Legal Business

Slaughters first to up pay for trainees and NQs

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Slaughter and May has again become the first major City player to announce changes to its junior fee-earners’ pay levels, with a marginal rise in salary for first year trainees and increases for newly-qualified lawyers (NQs) of up to 3%.

The changes, which will take effect from tomorrow (1 May), will see first year trainees receive £500 more than last year, bringing their pay to £39,500.

Second year trainees will receive £1000 more, boosting their salary to £45,000.

NQs will now receive £65,000, a £2000 increase on last year. This comes after the Magic Circle firm last year raised its NQ pay by £1500 to £63,000 and means that NQ salaries are slowly edging back to the £65,000 paid by the largest City firms before the financial crisis hit in 2008.

One-year post qualification experience (PQE) lawyers will get an extra £500, while two-year PQE pay is up to £79,000, an increase of £1000.

Richard Clark, Slaughter and May’s executive partner, said: ‘The firm has seen an encouraging level of activity so far this year and we remain cautiously optimistic about the prospects for the continuing recovery of the wider economy.’

Last year Slaughters was also the first to unveil its junior pay increases and the market will now watch to see how the remainder of the Magic Circle responds, with Linklaters last year upping NQ pay from £61,500 to £64,000, CC up to £63,500, while Allen & Overy held junior fee-earners’ pay at the same rate, £61,500 for a NQ.

david.steveson@legalease.co.uk

Rates in full:

Newly qualified: £65,000 (£63,000)

One year PQE: £70,000 (£69,500)

Two year PQE: £79,000 (£78,000)

Three year PQE: £89,000 (£87,500)

Trainee year 1: £39,500 (£39,000)

Trainee year 2: £45,000 (£44,000)

Legal Business

Smartphone wars: Slaughters, Cleary and Freshfields lead for Motorola and Apple in EU’s verdict to level playing field

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Competition Cleary Gottlieb Steen & HamiltonFreshfields Bruckhaus DeringerSlaughter and May
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The latest instalment of the smartphone wars has seen Slaughter and May and Cleary Gottlieb Steen & Hamilton face Freshfields Bruckhaus Deringer as the European Union takes steps to reduce the seemingly never-ending and costly trail of patent disputes, saying that Motorola Mobility broke EU law by trying to use its patents to block sales of Apple products in Germany.

The decision by EU competition commissioner Joaquin Almunia this week found that smartphone manufacturer Motorola misused the standard essential patent and breached EU antitrust rules by using an injunction obtained against Apple in Germany in an attempt to create hold ups in the German court, thereby deliberately impeding competition.

The Commission said that the move constituted an abuse of dominant position. Motorola must now reach a fair licensing agreement with Apple within 12 months.

Motorola was represented by Slaughter & May Brussels competition partner Claire Jeffs. Cleary Gottlieb advised Motorola as co-counsel, with London-based competition partner Maurits Dolmans leading alongside associate Ricardo Zimbron.

Freshfields Bruckhaus Deringer Brussels-based competition and antitrust partner Frank Montag advised Apple alongside London-based antitrust partner James Aitken.

Dolmans said: ‘The Commission decision established a precedent that owners of essential patents, who have promised to license these on fair, reasonable and non-discriminatory terms, cannot obtain injunctions against users who are willing to take a license on those terms. This is now the law for everyone, in jurisdictions as diverse as the US, the EU and China.

‘The next and increasingly important concern, is producers who transfer patents to non-practicing entities (sometimes called “trolls”), giving them incentives to go after their competitors. This is an unfortunate trend of patent misuse. If nothing is done about it, it could become a serious barrier to innovation.’

The Commission’s head of competition Joaquín Almunia added: ‘The so-called smartphone patent wars should not occur at the expense of consumers. This is why all industry players must comply with the competition rules. Our decision on Motorola, provides legal clarity on the circumstances in which injunctions to enforce standard essential patents can be anti-competitive.’

In January, Google agreed to sell Motorola Mobility to Lenovo for $2.9bn, having acquired it in 2011 for $12.5bn, which marked a significant high point in the smartphone patent bubble.

Jaishree.kalia@legalease.co.uk

Legal Business

Slaughters, Freshfields and Linklaters lead on Glaxo/Novartis multibillion-dollar joint venture

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Magic Circle trio Slaughter and May, Freshfields Bruckhaus Deringer and Linklaters have landed lead advisory roles on a multi-billion-dollar joint venture and asset swap between pharmaceutical giants GlaxoSmithKline (GSK) and Novartis.

The three-prong deal – announced in the same week as Novartis’ Freshfields-led $5.4bn sale of its animal health division to Eli Lilly – will see GSK and Novartis combine their respective consumer healthcare businesses, giving GSK a majority stake of 63.5%.

A further asset swap will see GSK acquire Novartis’ global vaccines business (excluding flu vaccines) for an initial cash consideration of $5.25bn with potential ‘milestone payments’ of up to $1.8bn alongside ongoing royalties, as Novartis acquires GSK’s cancer drugs business for $16bn.

Freshfields’ London-based corporate partner Julian Long led a team for Novartis. Rod Carlton, head of the firm’s London antitrust, competition and trade group; Thomas Janssens, managing partner of the firm’s Brussels’ office; and US antitrust partner Paul Yde also worked on the deal.

Linklaters also advised Novartis on the deal, fielding a multi-jurisdictional team led by corporate partner James Inglis and including Aisling Zarraga (corporate partner); Peter Cohen-Millstein (US corporate counsel); Sir Christopher Bellamy QC (anti-trust partner), Jeff Schmidt (US anti-trust partner), Nigel Jones (IP partner), Marly Didizian (TMT Partner), and Dominic Winter (tax partner).

The Slaughter and May team advising GSK was led by corporate and commercial partners Simon Nicholls, Gavin Brown, Richard Smith and David Johnson, who worked alongside GSK’s internal legal team including Dan Troy, Chip Cale, Antoon Loomans, James Ford, Paul Noll and Edward Gimmi.

Meanwhile, a US team from Cleary Gottlieb Steen & Hamilton is also advising GSK, with anti-trust partner George Cary leading alongside Cologne-based competition partners Romina Polley and Patrick Bock. Swiss firm Niederer Kraft & Frey is advising on Swiss law.

GSK’s CEO Sir Andrew Witty GSK said: ‘This proposed three-part transaction accelerates our strategy to generate sustainable, broadly sourced sales growth and improve long-term earnings.

‘Opportunities to build greater scale and combine high quality assets in vaccines and consumer healthcare are scarce. With this transaction we will substantially strengthen two of our core businesses and create significant new options to increase value for shareholders.’

The transaction is expected to complete during the first half of 2015 subject to approvals.

In a separate deal, Novartis announced today (22 April) that it has agreed to sell its animal health division to Eli Lilly and Company for nearly $5.4bn. Weil Gotshal & Manges advised longstanding client Lilly while Freshfields once again led for Novartis.

sarah.downey@legalease.co.uk

Legal Business

Deal Watch: Slaughters advises on £3.6bn ICI pension annuity buy-in and £390m Ignis buyout; Travers leads on $3.1bn Nets sale

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Corporate Kirkland & EllisSlaughter and MayTravers Smith
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Standout corporate mandates over the past few days have included a high profile run by Slaughter and May on deals including a £3.6bn bulk annuity buy-in over the ICI Pension Fund and Standard Life’s £390m acquisition of Ignis Asset Management, as Travers Smith and Kirkland & Ellis led on the $3.1bn acquisition of Nordic card-payment business Nets Holding.

Slaughters pensions and employment partner Charles Cameron led a multi-disciplinary team for Imperial Chemical Industries and Akzo Nobel on the de-risking of the ICI Pension Fund, under which the trustees of the fund entered into bulk annuity buy-in policies with Legal & General Assurance Society and Prudential Retirement Income, representing the largest bulk annuity policy arranged by a pension scheme in the UK.

Also on the team were corporate and commercial partner Jonathan Marks, financing partner Philip Snell and associates Victoria MacDuff, Eleanor Hart and Victoria Judd.

Allen & Overy led by insurance partner Philip Jarvis and pensions partner Neil Bowden advised the trustee of the ICI Pension Fund.

The deal came as Marks led for Slaughters on investment group Standard Life’s acquisition of Ignis Asset Management for £390m in cash. Freshfields Bruckhaus Deringer led by Robert Stirling advised Ignis.

Last week the Magic Circle firm announced its role alongside Paul, Weiss, Rifkind, Wharton & Garrison advising RSA Insurance Group on a fully underwritten rights issue to raise approximately £773m, led by corporate partner Andy Ryde, and separately for Dong Energy on its disposal of a 50% interest in offshore windfarm Westermost Rough to Marubeni Corporation and UK Green Investment. Linklaters led by John Pickett advised the buyers.

Meanwhile, at Travers Smith a team led by senior partner Chris Hale, along with senior corporate associate Adam Orr, worked alongside Danish law firm Bruun & Hjejle, to advise management on the acquisition of Nets Holding by a group of private equity firms including Advent International, Bain Capital and Danish pension fund ATP for $3.1bn.

A Kirkland & Ellis team advised the buyers, with a team that included London-based corporate partners Sam Pakbaz and Justin Hutchinson along with debt finance partners Neel Sachdev and Christopher Shield, tax partner Ian Taplin and competition partner Sarah Jordan.

Announced on Monday, the deal requires that the buyers pay Nets shareholders roughly $17 in cash for each of the Copenhagen-based target’s shares. Nets shareholders will also receive a dividend worth about 50 cents per share. The deal is expected to close in the second quarter, pending regulatory approval.

Nets provides payment solutions, card and information services and digital security solutions in the Nordic region and has 2,600 employees. Last year the payment processor handled more than six billion card transactions supporting more than 33 million payment cards and over 500,000 merchants in the Nordics.

Travers Smith on the same day announced its role advising Cyprus-based online broker IronFX Global on its sponsorship agreement with FC Barcelona.

The arrangement will see IronFX, which has 15 platforms trading over 200 instruments in forex, spot metals and CFDs on US and UK stocks and commodities, become an ‘official partner’ of the renowned football club throughout the world, giving it extensive marketing and promotional rights over FC Barcelona’s brand and player images.

Francesca.fanshawe@legalease.co.uk

Legal Business

Diageo’s consolidated panel unveiled as Slaughters, Addleshaws and Pinsents win a place

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Global drinks brand Diageo has appointed Slaughter and May, Addleshaw Goddard and Pinsent Masons as its ‘general preferred suppliers’ for the UK following a four-month long review.

Confirmed today (31 March), Diageo has since December been reviewing its legal suppliers for the UK (excluding Northern Ireland), resulting in a ‘material consolidation’ of its legal services suppliers. Firms that have previously been reported to be on the FTSE 100 company’s main panel include CMS Cameron McKenna and legacy SJ Berwin.

The trio of LB100 firms will formally take up the role tomorrow (1 April) – tasked with a broad range of commercial services – with the role running to 30 June 2016.

In addition, a number of ‘specialist approved suppliers’ will be appointed to cover areas such as intellectual property, and specialist commercial and contentious work.

In a statement, Diageo said: ‘We do not intend to publicise a list of the “specialist approved suppliers” or comment further on the process or outcome of the review.’

Corporate lawyer Moriarty stepped into the role in mid-July last year, having taken over the 76-lawyer team from Tim Proctor who retired from the company after 13 years. Moriarty previously worked in private practice in London and Dublin before joining Diageo’s in-house team in 1997, where she also worked as corporate M&A counsel and regional counsel for Ireland.

Diageo last carried out a review of its external advisors in 2009.

Slaughters’ well-established relationship with the Diageo team includes corporate partner Simon Nicholls’ role in 2012 advising on the drinks company’s £2.4bn transaction to acquire up to 53.4% in United Spirits Limited, India’s leading spirits company.

Sarah.downey@legalease.co.uk

Legal Business

Partner promotions: Slaughters bucks trend to make up seven London partners

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While partnership promotions among the City elite have generally been on the wane in recent years, Slaughter and May has today (19 March) announced the promotion of seven lawyers to its partnership in London, a significant increase on the previous two years which saw only two partners made up. 

Jonathan Clark is now a dispute resolution partner for the firm, Jordan Ellison and Anna Lyle-Smythe have been made competition partners, Susannah Macknay has been promoted to corporate partner and Azadeh Nassiri is now a partner in the finance practice, while Dominic Robertson and Tom Vickers have been made up in the tax and restructuring practices respectively.

The firm now has 119 partners, the majority of which, 109, are based in London. This figure also includes the three partners made up in Hong Kong in January, which included the firm’s first-ever lateral hire, John Moore, who joined from Morrison & Foerster. The last time the firm promoted more than seven associates to partnership, was in 2006 when eight were made up.

‘We are delighted to welcome seven very talented new partners. They cover a range of practice areas and will, I know, make a tremendous contribution to the firm’s practice,’ said Chris Saul, senior partner at the firm.

Following the election of Macknay, Lyle-Smythe and Azadeh Nassiri, 20% of the firm’s partnership is now female.

david.stevenson@legalease.co.uk

Legal Business

Oil and gas: Slaughters, Linklaters and Hengeler act on €5.1bn sale of RWE Dea

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With large deals in the oil and gas sector still often struggling to get away, RWE’s €5.1bn sale of its upstream oil and gas business RWE Dea to Russian billionaires Mikhail Fridman and German Khan has gifted Slaughter and May, Hengeler Mueller and Linklaters with major corporate mandates, as the deal is already touted to be one of the most significant of the year.

The acquisition from RWE – one of Europe’s big five energy companies – was made by the LetterOne Group, an investment vehicle set up by Fridman and Khan in 2013.

Slaughters and Hengeler put a team together to advise RWE, led by Slaughters oil and gas partner Hywel Davies and corporate partners Matthias Hentzen and Thomas Meurer at Hengeler.

Linklaters advised LetterOne Group, with a team from Dusseldorf led by corporate partners Ralph Wollburg and Tim Johannsen-Roth.

Davies told Legal Business: ‘We’ve seen quite a lot of people looking at decent size deals, the problem is pulling them off. There’s an appetite for large deals, but in the oil and gas sector deal activity in 2013 was significantly down. On the commodities side it’s tended to be portfolio management and shuffling [of assets].’

According to EY, while the oil and gas sector remained one of the most active and resilient global sectors for M&A, the total value of reported oil and gas transactions in 2013 was $337bn, down by 21% on a record high of $423bn posted in 2012. The number of deals – both reported and unreported – was down from 1,800 in 2012 to just under 1,400.

However, there was an increase in ‘megadeals’ in 2013: four with a reported value of over $10bn, compared with three in 2012.

RWE is a longstanding client of both Slaughter and May and Linklaters. In 2006, Slaughters advised RWE on its sale of Thames Water Holdings to Kemble Water for £4.8bn, while Linklaters advised renewable division RWE Innogy on its £400m refinancing of its windfarm portfolio, Zephyr Investments in 2004. Hengeler Mueller also has a history with the energy giant, advising RWE Deutschland on the restructuring of its grid business last year.

david.stevenson@legalease.co.uk

Legal Business

Magic Circle leadership: Slaughters appoints Ryde and McClean as head of corporate and finance

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In a week that has seen Freshfields Bruckhaus Deringer appoint firm lifer Julian Long as London managing partner, Slaughter and May today announced that Andy Ryde has taken over as head of corporate and Andrew McClean as head of finance, both who trained with the Magic Circle firm.

Ryde takes over from Frances Murphy, who has been in the role since 2008, while McClean will replace Paul Stacey, who was appointed in 2011. The replacements were prompted by the decision of the outgoing partners to step down and Chris Saul, senior partner of the 692-lawyer firm, told Legal Business that their decision was based on a desire to return to the ‘coalface’ of legal work.

After training with the top 15 LB100 firm, rated M&A lawyer Ryde became a partner in 1996. His clients include Marks & Spencer, RSA, Ladbrokes, Bupa and Direct Line, for which he acted on its IPO in 2012, and GE where he acted on the IPO of GE Money Bank Switzerland.

McClean, who made partner in 1998, spent 11 years in Frankfurt and then Paris before returning to London in 2010. His standout work includes advising Technicolor on a major refinancing and the Central Bank of Cyprus in relation to the 2013 ‘bail-in’ refinancing of Laiki Bank and The bank of Cyprus.

The appointments are for a three-year term.

‘It is excellent that Andy Ryde and Andrew McClean are joining the roster of stream heads here at the firm. They are both extremely talented and energetic individuals and will make a great contribution in their new roles,’ said Saul, in a statement.

The election saw the remainder of practice heads reappointed.

david.stevenson@legalease.co.uk

The full list of heads of department are:

Competition: Philippe Chappatte

Corporate: Andy Ryde

Dispute Resolution: Deborah Finkler

Financial Regulation: Jan Putnis

Financing: Andrew McClean

IP/IT: Cathy Connolly

M&A: Steve Cooke

Pensions & Employment: Jonathan Fenn

Real Estate: David Waterfield

Tax: Sara Luder

Legal Business

RBS share sell-off in Direct Line gifts Allen & Overy with £1bn deal

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Just under a year earlier than expected by some in the City, Royal Bank of Scotland (RBS) this week (26 February) announced the sell-off of the majority of its remaining stake in Direct Line, gifting Allen & Overy (A&O) with a further bite of the cherry in a deal anticipated to be worth over £1bn.

A&O led by corporate partner David Broadley was first instructed on RBS’ float of 34.72% of Direct Line in the autumn of 2012, after the 80% nationalised bank was forced to offload the major insurer under EU regulations on state aid.

The beleaguered high street bank sold off a further tranche to investors last March for £507m, with this latest sale of the majority of its outstanding shares coming in the same week as RBS announced a loss in excess of £8bn, as chief executive Ross McEwan also announced plans to reduce the bank’s costs by £5bn by 2017.

On the IPO Broadley led a multi-disciplinary A&O team alongside senior RBS advisers, general counsel corporate/M&A Rushad Abadan and legal counsel Scott Gibson. The team worked opposite Slaughter and May for Direct Line, led by M&A partners Jeff Twentyman, Andy Ryde and Robert Chaplin. Direct Line was also advised by its in-house team led by general counsel and company secretary Humphrey Tomlinson.

However, Slaughter and May said it will have no role on the forthcoming £1bn straight forward sell-off of RBS shares, which are largely expected to go to institutional investors.

The role is a significant repeat instruction for A&O, which is on RBS’ 21-strong panel, unveiled in July 2013 and including Clifford Chance, Freshfields Bruckhaus Deringer and Linklaters as well as many of the larger City and transatlantic firms such as Eversheds, Hogan Lovells and Norton Rose Fulbright. RBS often turns to Linklaters for its major corporate mandates, including the sale of a 20% stake in WorldPay to private equity firms Advent International and Bain Capital late last year.

The sell-off of Direct Line comes as the insurance company reported a 70% increase in pre-tax profits on Wednesday.

Under European Union competition rules, imposed after the £45bn taxpayer bailout of RBS, it must sell its entire holding by the end of this year.

david.stevenson@legalease.co.uk

Legal Business

Slaughters adds US capability in Hong Kong as best friends become rivals

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Moore becomes first lateral hire in firm’s 125-year history

It had been well telegraphed but even so news that Slaughter and May was making the first lateral hire in its 125-year history to add US securities capability to its Hong Kong arm was enough to send a minor jolt through the global legal profession.

Slaughters unsurprisingly chose a top-notch CV to break with tradition, hiring Morrison & Foerster’s co-head of China capital markets John Moore. Moore, who joined the UK firm in February as its 12th Hong Kong partner, is the former head of the US capital markets team for Herbert Smith and has also previously held senior roles at Sullivan & Cromwell and Goldman Sachs.