Legal Business

A mixed bag for Simmons & Simmons as firm posts record turnover but tumbling PEP

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Financial results 2015/16 Simmons & Simmons
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Results season has proved something of a mixed bag for Simmons & Simmons, with turnover up 2% in 2015/16 to hit a record £295.1m but partners suffered a sharp fall in profits as its cost base soared.

Growth slowed last year after something of a revival for the City stalwart in 2014/15, when revenue rose 8% to £290.1m and profits per equity partner (PEP) leapt 17% to £649,000.

Revenue was up £5m to £295.1m in the 12 months to 30 April 2016, which while far from impressive on a year-on-year basis, gives the firm its strongest showing since 2008/09 when turnover hit £291.3m. It is also in sharp contrast to the dismal results posted by City peers Ashurst, which saw revenue plummet 10% £505m, and Berwin Leighton Paisner, which saw revenue drop 2% to £254m.

Nonetheless, the costs associated with closing down its offices in Rome and Abu Dhabi, combined with rising rent and salary costs, hit Simmons & Simmons’ bottom line. Net profit decreased 6% to £88.8m, with PEP dropped back below the £600,000 barrier to £585,000.

This means the average take home pay across the firm’s partnership is £64,000 lower than in 2014/15, when PEP hit a record high of £649,000.

Simmons & Simmons managing partner Jeremy Hoyland (pictured) told Legal Business: ‘It’s slightly disappointing but it’s good that we got income growth. Net profit down as revenue had not risen sharply enough to meet an increasing cost base and that’s a story you will hear across a lot of firms. We held costs quite tight in the previous year and it just built up the pressure.

He added: ‘At some point you’ve got to release the pressure, and it was necessary for the business, to increase salaries and make investments across our network, with expansion in Munich, Singapore and Bristol. It all comes as a cost. It was a declining picture, which is never good, but everybody understood in the partnership that investing in the business was the right thing to do and we all knew it would take a big rise in revenue to cover those.’

While the firm’s London office had a flat year, mainly due to less transactional activity and a ‘tailing off after Christmas’ due to market unease over the EU referendum that resulted in a Brexit result, Hoyland said that the firm had a ‘better performance in continental Europe and in Asia’. France was a standout performer, with the firm’s offices in the Netherlands and Luxembourg putting in strong revenue increases.

The firm was flat across its corporate and banking groups, with strong showings across its contentious practices, particularly in financial services litigation.

tom.moore@legalease.co.uk

Legal Business

Simmons builds out real estate practice with Goldman Sachs hire

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Strategic recruitment Simmons & Simmons
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Nearly a year after tapping Barclays for its corporate offering, Simmons & Simmons has hired from the in-house community once again with Goldman Sachs executive director and senior counsel, Deian Rhys.

Starting his role as a partner today (6 June) Rhys is a real estate specialist specialising in cross border transactions. He spent more than eight years at Goldman Sachs, having spent six years as an associate at Linklaters prior to his move in-house.

Rhys’s move follows the appointment of Barclays M&A chief Khasruz Zaman last summer, who exited the bank after a decade in its Canary Wharf HQ for Simmons’ corporate and commercial practice.

A firm spokesperson said Rhys was unavailable for comment and instead provided this statement from real estate head John Kelsey: ‘Deian comes to us with a valuable insight to handling real estate transactions from a client perspective contributing further to our high quality offering to our real estate clients. His contribution will also add further industry strength to both our financial institutions and our asset management & investment funds sector groups.’

Jonathan Hammond, head of the firm’s international financial institutions sector group, added that the firm will continue to invest in the practice with internal promotions and further lateral hires.

Turnover growth has been stagnant at Simmons, which in December posted a modest 1% rise in revenue for the first half of the current financial year.

The UK top 20 firm posted a £2m increase in turnover to £142m for the first half of 2015/16, which represents a 9% increase on half-year revenue over two years, with income for the first half of 2015/16 up £12m on the £130m logged for the first six months of 2013/14

Last year the firm voted through a three-year business plan with a focus on strengthening referral relationships in the US. The strategy, which started running from 1 May 2015 through to 30 April 2018, aims to place greater structure around which US firms partners refer work to, in the hope of forging stronger relationships.

sarah.downey@legalease.co.uk

 

Legal Business

A&O hires Simmons IP star Noor in patent court play

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Litigation Allen & OverySimmons & Simmons
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In preparation for the new Unified Patent Court (UPC), Allen & Overy (A&O) has strengthened its life sciences practice with the hire of Simmons & Simmons IP partner Marjan Noor.

Noor (pictured) is well regarded for her specialisation in patent litigation and regulatory advice in the life sciences sector. Joining Simmons & Simmons in 2010, Noor has represented clients such as pharmaceutical companies Bayer, GSK Vaccines and Eli Lilly.

The firm said Noor’s arrival is ‘an important part of the firm’s preparations for the UPC and the strategically significant patent litigation in this new forum’, allowing the A&O team to ‘fully take advantage of the opportunities presented by the UPC’.

The new court represents the biggest ever shake up of European patent legislation, as it creates a create a unified position to patent registration and litigation across 25 European member states, affecting businesses in a range of sectors, including TMT, life sciences, aerospace & defence and industrial & manufacturing.

A&O global head of litigation Tim House described Noor as an excellent patent litigator and life sciences regulatory specialist.

He added: ‘We are delighted to welcome her to our strategically important and thriving practice group. We are confident that Marjan’s appointment will boost and strengthen our client offering.’

Noor joins a 15 partner strong global IP group, working alongside London IP litigation head Nicola Dagg, Neville Cordell, Jim Ford, Mark Ridgway and Nigel Parker in the firm’s London office.

Dagg said Noor’s hire comes at a time of ‘generational change for patent litigatiors’.

She addeD: ‘This is extremely timely given how busy patent litigation is in the life sciences sector on the eve of the UPC opening for business with the life sciences division in London.’

The hire is part of wider growth that is expected across the four year tenure of the firm’s new management team. Senior partner Wim Dejonghe and managing partner Andrew Ballheimer are to lead the firm until 2020.

Speaking with Legal Business, Dejonghe and Ballheimer indicated their goal is to ‘keep growing in a quality way’ with further growth expected across the US, China and Europe.

madeleine.farman@legalease.co.uk

Legal Business

Skin in the game – Simmons launches ‘fund’ to back fintech stars with free advice

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Innovation Simmons & Simmons
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With law firms scrambling to build links with the much-hyped fintech sector, Simmons & Simmons has put its money where its mouth is with the launch of a £100,000 ‘fund’ offering free legal advice to promising start-ups.

The S&S FinTech Fund is touted as the first of its kind in the legal industry, with Simmons hoping that offering free legal advice to promising start-ups will lead to strong relationships with fast-growing clients.

The idea is the brainchild of Simmons partner Angus McLean, who spotted that fintech start-ups often face tough legal issues during their infancy given the increasing regulatory burden on finance providers.

McLean, who leads Simmons’ fintech team, said: ‘Early stage fintech businesses in the UK currently face challenges finding the right kind of legal support. Our vision is to help promising start-ups solve challenging legal or regulatory problems that could otherwise slow down their development or, in some cases, prevent them from getting off the ground at all.’

The fund commits £100,000 a year to help up to four UK fintech start-ups through the provision of free legal advice. The fund will provide legal advice worth up to £33,000 per client annually, with the expectation that Simmons will work with three or four selected clients. The firm does not expect to take equity in return for providing that advice.

Simmons is tapping into a booming marketplace, with global investment in fintech up 75% in 2015 to $22.3bn, according to consultancy Accenture. Fintech has become one of the darlings of the UK economy, given London’s strong financial platform and focus on technology. The UK industry generated more than £6bn in revenue in 2015, according to EY.

To qualify for support via the fund, fintech businesses will have received no more than £1m of investment and been accepted onto one of the leading UK fintech accelerator programmes or been referred to Simmons by an established fintech-focused venture capital investor.

The unusual attempt to share risk with tech-driven clients loosely echoes the practice pioneered by a handful of major law firms in the late 1990s dot.com boom of taking equity stakes in return for offering free legal advice. The tactic, which was most prominent among Silicon Valley advisers but also extended to some City law firms, has become less common in recent years.

However, this move will be seen as a symbolic statement of commitment by Simmons for the much-touted sector, which is typically driven by entrepreneurs rather than institutional banking groups.

Simmons managing partner Jeremy Hoyland (pictured) added: ‘The firm already acts for some of the leading fintech businesses in the UK. The fund will allow us to use our specialist expertise to contribute meaningful support to the UK fintech sector, while also building strong relationships with the next generation of exciting businesses.’

tom.moore@legalease.co.uk

Click here for more commentary on fintech

Legal Business

‘High performance culture’: promotions down by nearly half as Simmons makes up seven globally

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Partnership promotions Simmons & Simmons
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After a 13-strong partner promotions round last year, Simmons & Simmons has made up just seven lawyers in its latest promotions round.

The firm, which is experiencing slower financial growth after a record-breaking 2014/15, has made up just three lawyers in the City this year. This is just a third of the number made up 12 months ago, when nine lawyers across seven practices got the nod in the City. Elsewhere Paris, Düsseldorf, Hong Kong and Milan received one promotion apiece.

The City promotions include structured capital markets specialist David Toole, a 2013 hire from Linklaters. Corporate tax lawyer Hatice Ismail and Alexander Thavenot also made the grade in London, being made partners in Simmons’ financial markets and dispute resolution practices respectively.

While it is a small round, three of seven of the promotions are women, representing 43% of the round. This is higher than the 30% target that most City firms have set themselves.

Simmons’ senior partner, Colin Passmore, said: ‘These individuals all exemplify our high performance culture and values through their ambition, expertise, commitment and collegiality. Again this year, they recognise the range of talent that exists across our practice areas and our offices that has been key to our development over the past few years.’

tom.moore@legalease.co.uk

Simmons’ promotions in full:

Hatice Ismail, London, financial markets

Alexander Thavenot, London, dispute resolution

David Toole, London, financial markets

Sarah Bailey, Paris, dispute resolution

Christian Bornhorst, Dusseldorf, corporate and commercial

Eva Chan, Hong Kong, financial markets

Augusto Santoro, Milan, corporate and commercial

Legal Business

Winston & Strawn makes double partner hire from Simmons in aviation finance boost

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Strategic recruitment Simmons & SimmonsWinston & Strawn
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US firm Winston & Strawn has swooped on City rival Simmons & Simmons to take aviation finance duo Mark Moody and Christopher Boresjo.

Moody, who has been a partner at Simmons & Simmons for over a decade, is a member of the asset finance and leasing group at the City firm and specialises in cross-border asset financing in the aviation industry. A leading individual in The Legal 500 for asset finance, Moody will arrive at Winston & Strawn before the end of this month.

Moody has worked closely with Boresjo for nearly a decade and their arrival bolsters Winston & Strawn’s finance team. Boresjo’s arrival date is still to be confirmed. The pair will also be joined by associate Manolis Hatziapostolou, who will be promoted to counsel upon joining Winston & Strawn.

The arrival of Moody and Boresjo come as part of a wider play in the finance market. The team hires come a year after Winston & Strawn took 11 partners from Pillsbury Winthrop Shaw Pittman which saw a large finance team arrive in the US and co-head of energy, infrastructure and projects James Simpson arrive in the City.

Late last year Winston & Strawn rejigged its global executive committee, with London board member and disputes partner Michael Madden replaced by corporate partner Zoe Ashcroft, signalling a shift in focus for the US firm. At the time managing partner Tom Fitzgerald told Legal Business the firm wanted to commit more resources to London and diversify its offering, having previously focused on disputes.

In March the Winston & Strawn lost co-head of arbitration Joe Tirado to Garrigues, which hired the English-qualified lawyer to launch an arbitration practice in London.

tom.moore@legalease.co.uk

 

Legal Business

Simmons cited in Panama Papers leak after working with Mossack Fonseca

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Offshore Simmons & Simmons
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City law firm Simmons & Simmons has been named in the Panama Papers leak, after 11.5 million confidential documents were leaked from Panamanian law firm Mossack Fonseca.

Simmons is named in a document from 2006 as a legal adviser alongside Mossack Fonseca on advice given to investment fund Blairmore Holdings, where Ian Cameron – the late father of British Prime Minister David Cameron – was a director. Blairmore Holdings has a registered office the same building as Mossack Fonseca, in Arango Orillac Building in Panama City, and Simmons & Simmons has been the investment fund’s principal English law adviser.

The investment fund, named after the Cameron family’s ancestral home in Aberdeenshire, was run from the Bahamas and The Guardian newspaper has claimed Blairmore has never paid tax on its UK profits because of its tax arrangements.

The leak has revealed some 12 world leaders, including close associates of Russia’s president Vladimir Putin, and 143 politicians have used the Panama law firm to avoid tax in developed countries. The leak puts the link between international and offshore law firms under the microscope.

Mossack Fonseca said in a statement: ‘It is legal and common for companies to establish commercial entities in different jurisdictions for a variety of legitimate reasons, including conducting cross-border mergers and acquisitions, bankruptcies, estate planning, personal safety, restructuring and pooling of investment capital from different jurisdictions in neutral legal and tax regimes that does not benefit or disadvantage any one investor.’

The firm said its services are regulated on multiple levels, often by overlapping agencies and has a strong compliance record.

‘In addition, we have always complied with international protocols… to assure as is reasonably possible, that the companies we incorporate are not being used for tax evasion, money laundering, terrorist finance or other illicit purposes.’

tom.moore@legalease.co.uk

For more on the Panama Papers see: ‘Guest post: The Panama Papers – why it’s very possible the behaviour is criminal.’

Legal Business

Asia round-up: HFW enters association in Shanghai as Simmons hires former Dentons head for Singapore

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Asia Holman Fenwick WillanSimmons & Simmons
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Holman Fenwick Willan (HFW) and Simmons & Simmons have made moves to boost their presence in Asia, with HFW entering a formal association with Shanghai firm Wintell & Co, while Simmons expands its financial markets practice in Singapore, hiring Dentons’ former managing partner.

Following approval by the Shanghai Justice Bureau, HFW has formalised its partnership with Wintell, which will enable the firm to practice domestic law. Shanghai-based Wintell has more than 20 partners and nearly 100 lawyers across Guangzhou, Tianjin, Ningbo and Zhoushan. The firm specialises in shipping, insurance and corporate law.

After working with Wintell for many years, HFW says its Shanghai office will come together with the firm to ‘take advantage of the strong client base of each firm, combining HFW’s international footprint with Wintell’s local Chinese law expertise to provide clients with enhanced on the ground service.’

Meanwhile Simmons has appointed Dentons’ former managing partner of its Singapore office Matthew Cox, to its financial market practice. Denton’s Singapore office was closed in early 2015 after the announcement of its combination with one of China’s biggest law firms, Dacheng, which at the time of the pairing formed a 6,600-lawyer giant operating under a Swiss verein structure.

With almost 16 years’ experience, Cox has a particular focus on international structured trade and commodity finance and financings into emerging markets.

Head of Simmons’ financial markets group in Asia Rolfe Hayden said: ‘As opportunities for international trade increase, Matthew’s expertise will greatly enhance opportunities for our clients and our current offering in trade finance while complimenting experience across our international financial markets team.’

madeline.farman@legalease.co.uk

Legal Business

KWM and Simmons clock poor retention rates as Eversheds hits 100%

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Trainee retention Eversheds SutherlandKing & Wood MallesonsSimmons & Simmons
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The rough and tumble of trainee retention season offers contrasting images to future lawyers as Eversheds keeps on all eight trainees while Simmons & Simmons becomes the latest firm accused of tampering with its figures.

Simmons & Simmons, which recently released a 78% retention rate for its spring trainees, has been accused of altering its figures after a poor year for keeping its young talent. The firm announced that nine trainees had gone through the qualification round ending in February, with eight offered jobs and seven accepting. However, it has since emerged that there were 13 trainees on the intake, rather than nine, giving Simmons & Simmons a lower retention rate of 54%.

A spokesperson for the firm would not confirm how many people started in the trainee cohort, stating that ‘it’s not manipulation’ and that the firm only counts people who ‘go through the process.’ She would not detail how long it takes for a trainee at the firm to be considered ‘going through the process’.

Simmons & Simmons previously posted a poor retention rate for its autumn 2015 cohort, with just 64% of the 28 trainees that begun the programme still with the firm as a newly qualified lawyer.

King & Wood Mallesons, which recently cut 15% of its European and Middle Eastern partnership, has kept on 14 of its 20 qualifying trainees, or 70% of this round.

Eversheds, on the other hand, posted a 100% retention rate with all eight trainees set to continue at the firm. Three of these are based in London, qualifying into commercial and financial services disputes and investigations practices, with a further four trainees qualifying in Birmingham and Cambridge. The firm also took on a trainee in Paris, to be based in the firm’s international arbitration practice.

Firms in the Magic Circle all released their retention rates earlier this year, with the general pattern being that firms have achieved lower retention rates than the same time last year, although Slaughter and May has bucked this trend by keeping on 91% of trainees, up from the 88% it kept on in spring 2015.

Our sister website The Lex 100 has created a retention rate table which will be updated as more figures are announced.

tom.moore@legalease.co.uk

Legal Business

Abu Dhabi exodus continues as Simmons becomes the latest major firm to pull out

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Middle East and Africa Simmons & Simmons
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With many major law firms losing money in the Middle East after overinvesting during the oil boom in the 2000s, Simmons & Simmons has followed Latham & Watkins and Herbert Smith Freehills (HSF) in shutting down its Abu Dhabi operations.

Simmons carried out ‘a detailed review’ after its losses in the Middle East, which also includes offices in Dubai and Doha, rose from £243,000 in 2014 to just under £2m in the 12 months to 30 April 2015. The closure of the Abu Dhabi office affects five lawyers, including three partners. The firm’s accounts show in total Simmons has 56 staff, including 29 fee-earners and three partners in the Middle East.