Legal Business

Serious Fraud Office settles first Tchenguiz case for £3m with a further £3m in costs

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Litigation Stephenson Harwood
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The high profile Tchenguiz brothers’ lawsuit against the Serious Fraud Office (SFO) for around £300m has finally settled after the SFO agreed to pay Vincent Tchenguiz £3m.

The SFO will pay £3m to Vincent within 14 days and a further £3m towards costs within 21 days after reaching the agreement on Friday 25 July.

Stephenson Harwood commercial litigation partner Sean Jeffrey represented Vincent Tchenguiz in the case, and replaced Shearman & Sterling rated litigation partner Jo Rickard who previously represented property tycoon Robert Tchenguiz earlier this month. Jeffrey also added Catherine Newman QC of Maitland Chambers to the Tchenguiz brothers list of barristers, which includes Joe Smouha QC of Essex Court Chambers and Alex Bailin QC of Matrix Chambers.

The separate civil damages claims brought Tchenguiz and his associated interests remain to be settled.

SFO director David Green QC said: ‘I am pleased that we have been able to resolve this matter without the need for a costly trial. The SFO deeply regrets the errors for which we were criticised by the High Court in July 2012. On behalf of the SFO I apologise to Mr Tchenguiz for what happened to him. The SFO has changed a great deal since March 2011, and I am determined that the mistakes made over three years ago will not be repeated.’

The claims came after the SFO’s initial investigation led to warrants for a public raid on the Tchenguiz’ properties involving 135 police officers. The investigations were however dropped and in judicial review proceedings in 2012, when the High Court overturned the search warrants used by the SFO to seize documents and files, on the basis they were improperly obtained.

Jaishree.kalia@legalease.co.uk

Legal Business

Robert Tchenguiz switches from Shearman to Stephenson Harwood in £300m SFO claim

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Litigation Shearman & SterlingStephenson Harwood
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Property tycoon Robert Tchenguiz has replaced Shearman & Sterling with Stephenson Harwood as his adviser on a high profile lawsuit against the Serious Fraud Office (SFO) for around £300m.

Stephenson Harwood led by commercial litigation partner Sean Jeffrey is already advising Vincent Tchenguiz in the case, which sees the brothers claim that the agency made serious mistakes in its investigation of their role in the collapse of Icelandic bank Kaupthing, of which they were executives.

The SFO’s investigation led to warrants for a public raid on the Tchenguiz’ properties involving 135 police officers.

However, the investigations were dropped and in judicial review proceedings in 2012, the High Court overturned the search warrants used by the SFO to seize documents and files, on the basis that they were improperly obtained.

Both brothers are seeking damages for their loss stemming from the impact of the raids, with Robert Tchenguiz until recently advised by rated Shearman litigation partner Jo Rickard.

Jeffrey is now managing a claim for damages on behalf of both tycoons’ personal interests and their investment vehicles for misfeasance in public office, as well as trespass, wrongful arrest, human rights breaches and malicious prosecution.

In a further development to the legal line up Jeffrey has added Catherine Newman QC of Maitland Chambers to the Tchenguiz brothers list of barristers, which includes Joe Smouha QC of Essex Court Chambers and Alex Bailin QC of Matrix Chambers.

Slaughter and May partner Jonathan Cotton continues to advise the SFO. Earlier this year the SFO, which failed to make a single raid in 2012 following widespread criticism of the Tchenguiz investigation, requested £19m in emergency funding from the Government as it seeks to bankroll the litigation and fund investigations into Libor and Rolls Royce.

The agency last year brought in an additional 10 junior barristers to join the team involved in the defence of the Tchenguiz claim.

Slaughter and May managed the disclosure exercise and a witness statement filed by Slaughters’ dispute resolution partner Jonathan Cotton as part of the pre-trial hearings last year revealed that the SFO spent £118,000 up to 30 April 2013 on the disclosure review.

The SFO’s decision to hire Slaughter and May and apply this level of resource reflects the fact that, if the Tchenguiz brothers win, this will be the biggest single largest payout in the SFO’s 25-year history.

Shearman declined to comment.

Tom.moore@legalease.co.uk

Legal Business

Growth for Stephenson Harwood with revenue up 8% and 19% hike in PEP

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Financial results 2013/14 Stephenson Harwood
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Revenue at UK top 40 firm Stephenson Harwood rose by 8% to £121m in the 12 months to 30 April 2014, marking the firm’s sixth successive year of growth, coupled with an 19% increase in its profit per equity partner (PEP).

Boosted by the continuation of The Fiona Trust litigation, an eight-year shipping fraud trial between head of international arbitration Louis Flannery’s Russian client Dmitry Skarga and state-owned Sovcomflot, and a strong year in the infrastructure sector, the firm’s revenue was up by £8.3 million.

While successive revenue growth has been achieved even in the immediate aftermath of the recession, the same cannot be said for the firm’s PEP, which last year dropped by 10% to £453,000. The rise of 19% takes PEP up to £537,000 and back to levels seen by the firm in its 2011-12 financial year.

Key deals during the year included partner Tammy Samuel’s advisory role on Northern Rail’s franchise agreement and corporate partner Andrew Edge lead role on accountancy firm Baker Tilly’s sale of its private client financial management business.

The 120-partner firm has also undertaken international expansion in Seoul, and in March received formal approval to combine with Singapore firm Virtus Law from the local Attorney General’s Chambers.

Sharon White (pictured), chief executive of Stephenson Harwood, said: ‘We have seen particularly strong growth in our transactional practices – corporate, finance and real estate – but the market remains very competitive. Our performance this year reflects the importance of the investments we have made in developing the firm during the past few years and we will continue to identify opportunities to grow and strengthen our business.’

tom.moore@legalease.co.uk

Legal Business

Partner promotions: Osborne Clarke makes up five in the UK after Stephenson Harwood promotes City duo

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Partnership promotions Osborne ClarkeStephenson Harwood
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Osborne Clarke (OC) has made up five new partners in its 2014 promotion round across the UK, constituting the firm’s highest-ever UK figures in three years, following Stephenson Harwood’s announcement last week that it has made up just two City associates to partner this year.

OC’s UK promotion figures, which follow the top 35 firm’s announcement in January that it has made up four partners in its German office, represent an increase of 67% on last year, when the firm made up three in the UK across an eight-strong promotions round.

Managing partner Simon Beswick, said: ‘Our clients demand the very best advice and service, so the process of becoming a partner at OC is deliberately challenging. Our five new partners have all come through the process with flying colours and I’m confident that they will make a huge contribution to our ongoing success.’

Elsewhere at Stephenson Harwood, the two partner promotions: Cristan Evans in the firm’s marine and international trade group and Simon Brading in its real estate group, constitute a drop of 50% on last year, when four partners were promoted in the London office.

Chief executive Sharon White said: ‘Both Cristan and Simon are highly regarded by clients and colleagues alike and will play important roles in the future development of their respective practice areas. I congratulate them on their promotions to partnership and look forward to their support in helping Stephenson Harwood continue to grow and develop.’

Both promotion rounds follow DLA Piper which on Thursday (1 May) announced it had made up 45 to partnership, of which the lion’s share were allocated within the US, and constituted a 33% increase on last year.

sarah.downey@legalease.co.uk

 

The full list of partner promotions:

Osborne Clarke

David Blair, financial services regulation

Mark Wesker, corporate (equity capital markets)

Neil Bromwich, planning (renewable energy and infrastructure sectors)

Tom Bussy, banking (acquisition and media finance)

Kate Topp, real estate (residential development)

 

Stephenson Harwood

Cristan Evans, marine and international trade

Simon Brading, real estate

Legal Business

Stephenson Harwood enters Formal Law Alliance with Singapore’s Virtus Law

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Asia Stephenson Harwood
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Stephenson Harwood has received formal approval to work with Singapore firm Virtus Law from the local Attorney General’s Chambers.

Under the Formal Law Alliance (FLA), the firms will work more closely together to undertake work requiring both English and Singapore law expertise.

The top 40 firm ramped up its Asia presence in May last year, when it announced its exclusive association with Virtus Law, with a particular focus on corporate, litigation and asset finance. The firm also launched in Beijing around the same time, marking its fourth office in Greater China. This year has seen a further focus on building its presence in Asia, with the announcement in February of plans to open in the burgeoning Seoul market, with the hire of DLA Piper’s local office head and litigation partner Michael Kim.

In addition to Beijing, Stephenson Harwood also has offices in Hong Kong, Guangzhou and Singapore, and associations with Christian Teo Purwono & Partners in Indonesia and U Tin Yu & Associates in Myanmar.

Stephenson Harwood Singapore managing partner Martin Green said: ‘Virtus Law’s areas of capability correspond to key areas of Stephenson Harwood’s expertise in Singapore. The alliance with Virtus Law LLP will enable us to offer clients a more tightly integrated service in multi-jurisdictional matters involving English law and permitted areas of Singapore law.’

Arthur Loke, senior partner in Virtus Law, added: ‘This alliance will allow us to pool our resources in terms of client advice, extend our legal provision and client offering to Stephenson Harwood’s international clients. We look forward to working with the Stephenson Harwood partners to do so.’

jaishree.kalia@legalease.co.uk

Legal Business

‘A good time to take over’: Stephenson Harwood appoints new head of corporate as H1 revenues up by 17%

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Corporate Stephenson Harwood
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With Stephenson Harwood’s chief executive Sharon White this month reappointed for a further three-year term, the high profile transactional lawyer has relinquished her dual role as head of corporate to Andrew Edge, who concedes that ‘it is a good time to take over’, with the department’s revenues up by 17% in the first half of the 2013/14 financial year.

Edge (pictured) formally takes over on April 1 2014, with the firm’s City corporate practice’s revenue on an upward trajectory, having risen to £14.3m in the 2012-13 financial year, up nearly 7% from £13.4m in 2011-12.

Having joined Stephenson Harwood from Ashurst in March 2010 Edge, who specialises in public and private M&A, will manage a team of 67 lawyers including 23 partners covering commercial and outsourcing, projects, funds, tax and competition, and 14 corporate finance partners.

He plans on striking a healthy balance between management and doing deals. ‘I am not going to take my foot off the pedal,’ he says. ‘I became a corporate lawyer to do deals and that is what I will continue to do.’

He adds: ‘Over the last few years the firm has built on the foundations of the strong team we already had. For example, we brought in Tom Nicholls [from Lawrence Graham] and before him, Jonathan Cripps [from Eversheds], and we are feeling the benefits of these investments. It was a slow 2011 but the markets have picked up.’

Nicholls joined the firm in February 2013, having been head of energy and natural resources at Lawrence Graham, and focuses on M&A and equity fundraisings, both on the main market and the alternative investment market. Cripps, meanwhile, now heads the firm’s projects team and is considered one of its top billers. He brought over waste disposal authority client North London Waste Authority in 2012. Other new corporate clients include Schroders Real Estate Investment Trust.

Edge, meanwhile, has led on high value deals including advising Piramal Healthcare, a Mumbai-listed pharmaceutical company, on the sale of its Indian prescription generic pharmaceuticals division to US pharmaceuticals giant Abbott for $3.7bn; representing Baker Tilly on the acquisition of the assets of RSM Tenon Group by way of a pre-pack administration; and advising GDF SUEZ on the £190m acquisition of Balfour Beatty’s UK facilities management division – operating as Balfour Beatty WorkPlace.

White said: ‘Andrew is a highly respected figure in the market and since his arrival, his skill base has enhanced our ability to offer corporate services to a wide range of clients. I am delighted that he will now take up the position as practice group leader of the corporate group, to oversee the growth and development strategy which we are committed to fulfilling.’

The appointment comes as Stephenson Harwood last week appointed Richard Parsons as its new global head of aviation, following the departure of Paul Ng to Milbank, Tweed, Hadley & McCloy.

jaishree.kalia@legalease.co.uk

Legal Business

Asia round-up: DLA Piper, Hogan Lovells and Stephenson Harwood move to bolster regional networks

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Asia DLA PiperStephenson Harwood
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Despite the bearish mood that last year gripped many international law firms regarding Asia, and sustained tremors this year running through emerging market securities, a host of major advisers have kicked off 2014 with significant investments in the region, including DLA Piper, Hogan Lovells and Stephenson Harwood.

DLA Piper has hired O’Melveny & Myers partner Mark Fairbairn to head its restructuring group in Asia. Fairbairn was based in O’Melveny’s Hong Kong arm, having joined in 2008 following a five-year tenure at White & Case.His focus is on distressed and alternative investments, financial restructurings and insolvency. Counsel Ashley Bell also joins the Anglo-American giant’s restructuring group from O’Melveny. This is the third recent hire that DLA Piper has made from O’Melveny, as corporate partner Timothy Tan joined the firm’s Bangkok office last month.

Hogan Lovells, meanwhile, has scored a high-profile recruit with the appointment of Herbert Smith Freehills’ head of litigation in south-east Asia, Maurice Burke. Burke, who is set to join Hogan Lovells in May, has extensive experience on a range of commercial litigation, contentious regulatory and investigation matters throughout Asia. He will work alongside Singapore-based international arbitration partners Jonathan Leach and Paul Teo, a team that is rated in the top-tier of the recently released edition of The Legal 500 Asia Pacific 2014.

Commenting on Burke’s arrival, Stephen Immelt and Michael Davison, global co-heads of Hogan Lovells’ litigation, arbitration and employment practice, said: ‘Singapore has established itself as a hub for resolving disputes in south-east Asia. As one of the leading practitioners in the region, Maurice will further enhance our top-tier offering to clients across south-east Asia.’

Elsewhere, Jones Day has announced that David Carden, the US’s first ambassador to the Association of Southeast Asian Nations will re-join the firm as partner-in-charge of Asia. He was a partner based in New York and co-head of Jones Day’s securities litigation and SEC enforcement practice before his ambassadorship in March 2011.

Finally, top-50 UK practice Stephenson Harwood has hired DLA Piper’s Seoul office head Michael Kim as a partner in the marine and international trade practice to aid the firm’s launch in the much-touted economy. Kim will be based in the firm’s London office initially but with a planned opening in South Korea soon, Kim will be the managing partner of the new office.

He is experienced in ship finance and litigation, as well as arbitration matters. Both Kim and the firm share some clients including Export-Import Bank of Korea, STX Corporation, Daewoo Shipbuilding & Marine Engineering and Hyundai Merchant Marine.

‘As the world’s twelfth-largest economy and one of the largest in Asia, Korea is a key market for Stephenson Harwood. Michael’s appointment further strengthens our Korea practice and provides us with the opportunity to apply for a licence for an office in Korea, and in doing so, extends our Asia network,’ said Sharon White, chief executive of Stephenson Harwood.

Whatever the doubts about Asia’s medium-term prospects, it is clear that the queue of ambitious law firms looking to forge potent practices in Asia shows no sign of shortening during 2014.

david.stevenson@legalease.co.uk

Legal Business

Seoul searching: Stephenson Harwood hires DLA Piper’s South Korea head Michael Kim

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Asia Stephenson Harwood
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With five of its nine overseas offices in South and East Asia, it is perhaps unsurprising that Stephenson Harwood has become the latest UK firm to make plans to open in the burgeoning Seoul market, with the hire of DLA Piper’s local office head and litigation partner Michael Kim.

Kim brings with him a developed reputation in South Korea and experience in shipping, ship finance, shipbuilding and offshore and general commercial litigation and arbitration matters.

However, the top 35 UK firm today (7 February) announced that it has yet to apply for a license to set up in Seoul and Kim will be based in London initially, in the anticipation of relocating to its latest Asian outpost when permission is granted.

Key mutual clients of both the firm and Kim include the Export-Import Bank of Korea, STX Corporation, Daewoo Shipbuilding & Marine Engineering and Hyundai Merchant Marine.

Stephenson Harwood’s head of the marine and international trade practice Mike Phillips said: ‘There are significant synergies between Michael’s work and that of the marine and international trade and finance practices of Stephenson Harwood both in London and in Asia. We both work for most of the biggest names in Korean shipping, ship building, finance and trade sectors and Michael’s arrival here will take the firm’s leading reputation to the next level.’

Stephenson Harwood already has offices in Beijing, Hong Kong, Guangzhou and Singapore, as well as a number of associations in the region.

Seoul’s GDP is $1.13trn and since the liberalisation of the legal market in 2012 it has drawn the likes of Baker & McKenzie and Cleary, Gotlieb, Steen & Hamilton, which in 2013 acted for local private equity house MBK Partners on its €1.24bn acquisition of ING Life Korea.

Stephenson Harwood chief executive officer Sharon White added: ‘As the world’s twelfth largest economy and one of the largest in Asia, Korea is a key market for Stephenson Harwood. Michael’s appointment further strengthens our Korea practice and provides us with the opportunity to apply for a licence for an office in Korea, and in doing so, extends our Asia network.’

Jaishree.kalia@legalease.co.uk

Legal Business

LLP latest: Trowers accounts confirm profits slide as Holman and Stephenson Harwood power on

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Financial results 2013 Holman Fenwick WillanStephenson HarwoodTrowers & Hamlins
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What finer way to kick off the New Year than a stream of law firm limited liability partnership (LLP) accounts? The latest in a run of recent filings confirm the extent of the fall in profitability at Trowers & Hamlins, while Holman Fenwick Willan and Stephenson Harwood confirm revenue increases.

Trowers’ LLP accounts for 2012/13 show that the firm’s net income fell from £26.2m to £16.1m while operating profit was down from £28.4m to £18.8m. The firm said the sharp fall in profits was largely due to the cost of moving its new London headquarters. Its turnover also decreased by 3.6% to £78.2m in 2013 from £81.2m the previous year.

The firm’s overall staff count grew from 514 to 527 while fee earner headcount remained static with the highest paid equity partner taking home £411,002, down from £496,838 in 2012.

Moreover, the firm took out new loans and finance leases during 2013 totalling £5.8m compared to £785,000 in 2012. The firm’s cash position has weakened against the previous year, moving from a surplus of £8.17m to net debt of £5.19m.

The firm, which has in recent years had to weather a slowdown in its public sector practice and problems in its Middle East network, also today (3 January) confirmed that it was to close its Cairo branch, citing uncertainty in Egypt. Trowers’ Cairo managing partner Sara Hinton along with other fee-earners will join local firm Ibrachy & Partners and operate on a ‘best friends’ basis.

In contrast, at Holman Fenwick revenue grew to £141.4m in the financial year 2012/13, up from £124.2m the previous year, while profits also rose to £47m from £39.7m. The firm has been one of the most financially successful practices in the UK top 50 over the last five years, with revenues rising 82% since 2008.

The firm employed 445 fee-earners on average compared to 436 the previous year, while the overall staff headcount was slightly lower at 771 compared to 780 in 2012. Staff costs increased to £53.4m from £49.3m. The firm’s average number of members grew from 128 to 141.

The LLP’s bank borrowings totalled £16.1m compared to £17.8m the previous financial year.

Meanwhile, Stephenson Harwood’s revenue increased by 3.7% to £113.3m to £109.3m, after announcing a 2% growth in revenue from £110.2m to £112.3m in July. The firm told Legal Business the unaccounted £800,000 was due to subletting income.

The firm’s profit remained static against preliminary estimates at £36.8m. The figures come after the firm transferred to a LLP structure in March 2012.

Member headcount grew from 105 to 112, with the highest paid LLP member receiving £895,000, down from £910,000 in the previous year. Average fee-earner and support staff headcount also increased from 506 to 522 and 173 to 180 respectively with the overall staff increasing from 679 to 702. This led to staff costs rising to £41.4m from £39.6m.

The firm’s pension liabilities also grew firm £39.9m in 2012 to £47.6m while its pension deficit also increased from £4.8m to £6.6m. In addition, the firm has bank loans of £6.2m, which it will pay in 32 quarterly instalments of £200,000 until February 2021.

jaishree.kalia@legalease.co.uk

Legal Business

Financial results 2013: DAC Beachcroft, Stephenson Harwood, Brodies and Morgan Cole reveal their numbers

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Financial results 2013 BrodiesDAC BeachcroftStephenson Harwood
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Top 30 UK firms DAC Beachcroft and Stephenson Harwood today (15 July) unveiled growth in revenue for 2012/13, while Brodies last week revealed a third consecutive increase in turnover and profit and Morgan Cole has seen its profits drop significantly.

DAC Beachcroft’s revenues have increased by 14.2% to £188.2m, up from £164.8m in 2011/12. Net profit at the 1079-lawyer firm also increased by 42% to £31.8m at the end of the last financial year, up from £22.4m the previous year. However, profit per equity partner (PEP) is down by 11.5% from £321,000 in 2011/12 to £284,000.

The firm merged with Davies Arnold Cooper in October 2011 and in January this year became the first European firm to launch in Chile by acquiring two local firms. Managing partner Paul Murray said: ‘Year-on-year comparisons continue to be distorted by the merger mid-year in 2011/12 but these numbers will provide a baseline for next year. Overall the results are acceptable in what continues to be a challenging and changing economic environment.’

Also unveiling its revenue figure today is UK top 30 firm Stephenson Harwood, which announced a more modest growth of 2% to £112.3m at the end of the 2012/13 financial year, up on last year’s figure of £110.2m.

The firm has attributed the growth to ‘some major investments including the recruitment of 12 new partners and the opening of offices in Dubai and Beijing’, chief executive Sharon White (pictured) said.

The firm now has nine offices across Europe, Asia and the Middle East and has acted on a number of high profile international deals over the course of the year, including for Indonesia-based Lion Air for the world’s largest commercial aircraft order, comprising 234 Airbus – A320 and A321 aircraft, with a price list value of $24bn. The firm also advised Hitachi on its bid to provide the rolling stock for London’s Crossrail, with a total contract value of around £1.8bn.

Meanwhile, Scottish firm Brodies has seen its revenue grow for the third year in a row, posting a 7.5% increase to £46m, up on £42.8m last financial year. The firm has credited the successful implementation of the second year of its three-year strategic plan, following on from a revenue increase of 16% in 2011/12, up from £36.9m.

Over the course of the year, the firm, which has four offices across Scotland and in Brussels, has continued to expand its Aberdeen office, which has grown from 34 to 46 staff, including 28 lawyers, as a result of three partner hires and six new lawyers.

Legal Business Management Partner of the Year, Bill Drummond, said: ‘The targeted investment that is being made across the business – in people and infrastructure – positions us well to benefit from stabilising market conditions and our strong balance sheet means that Brodies’ management team can continue to seek suitable investment opportunities to further enhance the service we deliver to our clients.’

Elsewhere, national top 75 firm Morgan Cole has posted a drop in revenue and profit, posting a turnover of £35.4m, down 3.3% from last year’s £36.6m, while PEP also dropped 34.7% to £162,000 from £248,000 in 2011/12.

Managing partner Elizabeth Carr said the firm has spent the past year considering its future business strategy ‘to ensure the right structure to meet the needs of the evolving market’ and subsequent changes to that structure and investment in the firm’s property portfolio means the reduction in revenue and profit are ‘entirely as expected.’

Highlights of the year include growth of £1.7m in the public sector and appointments on the Government Procurement and NHSLA panels.

Carr added: ‘Consolidation, competition and pricing pressures will continue through 2013-14 but we are confident that exemplary service to clients, focused sector marketing and an open approach to merger and acquisition opportunities will result in new clients and increased revenue in 2013-14 and beyond.’

francesca.fanshawe@legalease.co.uk