Legal Business

Slaughters, Davis Polk and Skadden cash in on Shire’s biggest ever takeover

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Corporate Davis Polk & WardwellSkadden, Arps, Slate, Meagher & FlomSlaughter and May
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Dublin-headquartered Shire, took to the January sales with the $1.5bn it received in a break-fee from US pharma giant AbbVie following the collapse of their proposed $55bn tie-up late last year, securing the acquisition of biotech firm NPS Pharma.

The company returned to Slaughter and May, which drafted the AbbVie break-fee due to the political climate around tax inversion deals, to advise on the purchase of biotech NPS for $5.2bn. The deal is Shire’s largest-ever acquisition and comes amid increased pressure to deliver shareholder value.

Legal Business

Strangling the golden goose – English law needs reform

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Legal affairs Slaughter and May
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Slaughter and May’s Nigel Boardman, James Shirbin and Andrew Blake argue that English law needs drastic reform to remain internationally competitive

English law occupies a privileged position. Thanks in significant part to the City’s role as a major global financial centre, England has become the jurisdiction of choice for many enterprises and deals (and subsequent disputes) that may otherwise have little territorial connection to the UK. The primary beneficiaries of this happy arrangement have been London’s major commercial law firms, who have received a steady flow of major transactional and litigious work.

Legal Business

‘The pharma sector is very busy’: Slaughters, Davis Polk and Skadden win roles on Shire’s $5.2bn acquisition

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Corporate Davis Polk & WardwellSkadden, Arps, Slate, Meagher & FlomSlaughter and May
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Slaughter and May was called upon by longstanding pharmaceutical client Shire on its biggest acquisition to date as it purchased biotech NPS Pharma, represented by Skadden, Arps, Slate, Meagher & Flom, for $5.2bn.

Slaughter and May corporate partner Martin Hattrell, who handled Shire’s collapsed $55bn sale to US pharma giant AbbVie late last year, led on deal to buy the New Jersey-based rare disease drug maker. Shire will acquire all the outstanding shares of NPS Pharma, which manufactures drugs to treat short bowel syndrome and is seeking to register Natapara to treat hypoparathyroidism, for $46 per share in cash.

Hattrell, who is relationship partner for the Dublin-based pharma company, worked alongside finance partner Mark Dwyer on the deal. US legal advice was provided by Davis Polk & Wardell corporate partners Bill Chudd and George Bason, with the New York-based duo also instructed on the collapsed sale to Abbvie.

Shire’s chief executive, Flemming Ornskov, said: ‘The acquisition of NPS Pharma is a significant step in advancing Shire’s strategy to become a leading biotechnology company. We look forward to accelerating the growth of the NPS Pharma portfolio based on our proven track record of maximizing value from acquired assets and commercial execution.’

Skadden M&A partners Eileen Nugent, based in New York, and Boston-based Graham Robinson represented NPS Pharma.

Shire secured a $850m short-term bank facility, which, in addition to Shire’s cash and cash equivalents, and its existing $2.1bn five-year revolving credit facility, will finance the transaction plus fees and expenses. In due course, the company plans to refinance the short-term bank facility through new debt issuances. Commenting on the deal, Hattrell said: ‘Much of the work was financing work, and it was primarily a US deal.’

He added: ‘Shire has been a very active client in the last 12 months. The pharma sector is very busy at the moment and I expect that to continue.’

tom.moore@legalease.co.uk

Legal Business

‘Culture of valuing and recognising everyone’s contribution’: Slaughters unveils bumper associate bonus package

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Associates Slaughter and May
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Slaughter and May has increased the size of its annual bonuses, with associates qualified for more than four and a half years set to receive an additional 15% on top of their salary.

Associates at the firm, which last year introduced a discretionary bonus to all staff after abandoning its rigid associate lockstep, will reap a larger bonus this year, linked to both PQE and performance.

Associates up to six months qualified and achieving a good or exceptional level of performance will receive a 7.5% bonus this year, up on the 6% paid out in 2013, and worth almost £5,000. Associates qualified for between one and two years are set to take home a 10% bonus, a rise on the 8% handed out this time last year.

The biggest rise, amid increased competition for talented senior associates as US law firms look to build out in the City, have gone to those qualified for more than two and a half years. Those qualified for between two and a half and four years will earn an extra 2.5% this year, with bonuses rising to 12.5%, while those qualified for more than four years will see bonuses hiked up by 3% to 15%.

Associates who do not attain a good to exceptional level of performance – with points awarded to individuals based on legal knowledge and skills, business and communications skills, practice management and people skills and personal development – will receive a lower bonus. In 2012, all associates at the firm were paid a flat bonus of 5%.

Bonuses for trainees and support staff have been frozen at 3%. That means a first year trainee at the firm will expect to take home a £1,185 bonus, while second year trainees will take home around £1,350.

Executive partner Richard Clark said: ‘Our bonus levels reflect a busy year for the firm and our staff. We do not impose billing or time recording targets on our associates and our approach to bonus differentiation is to recognise performance and career progression while ensuring that we reflect our team culture of valuing and recognising everyone’s contribution.’

tom.moore@legalease.co.uk

Legal Business

‘We are a true partnership’: Slaughter and May names Wittmann new practice head as CC re-elects senior partner

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Leadership Clifford ChanceSlaughter and May
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Slaughter and May has appointed David Wittmann as the firm’s practice partner with the role’s current holder, partner Paul Olney, stepping down at the end of the year.

Wittmann will be responsible for the firm’s overall practice strategy and development both within the firm and its ‘best friends’ relationships with leading law firms outside the UK.

Slaughter and May has offices in London, Brussels, Beijing and Hong Kong, and Wittman rejects the view that Slaughter and May is a UK focused firm. ‘We operate from four offices,’ he said. ‘The competition like to paint us into a UK domestic firm but a large amount of the firm’s work is international across all out practice areas.’

Wittman told Legal Business that while ‘it will be business as usual’, he will focus on maintaining the firm’s culture. ‘We are not a heavily managed firm, we are a true partnership and this is very central to the way we operate. We don’t direct partners on how to manage their practices but try and build a consensus,’ he said. ‘M&A has been somewhat patchy this year, but we have been busy in disputes, regulatory work, competition and investigations.’

The role, when it goes into effect on 1 January 2015, will see him work closely with senior partner Chris Saul and executive partner Richard Clark. He succeeds Paul Olney who announced previously that he would retire from the firm at the end of 2014, after six years in the role and having been a partner at the firm since 1990.

Wittmann became a partner in 1997, having joined Slaughter and May as a trainee solicitor in 1988. His time at the Magic Circle firm has seen him advise on corporate, corporate finance and private equity work.

Meanwhile, Clifford Chance has re-elected Malcolm Sweeting as senior partner to serve a second four-year term and chair the firm’s Partnership Council. Sweeting said, ‘The legal landscape is not immune to change, and it is clear that our clients are increasingly challenging us to innovate and adapt. It is also clear from discussions with our clients, across sectors and from around the globe, that there are fantastic opportunities for Clifford Chance to support them as they look to achieve their ambitions and navigate this rapidly changing environment.’

jaishree.kalia@legalease.co.uk

Legal Business

The Friday Edit: Lloyds unveils panel, LB unveils The Disputes Yearbook and Slaughters’ magic still mesmerises the profession

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Comment Lloyds Banking GroupSlaughter and May
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It’s that time of the week again, dear readers, where we help you look back at the interesting legal happenings since Monday and pick out some of the highlights of this month’s edition of Legal Business. You can click here for further information on gaining full access to Legal Business.

Analysis of the week: Martial law

Can the disputes boom continue? And if it can are City law firms ready to bring their once-marginalised litigators back fully into their inner circles? These and many other issues were tackled in the piece, Martial law, the combatively titled signature piece for our 2014 Disputes Yearbook. The article assesses if the post-Lehman expansion of contentious work can continue and finds litigators unlikely to again accept taking a secondary role to deal lawyers. By a similar token the momentum running in favour of litigation boutiques shows no sign of having run its course.

Story of the week: Lloyds panel review

Though we reported it first late last Friday evening, it was this week that most readers would have seen the news of Lloyds’ long-awaited panel review, with 10 law firms making it on to the bank’s core own-account roster. Previous Lloyds counsel not on the list include Osborne Clarke, Stephenson Harwood and Berwin Leighton Paisner. By all accounts, the process was considerably less aggressive than Barclays’ overhaul earlier this year – which was reputed to have sliced £20m off the bank’s annual legal spend – but few expect the trend for tough bank reviews to change any time soon. Click here for our report and here for a recent interview with Lloyds’ Andrew Whittaker and Kate Cheetham for more background.

Comments of the week: Keeping Slaughters relevant and Norton Rose Fulbright’s ‘seamless’ service

In a further reminder that something mysterious about Slaughter and May still quickens the profession’s pulse, our piece on the firm ‘Never mind the magic, feel the substance‘ rapidly became the most widely read comment piece to have appeared on Legal Business’s website this year. While taking a sceptical view of the firm’s chances of sustaining its position indefinitely, we conclude its quality and consistency still provide formidable and enduring assets in the age of global law. We raise the point that Slaughters’ traditionalist view of client services could be more aggressively deployed to its advantage. Subscribers wanting to read the accompanying assessment of the firm’s celebrated corporate practice, The new boy, should click here.

Another popular piece came from regular LB contributor Bruce MacEwen of Adam Smith, Esq, who takes a jaded view of Norton Rose Fulbright’s attempt to have its cake and eat it in a dispute about conflicts and the status of its multi-profit centre combination. Bruce concludes: ‘Lawyers get enough of a bad rap in the public imagination for this very kind of behaviour: Saying one thing for widespread public dissemination and standing on contradictory legalistic distinctions invisible to anyone who’s not a lawyer, and implausible to many who are, when that tactic suits their self-interest.’

Quotes of the week:

‘There is a storm on the horizon and I don’t think many UK in-house counsel recognise it. Where is the line? Where do we have a moral, social or legal obligation to offer testimony and evidence, and discuss things externally? Or do we just have to shut up, be quiet and only speak to our client? That is a moving target right now.’

Bill Mordan, group GC at RB, reflects on the ethical challenges facing the modern in-house counsel, Where next, consigliere?

‘Professionals spend their career trying to convince their clients that they are essential and then at a certain point they realise that they will have to leave the firm and slip out of the door and no-one will really notice. That’s really hard.’

Slaughters veteran William Underhill reflects on the changing of the seasons, The new boy.

‘The kind of people you want to hire at a law firm are those who have a major zest for life and want to do things outside the office. That lawyer will otherwise lack in originality and the ability to work fast and efficiently. I see a lot of friends and family, play a lot of sport, and watch a lot of films. I saw Guardians of the Galaxy the other night – I highly recommend it.’ Clifford Chance litigation partner Simon Davis on keeping his edge, The Disputes Yearbook

Top posts:

Revealed: Lloyds unveils 10-firm roster as panel overhaul draws to a close

Comment: Never mind the magic, feel the substance – Slaughters has only one shot at staying relevant

Guest post: ‘Seamless’? The unintended consequences of Norton Rose Fulbright’s ‘combination’ argument

Quinn Emanuel targets City competition practice with Hausfeld partner hire

What’s in a name: One year on King & Wood Mallesons drops SJ Berwin

alex.novarese@legalease.co.uk

Legal Business

Comment: Never mind the magic, feel the substance – Slaughters has only one shot at staying relevant

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Comment Slaughter and May
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During its 125th anniversary year, Slaughter and May still divides the industry like no other institution. For its admirers, it is the standard bearer, bucking the received wisdom of the modern legal market – for detractors, an outfit on borrowed time, hoping to bet against the market (with an unhedged bet at that).

But 17 years since it first articulated what became irritatingly known as its best friends strategy, there remains no clear answer as to which camp is right.

Still, as we find in our look at the firm’s celebrated corporate practice this month (see ‘The new boy‘), Slaughters has had a pretty good crisis. Buoyed initially by bank bailout work, it has coped admirably in an environment in which its domestic corporate market has been in hibernation, while the economic shift eastwards further threatened its relevance.

On paper, Slaughters should be in trouble. In reality, the simplicity of its structure, relatively low cost-base, flexibility of its generalist approach and consistency of its partnership have compensated in the medium term, though not without a little slimming down.

The firm retains by far the strongest corporate bench in the City, while also having picked up market share as City rivals shift focus abroad. It’s striking and slightly unsettling the extent to which the firm still relies on Brand Boardman – there are more succession issues than Slaughters lets on – but even without Mr M&A, it’s a fantastic line-up.

None of which is enough to put Slaughters’ future beyond reasonable doubt. The international question looms as threateningly as it did in the late 1990s. Slaughters’ main counter to global challengers – that they are plagued with quality control issues across their networks – is eroded year on year. Top global firms have their strategic issues, but they are generally making ground in this area and will make more in the future.

In response, new head of corporate Andy Ryde (pictured) is putting renewed emphasis on its international profile. What else can the firm do? It has been fortunate that Asia and the US have proved so problematic for key rivals post-Lehman but the law game gets more international by the minute. Slaughters’ sales pitch here would also be more convincing if it wasn’t forced every five years or so to give the same spiel about how its referral arrangements used to be a little rough around the edges but their ‘best friends’ really get it now. How much more scope there is to improve the firm’s international showing without a shift in strategy is debatable. Slaughters cannot match its global rivals for resource.

What will be interesting is if Slaughters were to more robustly articulate another aspect of its approach that makes it as distinct: its classicist view of client service undiluted by CRM programmes or matter profit analysis. There’s certainly scope to play that message up: its international strategy is damage limitation in mitigating the negative inherent in its chosen model. In contrast, its bat-for-your-client ethos could have a major upside in the era of more demanding GCs.

This also brings us to the main reason Slaughters has endured as an institution against the odds: it provides a world-class service to clients and has the most consistent partnership in the City. Forget the grating attempts to shroud itself in mystique, which may still impress the tourists but no one else, Slaughters’ selling point isn’t style, it’s substance. And it will be those qualities that will give it a shot of confounding expectations for years to come.

For more analysis of Slaughter and May’s strategy see: The new boy – can Ryde & co keep Slaughters’ deal team on top

alex.novarese@legalease.co.uk

Legal Business

The new boy – can Ryde & co keep Slaughters’ deal team on top?

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Corporate Slaughter and May
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The City’s top deal shop has a new corporate head. Legal Business meets Andy Ryde and asks if Slaughters can keep the M&A magic going.

For a state school lad from Nottinghamshire who self-mockingly confesses to still having the tiniest chip on his shoulder, it has been quite a journey. Slaughter and May partner Andy Ryde in March was named as the firm’s new head of corporate, leading what most neutral observers would see as, by some margin, the City’s top deal practice.

Legal Business

Never mind the magic, feel the substance

Posted on |
Comment Slaughter and May
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During its 125th anniversary year, Slaughter and May still divides the industry like no other institution. For its admirers, it is the standard bearer, bucking the received wisdom of the modern legal market – for detractors, an outfit on borrowed time, hoping to bet against the market (with an unhedged bet at that).

But 17 years since it first articulated what became irritatingly known as its best friends strategy, there remains no clear answer as to which camp is right.

Legal Business

‘We would expect to bring in a few more lateral hires’ -Slaughter and May loses London tax partner to Greenberg Traurig Maher

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Strategic recruitment Greenberg TraurigSlaughter and May
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Having broken with tradition in making its first-ever lateral hire this year, Slaughter and May has seen a rare departure at partner level, with long-serving tax partner Graham Iversen leaving the firm to become head of Greenberg Traurig Maher‘s (GTM) London tax practice.

Iverson, who joined the Magic Circle firm in 1990 and made partner in 2000, becomes GTM’s second tax partner in London and seventeenth partner in total. He replaces Justin Hamer, who was recruited by GTM from Paul Hastings in 2009, who is retiring from the firm.

According GTM chair Paul Maher, Iversen’s name came up after the London practice canvassed colleagues for a suitable replacement for Hamer, in light of the fact that tax is a critical component of Greenberg Traurig’s practice internationally.

‘We would expect to bring in a few more lateral hires over the next three to six months,’ said Maher. ‘Graham’s a direct replacement for Justin but also part of strategy to grow our core components. Graham has a very broad skill set and there are very few things he hasn’t done. He will have a key role in building our European tax practice.’

Iversen’s exit, planned for November, takes Slaughter and May’s tax practice down to eight partners, with the firm promoting Dominic Robertson to partner last year. Senior partner Chris Saul confirmed Iversen’s departure and told Legal Business: ‘Graham has been an excellent member of the team here at the firm and we wish him every success.’

tom.moore@legalease.co.uk