Legal Business

Revolving Doors: Davis Polk hires magic circle PE partner as Kirkland opens in Frankfurt

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Revolving doors Davis Polk & Wardwellfried frankKirkland & EllisMilbank

Davis Polk has hired an A&O Shearman corporate real estate partner in London, while Milbank and Kirkland pick off talent from Latham.

Davis Polk expanded in London with its hire of A&O Shearman PE partner Gordon Milne. The move brings Davis Polk’s London partner headcount to 11, based on numbers reported on the firm’s website.

Though Davis Polk opened in London in 1973, it has maintained only a small presence in the city. This year, however, it has signalled its intention to build, with Milne’s hire coming just months after the firm announced it was bringing in Paul Hastings global finance cohead and Legal 500 acquisition finance leading partner Luke McDougall in April.

‘We have identified our London office as an area ripe for growth’, said managing partner Neil Barr in a statement. ‘Gordon is highly respected in the market and represents an important step in the execution of our strategy to build out our UK private equity capabilities.’

Europe practice head Will Pearce added: ‘Gordon is one of the preeminent private equity practitioners in London, with an impressive portfolio of longstanding fund clients. We are absolutely delighted to have him on board.’

Milne’s departure comes after 24 years at legacy Allen & Overy and A&O Shearman. His practice covers a range of cross-border M&A and corporate finance transactions, with highlights including advising the consortium on the sale of New Scientist Group to Daily Mail and General Trust (DMGT) and advising Exponent Private Equity on a number of multimillion-pound transactions including its sales of BBI Group and BBI Healthcare and its acquisition of TRS Group.

Meanwhile, Milbank has announced the hire of a six-strong team of finance lawyers from Latham & Watkins, headed by collateralized loan obligation (CLO) partner Alex Martin.

The move was announced on the same day that it was reported that Sidley Austin had tapped Latham for a team of five leveraged finance partners led by Jayanthi Sadanandan and Sam Hamilton. The dual exits mean that Latham’s finance platform has lost 11 lawyers in quick succession, six of them partners. 

Martin’s team includes Kristine Kozicki, who joins as special counsel, and four more associates. The six will join Milbank’s alternative investment practice. Milbank Chairman Scott Edelman said in a statement: ‘Alex’s extensive experience with CLO matters is highly compatible with our global Alternative Investments practice, and his unique focus will both complement and enhance the team’s work across all of our offices.’

Elsewhere in the City, Fried Frank has hired Freshfields corporate real estate partner Roger Schofield, who will switch offices in September. Specialising in real estate joint ventures, capital solutions, acquisitions and dispositions, Schofield joins after a 16-year stint at Freshfields, five of those as a partner.

Head of Fried Frank’s corporate real estate practice Fiona Kelly said in a statement: ‘His experience in guiding clients through complex structured real estate transactions and capital solutions is a perfect complement to our dynamic team.’

On mainland Europe, senior M&A lawyer Tobias Larisch is set to join Kirkland & Ellis to launch the firm’s new Frankfurt office. The new site is Kirkland’s first in Europe since it launched in Brussels in 2021 and will be the firm’s second office in Germany, almost 20 years after it opened in Munich in early 2005.

Larisch will join from Latham, where he serves as regional chair of the firm’s corporate department. He advises on M&A, public takeovers, joint ventures and carve-outs and has a focus on the energy and infrastructure sectors.

In a statement, chairman of Kirkland’s executive committee Jon Ballis said: ‘As one of Germany’s leading M&A lawyers, Tobias’ expertise and deal experience fit very well within the areas where we see increasing demand for our services.’ Ballis continued, ‘opening a Frankfurt office will make available to us a new pool of leading legal talent looking to work on some of the most complex transactions in Germany.’

Also in Frankfurt, McDermott Will & Emery has strengthened its global transactions practice with the hire of Alexander Klein as a partner from Gibson Dunn. He brings with him expertise advising on acquisition financing, corporate finance and syndicated lending for both domestic and international transactions.

Matthias Kampshoff, managing partner of McDermott’s Germany offices said in a statement: ‘Alexander’s appointment supports our strategy of creating a leading German private equity and finance service for our clients. Alexander’s arrival is very welcome, as our finance team in Germany has been exceptionally busy this year.’

Tom.Cox@legalease.co.uk

Legal Business

‘When someone is so disaffected it’s best to get them out sooner rather than later’: Kirkland to hold back pay for departing partners; cut notice period

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Kirkland & Ellis

Kirkland & Ellis is overhauling its equity partner exit terms – ushering in new policies to withhold compensation for departing partners, as well as slashing notice periods and speeding up the time it takes those leaving to be repaid their capital.

Partners are understood to have unanimously approved the changes earlier this week (16 July), with the move, first revealed by Financial News, meaning equity partners leaving the firm could potentially see millions in accrued compensation withheld by Kirkland, where average PEP stands at nearly $8m and stars are paid significantly more.

Until now, Kirkland has withheld 55% of equity partners’ annual compensation until the following year. The new policy grants Kirkland the option of withholding this accrued compensation from departing partners altogether. It will be at Kirkland’s discretion whether it chooses to withhold the distributions.

In addition, the firm has also approved a change that will reduce the notice period for exiting partners from 120 days to 60 days, effectively returning Kirkland to the notice period it had prior to 2016.

The firm has also slashed the time those leaving will have to wait for their capital to be repaid from 12 months to three months.

The changes to Kirkland’s exit terms on its partnership agreement come after the firm saw a string of high-profile departures to Paul Weiss in London last year.

Debt finance partner Neel Sachdev and buyout partner Roger Johnson left to launch an English law practice for Paul Weiss, going on to bring in equity partners including Timothy Lowe (tax) and Matthew Merkle (capital markets), as well as several non-equity partners.  For more on Kirkland and Paul Weiss, see LB’s feature ‘Market forces: Paul Weiss, Kirkland and the war for London talent’ . 

With new firms likely having to pick up the cost of any potential profit distributions withheld from new recruits, the overhaul will make it more costly to add lateral teams from Kirkland in future.

Danielle Crawford, a partnership counsel at Forsters, said that in practice departing partners would likely not lose out personally because of the change, with their new firms instead picking up the additional cost of matching the withheld distributions.

She told Legal Business: ‘Talking about the discretion to withhold distribution payments for departing partners is very common across the bigger firms especially Kirkland’s competitors. It makes it less attractive for partners to leave, if a firm wants to poach a partner, they might have to make good that loss to persuade the partner to leave.’

Meanwhile speeding up the time it takes to get departing partners out of the door and to receive their capital back will save Kirkland money and it will also be better for firm culture, according to partnership experts.

‘Prolonged departures are not good for team morale/key firm-client relationships,’ added Crawford. ‘There is also a higher risk that the departing partner can take more business from the firm if they continue with client work for a number of months after they have decided to leave.’

Another partnership lawyer said: ‘When someone is so disaffected it’s best to get them out sooner rather than later rather than having them hanging around for a longer period.’

Partners suggest reducing the notice period and time taken to repay capital could well have been sweeteners for partners to get the changes over the line and boost retention. They also bring the firm in line with other firms, which have increasingly been looking at exit terms. Linklaters for example discussed withholding profit from departing partners before deciding against it.

‘It is increasingly common, particularly for the large, high earning US firms,’ said Jon Haley, head of professional partnerships at Farrer & Co.

He added: ‘It has not historically been common in UK legal partnerships but you do not have to look hard to find similar Bad Leaver mechanisms – whereby retained value in some form or other is forfeited on exit – in other high earning sectors such as private equity and financial services, so in some ways the legal profession could be said to be lagging behind and I suspect others will follow soon.’

elisha.juttla@legalbusiness.co.uk

tom.cox@legalease.co.uk

Legal Business

Kirkland, Paul Weiss and Slaughters lead on £3.5bn Royal Mail takeover bid

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Deals Kirkland & EllisPaul, Weiss, Rifkind, Wharton & GarrisonSlaughter and May

Kirkland & Ellis, Paul Weiss and Slaughter and May are advising on the proposed takeover of the Royal Mail’s parent company, International Distributions Service (IDS), by Czech billionaire Daniel Kretinsky. 

The deal is a revised non-binding proposal from EP Corporate Group for the remaining share capital of IDS which is not already owned by EP, which at present, holds 27.6% of IDS’s issued share capital.  

The proposal values the entire issued share capital of IDS at approximately £3.5bn.  

EP is being advised by Kirkland, with a team led by corporate partners David Higgins, Dipak Bhundia and Jiri Peterka, alongside antitrust & competition partner Matthew Sinclair-Thomson. 

Paul Weiss is also advising EP, handling financing and structuring aspects of the bid, with finance duo Neel Sachdev and Stefan Arnold-Soulby, leading the firm’s team.

Slaughters corporate duo Richard Smith and Claire Jackson are advising IDS’s management.  

In an announcement to the London Stock Exchange, IDS chair Keith Williams said: ‘The Board is minded to recommend this offer price, which it considers to be fair and reflects the value of GLS’ current growth plans and the progress being made on change at Royal Mail to adapt the business to a significant fall in the demand for letters and growth in parcels.  

‘It is however regrettable that despite four years of asking, the Government has not seen fit to engage in reform of the Universal Service and thus improve our financial position and ensure that Royal Mail could provide an economically sustainable service to the British public.’

holly.mckechnie@legalease.co.uk

Legal Business

Market forces: Paul Weiss, Kirkland and the war for London talent

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Global London Kirkland & EllisPaul, Weiss, Rifkind, Wharton & Garrison

In the contest for the biggest legal story of the moment, the A&O Shearman merger may be more transformational for the firms involved, but it is fair to say it has not quite captured the imagination like Paul Weiss’s dramatic and audacious hiring spree in London.

‘The question is whether a firm can genuinely build an elite PE practice by lifting out the top guys from different shops,’ muses one US firm partner, on Paul Weiss’s bid to crack London.

Legal Business

Talk of the town: Why Kirkland/Paul Weiss underlines the value of controlling the management message

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The Issue Kirkland & EllisPaul, Weiss, Rifkind, Wharton & Garrison

Clandestine conversations, a recruitment strategy on steroids, eye-watering salaries and internal politics galore, the Paul Weiss/Kirkland story has enough drama in it to keep the attention of even those outside the legal market.

For City partners, the interest in what’s going on has been off the scale.

Legal Business

A&O high yield head retires ahead of Shearman tie-up as firm makes first combined partner promos

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Partnership promotions Allen & OveryKirkland & EllisShearman & Sterling

Prominent high-yield partner Kevin Muzilla has retired from Allen & Overy, in the latest departure from the practice ahead of next month’s A&O Shearman mega-merger.

Ranked in the Legal 500 Hall of Fame for London high-yield, Muzilla joined A&O from Milbank as a partner in 2009, and has since headed up the firm’s leveraged finance teams, first the US and then Europe.


He has been active in the European high yield market since its inception, and has been involved in many market-defining deals, including advising the
underwriters on what was the largest Russian LBO financing in history
– the acquisition of Russian transportation group FESCO, which won the Legal Business Finance Team of the Year award in 2014.

His departure follows that of Marwa Elborai, also a Legal 500 high-yield leading individual, who left for Kirkland & Ellis last month after joining from Shearman in late 2022, while fellow high yield grandee Ward McKimm recently confirmed he would be retiring from Shearman ahead of the 1 May combination with A&O.

Another high yield specialist partner, Jeanette Cruz, also left A&O last August, according to filings on Companies House.

A&O said in a statement: ‘We would like to thank Kevin for the contribution that he has made during his time at A&O and wish him all the best for the future.’

A&O’s London high-yield bench is by no means totally depleted. Prominent partners remaining include US-qualified John Kicken, who joined in 2014 from Cravath, and Brad Weyland, who came in as a partner in 2021 from Latham & Watkins, where he was a counsel.

The magic circle firm is currently gearing up for the completion of its combination with Shearman; a deal which is of driven in large part by complementary finance expertise at both firms. Shearman’s London office includes Legal 500 high-yield leading individual Trevor Ingram and next generation partner Gordon Houseman, who made partner at the US firm in 2015 and 2021 respectively.

Elborai’s departure to Kirkland was followed last week by the news that A&O debt finance partner Vanessa Xu, who was made up in 2017, would also be joining the US firm’s London office.

However, these departures are to be offset by the first combined round of partner promotions at A&O Shearman, with 40 new partners announced in a joint press release issued today (8 April).

Of these, 32 come from A&O and eight from Shearman. This balance was ‘consistent with the relative size of the two firms and their geographic footprints’, the press release said, with A&O’s 80% share in line with its 78% share of the merged firm’s total headcount, according to data from last year’s Global 100. Last year A&O promoted 36 partners with 12 in the UK, while Shearman promoted ten, with one in the UK.

All nine of the new London partners came from A&O, with three each in banking and corporate. Thirteen have been made up to partner in the US, including five from A&O and eight from Shearman. The total also included 13 new partners in continental Europe, four in Asia, and one in the Middle East, all of which were from A&O.

Banking was the biggest overall practice area with ten promotions all from A&O. Corporate was in second with nine, including eight A&O corporate partners and one Shearman M&A partner. The new partners also included six in litigation, five in international capital markets and four in tax.

Full list of partner promotions:

Allen & Overy

New York
Lena Kiely, International Capital Markets
Puja Patel, Corporate
Derek Poon, International Capital Markets

Washington DC
Michael Sykes, Banking
Gideon Wiginton, Banking

London
Tim Bates, International Capital Markets
Imogen Carr, Corporate
Vanessa Morgan, Management
Rebecca Noble, Banking
Rachel O’Reilly, Banking
Kate Pumfrey, Litigation
Alex Shandro, Corporate
Jason Symington, Banking
David Weaver, Corporate

Brussels
Axel de Backer, Banking

Amsterdam
Luke Whibley, Banking

Paris
Laurie-Anne Ancenys, Corporate
Charles del Valle, Tax
Anne-Caroline Payelle, Corporate

Duesseldorf
Catharina Glugla, Corporate

Munich
Rauni Ahammer, Banking

Frankfurt
Tim Drach, Tax
David Schmid, Litigation
Sebastian Schulz, Litigation

Luxembourg
Baptiste Aubry, International Capital Markets
Franz Kerger, Tax
Madrid, Spain
Ishtar Sancho, Tax

Dubai
Arash Koozehkanani, Litigation

Jakarta
Mohammad Andrew, International Capital Markets

Singapore
Matthew Del Rosso, Banking
Jessica Lee, Banking
Ayesha Thapar, Corporate

Shearman & Sterling

New York
Melisa Brower, Compensation, Governance and ERISA
Jonathan Cheng, Antitrust
Joshua Ebersole, Litigation
Jai Garg, Compensation, Governance and ERISA
Christopher Glenn, Mergers & Acquisitions
Leila Siddiky, Litigation

Washington DC
Brian Hauser, Antitrust

Austin
Michelle Kwan, Emerging Growth

The promotions are broadly balanced along gender lines, with 23 men (57%) and 17 women made up.

alexander.ryan@legalbusiness.co.uk

Legal Business

Paul Weiss and Kirkland break revenue records amid London lateral shakeout

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Financial results Kirkland & EllisPaul, Weiss, Rifkind, Wharton & Garrison

Paul Weiss has broken through the $2bn global revenue mark, posting a 10.8% hike on last year, as the firm’s bold London recruitment drive continues to make headlines.

The firm’s 178 equity partners took home an average of $6.5m in 2023, with profit per equity partner (PEP) up 14.8% from $5.73m the previous year.

Overall profit came in at $1.17bn, while revenue per lawyer was up 5.3% to $1.98m from last year’s $1.88m.

In recent months, Paul Weiss has recruited some of the City’s biggest hitters, among a total of 17 partner hires. Most have joined from Kirkland & Ellis, following the defections of debt finance superstar Neel Sachdev and big-name corporate partner Roger Johnson in August. The duo joined to lead the US firm’s London office, initiating a wave of hires aimed at building up a substantial English law practice.

Sachdev brought with him a Kirkland team including debt finance partner Kanesh Balasubramaniam and capital markets partners Matthew Merkle and Deirdre Jones, while Johnson has assembled an M&A practice with ex-Kirkland partner Andreas Philipson, as well as a tax practice featuring former Kirkland partners Timothy Lowe and Cian O’Connor.

Other names joining from Kirkland have included debt finance partner Stefan Arnold-Soulby and technology and intellectual property transactions specialist John Patten.

Paul Weiss has also targeted the Magic Circle, starting with the hire of Linklaters M&A partner Will Aitken-Davies in September. Notably, Lowe, O’Connor and Patten also had stints at Linklaters.

In December, it came as no surprise when Paul Weiss hired from Linklaters again, bringing on Nicole Kar, the former head of the Magic Circle firm’s antitrust and foreign investment practice. Adding to the Linklaters alumni, the following month the firm hired public M&A partner Dan Schuster-Woldan.

Clifford Chance has also been a target, with high-profile private equity partner Christopher Sullivan and acquisition finance partner Taner Hassan coming over in December, and just last week (18 March), junior private equity partner Oliver Marcuse followed suit.

Outside of the Magic Circle, Paul Weiss has also hired former Ropes & Gray competition partner Annie Herdman, who also served at Kirkland earlier in her career.

The recruitment drive has seen a complete changing-of-the guard for Paul Weiss in London, which has had a modest City presence without English law capability since 2001. Last May deputy London head Ramy Wahbeh and corporate partner Kaisa Kuusk both left to join Sidley, followed by the departure of London managing partner Alvaro Membrillera to Kirkland in early August, a move which was one of a number of factors which sparked the flurry of moves in the opposite direction.

On the back of the new additions, the firm announced in October it was set to move into Twitter’s former UK headquarters in Soho.

Recent London deal highlights for Paul Weiss have included advising General Atlantic on its acquisition of a majority stake in coffee shop Joe & the Juice from Valedo Partners, with Johnson and Balasubramaniam working alongside partners in the US.

The seven billion dollar law firm

Despite the departures in London, Kirkland has consolidated its position as the largest law firm in the world, with global revenue increasing by 10% last year to $7.2bn, according to The American Lawyer.

The firm’s 539 equity partners took home an average of $8m as PEP increased 5.8%, with overall profit standing at $4.3bn. RPL also increased by 7.5% from $1.9m last year, to $2.05m.

As well as highly regarded private equity partner Membrillera, the firm has made a number of other significant recent additions to its team, including debt finance partners Ian Barratt and Sinead O’Shea, who joined from Simpson Thacher & Bartlett, while Herbert Smith Freehills ESG head Rebecca Perlman also recently came on board in London.

O’Shea, alongside London debt finance colleague Jerome Hoyle, were recently part of a global team advising KKR on financing for its voluntary public takeover offer to all shareholders of Encavis, a leading German wind and solar park operator.

The firm’s restructuring team has also handled a number of significant mandates of late, such as advising global engineering and construction business McDermott International on the cross-border restructuring of around $2.6bn of the group’s secured debt facilities.

In 2023 Kirkland also opened a new office in Riyadh, recruiting corporate partner Noor Al-Fawzan and capital markets Manal Al-Musharaf from Latham & Watkins and White & Case respectively, to join the 20th global office of the Chicago giant.

elisha.juttla@legalease.co.uk

Legal Business

Infrastructure profile: Sara Pickersgill – ‘Pick something you love doing and do it only for as long as you love it’

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Infrastructure Kirkland & Ellis

Kirkland & Ellis’ Sara Pickersgill on switching track from opera singer to infrastructure lawyer and why The Lion, the Witch & the Wardrobe offers salient lessons for a career in the City

Why did you want to be a lawyer and why infrastructure in particular? Has it delivered what you expected?

Legal Business

The onslaught continues: Paul Weiss raids Kirkland again to hire City IP partner

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Strategic recruitment Kirkland & EllisPaul, Weiss, Rifkind, Wharton & Garrison

Just when the market thought Paul Weiss had eased up on its hiring spree in the run-up to Christmas, the firm has hired John Patten, a partner in the London technology and intellectual property (IP) transactions practice of Kirkland & Ellis.

The move sees the Wall Street giant continue to pursue with gusto the build-out of the English law practice that has gathered momentum in short order, much to the chagrin of the management of Kirkland and Linklaters, among others.

For his part, Patten, who is joining Paul Weiss as a full equity partner, has been a partner at Kirkland since October 2021, before which he was a trainee, and subsequently an associate at Linklaters.

His practice focuses on advising clients on commercial and corporate transactions in which technology and IP play a role, as well as advising on data protection compliance with European data privacy laws.

The hire brings Paul Weiss another step closer to establishing a top-flight corporate practice to complement the formidable finance practice brought over from Kirkland in August by rainmaker Neel Sachdev.

Sachdev, along with private equity star Roger Johnson who defected from Kirkland around the same time, are co-leading Paul Weiss’ London office. The M&A offering also includes former Linklaters partner Will Aitken-Davies and former Kirkland partner Andreas Philipson.

If the strategy for Paul Weiss in London is to eventually be able to service all areas of private equity, the plan certainly seems to be coming together.

nathalie.tidman@legalease.co.uk

Legal Business

One in, one out: Deal star Johnson to exit Kirkland as Membrillera joins from Paul Weiss

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Strategic recruitment Kirkland & Ellis

Roger Johnson, among the first wave private equity stars to defect to Kirkland & Ellis from the Magic Circle, has left the Chicago powerhouse’s London office.

The move was quickly followed by news that Kirkland has hired the well-respected private equity partner Alvaro Membrillera from Paul Weiss in the City, where he was London managing partner.

Johnson, a leading individual for high-value private equity according to The Legal 500, was Linklaters’ influential Nordic dealmaker when his departure in 2015 for Kirkland sent shockwaves around the market.

He was believed to have joined Kirkland on a $5m package after turning down an offer from White & Case and had as a key client Swedish private equity house EQT.

Johnson made the move from Linklaters to Kirkland hot on the heels of rising star Matthew Elliott the same year. His move also prompted other corporate partners to leave Linklaters, including the high-profile David Holdsworth and Stuart Boyd.

A spokesperson for Kirkland said: ‘We do not comment on personnel matters.  But we can confirm that Roger Johnson is no longer affiliated with the firm.  We wish him well in his future endeavours.’

For his part, Membrillera acts for private equity firms and their portfolio companies on cross-border M&A and leveraged transactions across Europe.

Jon Ballis, chair of Kirkland’s executive committee said of the hire: ‘Alvaro is one of Europe’s top private equity lawyers with substantial experience leading complex cross-border transactions for sophisticated financial sponsors. We’re very pleased that the Kirkland platform continues to attract leading talent like Alvaro, particularly in Europe, which is one of our fastest growing markets.’

nathalie.tidman@legalease.co.uk