Legal Business

Linklaters strengthens German private equity arm with former Clifford Chance heavyweight

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Strategic recruitment Clifford ChanceLinklaters

Former Clifford Chance(CC) Germany private equity (PE) head, Christopher Kellett, who retired from the firm’s partnership in April, is understood to be joining Linklaters’ Frankfurt office as the firm strengthens its capabilities.

Kellett joined CC in 1996. The firm appointed him head of PE in Germany in 2015.

In June, following Kellett’s retirement, Dusseldorf-based Anselm Raddatz who joined CC from Freshfields Bruckhaus Deringer in 2015, was named head of PE in Germany.

Germany is an increasingly key market for the Magic Circle in Europe, particularly in the context of the UK triggering exiting the European Union. Linklaters’ German practice covers four offices and a total of 254 lawyers across the country, while CC has three offices in Germany and a total of 285 lawyers in the country overall.

Last month, newly-appointed Linklaters Germany senior partner Andreas Steck told Legal Business that the firm had set itself the key target of ‘being a leading adviser to DAX 30 clients in Germany and abroad’ and argued that this had been achieved.

In contrast, overthe last few years, CC has been restructuring its German practice. As managing partner Matthew Layton told Legal Business earlier this month, the firm looked at whether it was positioned with the right resource to meet client demand in Germany: ‘Now we think we got it in the right shape and are looking to strengthen further laterally and organically’.

‘We acknowledged we had fallen slightly behind in that market before and we made a strategic step to make sure we’re right at the top of that market,’ he said. Along with Anselm Raddatz, CC also added high-profile King & Wood Mallesons German funds head Sonya Pauls to its German ranks in 2016.

However, in 2016 Latham & Watkins hired Linklaters’ head of private equity in Germany, Rainer Traugott, and CC’s global co-head of PE Oliver Felsenstein in 2015.

Earlier this year, CC re-arranged its lockstep structure, capping some European practices below London pay levels to reflect market dynamics.

Legal Business reported that Linklaters was trialling an alternative career track in its German offices to allow its associates take a pay cut in return for a reduced working week.

Georgiana.tudor@legalease.co.uk

For more, see: The Global 100: The European question – Have years of cuts left the Magic Circle exposed as Brexit looms?

Legal Business

Linklaters to recruit first chief information security officer as DLA breach pushes security up firms’ agenda

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Cyber security Linklaters

Linklaters is seeking to recruit a chief information security officer (CISO) to establish, shape and deliver its global IT security strategy and management programme, a new position for the Magic Circle firm.

The recruitment drive follows swiftly after a major cyber attack on DLA Piper on 27 June, which knocked down the firm’s communication system, temporarily putting its phones and computers out of action. 

The full extent of the DLA attack has yet to be established but in a 27 June statement, DLA said that the interference appeared to be related to the global cyber event known as “Petya.”

The malware attack, similar to that which hit UK public organisations such as the NHS in May, has yet to be fully resolved, although DLA stated that it continued ‘to see no evidence that client data was taken or that there was a breach of the confidentiality of that data.’

The new Linklaters security role, based in its London office, will report to chief information officer Matt Peers, according to an advert placed by the firm.

The CISO will be a member of the information system and strategy leadership team and will have overall responsibility for ‘all aspects of information security’ across the firm, to protect the firm and its clients’ data and information assets.

The role is initially for one year and will include identifying, evaluating and reporting on security risks, aligning the security posture of the firm to help Linklaters effectively protect its information and technical assets.

Linklaters requires the CISO to manage and execute security controls to support its compliance and regulatory requirements.

The resource will play ‘a key role in shaping and delivering the Linklaters global IT strategy’ and ‘protecting data and information assets of the firm and its clients’, according to the firm.

The new CISO will also work train Linklaters staff against information security threats and may communicate with clients ‘to give them comfort over the processes and controls that we have in the firm’, according to the advert.

Magic Circle firm Freshfields Bruckhaus Deringer, Allen & Overy,  Slaughter and May and Clifford Chance all have similar roles in place.

Marco.cillario@legalbusiness.co.uk

Legal Business

US and Asia focus: Linklaters’ new executive committee shakeup brings fresh regional targets

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Leadership Linklaters

Linklaters is to renew its focus on the US and Asia following its appointment of a new global head of US practice, Tom Shropshire, and an Asia regional managing partner, Nathalie Hobbs, to its executive committee in a shakeup of the firm’s top management group.

Shropshire replaced Scott Bowie to lead the New York and Washington DC offices and is now responsible for further developing the firm’s global US practice.  Bowie is due to leave Linklaters at the end of July.  

Together with dispute resolute partner Satindar Dogra and global head of environment Vanessa Havard-Williams, Shropshire also leads the firm’s operational intelligence group, a multi-disciplinary global team combining regulatory risk, governance and compliance expertise, launched in January 2014.

The committee, which is responsible for key management decisions, makes recommendations to the Magic Circle firm’s partnership board.

Managing partner Gideon Moore continues to chair the group, to which the appointments were made at the end of June.

Shropshire, who began his career at Linklaters in 1998 and became a London-based US corporate partner in 2006, described his role within the firm’s operational intelligence group as a ‘great fit’ within the US: ‘We want to help our US clients manage global risk, whether they invest in the US or Asia or Europe, develop solutions that will work globally.’

‘We are trying to develop a team of lawyers that can help clients who have to manage risk across a whole range of different jurisdictions,’ Shropshire told Legal Business. 

Building a credible US practice, however, was one of the main issues facing Moore and senior partner Charlie Jacobs when they took over the leadership of Linklaters in 2016. The role of global head of US practice was established around that time.

‘We thought about how we could better approach US clients by working with them on a global scale,’ said Shropshire.

Linklaters’ New York office opened in the 1970s and the firm heavily invested in expanding its US presence in the early 1990s. ‘Our US clients and their activity have been very predictable, consistent and attractive, and therefore increasingly important for the practice,’ Shropshire told Legal Business.

Hobbs, a senior banking and private equity partner based in Hong Kong, specialises in cross-border leveraged finance and acquisition financing and took over from Marc Harvey. Last month Moore said that she and her team would support the firm’s clients in Asia to take advantage of the region’s ‘many growth opportunities’.

Speaking to Legal Business about the opportunities Asia presented, Hobbs said: ‘Chinese companies have made significant investments in European and US assets – such as the ChemChina/Syngenta acquisition, for which we did the financing.

‘Although there is now increased scrutiny in the PRC – which has led to a slowing of outbound acquisitions, those which are strategic and in line with the core business of the buyer are still going ahead and we think this will continue.’

‘There are some key sectors such as energy and TMT which remain areas of strong growth in the region. Chinese technology companies are growing at a very fast rate and regional M&A in the tech and telecoms space has been a trend over the last few years – which we feel is likely to continue.’

She also pointed to specific developments in the area which gave the firm opportunities to assist clients in adapting to changing regulatory and legal environments: these included the new insolvency and restructuring regime in Singapore and the manager in charge regime in Hong Kong.

Shropshire and Hobbs joined a 12-strong group, including the heads of the firm’s three divisions – Michael Bennett from dispute resolution, corporate’s Aedmar Comiskey from and Michael Kent from finance and projects.

The committee also includes regional managing partner for Western Europe, Claudia Parzani, Germany senior partner Andreas Steck, client and sector partner Sarah Wiggins, chief finance and operations officer, Peter Hickman and HR director, Chris Lynch.

marco.cillario@legalbusiness.co.uk

Legal Business

Former Linklaters global COO to head Baker McKenzie’s London office

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Leadership Baker McKenzieLinklaters

Former Linklaters’ global chief operating officer Simon Thompson (pictured) has joined Baker McKenzie’s London office as its new chief operating officer (COO) with effect from August.

Thompson will serve on the firm’s London management committee, led by London managing partner Alex Chadwick.

The new COO will join Bakers from independent legal management consultancy Change Harbour, which he co-founded in 2011 after seven years at Linklaters.   

With responsibility for London operations, he will support the implementation of the firm’s strategy in London, which the firm said included further investment in the firm’s corporate and transactional centres and recruitment of up to 20 transactional partners in London over the next three years, as outlined to Legal Business by Baker McKenzie’s global chair Paul Rawlinson in March. 

‘We have around 400 lawyers in London but we would want to increase the bench strength in regular M&A, private equity, banking and finance by 10 to 20 partners in two or three years from around 30 at the moment,’ Rawlinson said at the time.

Chadwick told Legal Business that the firm’s London strategy was centred on ‘bolstering our transactional practices with a view to attracting more high-value mandates’.

He added: ‘Simon will play a key operational and delivery role at management committee level as we continue with the strategy implementation.’

The London office, whose revenues jumped 20% to £176m this year, hired partners from Magic Circle firms earlier in the year: David Duncan and Melanie Howard joined the M&A department from Allen & Overy and Clifford Chance respectively in April.

Alex Lewis joined Bakers’private equity team leaving Rope & Gray. Will Holder and Carl Richards also made the move to the firm’s corporate team from Kind & Wood Mallesons at the start of 2017.

The firm also made up 80 new global partners last month, including five in London, as well as electing Matthias Scholz as German managing partner.

Thompson’s career began at British Petroleum where he worked in IT management, before joined Linklaters in 1994. There, he became director of information systems and strategy in 2001 and developed Linklaters’ IT, organisation and governance strategy, before his appointment to COO in 2007. 

Marco.cillario@legalbusiness.co.uk

Legal Business

Linklaters advises L’Oréal on €1bn Body Shop sale

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Corporate Linklaters

Linklaters, Davis Polk & Wardwell and Baker McKenzie led as L’Oréal looked to sell The Body Shop for €1bn to Brazilian cosmetic company Natura.

Natura was in exclusive negotiations with L’Oréal, which put The Body Shop up for sale in February after buying the business in 2006 for £652m.

Legal Business

Financials 2017: Linklaters sees currency impact drive 10% income hike as PEP surges 8% to hit £1.5m

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Financial results 2017 Linklaters

Global revenue at Linklaters was up 9.8% in 2016/17 to £1.44bn, a record high for the Magic Circle firm, although the leap was largely due to the strong euro and dollar and the weak pound. In constant currency terms, revenue rose 1.7%.

In the first Magic Circle firm financial results to be announced this year, Linklaters’ pre-tax profit stood at £664.4m, which was flat on the previous year in constant currency and excluding one-offs. Compared to last year’s £611.9m, pre-tax profit rose 8.6% in sterling terms.

Profit per equity partner (PEP) increased 8% to £1.51m. 

Linklaters managing partner (pictured) Gideon Moore told Legal Business of his satisfaction with the results: ‘The team did great work, particularly bearing in mind the political background, with the Brexit vote in Britain and the election of Donald Trump as president of the United States.’

The US, UK and south-east Asia performed particularly strongly, while the firm’s Italy offering posted its best ever annual revenues, focused on its banking practice.

In Britain, the firm advised on the second-largest infrastructure deal in the UK in the past decade, separating National Grid’s gas distribution business into a newly-incorporated company, Cadent.

Linklaters also advised Unilever during a hostile takeover bid from Kraft. Had it succeeded, it would have been the second-largest takeover in corporate history.

Other key deals for the firm included Anheuser Busch (AB) InBev’s takeover of SABMiller for £79bn, to create the world’s largest beer firm, as well as acting on Softbank’s $100bn fundraising.

In March, the Magic Circle firm revealed its ‘Strategy Refresh’ project, part of Moore and senior partner Charlie Jacobs’ drive towards a new approach, after former managing partner Tony Angel’s years at the firm’s helm.

‘Next year we will implement the strategy’, said Moore. ‘And that’s the difficult bit. We want to get the team to work very closely with everyone else to make sure we are all going in the same direction.’

Moore added that diversity was a big factor in his vision for the firm, as shown by this year’s appointment of Western Europe regional managing partner Claudia Parzani, Asia’s regional practice head Nathalie Hobbs, alongside client and sectors partner Sarah Wiggins to the firm’s executive committee.

‘We can’t provide the best team for our clients unless we are sure we are looking at every person that could be part of that team,’ concluded Moore.

‘Our clients want to have the best solutions delivered, and in order to do that we have to have a diverse team: otherwise we would have four people sitting around a table all thinking the same thing.’

Marco.cillario@legalbusiness.co.uk

Legal Business

Magic Circle pay watch: Links edges up associate salaries, Slaughters holds and CC gets coy

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Salaries Clifford ChanceLinklatersSlaughter and May

Pay rises continue to ripple through the top-end legal services market despite the uncertain outlook for the City. The latest to go is London giant Linklaters, which has nudged up its base rate for junior lawyers by £1,000, handing newly-qualified (NQ) solicitors £82,000.

Elsewhere, Slaughter and May has just elected to hold mid-year associate salaries following a previous pay boost in January, while Clifford Chance (CC) has brought its pay for junior lawyers up only to match inflation… while coming over uncharacteristically coy on the subject.

NQ lawyers at Linklaters can now earn a total package of £90,000 including bonuses. This is up from last year’s £81,000, according to a breakdown the firm provided in 2016.

Linklaters confirmed that in 2016/17, 1PQE associates would earn a minimum of £90,000, with 2PQE and 3PQE associates’ pay at least £100,000 and £111,000 respectively. High-performing lawyers could receive substantially more, with some 1PQEs earning £101,000. High-performing two year PQEs earned £119,000 and high-performing three year PQEs earned £130,000. However, Linklaters declined to confirm the new packages for 2017/18 beyond newly-qualified level.

Slaughters had previously boosted associate base salaries by 10% as of 1 January 2017. NQ pay increased 9% to £78,000, while 1PQE salaries rose 10% to £87,000. The firm this month opted to hold associate pay bands for the coming year.

CC, meanwhile, has brought its junior lawyers’ base rate pay up to match the UK’s 2.7% jump in inflation, which for a newly-qualified base rate of £85,000 would suggest increases of over £2,000 for junior associates.

In an unusual move, given that it has for years been established practice for major law firms in Wall Street and the City to disclose pay bands for junior lawyers, CC declined to comment, confirm or deny any specific figures when contacted.

Last year, however, CC issued a press statement on 1 May confirming its 2016/17 pay bands for NQ lawyers, with the inclusion of bonuses bringing NQ pay to £85,000 compared to £70,000 before bonuses in 2015.

One CC partner told Legal Business that they did not understand why the firm is keeping its cards close to its chest, as ‘the increase has been received positively by junior lawyers, and that the growth is “high numbers” all-around in terms of pounds and pence’.

The fiddling with associate compensation comes as City leaders are caught between contrasting forces of disapproving general counsel on one hand and US-based law firms, which are continuing to hike salaries for junior lawyers, on the other.

It appears that one response for London leaders struggling to match the US dollar is to be less transparent on associate comp and hope the core talent pool does not notice the difference. If so, the odds do not look great.

georgina.tudor@legalease.co.uk

Legal Business

Linklaters advises L’Oreal on €1bn sale of The Body Shop alongside Baker McKenzie and Davis Polk

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Corporate Baker McKenzieDavis Polk & WardwellLinklaters

Linklaters, Davis Polk & Wardwell and Baker McKenzie are advising as L’Oreal looks to sell The Body shop for €1bn to Brazilian cosmetic company Natura.

Natura is in exclusive negotiations with L’Oreal, which put The Body Shop up for sale in February after it bought the business in 2006 for £652m.

The world’s largest cosmetics company announced the decision following a fall in The Body Shop’s operating profits, which sat at €34m at year end in 2016, down a 38% from €55m the previous year. The deal is expected to close later this year.

London and Paris-based Linklaters corporate partner Vincent Ponsonnaille (pictured) led the Linklaters team advising L’Oreal, which included London banking partner Naidenov and Paris corporate partner Laurent Victor-Michel. The cosmetic company also instructed Baker McKenzie with a team led by London Funds partner James Burdett.

Natura turned to Davis Polk for advice, with Jacques Naquet-Radiguet leading the firm’s team.

L’Oreal previously turned to Linklaters for advice in its original purchase of The Body Shop, with London-based Corporate partner Richard Godden leading the Linklaters team. Baker McKenzie advised The Body Shop on the deal.

The Magic Circle firm also advised L’Oreal over its buyout of China-based cosmetic mask manufacturer Magic Holdings International for around $845m in 2014. Paris-based corporate partner Bruno Derieux led the team. 

Madeleine.farman@legalease.co.uk

Legal Business

Linklaters and Osborne Clarke latest to make moves in Shanghai

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China LinklatersOsborne Clarke

Magic Circle firm seeks local joint venture as OC opens fledgling practice

Linklaters and Osborne Clarke (OC) are the latest Legal Business 100 firms to make moves in Shanghai, with the Magic Circle firm finally putting its plans in play to practise local law.

Legal Business

Simpson Thacher and CC act on $12.2bn real estate sale of Logicor to CIC

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Property Clifford ChanceLinklatersSimpson Thacher & Bartlett

Simpson Thacher & Bartlett and Clifford Chance (CC) have advised Blackstone and China Investment Corporation (CIC) respectively, as Blackstone announced the $12.2bn sale of its pan-European logistics company Logicor to CIC.

Simpson Thacher advised real estate investor Blackstone, with a team led by corporate partners Wheatly MacNamara and Adam Signy in London. CC acted for CIC, with global co-head of real estate Adrian Levy and corporate partner Nigel Wellings leading.

Developed through 50 different acquisitions, Logicor owns and operates a portfolio of high-quality logistics assets, totaling 147 million square feet in 17 countries. Over 70% of these are located in the UK, Germany, France and Southern Europe, along the major transport corridors and close to key cities, to follow a shift in demand driven by online sales.

US private equity house Blackstone manages approximately $102bn in investor capital, while CIC is headquartered in Beijing with registered share capital of $200bn.

Clifford Chance’s global co-head of real estate sector Adrian Levy led the team, with support from partners Nigel Wellings, Alis Pay, Catherine Cook, David Saleh and Barry O’Shea.

This March, Simpson Thacher advised on a separate Blackstone and M7 real estate venture to acquire Hansteen’s continental European properties.

Simpson Thacher’s Macnamara also led on Blackstone’s acquisition of the real estate assets of GE Capital, in a deal valued at approximately $23bn, alongside Wells Fargo. She also led when acting on Blackstone’s €6bn acquisition and financing of over six million square feet of logistics assets in Europe. Both deals took place in 2015.

Last December, Simpson Thacher advised Blackstone on the purchase of Solvay’s cigarette filter business Acetow to private equity group Blackstone, for around €1bn.

Equally, in 2012 CC acted for CIC on the purchase of a 10 per cent stake in Heathrow Airport.

Earlier that year, when CIC bought a stake in Thames Water’s parent company Kemble Water, it turned to Linklaters for advice.

The deal is expected to close later this year.

Georgiana.Tudor@legalease.co.uk