Linklaters continues to leverage its relationships with Chinese banks and corporates, winning four high-profile capital markets mandates as the country internationalises its economy.
With China looking to open up an offshore renminbi debt market, Linklaters won the race to handle the People’s Bank of China debut international bond sale, a move that will act as a calling card for Chinese mandates in the future.
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Linklaters is in advanced discussions with two Chinese law firms, Shanghai Capital Law & Partners and Shanghai Kai-Rong Law Firm, as it bids to become the first Magic Circle law firm to practise Chinese law.
Labelled Project Trident, Linklaters has been searching for a local law firm to partner with in the Shanghai free trade zone since the start of the year. Asia managing partner Marc Harvey, who was recently pipped to the managing partner post by banking chief Gideon Moore, is leading the project and has overseen discussions with 10 Chinese firms.
China’s ministry of justice approved plans to allow international firms to enter its legal market through the Shanghai free trade zone last year after decades of protectionism. The move made cooperation agreements available to firms operating in Hong Kong, Macau and Taiwan, allowing international firms to practise Chinese law for the first time, rather than relying on a representative office.
Shanghai Capital Law & Partners and Shanghai Kai-Rong Law Firm, both boutiques, fit with Linklaters plan of tying up with a small local firm. These talks are the most advanced of the 10 firms Linklaters has met with.
Shanghai Capital Law & Partners was established in 2004 and specialises in handling initial public offerings, securities and M&A work. The firm has 12 lawyers.
Shanghai Kai-Rong Law Firm, which specialises in M&A and disputes work, was founded in 1998 by Jin Yu-Lai as one of the first private law firms in Shanghai. The firm has 15 lawyers, six of whom are partners, and is also known for its finance and shipping work. Major clients include Air China, Singapore Airlines and HSBC Insurance.
Yu-Lai is most well-known for his work for Korean Air after one of its aircraft crashed in Shanghai in 1999, killing eight people. He has built up a strong following in this area, acting for Bombardier following the Baotou air crash that killed 54 people in 2004 and also counts Etihad Airways as a client.
One Linklaters partner told Legal Business: ‘We need to set up something in Shanghai. Every firm wants to do that and some already have. Harvey informed senior members of the partnership last month that we are continuing to progress our PRC law speciality, Project Trident, and while we continue with a target law firm, which may be one of these two, we also consider a potential greenfield option should we not be able to identify a suitable law firm.
‘What is really means is that we are still wondering whether we will do a joint venture or set up a greenfield option ourselves. If we did a greenfield option we have a number of qualified Chinese partners, so they could move to their own firm – or ideally, we may want to find one or two individuals and set up a new firm with them.’
Baker & McKenzie became the first international law firm to get permission to practise local law in China in a joint operation with Chinese firm FenXun Partners in April this year.
tom.moore@legalease.co.uk
Clifford Chance (CC), Linklaters and Freshfields Bruckhaus Deringer have all landed advisory roles alongside Travers Smith on a deal which will see CVC Capital Partners form a partnership with Singapore sovereign wealth fund GIC to invest in the roadside assistance provider RAC through the purchase of Carlyle’s stake in the latter.
The RAC is the second-largest roadside assistance provider across the UK and has approximately 8.6m members as of 30 September, 2015. During Carlyle’s ownership, revenues grew from £417m in 2010 to £498m in 2014.
CC advised longstanding client CVC with a team led by corporate partner David Pearson. The firm also recently advised CVC, which holds $60bn in funds under management, on its $150m acquisition of a 50% stake in Arteria Networks Corporation, a Japan-based telecoms carrier focused on enterprise customers.
Linklaters advised Carlyle on the exit with relationship partner Alex Woodward leading, while Freshfields advised GIC with global financial investors group co-head David Higgins leading a team.
Travers Smith advised RAC management on the transaction with senior partner Chris Hale leading a team alongside corporate partner Adam Orr.
Last year Freshfields, Linklaters and Travers combined for the same clients as Carlyle sold half its majority stake in RAC to GIC.
The transaction is subject to approvals and is expected to close in early 2016.
sarah.downey@legalease.co.uk
For more on deal activity subscribers can read: ‘Private equity ABC – the brutally simple world of a private equity lawyer’
The highest-paid LLP member at Linklaters took home £3.2m during the last financial year, a 33% increase on what was paid in in 2013/14.
Recent filings at Companies House for the 2014/15 financial year reveal the highest-earning member took home £800,000 more than the £2.4m given to the highest paid member in 2013/14.
This figure in LLP accounts does not necessarily equate to the highest paid equity partner and can relate to ‘golden handshakes’ to retiring members.
The firm’s latest LLP accounts largely reflect what Linklaters reported earlier in the year, with revenue up 1% in the 12 months to 30 April 2015 to £1.26bn. This is £10m more than the £1.25bn reported the year before.
Profits rose by 7% from £376.8m to £402.6m during this period.
The number of lawyers at the firm rose slightly, from 2,325 in 2013/14 to 2,387 last year. Staff numbers, including lawyers were up by 3% to 4,482.
Linklaters senior partner Robert Elliott wrote in the filing that the firm was heavily impacted by currency fluctuations – noting that its turnover was 5% higher than the preceding year on a constant currency basis.
Elliot said: ‘Demand was strong across all our practice and sector groups but, in particular, in 2014-15 the firm has benefited from improved volumes in M&A and continued growth in contentious and non-contentious regulatory work, with dispute resolution and arbitration also being particularly active.’
In July outgoing managing partner Simon Davies told Legal Business while the firm was supplying about 1% of the legal services market there was room to grow.
‘I accept that growth will be at the cost of someone else but that was more true three years ago than it is today. Even though we’re not seeing growth of the same level as we experienced pre-financial crisis there is still growth in the market.’
Last month Linklaters partners voted in Gideon Moore as managing partner to succeed Davies. Banking partner Moore has been handed a four year term.
tom.moore@legalease.co.uk
David Ereira, the City finance heavyweight who has spent 25 years as a partner at Freshfields Bruckhaus Deringer and latterly Linklaters, has finally joined a US firm with Paul Hastings securing his hire.
Courted by a host of US firms, restructuring and debt finance partner Ereira will join Paul Hastings’ London office as a corporate partner. He made a rare jump between Magic Circle firms in 2007 when Linklaters senior partner Robert Elliott persuaded Ereira to join the Silk Street-based firm and has spent the majority of his time there advising PwC as the administrators of Lehman Brothers.
Arguably the most senior hire Paul Hastings has ever made in the City, Ereira’s arrival follows the announcement this week that Berwin Leighton Paisner’s (BLP) head of structured debt and capital markets, Paul Severs, has also agreed to join the firm. 2015 has also seen the hire of Duncan Woollard from King & Wood Mallesons to spearhead its private equity play in London and Ashurst banking partner Luke McDougall joining to expand its leveraged finance team in the City.
Paul Hastings restructuring chair Luc Despins said: ‘The addition of a lawyer of David’s standing and stature will be a great asset for us as we continue to enhance the quality and reputation of our restructuring practice in London. It is essential for us to offer leading-edge restructuring capability coherently across English law and US law, and having a partner of David’s experience adds significantly to our global strength.’
Ronan O’Sullivan, chair of the London office, added: ‘The development of a tier one finance and restructuring practice is a central component of our strategy in London and having someone of David’s reputation join us will continue our momentum and trajectory as we build out our capabilities in this practice. David’s arrival will add further depth and prestige to our practice here in London and will position us well to capitalise on restructuring opportunities that span across the UK, Europe and the US.’
tom.moore@legalease.co.uk
Subscribers can read about David Ereira’s career in: ‘Life During Law – David Ereira’ here.
The 450-strong partnership at Linklaters gathered today at the Jumeirah Carlton Tower in London to pass through the appointment of Gideon Moore as the Magic Circle firm’s new managing partner.
The vote ratifies the partnership board’s decision, taken earlier this month, which proposed Moore as the firm’s successor to Simon Davies. Currently heading the firm’s global banking practice, which represents around 20% of the firm’s income, Moore has been handed a four-term term as managing partner.
Moore said: ‘I am honoured to have the opportunity to lead a firm like Linklaters, which over its 175-plus year history has developed a reputation for excellence, operating at the highest level, and so often at the cutting edge of complexity and innovation, for many of the world’s leading businesses and organisations. It is not something I take for granted.
‘We are at our best when our people collaborate effectively, looking forward and outwards in the interest of our clients. And so my job will focus on creating the best conditions for this firm to excel – delivering an outstanding client experience; investing to manage our matters ever more efficiently; ensuring that we are able to support our clients around the world with our uniform top level advice; and by making Linklaters an ever better place to work, where our people can perform to the best of their abilities and thrive in their careers.’
Senior partner Robert Elliott added: ‘Gideon is an outstanding lawyer with proven management and leadership qualities. His election comes after a tremendously positive and collegiate process and marks the next phase in the firm’s development, which I believe Gideon is ideally suited to lead.’
The election, which was triggered early due to Davies’ surprise decision to join Lloyds Banking Group in early 2016, saw Moore pip dispute resolution head Michael Bennett and Asia managing partner Marc Harvey to the post.
Moore emerged as the strongest candidate for the managing partner post after the elimination of finance and projects head Michael Kent, western Europe managing partner Pieter Riemer and co-head of operational intelligence Tom Shropshire from the race at the end of September.
Sheffield-born Moore has led Linklaters global banking group since 2011 and his tilt at the top job was boosted recently by his reappointment to the role, despite his candidacy for the managing partner post. The oldest and the most experienced of the final candidates, Moore was the only partner on the final shortlist not to have been trained at Linklaters, having started his career as a barrister before stints at Magic Circle rival Clifford Chance and DLA Piper.
Having spent all of his Linklaters career at Silk Street, Moore has a large following in London after his time in charge of the banking group. Before becoming banking chief, Moore spent 10 years as head of leveraged finance with partnership board member Nick Syson.
tom.moore@legalease.co.uk
Linklaters and Slaughter and May have landed major roles advising on the government’s record-breaking £13bn sale of former Northern Rock mortgages acquired during the financial crisis.
Announced this morning (13 November) by the Treasury, the mortgages originally owned by Northern Rock are being sold by UK Asset Resolution (UKAR) – set up to look after the mortgages nationalised when Northern Rock and Bradford & Bingley ran into difficulty in 2008 – to Cerberus Capital Management, in what is the largest-ever financial asset sale by a government in Europe.
UKAR is selling this portfolio of mortgages for £280m more than their book value, demonstrating the strength of global investors’ interest in the UK.
In a statement UKAR said taxpayers will get back more money from Northern Rock than they were ‘forced to put in during the financial crisis’, and today’s sale means the government has exited over 85% of the assets of the former bank. All proceeds will be used to pay down the national debt.
Slaughter and May advised UKAR with a team led by finance partner Guy O’Keefe and corporate finance partner Craig Cleaver. O’Keefe told Legal Business: ‘The deal involved a high degree of overlap on financial regulatory and competition law issues, with bespoke state aid considerations to navigate through.’
The firm had previously advised the Treasury, its longstanding client, on the transfer of Northern Rock and Bradford & Bingley into public ownership in 2008.
Allen & Overy advised the financing banks in respect of the agreement by Cerberus to acquire the mortgages from UKFI, which manages Treasury’s 100% share in UKAR. The team was led by securitisation partner Salim Nathoo, and included banking partners Trevor Borthwick and Ian Powell, corporate partner Annabelle Croker, real estate partner Dan Mckimm and tax partner Lydia Challen.
Linklaters advised Cerberus with a team led by structured finance partner Adam Fogarty and corporate partner Tracey Lochhead.
Cerberus is subsequently selling on £3.3bn of the portfolio to TSB, advised by Hogan Lovells with a London-based team led by partners John Allison, Jon Chertkow and Rachel Kent.
Chancellor George Osborne said: ‘Today marks another major milestone in clearing up the mess left by the financial crisis, with the sale of former Northern Rock mortgages. The sale is the largest ever sale of financial assets by a British government. The highly competitive process, unprecedented scale, and the fact that these mortgages have been sold for almost £300 million more than their book value demonstrates the confidence investors have in the UK, which has only been made possible by the success of our long term plan.’
sarah.downey@legalease.co.uk
Linklaters has again been awarded top marks as an external adviser in Legal Business‘ fourth annual in-house survey, emerging as the clear overall favourite for both quality of advice on high-profile, strategic matters, as well as ranking first overall for value for money.
Our 2015 survey, which drew responses on a range of topics from 458 in-house lawyers at major companies operating in the UK, provided the Magic Circle with a clear vote of confidence from the client community.
Linklaters, Slaughter and May, Clifford Chance and Freshfields Bruckhaus Deringer took the top four spots respectively for strategic high-quality legal advice, while Linklaters also took first place, as a new entrant, in the best value for money table, along with Clifford Chance and usual suspects Eversheds, Addleshaw Goddard, Osborne Clarke and Pinsent Masons.
Commenting on the ranking, Linklaters capital markets partner Jason Manketo said: ‘Delivering matters more efficiently to our clients is a key priority for the firm. It has been for some time and is making a real difference to our operations. Our approach is to focus on a comprehensive set of initiatives – not just on lower-cost resourcing. As such, we continue to invest heavily in knowledge and technology; we are identifying more cost-effective options in the running of matters through mapping and project management, and are relying on a wide range of lower-cost options to complement our offering.’
In-house attitudes towards the non-law firm providers of legal services remain mixed, with just 18% of respondents being positive towards the role and services these New Law providers offer. However, the renewed push by the accountancy firms into legal services has been noted, with PwC, Deloitte, EY and KPMG all gaining recognition behind Axiom, which took first place again.
With nearly two thirds (60%) of respondents rating their preferred firms as ‘good’ for providing value for money against 35% who rated them as ‘fair’, the survey also showed demand for external legal services has increased, with close to half (44%) of respondents stating that their demand had risen. Connected to this, there has been a slight downward shift in the percentage of companies with a policy of retaining work internally, with 71% of in-house counsel having a firm policy in place to keep matters in-house, down from 81% two years ago.
The research also showed that many who pursue a career in-house are in it for the long haul, with 74% saying they see themselves having a long-term career as a lawyer working in-house, while 76% said they felt personally satisfied in their job.
For the full in-house report, subscribers can read: ‘The In-House Lawyer Survey 2015: Balancing Acts’
Baker & McKenzie global litigation head Tom Cassels has become the second senior litigator to leave the firm for Linklaters in a matter of days.
The loss of Cassels, who was last year promoted to global litigation chief overseeing 700 lawyers, is a reverse for Bakers and follows the departure of its New York litigation head Douglas Tween to Linklaters last week.
Cassels, one of Bakers’ highest billers in London, joins a partner in the firm’s dispute resolution practice.
The move is a highly unusual London lateral hire for Linklaters but comes at a period in which the City giant has been intent on bolstering its historically under-weight contentious practice to compete with dispute leaders such as Freshfields Bruckhaus Deringer and Herbert Smith Freehills.
Cassels follows several prominent litigators moving to the Magic Circle firm in recent years. Banking litigator Christa Band left Herbert Smith in 2009 for Linklaters and has become a senior figure at the firm, having been part of an 12-strong partnership board that this month selected Gideon Moore as the firm’s next managing partner. HSF arbitration partner Matthew Weiniger QC made the same switch in July this year.
Cassels is known for his work advising the BBC Trust on the Jimmy Savile sexual abuse scandal and the broadcaster’s investigation into sex abuse allegations against radio presenter Stuart Hall. Other clients include energy major Shell, mobile operator Three and Formula 1 racing team McLaren Mercedes. He leaves Bakers after 21 years.
He is the third lateral hire by Linklaters in the past week, with Tween’s arrival in New York followed with the arrival of Margot Schonholtz from Willkie Farr & Gallagher to head its restructuring and insolvency practice in Manhattan.
tom.moore@legalease.co.uk
Linklaters’ New York office is on a lateral hiring spree by its own standards, with the Magic Circle firm following up its first US lateral in two years with its second in a week.
Seven days after appointing Baker & McKenzie’s New York litigation head Douglas Tween as chief of its US cartel and government investigations practice, Linklaters has hired Margot Schonholtz from Willkie Farr & Gallagher to head its restructuring and insolvency practice in Manhattan.
With outgoing managing partner Simon Davies set to be succeeded by banking chief Gideon Moore and partner feedback putting the US at the top of its agenda, Schonholtz’s arrival signals a departure from a strategy that has sought to win work for Fortune 500 clients in Europe and Asia without depending on US mandates as well.
Schonholtz joins the firm’s restructuring and insolvency practice, specialising in representing leading institutional creditors, agents to syndicated lending groups on debt restructurings, complex loan workouts, asset sale transactions and insolvency matters.
She leaves Willkie Farr after five years at the firm, having spent the previous decade as a partner at Kaye Scholer and Clifford Chance.
Tony Bugg, global head of Linklaters’ restructuring and insolvency practice, said: ‘US bankruptcy law is increasingly becoming a key component to global restructurings. Margot’s credentials, experience and understanding of this space, across multiple jurisdictions, make her ideally suited to our client work in complex, high-value cross-border restructuring matters.’
tom.moore@legalease.co.uk
