Legal Business

HSF arbitration heavyweight Weiniger QC to depart for Linklaters

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Strategic recruitment Herbert Smith FreehillsLinklaters
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Linklaters has returned to a familiar hunting ground, Herbert Smith Freehills (HSF), to hire experienced arbitration partner Matthew Weiniger QC.

Fresh from defeating Singapore over a $1.2bn claim made against his client, Malaysia, Weiniger QC has resigned from Herbert Smith Freehills after 21 years at the firm. He will join a Linklaters disputes team that already boasts HSF alumni in Christa Band, who joined in 2009 and now sits on the partnership board as well as Gavin Lewis in Hong Kong and financial regulatory litigators Nikunj Kiri and Martyn Hopper, all of whom joined in 2013.

The London-based arbitration lawyer is set to join Linklaters towards the end of the summer, with an official date still to be arranged. He is currently handling a multibillion-dollar claim from Standard Chartered Bank over a claimed investment in a power plant near Dar es Salaam and a €90m claim for water company United Utilities against Estonia over changes to the country’s tariff mechanism.

Weiniger QC is well known for representing Eurotunnel in its successful claim against the French and UK governments for costs and expenses suffered from a security situation caused by asylum seekers trying to cross the English Channel. He made partner at Herbert Smith in 2003 and took silk in 2014. He lectures on arbitration and public international law and is a visiting professorial fellow at the Centre for Commercial Law Studies at Queen Mary, University of London.

A spokesperson for HSF said: ‘We can confirm that Matthew Weiniger is leaving. We thank him for his contribution to the development of our outstanding international arbitration practice and wish him well for the future.’

tom.moore@legalease.co.uk

Legal Business

Linklaters’ Davies to step down early as managing partner to join Lloyds

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Leadership Linklaters
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On the same day that the City giant posted its results for the last financial year, Linklaters‘ managing partner Simon Davies has confirmed he will retire from the firm at the end of 2015, a year ahead of the end of his current term, to join Lloyds Banking Group.

Davies, who became Linklaters’ youngest-ever managing partner at the age of 40 when he assumed the role in January 2008, has told the Linklaters partnership that he will be joining Lloyds Banking Group as chief people, legal and strategy officer. He will also take a place on the bank’s executive committee.

While Davies was expected to leave the firm at the end of his current term, the resignation will lead to an accelerated election process to find his replacement. With the firm already in a process to elect a new senior partner, a post London corporate partner Charlie Jacobs is viewed as a leading candidate for, Linklaters will experience a complete management overhaul.

A spokesperson for Linklaters said: ‘Simon’s current term as firm-wide managing partner was due to end 30 December 2016. Given this development, the partnership board is planning the way forward, looking to ensure an orderly transition. Members will consult on the best way to achieve this and will aim to reach a decision before the end of the month. Senior partner Robert Elliott will attend executive committee meetings on a regular basis and will work with the committee to ensure continuity of management during the transition.’

Lloyds chief executive António Horta-Osório said: ‘This will be a key role for the group and with his extensive experience of managing and leading a major global business, I have no doubt Simon will prove to be an invaluable addition to the group and to our senior team.’

Davies will leave Linklaters after two terms as global managing partner. The Welsh-born corporate and securities lawyer made his name at the top City firm in its Asia practice before upsetting two higher profile contenders – Nick Eastwell and John Tucker – to secure the managing partner role in 2007.

Succeeding Tony Angel, Davies was regarded as hawkish on performance and ensuring that Linklaters’ business was intensely focused on premium work even as the firm was soon engulfed along with its peers in the banking crisis through 2008 and 2009.

Davies was a force in pushing through two major partnership restructurings at the firm, in 2009 and 2011. Controversy over the second restructuring led the firm to put Davies’ re-election as managing partner in 2012 to a second vote after initially falling short of the 75% margin needed to ratify the appointment.

Despite the reputation as a hard-nosed leader, the state-educated Davies also strove to reposition the conservative Linklaters as more progressive and diverse business. He also helped expand Linklaters’ reach in the Asia Pacific region after shifting the firm’s strategy to forge a formal tie-up with leading Australian law firm Allens in 2012.

While it is unusual for senior leadership of leading law firms to stand down early, Ted Burke, then managing partner of Linklaters’ old sparring partner Freshfields Bruckhaus Deringer, stood down part way through his term to join US private equity house ArcLight Capital in 2013.

Davies said: ‘I have thoroughly enjoyed my 25 years at Linklaters. It’s a fantastic firm that I will be leaving with real sadness but as my second term as firm-wide managing partner draws to a close, I feel the time is right for me to accept a new challenge and take on a senior executive leadership role with an outstanding business. The role involves leading in areas I have experience and expertise in – people, legal and strategy, but in a different industry which is very exciting.’

Elliott added: ‘Simon has brought unrelenting energy and commitment both to our clients and to our business – very ably steering the firm through challenging economic times. We owe him a debt of gratitude for his tremendous contribution and for the current very strong footing of the firm. This represents a fantastic new challenge for Simon and promises to provide an interesting and fulfilling continuation of his career. The partnership board will now consider the best way forward in order to ensure an orderly transition, ultimately leading to a process which will elect what I’m sure will prove an outstanding new leadership team.’

The first Magic Circle firm to release its financial results this year, Linklaters this morning posted a 1% rise in revenue to £1.27bn. Profits per equity partner (PEP) rose 2% from £1,340,000 to £1,368,000.

tom.moore@legalease.co.uk

Legal Business

Linklaters first magic circle firm to post financials with revenues and profits flat

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Financial results 2015 Linklaters
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The first Magic Circle firm to release its financial results, Linklaters posted a 1% rise in revenue to £1.27bn as it struggled to capitalise on the return to form of its heavyweight corporate team in London.

Despite a strong showing in London and a much-improved performance in Asia, where the firm advised on the $26bn merger between Chinese rolling-stock giants CSR and CNR, the firm added just £11.6m to its turnover in the 12 months to 30 April. Profits per equity partner (PEP) rose 2% from £1,340,000 to £1,368,000.

Growth at Linklaters has been more subdued than in the 2013/14 financial year, when the firm posted a 5% rise in revenue and PEP picked up by 6%.

As will inevitably be the case with most of the London-based global elite, the last financial year saw the firm hit by a weak euro affecting its significant European practice. It has continued to struggle to make significant headway with US clients after a prolonged pursuit of Fortune 500 corporates that included a launch in Washington, DC at the end of 2012.

Nonetheless, net profit rose to hit a record high, up 3% from £557.3m to £573m. The previous record was set in 2007/08, when Linklaters’ equity partners shared out £564m. Revenue remains some £27m behind the firm’s record-breaking 2007/08 financial year, with PEP also still below pre-financial crisis levels.

Simon Davies, Linklaters’ managing partner, told Legal Business: ‘[The partners] appear content. I take comfort in the fact we’re up in sterling terms. If exchange rates stay as they are, then we’re going to be looking to build off our growth this year so that we continue to rise in sterling. If we were sitting here looking at negative growth at a sterling level then you’d be more concerned. There isn’t a lot you can do about currency but if you look at the strength of the underlying business it’s 5% up in revenue and 5% up in profits. That’s what one should focus on in determining whether the firm is performing well or not.’

Davies added: ‘We’re supplying about 1% of the legal services market so the scope to grow is significant. 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. We feel we’re doing well in client wins, which should result in market share growth, and we will enjoy that together with taking some of the growth in the legal sector at large. We enter this new year with good momentum.’

While the firm did grow its lawyer headcount to 2,601 people, the size of the partnership slipped slightly to 450. The firm also slowed down on lateral hiring in the last year, with just four lateral hires coming in compared to the 14 it brought in last year, and has been hit recently by a series of exits, including head of real estate M&A Matthew Elliott to Kirkland & Ellis and projects partners Matthew Hagopian and Manzer Ijaz to Milbank, Tweed, Hadley & McCloy .

The results follow blistering results released by a host of US firms for the 12 months to 31 December 2014, with Latham & Watkins adding a staggering $327m to its top line to $2.61bn, Kirkland & Ellis bringing in an extra $134m and Gibson, Dunn & Crutcher earning an additional $79m.

tom.moore@legalease.co.uk

Legal Business

Dealwatch: CC and Linklaters take lead on GE’s $2.2bn finance unit sale to Japan’s SMBC

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Corporate Clifford ChanceLinklaters
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Magic Circle duo Clifford Chance (CC) and Linklaters have taken lead advisory roles on General Electric’s $2.2bn sale of its European private equity financing business to a unit of Japan’s Sumitomo Mitsui Banking Corp (SMBC).

The deal saw London-based partners advise with CC asset finance partner Oliver Hipperson acting for GE alongside corporate partner Tim Lewis, while Linklaters partner David Holdsworth acted for SMBC.

The deal is part of GE’s wider strategy focus on high-value industrial business and is subsequently selling most of GE Capital assets. But the company will retain its $1bn investment in the European senior secured loan programme and European loan programme, both joint ventures between affiliates of GE Capital and of Ares Capital.

The transaction is subject to regulatory approval and is expected to close in the third quarter of this year.

Last month saw a host of firms pick up work on the industrial giant’s restructuring, fielding large cross-border teams as it sold $26.5bn of real estate assets. Hogan Lovells led for GE on the real estate sale, with buyers The Blackstone Group and Wells Fargo represented by Simpson Thacher & Bartlett and Dechert respectively. Weil, Gotshal & Manges advised GE on the wider restructuring, which will return up to $90bn to shareholders, alongside Sullivan & Cromwell and Davis Polk & Wardwell.

Commenting on the latest transaction, GE Capital chairman and chief executive Keith Sherin said: ‘We had many indications of interest in this business and are pleased to partner with SMBCE on the sale of this franchise. We continue to execute with speed, certainty and value as we work to transform GE to a more focused industrial company.’

sarah.downey@legalease.co.uk

Legal Business

Dealwatch: A&O and Linklaters sweep roles on €25bn supermarket merger alongside US trio

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Corporate Allen & OveryLinklaters
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The €25bn merger between international food retailers Delhaize Group and Royal Ahold has seen Allen & Overy (A&O) and Linklaters win roles advising the two sides alongside Cravath, Swaine & Moore, Simpson Thacher & Bartlett and Sullivan & Cromwell.

A&O is advising Ahold on its cross-border merger that will create a 6,500-store retailer, with Amsterdam-based partner Tim Stevens and Belgian partner Dirk Meeus leading. A&O’s Dutch team included antitrust partner Paul Glazener, employment partner Ferdinand Grapperhaus and tax partner Godfried Kinnegim, while corporate partner Hans Kets, tax partner Patrick Smet and employment partner Christian Bayart provided support from Belgium.

Meanwhile, Simpson Thacher picked up the US mandate for Netherlands-based Ahold, with a team including New York-based M&A partner Alan Klein and antitrust partner Kevin Arquit. Sullivan & Cromwell represented Ahold’s financial adviser Goldman Sachs, with a team led by New York-based corporate partner Stephen Kotran.

Linklaters represented the European side of the deal for Belgian retailer Delhaize with Brussels-based corporate partner Eric Pottier leading. He was supported by tax partner Henk Vanhulle and antitrust partner Bernd Meyring, both also based in Brussels, while corporate partner Pieter Riemer acted on the deal from Amsterdam. Cravath advised in New York with a team led by corporate partners Richard Hall and Jonathan Davis, and support from finance partner Craig Arcella, tax partner Christopher Fargo and antitrust partners Christine Varney and Julie North.

The combined group will serve an estimated 50 million customers per week across the US and Europe and have €54bn in annual sales.

kathryn.mccann@legalease.co.uk

Legal Business

CC matches peers in associate salary race – both Slaughters’ £70k NQs and Links’ 3 year PQE pay

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Salaries Clifford ChanceLinklatersSlaughter and May
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Clifford Chance has revealed its 2015 pay bands for newly-qualified (NQ) lawyers, matching the £70,000 NQ rates of Slaughter and May while also meeting Linklaters’ higher salaries for those with two and three year post-qualified experience (PQE).

Although the increases, which took effect from 1 May 2015, are smaller in percentage terms than those released so far by its Magic Circle peers, CC is matching the higher of the rates being offered to qualified lawyers by either Slaughters or Linklaters.

It sees NQs receive a 4% boost from £67,500 a year to £70,000 with up to a 20% bonus being paid. The band receiving the largest percentage increase comprises lawyers with three years PQE, who will receive £98,500 – a 5% increase on 2014. CC lawyers with over a year’s post-qualified experience will potentially receive up to 30% of their base salary as a bonus.

Trainees are also seeing their pay increase with year-one recruits being paid £42,000, up 4%, and year two trainees getting a 4% bump to £47,300 – a figure which is higher than that announced by rivals so far.

David Bickerton, London managing partner, said: ‘We have had a very strong performance over the last year, winning instructions on many pieces of high-profile and complex work, generating excellent results for clients and maintaining our leading position in this highly competitive market. This performance provides us with a strong platform to embark on our vision of becoming the law firm of choice for the businesses of today and tomorrow.

‘To do this, we need to retain our relentless focus on delivering the best advice to our clients in a way that responds to their priorities and needs. I believe that only the best, most motivated team will do if we are to deliver our exciting strategy. Today’s salary increases and bonuses are recognition of the high quality of our lawyers, and the critical role they will play in the success of that strategy.’

The new salary bands are as follows:

Trainee year 1: £42,000

Trainee year 2: £47,300

NQ: £70,000

PQE year 1: £75,500

PQE year 2: £88,000

PQE year 3: £98,500

michael.west@legalease.co.uk

Legal Business

Brait a boon for Links as New Look buyout lifts PE market

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Corporate Linklaters
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Less than a month after advising on the £1.3bn purchase of Virgin Active by billionaire Christo Wiese’s private equity vehicle Brait, Linklaters’ rising star Alex Woodward (pictured) last month led on Brait’s £780m acquisition of a 90% stake in fashion retailer New Look.

South African Wiese has added New Look to a string of recent investments in the UK High Street, which includes a stake in Iceland.

Legal Business

Linklaters finance practice knocked as firm loses leading partners in Germany and Hong Kong

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Finance Linklaters
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Linklaters has suffered senior exits in two key financial centres, with former German international board member Eva Reudelhuber departing for Gleiss Lutz in Frankfurt and Davis Polk & Wardwell hiring capital markets partner Jon Gray in Hong Kong.

A member of the international board between 2007 and 2014, Reudelhuber became a Linklaters partner when the Magic Circle firm merged with German giant Oppenhoff & Rädler in 2001. She is ranked by The Legal 500 as a leading individual in the German banking market, advising on syndicated loans, acquisition finance, project finance and structured finance.

Reudelhuber has helped build Linklaters’ German banking unit over the past decade and her exit will come as a blow to the firm. Her move happens as Linklaters cuts the number of international board members from 14 to 11 following a partnership vote last month, which saw the number of German seats reduced from two to one as Munich-based, co-head of global insurance Wolfgang Krauel, lost his place. She was also previously a member of the partnership matters subcommittee, which met quarterly to guide the firm’s responsibility towards its partners.

Gray’s exit to White Shoe firm Davis Polk will hurt the firm’s US securities practice in Hong Kong, where he is known for his work representing investment banks, funds and issuers in the New York, Hong Kong and Tokyo markets. Listed by The Legal 500 as a leading foreign lawyer for capital markets in Japan and fluent in Japanese, Gray was relocated to Hong Kong in 2009, just two years after being made up in New York. He leaves after a decade at the firm, having joined in 2005 as an associate from Simpson Thacher & Bartlett.

He is the latest partner to leave Linklaters’ Asia arm in the past 12 months, with the firm losing fellow Hong Kong capital markets partner David Ludwick to Freshfields Bruckhaus Deringer in March this year, while Nigel Pridmore left the firm’s capital markets team in July 2014 for Ashurst. Linklaters’ decision against relocating Beijing-based energy and project finance partner James Douglass back to London late last year, led to his City return with King & Wood Mallesons.

The changes to the international board were first mooted at the end of last year. They see two London seats also dissolved, with City-based head of intellectual property Ian Karet and corporate partner William Buckley losing their positions as a result. It brings the number of London-based members on the board down from six to four with banking partner Nick Syson, capital markets specialist Paul Lewis, corporate partner Aedamar Comiskey and litigator Christa Band maintaining their seats.

The new-look global strategy body will be renamed the partnership board but continue to be chaired by senior partner Robert Elliott, who said: ‘these changes are intended to streamline the firm’s senior governance body responsible for strategic and major decisions, allowing for an improved balance in its composition and a size which we think is ideal’.

The partnership agreed that managing partner Simon Davies would continue to sit on both the executive committee and the newly-named partnership board, despite its responsibility to act as a check on the decisions put forward by the executive committee.

tom.moore@legalease.co.uk

Legal Business

Linklaters reveals NQ salaries of £68,500 – under Slaughters but tops it with 3 year PQE band

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Salaries LinklatersSlaughter and May
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Linklaters has revealed its salary bands for junior lawyers in London with newly-qualifieds (NQs) receiving a £3,500 pay bump to £68,500 while those with three year post-qualified experience (PQE) had a 5% increase to £98,500.

Seat 1 trainees also had a 5% jump to £42,000, up from the £40,000 received last year while the band to receive the greatest percentage increase was two year PQE which gained 7.3% on last year rates and will be paid £88,000. Rounding out the increases, those with one year PQE had a 5% boost to £74,000.

On Wednesday (20 May), Hogan Lovells revealed it was matching Slaughter and May’s pay for NQs of £70,000. But while Linklaters’ NQs lose out in their first year in comparison with Slaughters and Hogan Lovells lawyers, those with three year PQE are better off by £2,000 with Slaughters paying £96,500. The difference is also apparent in trainee rates with Slaughters and Hogan Lovells both offering £41,000.

Simon Branigan graduate recruitment partner at Linklaters, said: ‘Coupled with strong performance-related bonuses – which we pay across all levels – and which for a significant majority have, in percentage terms, been in double figures on a scale that can realistically reach 35% of salary, we believe that our compensation is extremely competitive and an important factor in attracting and retaining some of the brightest and best talent in the market.’

tom.moore@legalease.co.uk, michael.west@legalease.co.uk

Legal Business

Dealwatch: Linklaters and CC act on New Look sale as South African billionaire Wiese continues UK high street buy-up

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Dealwatch Clifford ChanceLinklaters
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Less than 30 days after advising on the £1.3bn purchase of Virgin Active by South African billionaire Christo Wiese’s private equity vehicle Brait, Linklaters‘ rising star Alex Woodward has led on Brait’s £780m deal for a 90% stake in clothing retailer New Look.

Wiese, who made his money from South African retail giant Pepkor, has added New Look to a string of recent investments in the UK high street, which include a stake in Iceland. The deal sees private equity houses Apax Partners and Permira sell-up after 11 years of owning the outfit, and will pass on around £1bn of debt, giving New Look a total enterprise value of £1.9bn.

Clifford Chance corporate partners Amy Mahon and David Pearson, who advised Permira on its €250m purchase of Norwegian drug maker Pharmaq in 2013, advised Apax Partners and Permira.

Partner Danny Blum led a team at Eversheds which advised New Look on employee share plans. Blum said: ‘This was a rollercoaster of a deal which was complicated by the wide employee ownership structure in place at New Look and the speed at which the transaction took place.’

Brait said in a statement that, with New Look already operating more than 800 stores around the globe and holding the second largest market share in the UK womenswear, there are ‘strong growth prospects in France, Germany, Poland and especially China which is a priority market’.

Woodward worked alongside fellow private equity partners Stuart Boyd and Stuart Bedford, who also heads the firm’s London corporate team, in executing the deal. The Magic Circle firm is building a strong relationship with Brait as it focuses its investment on the UK market, having also advised the company on its purchase of feminine hygiene brand Lil-Lets in 2013.

The remaining 10% of New Look will be owned by the family of Tom Singh, who founded the business in 1969, and other senior management. UK corporate boutique Macfarlanes advised the Singh family led by corporate M&A partner Harry Coghill, while Fried, Frank, Harris, Shriver & Jacobson advised the management.

tom.moore@legalease.co.uk