Legal Business

‘We’re actively looking at our growth’: PwC hires King & Wood managing partner duo to spearhead Asia legal arm

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PwC Australia has hired former King & Wood Mallesons managing partners, Tony O’Malley and Tim Blue, to spearhead the expansion of the accounting giant’s corporate legal services business across the Asia Pacific.

The big four firm plans to build a ‘premium multi-competency legal practice globally’ and in Australia is targeting annual legal services revenue of US$100m plus.

The competition and telecoms lawyer Tony O’Malley, having served as managing partner for King & Wood Mallesons Australia and as deputy global managing partner of the firm until early last year [2013], will lead PwC’s legal practice in Australia and across the Asia Pacific. Blue meanwhile, who acted as managing partner for King & Wood Mallesons’ corporate M&A and tax practices, will join as a partner. He will serve as deputy to O’Malley and head the corporate and commercial legal practice.

On his appointment, O’Malley said: ‘PwC’s gloal network has size and scale second to none. We will leverage this scale to build a legal services offering that is tailored to the needs of the firm’s clients in a way which is not encumbered by the legacy issues that some of the established law firms are struggling with.’

With PwC’s global legal business achieving double digit revenue growth since 2007, the hires signal a marked period of expansion for the accountancy giant, which in July confirmed it had entered the Singaporean market via a tie-up with local firm Camford Law.

Partner Andrew Wheeler tells Legal Business the firm is ‘actively looking at our growth’ including in Japan and China, he says: ‘We’ve made public statements about wanting to break into the top 20 law firms globally and get over the billion and a half dollar mark. At the moment we’re earning about half a billion dollars in global legal services revenue which is a small part of PwC. We have to execute on our plans by opening in new jurisdictions we’re not in. We’ll also have to invest in our current jurisdictions which is what we’re doing in Australia.’

He adds: ‘We want to go to market together with other parts of the firm such as the tax, audit, and the consulting teams to provide a bundled service. Our proposition to clients is that we’re able to provide a seamless integrated service in places where it makes sense for them. If you look at the trade flows and where our global clients operate, places like Japan and China are really important to be in. There is a desire on our part to provide legal services there.’

Sarah.downey@legalease.co.uk

Legal Business

PwC beats international law firms to complete tie-up in Singapore with local firm Camford Law

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Big four giant PwC has made a decisive move to enhance its legal offering around the Asia-Pacific region, and has entered into a tie-up in Singapore with local firm Camford Law.

Specialised in corporate and commercial law, the 10-lawyer local outfit currently has two partners including corporate lawyer Bijay Nawal and capital markets lawyer Natarajan Sundararaman. Having been in talks for nearly two months, the firm has now joined PwC’s global network but will operate as a separate partnership and retain its name.

‘It’s good for us – they have a large network and we have worked with them for over a decade,’ Nawal told Legal Business. ‘We are an independent firm but it was a natural choice to do a tie-up with them.’

On whether there are added benefits to working with an accountancy giant as opposed to an international law firm, Nawal adds: ‘There’s advantages to tying up with an accountant. We are by and large a corporate firm and it makes sense for us to work with another organisation with a similar focus. There will be a lot of synergy given our respective practices.’

Nawal also confirmed that the local outfit had been approached by international law firms prior to its talks with PwC but declined to give any names.

PwC currently offers legal services in more than 80 countries and employs 2,400 lawyers whose practice areas include employment, entity governance and compliance, immigration, international business reorganisation, corporate M&A, banking and finance, litigation, antitrust, and financial services regulation.

On how law firms are faring in the Singapore market, which this year saw multiple firms including Allen & Overy, Clifford Chance, Latham & Watkins, and Norton Rose Fulbright renew their qualifying foreign legal practice licence, Nawal adds: ‘Foreign international firms are definitely feeling tougher competition and pressure on fees. The cost structures of international firms are much higher than local firms. That’s why local firms can be more competitive.’

Fellow big four giant Ernst & Young (EY) is also looking at its options in the Asia region. In December, it hired Herbert Smith Freehills’ Singapore partner John Dick, who specialises in energy & resources, South East Asia regional foreign investment and infrastructure.

Sarah.downey@legalease.co.uk

Legal Business

PwC forms new law firm in Canada one month after obtaining ABS status

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In the first major development since PricewaterhouseCoopers last month received authorisation from the Solicitors Regulation Authority (SRA) to become an alternative business structure (ABS), the accounting giant announced on 1 March that it has formed a new law firm in Canada by tying up with Toronto immigration outfit Bomza Law Group.

The new firm will be called PricewaterhouseCoopers Immigration Law, and Christopher Kong, national managing partner of PwC Canada’s tax services said: ‘With a range of global employment opportunities and the related complexities to employees and employers, an immigration law firm affiliated with PwC provides an opportunity to help our clients with the mobility of their people.’

PwC is the only one of the Big Four accountants to maintain a serious legal offering since the withdrawal of the likes of KPMG shortly after the turn of the century, and last year revealed that it was looking at a number of different options in the legal sector, including conversion to an ABS, to allow it to offer a more joined up service with its, until now, entirely separate legal arm.

Of the remainder of the Big Four, KPMG and EY have been considering their position and earlier this year, KPMG – which until the advent of Sarbanes-Oxley in 2002 ran 3,000-strong network KLegal – made a statement of intent with the hire of DLA corporate partner Nick Roome, with more legal hires in the pipeline.

Deloitte is the only one of the Big Four to have so far said it has no plans to enter the legal space.

Moves building on the accountants own networks are being closely watched in the City, and PwC’s latest venture joins the firm’s global immigration network of over 600 people in 126 countries.

Speaking as PwC obtained its ABS status last month, Crispin Passmore, SRA executive director of policy, said: ‘The authorisation of PwC Legal as an ABS is another example of the innovative changes taking place in the legal market. Nearly two years on from the first ABS licensed by the SRA, we are seeing further increased diversity in the supply of legal services, and that provides consumers with greater choice.

‘Throughout 2014, we expect to see further change as more businesses take advantage of the liberalisation to innovate and grow the legal market, be it through increased exports of corporate legal services, improving access and affordability for small business, or helping individual consumers solve the problems of day-to-day life.’

David.stevenson@legalease.co.uk

Legal Business

Davis Polk and Cleary act on big four Booz takeover as PwC re-shuffles legal leadership

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Corporate Cleary Gottlieb Steen & HamiltonDavis Polk & WardwellPwC Legal
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Major accountancy and advisory groups are always nice clients for law firms to have so Davis Polk & Wardwell, Cleary Gottlieb Steen & Hamilton and Linklaters have some cause for cheer after having been instructed on one of the biggest deals in the professional services sphere for years.

The deal sees big four accountancy and advisory group PricewaterhouseCoopers (PwC) seal an acquisition of New York-based Booz & Company, one of the proudest names in strategic consulting.

The deal will go to a vote of Booz’s 300 partners in December, bringing in a business with 3,000 staff and revenues of around $1bn. PwC, which currently generates revenues of $32bn, has been moving in recent years to expand its business in the lucrative strategic consultancy area.

Booz, which was founded in 1914, was a pioneer in the managing consulting business. The tie-up of two of the oldest names in professional services is likely to attract scrutiny from regulators, with audit watchdogs currently putting pressure on groups like PwC to avoid conflicts of interest.

Davis Polk was instructed as lead counsel for PwC, with the Wall Street leader fielding a team under global co-head of M&A David Caplan and corporate partner Oliver Smith. Other senior lawyers on the team included executive compensation partner Edmond Fitzgerald, tax partner Rachel Kleinberg and antitrust specialist Ronan Harty.

Caplan had previously advised PwC on its 2011 acquisition of management consulting firm PRTM for an undisclosed sum, as well as its buyout of Diamond Management & Technology Consultants for $378m in 2010.

Linklaters was also instructed on the deal, fielding a UK law team out of London led by corporate partners Richard Godden and Sarah Wiggins. Linklaters is a regular adviser to PwC in Europe, including acting for PwC on its lucrative role as the administrator in the European bankruptcy of Lehman Brothers.

Cleary Gottlieb is advising Booz with lawyers on the PwC deal including New York-based M&A partners Christopher Austin and Benet O’Reilly, employment partner Arthur Kohn, tax partner Sheldon Alster and antitrust specialist Brian Byrne in Washington DC.

Meanwhile, in a separate development, PwC today (31 October) announced a re-shuffle of the management of its PwC Legal network. Leon Flavell will now focus on his role as leader of PwC’s Global Legal Services Network. Shirley Brookes, currently managing partner of PwC Legal, is assuming Flavell’s role as PwC Legal’s UK senior partner.

The move will be watched closely at a time when many observers expect big four accountants to show renewed interest in the liberalising UK legal services market. Flavell commented: ‘We have the most geographically extensive legal services network in the world, with over 2,400 lawyers in over 80 countries. Revenues last year were $440m and there are fantastic opportunities for us to grow these further.’

Brookes said: ‘There are considerable opportunities for us to grow here in the UK and I am delighted to be taking on the role of senior partner.’

Sarah.downey@legalease.co.uk