Legal Business

Mishcon and Hogan Lovells line up as KWM takes case against Goodwin Procter over PE team

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Litigation Goodwin ProcterHogan LovellsKing & Wood MallesonsMishcon de Reya
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Mishcon de Reya and Hogan Lovells are to face off as King & Wood Mallesons (KWM) issues a claim against Goodwin Procter over several private equity hires made by the US firm.

As reported by Legal Business in July, KWM wrote to Goodwin over potential legal proceedings against it concerning the exit of a six-partner private equity team. The team, which included Paris managing partner Christophe Digoy and Maxence Bloch, is understood to have walked out with at least £8m in annual billings.

KWM’s claim is understood to be against both Richard Lever and Goodwin Procter. Lever announced he would leave KWM in April 2015 to develop a City PE practice at Goodwin, while the Boston-based announced the Paris team would join it from KWM a year later.

Goodwin is being represented by Hogan Lovells’ employment partner Stefan Martin, while Mishcon’s head of employment Daniel Naftalin is acting for KWM. Goodwin and KWM both declined to comment on the case.

KWM has said it will re-build its practice in France, highlighting that its profitable Paris funds team was unaffected by the Goodwin departures. The firm’s European partnership has undergone a testing 18 months, having recently re-organised its structure, moving from 17 to three divisions, asked 24 partners to leave in March and increased its loan facility with Barclays earlier this year.

This month the firm replaced both leaders for its legacy SJ Berwin practice, opting for Frankfurt partner Michael Cziesla as EUME senior partner, defeating Dubai-based disputes partner Tim Taylor QC. Earlier this October the partnership elected Tim Bednall as EUME managing partner, defeating Gareth Amdor in a two-man race for the position.

victoria.young@legalease.co.uk

For more on King & Wood Mallesons, subscribers can see Branded for an in-depth look at the firm.

Legal Business

Revolving doors: Dechert, Mishcon and Squires strengthen the ranks

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Strategic recruitment DechertMishcon de ReyaSquire Patton Boggs
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Following the post-summer hiring spree, the latter half of September only brought single lateral hires in criminal, corporate, tax and intellectual property (IP).

Mishcon de Reya’s business crime group announced this week the appointment of the Grillo sisters’ defence lawyer Richard Cannon. With effect from 5 October, Cannon will be the seventh lawyer in the two-partner business crime group established in 2014.

Cannon joins Mishcon de Reya from boutique criminal law firm Janes Solicitors, where he was a partner for 16 years focusing on defence of serious and complex fraud.

Commenting on his appointment, group head Alison Levitt QC said that ‘Richard brings to the firm a wealth of experience and expertise in criminal defence litigation at the top level’.

On the corporate side, Squire Patton Boggs also continues the European expansion of its global practice by confirming Kashif Siddiqui as its new partner in the London office. Joining from Trowers & Hamlins, Siddiqui focuses on cross-border M&A, disposals, joint ventures and reorganisations. Commenting on Siddiqui’s appointment, EMEA chair of the global corporate practice Jane Haxby said the hire is in line with the firm’s international focus and expansion of their UK practice. Siddiqui’s appointment follows last month’s hire of Bart Vanderstraete as partner in the Brussels office. Earlier this month Squires announced it would hold elections by the end of the year as its long-standing leader, Europe and Middle East managing partner leader Peter Crossley, steps down.

Meanwhile, Dechert added Sabina Comis to its benches as tax partner in the firm’s Paris office. Joining from Mayer Brown, part of Comis’ role will be focusing on advising French and international companies on tax structuring and dispute resolution. Dechert international and domestic tax group chair Daniel Dunn said Comis has an ‘impressive track record’ whilst head of tax in France. Last month the firm announced a ramp-up of its London office with the hire of long-serving DLA Piper financial services global co-chair Philip Butler.

georgiana.tudor@legalease.co.uk

Legal Business

Case study: Mishcon de Reya

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Financial results 2016 Mishcon de Reya
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The standout performer from this year’s second 25 is once again Mishcon de Reya which, along with Macfarlanes, has been the pace setter in this peer group over the last five years. The firm has come a long way since it first made its debut into the top 50 four years ago in 2012. Over five years, revenue has climbed more than 100% from £65m.

Mishcon revealed robust profits for the 2015/16 financial year, with profit per equity partner (PEP) up 11% to £1m as global revenue grew to £132.7m from £116.7m, an increase of 14%. The firm did, however, this year downsize its Manhattan practice to focus on IP. As such, New York revenue came in at £4.8m, a considerable drop given the business in recent years generated upwards of £13m.

Legal Business

Revolving doors: Mishcon makes key City hire as K&L Gates boosts Fintech practice

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Strategic recruitment K&L GatesMishcon de Reya
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Ahead of the expected summer slowdown, UK firms have made a spate of City hires, with Mishcon de Reya, K&L Gates and Excello Law all recruiting.

Mishcon de Reya has also hired in the City, taking private client partner Martin Davies from Clyde & Co. With extensive experience in the Middle East, Davies served as a partner at the firm for six years, and previously headed the international team at Howard Kennedy.

Boosting its London and New York offices, K&L Gates has hired Judith Rinearson into its Fintech practice. Rinearson joins from Bryan Cave along with Linda Odom, who joins the firm’s Washington DC office in its consumer financial services practice.

At Ashurst departures remained on the cards with the exit of Brian Dunlop, the firm’s CFO since 2013. It has been a tough 12 months for Ashurst, with revenues dropping 10% and a retreat from its European offices in Stockholm and Rome.

The firm has also seen the exit of several partners, with White & Case taking on two partners earlier this year, hiring disputes specialist Mark Clarke and capital markets partner Jonathan Parry. But it has also recently exploited the ongoing exits at King Wood & Mallesons, bringing in banking partner Robert Andrews to its London office.

Virtual firm Excello Law has added a leading Islamic finance lawyer to its team, hiring Ashley Freeman from Charles Russell Speechlys. Freeman was head of Islamic finance at the firm and for 13 years the head of legal at the central bank of Bahrain.

And after three years on the top bench, Supreme Court justice Lord Toulson is stepping down from his full time role. Toulson will retire officially in September after the Supreme Court’s summer break but will serve in a part-time role on a rotating panel of judges until a full-time justice is appointed.

matthew.field@legalease.co.uk

 

Legal Business

Mishcon de Reya City PEP climbs to £1m as firm undergoes Brexit review

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Financial results 2015/16 Mishcon de Reya
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High flying City firm Mishcon de Reya has announced robust profits for the 2015/16 financial year, with profit per equity partner up 5% to £1m as revenue in London climbed to £127.9m from £110m.

New York revenue came in at £4.8m which constitutes a considerable drop, given the business in recent years generated upwards of £10m. This is due to the firm’s decision in recent months to downsize its Manhattan practice to provide solely IP advice.

UK net profit came in at £35m. A breakdown of UK revenue showed litigation generated the highest revenue with £44m, while real estate came second with £31m. Corporate followed with £20m, while the private wealth practice brought in £19m and employment generated £10m.

Following a year-long consultation with the partnership and external advisers, the firm recently revealed a refreshed strategy for the next decade, with a target to lift UK revenue by 40% to £175m within the next three years.

Mishcon said it would review its business strategy this summer in preparation for ‘opportunities and threats’ posed by the Brexit referendum.

The surprise majority vote to leave the EU in June has driven management at the firm to re-evaluate its position for the future, and prepare for a potential decline in transactional activity.

Speaking to Legal Business, managing partner Kevin Gold said: ‘My first instinct is that it’s too early to call the consequences of a Brexit. There was immediate shock the day after [the vote] …people are asking: “Oh, what do we do?” We think internally “what are the opportunities and the threats?” We will see if we need to make any adjustments to our business planning over the summer.’

Gold (pictured) added: ‘We’ve always been quite strict on budgeting but we’re reserving the right this year to go back after six months and look at our budgets if there’s a total slowdown of transactional work. We’re just going to have to be realistic about that.’

On whether the review could lead to a reduction in staff headcount, Gold said: ‘I would never say never but we’ve no intention of that at this stage.’

The news coincides with the firm’s recent announcement that it launched a legal action over the triggering of article 50 and the process of Brexit. The firm is bringing the case on behalf of clients, which will be named if the case progresses to litigation, to ensure the UK does not begin the process of leaving the European Union without an act of parliament.

sarah.downey@legalease.co.uk

Legal Business

Anger over article 50: Protesters gather outside Mishcon over Brexit legal challenge

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Brexit Mishcon de Reya
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Protesters gathered outside the headquarters of City firm Mishcon de Reya today (7 July) in response to the firm’s plans to launch a legal action over the triggering of article 50 and the process of Brexit. However the City firm has also received over 1,500 emails of support of the action since the news emerged.

Located at Africa House in Holborn, a protest group named ‘spiked’ stood in front of the firm’s front doors and waved an orange banner stating ‘Invoke Article 50 Now!’ It is understood the protest lasted less than an hour.

The group’s Facebook page argues: ‘spiked is launching this campaign to call on the government to invoke article 50 of the Lisbon Treaty, initiating Britain’s exit, right now. And to defend democracy, too. If the Brexit quake has revealed anything, it’s that democracy is now disrespected across the political sphere. We need a new movement to defend the democratic ideal.’

An editor’s letter from the group’s website said of Mishcon: ‘[Mishcon] knows a majority of MPs want to stay in the EU, and clearly hopes they’ll overturn the people’s anti-EU will. Here we have a borderline coup, a legal firm nakedly elevating the interests of the capitalist class and expert cliques over the demands of the public.’

It has come as a surprise to many that the referendum is not legally binding in UK law and cannot alone trigger the UK’s departure from the EU, but rather, must be done under the withdrawal process laid down in article 50 of the Lisbon Treaty.

Mishcon is preparing the action for September on behalf of a group of unnamed clients to ensure the UK does not begin the process of leaving the European Union without an act of parliament. It has since received over 1,500 emails in support of the action.

Earlier this week, Martin Howe QC, chair of pro-Brexit group Lawyers for Britain, called Mishcon’s proposed action ‘devoid of all legal merit.’

The announcement from Mishcon follows Devereux Chambers barrister Jolyon Maugham launching a crowdfunded legal challenge against the Brexit process last week.

Mishcon has retained David Pannick QC and Tom Hickman of Blackstone Chambers as well as Rhodri Thompson QC of Matrix Chambers and Anneli Howard of Monckton Chambers.

The firm declined to comment on the protest.

sarah.downey@legalease.co.uk

Read more about the article 50 action in: ‘Guest post: Don’t abuse the Brexit litigants – their action shows we live in a free country’

Legal Business

Brexit challenged: Mishcon takes on article 50 action for mystery clients

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Brexit Mishcon de Reya
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Mishcon de Reya is preparing to launch a legal action over the triggering of article 50 and the process of Brexit, for a group of unnamed clients.

The LB100 firm is bringing the case on behalf of a group of clients to ensure the UK does not begin the process of leaving the European Union without an act of parliament.

Mishcon has retained David Pannick QC and Tom Hickman of Blackstone Chambers as well as Rhodri Thompson QC of Matrix Chambers and Anneli Howard of Monckton Chambers.

The firm said it had been in correspondence with government lawyers since 27 June to seek assurances that the process of leaving the EU would be started by parliament invoking article 50, rather than relying solely on the result of the public vote on 23 June.

Mishcon partner Kasra Nouroozi said: ‘We must ensure that the government follows the correct process to have legal certainty and protect the UK constitution and the sovereignty of parliament in these unprecedented circumstances.’

He said the result of the referendum was ‘not in doubt’ but that it was not legally binding, and for a prime minister to invoke the act without the approval of parliament would be unlawful.

Nouroozi (pictured) added: ‘We must make sure this is done properly for the benefit of all UK citizens. Article 50 simply cannot be invoked without a full debate and vote in parliament.’

Mishcon executive partner James Libson added: ‘The challenge is going ahead because we have clients who wanted to raise it, of course it is driven by clients and not the law firm. Their concerns are that there is a lot of debate about article 50 and it is a matter for the sovereignty of parliament. If it weren’t on the subject of Brexit this would be a standard judicial review of executive power.’

Leadership challengers for the Conservative party have offered differing viewpoints on the process of triggering article 50. Theresa May, who campaigned for Remain, has said the UK would need to wait until the government’s negotiating stance was clear, while pro-Brexit challengers Andrea Leadsom and Liam Fox have both said they would push on with negotiations as early as September.

The announcement from Mishcon follows Devereux Chambers barrister Jolyon Maugham launching a crowdfunded legal challenge the Brexit process last week.

Maugham said: ‘The narrow point that we are taking is that parliament enacted an advisory referendum. It could have enacted a referendum that had the effect of triggering article 50 but it didn’t. So who is to take that advice from the voters?’

Carter-Ruck barrister Peter Smith, a member of the pro-Brexit group Lawyers for Britain told Legal Business: ‘It’s a question of the prerogative. It’s the prerogative of the government to engage the article 50 process and it doesn’t require an act of parliament.

‘I wouldn’t want to be the high court judge who declares the government has to seek an act of parliament on this.’

He added the government ‘probably could have been clearer in its wording’ of the referendum act, since the European Union Act 2011 declared that all future EU treaties must be put to both a referendum and an act of parliament.

 

matthew.field@legalease.co.uk

Legal Business

Quinn, Stewarts and Signature demand costs from Mishcon clients in RBS litigation saga

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Litigation Mishcon de ReyaQuinn Emanuel Urquhart & SullivanStewarts
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The ongoing saga that is the £4bn shareholder group action against the Royal Bank of Scotland (RBS) continues to prove controversial, as it has emerged that litigation powerhouses Quinn Emanuel Urquhart & Sullivan, Stewarts Law and Signature Litigation are seeking millions worth of costs incurred from the claimants of Mishcon de Reya.

Essentially the argument centres over whether Mishcon’s clients should continue to have a free ride, and keeping benefiting from other claimants’ lawyers’ work, despite having left the shareholder group in October last year.

The RBS action is brought against the bank’s former chief executive Fred Goodwin and three other directors, and relates to a rights issue in April 2008, in which RBS sold its shares at £2 per share. The claimants allege that the prospectus on which the rights issue was based was ‘defective’ and contained material misstatements and omissions.

At a recent case management conference (CMC) in mid-June before Justice Robert Hildyard, an application was made by the three lead claimant groups, represented by Quinn, Stewarts and Signature, demanding that Mishcon’s clients – which include nine pension investment subsidiaries connected to Lloyds Banking Group and are listed as follower claimants – to pay their share of the costs incurred by the lead groups in taking the litigation forward on behalf of all claimants.

The follower claimants (whose damages are worth £420m of the £4bn total) are the same group that instructed Mishcon in place of Signature. The costs estimate, says one City litigator, is said to ‘run into the millions’ and dates from the time Mishcon came on the record last year and leading up to the trial in March 2017.

Separately, Mishcon disputes partner Richard Leedham, who took the instruction to lead the institutional clients from Signature last year, has filed a costs estimate totalling £700,000 for legal work on the case so far.

At the CMC in June, the judge expressed surprise that there was an issue in this respect and said he assumed the matter would be resolved quickly without the need for the application to be heard by him this month where it has been scheduled for a half-day hearing.

Evidence has been swapped by parties over the last few weeks and Justice Hildyard has considered using a judicial assistant to help him with the trial and the mass of expert evidence in particular. A decision on the costs debacle between advisers is expected to be handed down in July.

No additional costs budgets were filed or raised at the CMC however it is understood that RBS’s adviser firm, Herbert Smith Freehills, is likely to exceed its previous cost estimate of £92m.

The RBS Shareholder Action group is the largest of three currently in dispute with RBS. Herbert Smith Freehills continues to defend RBS, with a team lead by partners Adam Johnson, Simon Clarke, Kirsten Massey and James Norris-Jones.

sarah.downey@legalease.co.uk

Legal Business

Mishcon acts for former Torex boss taking on RBS and KPMG in £128m fraud claim

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Litigation KPMGMishcon de ReyaThe Royal Bank of Scotland
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Mishcon de Reya is acting in a £128m claim against the Royal Bank of Scotland and KPMG brought by former Torex Retail chief executive Neil Mitchell, with Dentons and Stephenson Harwood advising the defendants.

Mishcon de Reya disputes partner Richard Leedham is leading for the claimant with Stephen Auld QC, Michael Clark and Sophie Webber of One Essex Court as barristers.

Dentons partner Steven Mills leading on the case, and has instructed Fountain Court’s Patrick Goodall QC and Richard Power.

Also named in the case are Torex financial advisers KPMG who are being advised by Stephenson Harwood partner Ros Prince.

Mitchell’s case is being heard in the Royal Courts of Justice in London and alleges fraud against RBS, KPMG and two KPMG named partners. He is also bringing a separate action in the US against New York-based firm Cerberus Capital Management.

Mitchell claims that collusion between RBS, Cerberus and members of Torex’s advisers led to the purchase of the company at around £400m below the firm’s value, which caused its collapse.

He first brought his concerns to the Serious Fraud Office after Torex was sold to Cerberus in 2007 for £204m, but was later dismissed from the firm.

Mitchell said: ‘This is a landmark case against a state-funded bank which I allege has been acting against the interests of taxpayers for a number of years. I am seeking justice not only for myself, but also in the public interest of the hundreds of viable British businesses, thousands of employees and their families.’

A spokesperson for RBS said: ‘We have thoroughly investigated Mr Mitchell’s allegations and believe them to be entirely without merit. Mr Mitchell has chosen to issue legal proceedings which will be met by a full defence.’

RBS is also expected to face further claims running into the billions of pounds from hundreds of small and medium-sized businesses that they were forced out of business for the bank’s profit. That litigation is being brought by Enyo Law.

A spokesperson for KPMG said: ‘We strongly refute the allegation that KPMG or its members have acted improperly; there is no substance to the claims that have been made. The Courts have previously dismissed similar allegations and we have applied to have the current proceedings struck out.’

Cerberus Capital Management declined to comment.

matthew.field@legalease.co.uk

Legal Business

‘A transformed business’: Mishcon de Reya unveils ten-year strategy

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Mishcon de Reya
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Following a year-long consultation with the partnership and external advisers, high-flying City firm Mishcon de Reya has revealed a refreshed business strategy for the next decade, with a target to lift UK revenue by 40% to £175m within the next three years. Unaudited figures for 2015/16 project revenue to be in excess of £125m.

The 400-lawyer firm held its annual partnership conference in recent weeks at its headquarters at Africa House in Holborn, where managing partner Kevin Gold presented key points of the strategy spanning until 2026, subdivided into three year plans.

Speaking to Legal Business Gold (pictured) said he expected the litigation practice to increase from £35m to £53m, corporate from £20m to £26m, private client from £20m to £24m, employment from £8.5m to £11.3m and family from £6.2m to £7.5m.

While traditionally the firm has stuck to short term plans, Gold said: ‘We found as we got bigger, the time horizons were getting quite small…you get a fairly anodyne view on facts and figures as opposed to looking further afield – we wanted to ask – what firm are we going to be?’

Gold said disputes will remain a key focus with the firm aiming to launch a regulatory practice within the next year, and enhance its insurance, business crime, contentious tax, and international arbitration offering.

Gold also voiced the firm’s ambition to be a leading mid-market corporate department in London providing transactional support, regulatory advice, private equity and tax consultancy.

Major investment in technology is also on the agenda in order to ‘liberate fee earners.’ Chief strategy officer Nick West, who joined from alternative supplier Axiom earlier this year, is tasked to ‘drive the automation of everything that can be automated whether it’s legal or process.’ During that same period West will establish an internal laboratory to vet artificial intelligence initiatives in a bid to make the firm an ‘early adopter for new technologies.’

Following on from the roll-out of its private client and e-discovery ventures in recent years, ultimately Gold says the firm envisions itself over the next decade growing as a broad-based consultancy business.

However the firm’s New York office – a separate business which generated around $13m annually – is being scaled back to a patent only practice, and the firm is in the process of moving a four-partner team to smaller offices from Park Avenue to Soho.

As for firmwide remuneration, Gold said the option to move to a John Lewis-style partnership model that would see all staff own a stake in the business continues to be mooted. He does, however, point towards his ‘personal dislike of bonuses as opposed to ownership return.’

‘Bonuses take a huge amount of time. They’re unsatisfactory whereas if people have a vested interest and treat the firm like they treat their home we think we’ll get better returns from people and for them as members of staff.’

For Gold the concept of origination has increasingly become a ‘meaningless metric by itself’ and the various metrics to measure reward currently include contribution to knowledge training, mentoring, monitoring, and work generation.

‘As the firm and quality of clients have grown, very few people can claim to own a client individually. Once you bring in other metrics like generosity – how you take that introduction to a client and pass it on to someone else. That is built on the premise that the firm is different to others – it’s more important than the individual.’

sarah.downey@legalease.co.uk