Legal Business

‘Continued growth an excellent result’: year of investment brings slowdown for Pinsents

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Financial results 2017/18 Pinsent Masons

Pinsent Masons has recorded slower revenue growth for the 2017/18 financial year, with turnover increasing by 6% to £449.8m compared to the 11% growth the firm recorded last year.

Profit per equity partner (PEP) increased by 4% to £653,000, a significant slowdown from the 14% growth registered last year, however the increase comes despite the addition of six equity partners at the firm since July 2017.

The results point to a return to a more pedestrian pace for Pinsents, which last year saw revenues break the £400m barrier after a subdued 2015/16 performance. However, the five-year picture remains strong:  turnover has increased by 40% over that period, while profitability has grown by 60%, with the firm being one of the most consistent high-performers in the Legal Business 100 in recent years.

Around 90% of revenue generated came from clients operating in the firm’s core sectors, with advanced manufacturing and technology, financial services, infrastructure and energy and real estate the primary drivers of growth. Last year the firm estimated 85% of turnover came from the same sectors.

Speaking to Legal Business, managing partner John Cleland said: ‘This year we entered the year knowing it would be unpredictable, but in the current economy we continued with our level of investment with office launches and 30 laterals. Continued growth is an excellent result.’

Cleland believes the firm will now look towards consolidating after an active 12 months, with the firm expanding in Dublin, Madrid and Australia as well as making up 23 partners in March as part of a bolstered promotion round.

‘We’re always looking at opportunities but probably we will look at consolidating and making a return on our existing investments.’

Cleland highlighted Germany as a particularly lucrative area for the firm, while recent mandates have included acting on Mainstream Renewable Power’s sale to EDF of the £2bn Neart na Gaoithe offshore wind farm in Scotland, as well as a role advising Yorkshire-based polymer technology company Fenner on a cash offer by Michelin.

In March, the firm sold one of its earliest New Law investments, Cerico, to Dow Jones for an undisclosed sum.

thomas.alan@legalease.co.uk

For more on Pinsents, read ‘Our values are imperatives’: Pinsents chief on diversity, success and being bolder (£)

Legal Business

Revolving Doors: Ashurst and Greenberg Traurig strengthen City benches as Pinsents sees moves both ways

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Strategic recruitment AshurstGreenberg TraurigPinsent Masons

A bumper week for City and international lateral hires followed the Easter break last week with Ashurst and Greenberg Traurig among those to make strategic additions in London, strengthening their real estate and white-collar practices respectively.

Ashurst announced the hire of Alison Hardy from Squire Patton Boggs where she was national head of its property litigation team. James Levy, head of Ashurst’s London disputes practice, said: ‘Alison is a highly regarded and experienced real estate litigator. We have every confidence that she will deliver great results for clients and play a key role in further developing our capability in high value disputes.’

Similarly, US firm Greenberg Traurig made a significant lateral move in the City as it secured the services of white-collar defence and investigations specialist Barry Vitou from Pinsent Masons, who will now lead its London practice.

Vitou holds expertise working on corruption, money laundering and the UK Bribery Act. Greenberg vice chair Paul Maher said: ‘We are always exploring ways to enhance what we can offer clients. This is one of the things we will achieve with the expected addition of Barry Vitou.’

Pinsents, for its part, strengthened its restructuring team with the addition of Samantha Palmer as partner. Palmer joins from Ashfords where she was a board member and head of professional and financial risks. She also has previous experience with the Solicitors Regulation Authority (SRA), where she headed up the financial stability programme.

Pinsents said: ‘Samantha’s arrival enhances our ability to provide a market-leading offering in terms of the restructuring of professional practices, advising lenders to professional practices, business-structure work for investors into the legal sector and pure regulatory advice for law firms themselves.’

Elsewhere in London, experienced private client specialist Jonathan Kropman will be leaving post-merger Bryan Cave Leighton Paisner (BCLP) to join Trowers & Hamlins to lead its private wealth team. Kropman had led legacy Berwin Leighton Paisner’s private client group for 13 years.

BCLP however was at the forefront of European activity this last week, deepening its German footprint with the hire of Bernd Geier to lead the firm’s financial regulation practise in Frankfurt.

Geier leaves Dentons, where he occupied a similar role leading its financial regulation and funds practice. Roland Fabian, managing partner for BCLP Germany, said in a statement: ‘Through this expansion of our regulatory expertise, we will be able to offer clients comprehensive advice on their increasingly complex regulatory matters, particularly in the context of the impending Brexit.’

Despite the loss, Dentons also made moves in Europe as partner Giangiacomo Olivi joins the firm’s Milan office. Arriving from DLA Piper, Olivi will now spearhead Dentons’ data privacy team.

Further afield, Clyde & Co appointed Cameron Thomson as a partner in its Sydney office, with the real estate expert leaving Norton Rose Fulbright. In a statement Clydes said: ‘Cameron’s capabilities, along with the firm’s extensive footprint in the region, made establishing a dedicated non-contentious real estate practice in Australia the next logical step’

Stephenson Harwood was also among those that saw activity in Asia-Pacific, with the arrival of partner Allen Shyu from Troutman Sanders to its Beijing office, after the US firm announced the closure of its office earlier this year. Shyu, who joined Troutman from Orrick Herrington & Sutcliffe’s Hong Kong office, will lead on involved in capital markets deals, M&A and private equity matters.

Gibson, Dunn & Crutcher is also committed to international hires in Hong Kong by securing two partners from US counterpart Weil, Gotshal & Manges. John Fadely and Albert Cho are poised to join Gibson’s investment funds group after their respective stints at Weil, which lasted eight and four years respectively. Gibson chairman and managing partner Ken Doran said: ‘We are focused on building a premier corporate practise in Asia that complements our private equity and M&A practices in the US, Europe and the Middle East.’

thomas.alan@legalbusiness.co.uk

Legal Business

‘Our values are imperatives’: Pinsents chief on diversity, success and being bolder

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Interview Pinsent Masons

Legal Business (LB): How do you create a clearer picture of what Pinsents is doing on diversity?

Richard Foley (RF): You’ve got to be consistent in highlighting it as a priority. We’re clear about the programmes we have and we’re vocal about successes. We’ve just been ranked second of all UK corporates in this year’s Stonewall index for the second year running.

Legal Business

Pinsents calls for level playing field and more transparency as it reveals partners gender pay gap

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Gender diversity Pinsent Masons

Pinsent Masons has disclosed the earnings gap that hands male partners 22% more than female colleagues on average as it calls for changes to the gender pay reporting regime ahead of next year.

The top 25 UK law firm has taken the unusual step of disclosing its gender pay gap figures with reference to its partnership numbers. The partnership numbers reveal it pays male partners more than a fifth more on average, and 38% more on a median basis. Its bonus pay gap, however, sees female partners receive 11% more on average while the bonus pay gap is 0% on a median basis.

Its already-disclosed statutory gender pay gap filing – excluding partners – shows the firm has a 22% pay gap on both average and median basis. The bonus gap is 47% on average, and 40% median. The firm’s overall numbers, therefore, give the firm an average gender pay gap of 58%, reducing to 43% on a median basis, and a bonus pay gap of 52% on average, reducing to 50% for the median.

Pinsents senior partner Richard Foley said that following the firm’s statutory pay gap disclosure in February, a perception was hardening that lawyers and accountants are trying to duck the issue by not publishing their partner numbers.

Foley also criticised the current regime for allowing too much inconsistency in reporting benchmarks. As such, Foley said Pinsents would engage with the Law Society and other City law firms to seek changes from the government.

He added: ‘It cannot be right that partnerships have no common methodology and thus have to pick and choose what to report. Only by achieving consistency can we create a level playing field and secure the transparency expected of us by our people, our clients and the wider public.’

On Pinsents’ own gap, Foley said the numbers affirmed that not enough women were making it into senior positions within the profession. The firm’s female partnership had grown to 25% from 17% five years ago, with many in leadership roles.

‘To be clear, we are confident that we pay male and female partners and employees equitably. Many factors influence remuneration, from the geographic spread of our people to the discipline in which they practise.’

Firms have until 4 April to disclose their figures, with Freshfields Bruckhaus Deringer becoming the latest to disclose its last week, revealing it was performing well ahead of its Magic Circle peers.

hamish.mcnicol@legalease.co.uk

Legal Business

Pinsents posts largest partner round for three years but female promotions dip

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Partnership promotions Pinsent Masons

Pinsent Masons has lifted its 2018 partner promotion numbers after a slight dip last year, but the proportion of female promotions has fallen ahead of its target of a 30% female partnership by 2020.

The firm has made up 23 partners, effective 1 May, up from last year’s 16. A quarter of the promotions are female, sharply down from last year’s 68%, when Pinsents reached its 25% female representation target a year early.

Pinsents’ new target is for a 30% female partnership by 2020, and over the last three years 45% of its internal promotions have been female. The top 20 UK law firm’s current 400-plus partnership sits at just above 25% women.

Nearly a third of the promotions are based outside the UK, split between China, Australia, Germany, Dubai and France. The 1,600-lawyer firm opened offices in Madrid, Dublin, Johannesburg and Perth last year. Of the UK promotions, seven are in London. Seven of the promotions are in infrastructure, while six are in financial services.

Senior partner Richard Foley says it is the firm’s largest promotion round in three years, reflecting the firm’s sustained growth drive and international expansion. He adds: ‘[We] focus on investing in our people. We have worked hard to create both a level playing field, and an environment in which our people can develop the deep sector-specialism and innovative mind-set that characterises a Pinsents partner.’

hamish.mcnicol@legalease.co.uk

Pinsent Masons promotions

UK
Mark Baker, financial services
Charles Blamire-Brown, infrastructure
Matthew Clayton-Stead, financial services
Zoe de Courcy Arbiser, infrastructure
Tim Fearn, financial services
Stephen Glass, real estate
Hayley Goldstone, financial services
Natalie Harris, real estate
Andrew Herring, advanced manufacturing & technology
Greg Jones, infrastructure
Ravi Nayer, financial services
Amie Norris, corporate
Paul Noble, tax
Helen Robinson, real estate
Christopher Sharp, life sciences

David Woods, financial services, TMT, energy

 

 

Germany
Michael Prüßner, corporate

Australia
William Marshall, infrastructure, energy
Adam Perl, infrastructure, energy

China
Alvin Ho, infrastructure
Mark Hu, infrastructure

Dubai
Luke Tapp, employment

France
Melina Wolman, TMT

Legal Business

Moving on: Pinsents sells early New Law investment to Dow Jones

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Innovation Pinsent Masons

Pinsent Masons has sold one of its earliest New Law investments to financial information giant Dow Jones for an undisclosed sum, citing a need for it to move on for its next phase of growth.

The firm has sold online compliance solutions business Cerico, which it launched in 2013 as a joint venture with IT consultancy Campbell Nash and latterly upped its investment to a majority stake in 2015. Pinsent Masons retains a ‘strategic relationship’ with Dow Jones following the sale, meaning it will continue to provide and be paid for legal content, compliance support and consultancy to Dow Jones clients, when required.

Pinsent Masons senior partner Richard Foley (pictured) said the firm was proud of what it had achieved with Cerico, which he described as being an immense success with clients. He added: ‘As the business has moved toward its next phase of growth, it has been clear that it will need to integrate with a wider range of business and financial data to support the full range of client need. In that respect Dow Jones is the perfect partner to ensure that Cerico achieves its full potential.’

Glasgow-based Cerico provides online ‘know-your-business-partner’ programmes and digital compliance tools for clients including some international FTSE 100 and FTSE 250 businesses, which the firm would not name. Cerico’s chief executive Jim Armstrong and fellow director Julia Salmond move to Dow Jones with the sale, alongside 15 staff. Former executive chairman Richard Masters and co-founder Tom Stocker will remain partners at Pinsents.

Dow Jones head of professional information business Chris Lloyd commented: ‘Cerico is a best-in-class, end-to-end compliance and regulatory solution that is an excellent fit for Dow Jones as we move further into offering fully integrated solutions for our clients. Combined with Pinsent Masons’ expertise in this area we now have a unique and holistic offering to take to the market.’

Pinsent’s LLP accounts for the year to 30 April 2017 says the firm provided services worth £162,000 to Cerico that year, but the firm stressed this was a technical accounting figure and way off the value of the business. Cerico’s most recent financial accounts, for the year to 31 March 2017, say it purchased services worth £320,013 from related parties that year.

Cerico was one of Pinsents’ first investments in New Law, coming at around the same time it launched legal resourcing hub Vario. Since then, it bought a 20% stake in outsourcing business Yuzu in early 2017, and shortly after acquired diversity and inclusion business Brook Graham for an undisclosed sum.

hamish.mcnicol@legalease.co.uk

Legal Business

Panel beaters – Balfour revamps Pinsents partnership as Barclays’ buying shake-up signals its last panel contest

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In-house Balfour BeattyBarclaysPinsent Masons

Is big business turning its back on the conventional legal panel? This month at least sees two prominent examples, with listed infrastructure group Balfour Beatty extending and revamping its sole supplier partnership with Pinsent Masons as banking giant Barclays unveils its final global panel review.

Pinsents today (5 March) announced its sole supplier mandate with the FTSE 250 company had been re-signed until 2020, the second extension to a deal which kicked off in April 2013. The latest partnership, however, has introduced new pricing structures for greater flexibility.

Variable fixed-price arrangements have been implemented for routine projects rather than a single, capped fee for all business-as-usual matters, as was the case previously. Pinsents’ routine work will also generate credits which can be offset against legal spend on more complex work also handled by the firm. These credits could also be used for advice on the design and implementation of legal process technology.

Pinsents infrastructure partner Colin Fraser is the new relationship partner on the deal, which was spearheaded by Pinsents’ head of client strategy, Alastair Morrison, and Balfour Beatty general counsel (GC) David Mercer. Fraser commented: ‘We look forward to working in tandem with the Balfour Beatty legal team to redefine what blue-chip organisations can expect from their legal spend in innovation, value and cost certainty.’

Mercer added: ‘We’ve unlocked significant value for Balfour Beatty through our partnership approach and remain committed to driving continuous improvement. We are now working together on tech-led innovation blending legal service provision, in-house engagement and business system integration that is changing the way we do business and helping us to lead in this challenging market, not least in extracting maximum value from every legal pound spent.’

Pinsents also has a single-supplier mandate with energy giant E.ON for a five-year term. There have been a number of high profile sole-supplier deals, including Eversheds Sutherland with Tyco and Turkish Airlines and DLA Piper with Merlin Entertainments.

Barclays, meanwhile, confirmed a long-anticipated move to phase out conventional legal panels in favour of a more ‘dynamic’ model when its last global panel expires in mid-2021. The banking giant has launched its final formal panel review, which will run on a three-year term from 1 July 2018. Barclays’ previous review in 2016 slashed the number of firms used from between 350-to-400 to less than 140. At the time, external engagement head Stephanie Hamon said the industry was getting hung up on the word ‘panel’.

Hamon’s team has worked over the past two years to develop a new framework for more active management of Barclays’ counsel. Key changes included setting defined expectations against which firms were assessed, phasing out hourly rates, focusing on effective fee arrangements and developing deeper relationships.

The handover led to the bank’s decision to eliminate the laborious process of full panel review procedures. Barclays’ new approach would give the bank more flexibility in managing the size and composition of the firms it uses, adding and removing them when needed.

Hamon commented: ‘Panel refresh processes are not supporting what we want to achieve. What we really want is for our relationships to be a win-win partnership and for all of us to develop, thus helping the legal industry to evolve at pace.’

hamish.mcnicol@legalease.co.uk

Legal Business

Who Represents Who: Firms that will be affected by the fall of Carillion

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Corporate Addleshaw GoddardClarks LegalClyde & CoDLA PiperEversheds SutherlandFBC Manby BowdlerFieldfisherIrwin MitchellKennedysLinklatersPinsent MasonsRPCSacker & PartnersSlaughter and May

For more information on Who Represents Who, contact:
David Burgess,
Publishing Director, The Legal 500
legal500.com/wrw
david.burgess@legal500.com

Legal Business

For what they’re worth – Links, 2Birds and Pinsents among law firms disclosing chunky gender pay gaps

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Salaries Bird & BirdLinklatersPinsent MasonsTaylor Wessing

The UK’s top law firms have begun disclosing figures on gender pay gaps, with an initial round of numbers showing City giant Linklaters has the biggest gulf between male and female earnings.

The Magic Circle firm on Wednesday (7 February) published its figures for gender pay bands, as required under legislation introduced last year, which showed Linklaters paid its male staff members nearly 60% more in bonuses than women. The firm’s female employees were paid on average 23.2% less than male colleagues. The gap widened to 39.1% when the median figure was considered.

Linklaters’ figures were published as three more top 50 law firms today (8 February) unveiled equivalent numbers: Pinsent Masons, Taylor Wessing and Bird & Bird.

Taylor Wessing had the smallest gap, as the average hourly pay was 13.48% higher for men, rising to 32.1% on a median basis. In comparison, female staff at Bird & Bird earned on average 14.5% less per hour than their male counterparts, a figure that grows to 27.6% when earnings are ranked on a median basis.

The average pay gap at Pinsents was significantly higher at 22.4%, which the firm said was due to its regional office network resulting in lower rates for bottom-earners. However, the firm had the lowest median gender pay gap of the group at 22.4%.

CMS has already announced its figures, demonstrating that the average UK hourly earnings rate for women is 17.3% lower than men, while the median average hourly rate was 32.8% lower. CMS had the lowest mean average gap in terms of bonuses at 26.9%, while the firm’s median gap was at 30.4%.

Figures for the group were lower than the mean and median pay gap for the legal sector overall, which the Office for National Statistics estimates at 24% and 25.7% respectively.

The disclosures cover all business support staff and associates and demonstrate the position as of 5 April 2017. All UK companies with more than 250 staff are required to publish such figures by 4 April 2018.

All the law firms profess confidence that they are paying male and female employees the same for equivalent jobs. They gave broadly similar reasons for their gender pay gaps, pointing to the fact that there were more women in less well-paid roles and a higher number of part-time female lawyers.

At Linklaters, women made up 79.2% of staff in the lowest-earning quartile – which includes secretarial and junior business team positions. In this quartile, the pay gap was 5.96% in favour of women. But in the upper quartile of earners at the firm, women accounted for 44.9% and earned 6.5% less than men.

‘We are confident that we pay men and women fairly for equivalent roles,’ stated Linklaters in a formal announcement, adding that there was a ‘more significant gender imbalance within our lower pay quartile’. ‘This also feeds into our bonus figures because the bonus potential for our secretarial and junior business team roles is generally lower than for our legal and more senior business team roles.’

Bird & Bird – where bonuses paid to women were on average 33.5% lower than those paid to men – stressed that the bonus gap also reflected the higher number of part-time female employees. Only two men worked part-time at the firm last year, compared to 60 women. ‘Unlike the pay gap figures, which are based on hourly rates, the bonus figures are the actual sums paid. This means that those who work part-time or have been on maternity leave for part of the bonus year will have lower bonuses than men carrying out an equivalent role,’ said the firm.

Cynics will argue that law firms have ducked the key issue as they are not required to disclose the gap in earnings between male and female partners. And law firms being fond of preaching high standards while taking the low road of pragmatism are collectively taking it upon themselves to report as little as possible. The jaded may also note that years of publishing poor numbers on female partnership ratios has had little discernible impact on the advancement of women.

Marco.cillario@legalbusiness.co.uk

Legal Business

LLP latest: Taylor Wessing tightens its belt as Pinsent Masons gets expansive

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Financial results 2016/17 Pinsent MasonsTaylor Wessing

The latest round of LLP accounts show profit, management pay and remuneration for the highest earning member all fell at Taylor Wessing, while Pinsent Masons delivered strong growth across the board, pushing its top earner past the £1m mark.

Taylor Wessing’s accounts for the year to 30 April 2017 show that despite a small 2% increase in turnover to £129.3m, profit available for division among LLP members fell to $46.9m from $49.9m. Similarly, the sum awarded to the highest-paid member dropped 11% to £1,039,000 in the same period while pay for key management personnel fell to $5.8m from $6.1m.

Costs rose 6% to £81.6m over the period, offsetting the increase to turnover, and included an increase in staff costs to £45.9m from $44.3m. The number of members rose to 102 from 100, while fee earners increased by four to 292. The firm’s cash pile also fell 36% to £12.3m.

Meanwhile, Pinsent Mason’s first international LLP accounts since its overarching entity was created on 1 June 2016 show the highest-paid member took home 34% more last year, as turnover and profit both improved. Management also got a pay bump following what senior partner Richard Foley described a year of ‘sustained profitability, coupled with strategic investment into our business’.

Turnover at the firm rose 11% to £423.1m, helping profit rise to £134.9m from £117.5m despite an 9% increase in costs. Of the $287.2m in costs over the period, £182.9m related to staff, up 10%, and included a £14.6m increase to salaries over the year. The firm’s cash position also strengthened by nearly 42%, to £64.8m.

The accounts show the highest remuneration of a member was £1,086,951, up from £810,490, while pay for key management personnel rose 16% to £5.95m. The number of fee earners at the firm rose slightly to 1,368 from 1,357, while the total number of members – including equity and non-equity – rose to 357 from 349.

In a report accompanying the accounts, Pinsent Masons said Brexit has ‘increased uncertainty’ for the LLP, but that potential opportunities and risks are being considered and evaluated, which members believe the firm is well equipped to deal with.

Foley said highlights for the year included new offices in Düsseldorf and Johannesburg, as well as taking a minority stake in legal resourcing business Yuzu. ‘Since then we have continued to take steps to grow our business in-line with our vision to be recognised as international market leader in the global sectors in which we operate, as evidenced through further office openings in Madrid, Dublin and Perth.’

Hamish.mcnicol@legalbusiness.co.uk