit back in May against former partner Richard Lever and his new firm Goodwin on the basis of the firm hiring a six-partner private equity team from KWM in Paris. Lever left KWM in April 2015, closely followed by private equity partner Simon Fulbrook.

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

King & Wood’s European recap programme fails as firm considers options

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Financial management King & Wood Mallesons
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King & Wood Mallesons‘ European arm has failed to complete its planned recapitalisation programme, which was paused last month after a number of partner departures.

In a statement the firm said: ‘Having completed its assessment, a revised plan was submitted to the EUME partnership under which the same level of new partner capital was required, but with the financial support of the verein member firms. Regrettably, insufficient value of new capital was committed.’

‘The firm will continue to service the needs of clients, operating on a business as usual approach. The EUME partnership board and management are considering a range of strategic options, including mergers, in conjunction with the firm’s bankers and financial advisers. A further statement will be made in due course.’

KWM’s legacy European practice has had a turbulent time over the past two years following a series of exits. It is carrying more than £30m in debt.

The recap programme was paused after four heavyweight partners, including funds head and major biller Michael Halford, private equity partner Jonathan Pittal, corporate partner Andrew Wingfield (who is already at Proskauer Rose) and former managing partner Rob Day quit the firm.

The rescue 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. Salaried partners were also asked to contribute £60,000.

This would have guaranteed the remaining partners at least £11,000 per equity point, against a current figure of £14,000. The new value would see partners on the lockstep earn between £220,000 and £660,000, depending on their position.

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’

Read more: ‘Goodwin Procter to take Halford and other KWM partners as recap fails’

Legal Business

Simmons latest to benefit from KWM exits as German IP team quits

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Strategic recruitment King & Wood MallesonsSimmons & Simmons
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Simmons & Simmons announced today (16 November) the hire of King & Wood Mallesons (KWM) intellectual property (IP) partner Michael Knospe. He has joined Simmons’ Munich office together with counsel Caroline von Nussbaum and supervising associate Massimo Bellitto-Grillo.

Knospe joined SJ Berwin in 2010 and has a strong focus on trademarks and unfair competition and has experience across a number sectors, including TMT, consumer goods, life sciences and entertainment law. He spent the first 19 years of his career at Freshfields Bruckhaus Deringer, before he joined Howrey in 2007.

Simmons IP head Rowan Freeland said: ‘Michael’s arrival is a real vote of confidence in the firm’s international intellectual property practice and his presence will strengthen both our intellectual property offering on the ground in Germany and our wider international practice.’

KWM’s European partnership has had a difficult run of late, and this week is considering a deal from the firm’s Asian arm for an internal bailout following the halt of recapitalisation talks last month. The European partnership is carrying more than £30m in debt.

The deal is subject to a vote, of which at least 70 out of about 120 partners must agree to. The partnership has until the week beginning 21 November to decide on the deal which includes a 12 month lock-in, a call for contributions from salaried partners of £60,000 and a guarantee that equity partners will receive at least £11,000 per equity point. This would mean the highest earning partner at KWM will have the ability to pocket £660,000 and the lowest earning equity partner £220,000.

For Simmons, the team hire into its IP practice follows a string of exits to Allen & Overy earlier this year. London partners Marjan Noor, Marc Döring, Mark Heaney and David Stone all announced this year they would exit Simmons for the Magic Circle firm.

georgiana.tudor@legalease.co.uk