Legal Business

Continuity in turbulent times: Travers re-elects Kath Russ to second senior partner term

Travers Smith today (16 November) confirmed Kathleen Russ has been re-elected as senior partner for a second term, starting 1 July 2023.

Russ first took on the role in July 2019 when she succeeded long term leader Chris Hale. She has been a tax partner since 2001 and led the tax team from July 2007 to January 2017. Russ also contributed to firm strategy as a member of Travers’ partnership board.

She will be at the helm for another two years, alongside Edmund Reed, who has been managing partner since 2021, at a challenging time for the firm. For the financial year 2021/22, it recorded a slowdown in revenue and 9% drop in PEP from £1.22m to £1.105m which Reed attributed to the impact of economic volatility, exacerbated by its later financial year end of 30 June. This followed its recovery in 2021 from an 11% slump in net profit and 20% fall in profit per equity partner which accompanied its 1% revenue drop in 2019/20.

Russ (pictured) said: ‘The last few years have thrown up a number of challenges no one could have anticipated, and as we move beyond the pandemic, but into increasingly uncertain economic times, it is more important than ever that we focus on investing in our future and our people, and driving forwards our acceleration in our three core areas of focus: in the international alternative asset management sector, in cross-border mergers and acquisitions and in our global disputes and investigations work.

‘I have a deep-seated belief in the power of the team, the power of effective collaboration and in the power of harnessing and nurturing talent and I believe we do all these things exceptionally well at Travers Smith – this is our culture and this is what makes the firm truly great, and a wonderful place to work.’

Despite the economic headwinds, the firm has continued to attract impressive volumes of transactional work. Since 2020, the firm has acted in more than 130 private and public M&A transactions and over 30 equity capital markets transactions. It also handled over 160 private equity backed transactions since 2020, including Inflexion’s sale of Medivet to CVC which resulted in the firm’s recent recognition of Private Equity Team of the Year at Legal Business’ 2022 awards.

In fact, Travers – for the second year in a row – picked up two wins at this year’s awards. The second was in the prestigious Commercial Litigation category for its ‘substantially successful’ representation of HP in protracted fraud claims against Mike Lynch and Sushovan Hussain arising out of HP’s acquisition of Autonomy, a FTSE100 software company, in 2011.

The firm also promoted a record 11 new partners in July 2022 with the majority across the three core areas of focus highlighted by Russ.

On the ESG front, the firm hired its first pro bono partners and rolled out the Mindful Business Charter commitments during Russ’ first term. She also chair’s the diversity and inclusion board.

Reed added: ‘Kath has done a fantastic job as senior partner over the last few years and I am delighted she has been re-appointed for a second term. Her re-election signals the stability and continuity of the firm’s leadership and the confidence of the partnership in the firm’s direction, particularly reassuring in the turbulent times we are all living through. I am excited to continue working closely on the ambitious projects and initiatives we have already embarked upon together.’

megan.mayers@legalease.com

Legal Business

Financials 2021/22: Travers’ PEP takes a hit as revenue growth slows

Travers Smith has today (26 August) reported a modest 5% rise in revenue to £195m from £185.7m. This represents a slowdown from the firm’s 15% hike last year as it is impacted by the war in Ukraine and resulting macroeconomic challenges.

Profit per equity partner (PEP) fell 9% to £1.105m from £1.22m in 2021. Meanwhile, equity partner numbers stayed broadly flat with 58, one more than last year.

The firm’s later year end of June 30 meant that it was hit heavier in its final third than other firms by the economic disruption caused by the outbreak of the war and the subsequent rising costs globally.

This is not the first time the firm’s growth has been thwarted by economic volatility. Its 2020 setback of a 1% revenue drop, a 11% slump in net profit and a 20% fall in PEP was attributed to the coronavirus pandemic and exacerbated by its later financial year end.

Edmund Reed (pictured), who assumed the role of managing partner in 2021, is optimistic despite the challenging backdrop. He said of his first year at the helm: ‘It has been an extraordinary year. Who would have thought we would have ended up here, with all the things happening at the moment and what we read in the news? Against that we have had a pretty resilient set of results. We continue to be confident in our model and have continued to invest appropriately in the things we think we will drive profitability over the coming years.’

In the past year, the firm promoted 11 to the partnership and in August 2021 announced the relocation of its City HQ to Stonecutter Court planned for 2025. It also launched several legal technology projects, developed by the firm’s in-house team, including automated eSigning service TSSign.

Among the firm’s headline achievements, it won a protracted $5bn civil fraud claim brought by Hewlett Packard Enterprise relating to the $11bn acquisition of Autonomy. Other contentious highlights included defending a European truck manufacturer in damages claims arising from the European Commission’s Trucks cartel decision and conducted an investigation and cultural review following allegations of sexual misconduct against senior executives at a FTSE 250 company.

Elsewhere, its asset management team advised Nest on its £600m move into private equity with its partnership with Schroders Capital. M&A transactions to note included advising Brewin Dolphin on its recommended £1.6bn takeover by RCB Wealth Management, and assisting Ancala Partners with its acquisition of aerial emergency services businesses from Babcock International in Italy, Spain, Portugal, Norway, Sweden, Finland and Mozambique.

Looking forward, Reed predicts continued growth across the corporate and M&A, asset management and disputes and investigations practices, but remains alive to the challenging realties of the coming year:

‘It is incumbent on all businesses to be as agile and nimble as possible. We’re a world away from where we were two months ago, let alone the two months before that, so it makes it a very difficult environment in which to make very confident predictions. Having said that, the strategy remains to focus on and to drive heavily towards those three areas. We will continue to invest appropriately and develop our business to be well placed in the short, medium and long-term.’

Megan.mayers@legalease.co.uk

Legal Business

The ESG report – Event: Advising and acting for clients on ESG-related risks

ESG imperatives have never been more at the fore for partners, general counsel (GCs), or indeed any professional with exposure to related reputational risk. A webinar, hosted by Legal Business and sponsored by Travers Smith brought together partners, experts from in-house, the Bar and a crisis-management guru for a diverse and challenging debate on the ESG-related risks – and rewards – at the top of the agenda.

*****

Nathalie Tidman, Legal Business: What are the main ESG risks that corporates are facing right now?

Legal Business

Disputes perspectives: Rob Fell

I was one of those children who spent a lot of time arguing with parents and siblings over the dinner table. They must have thought I was a natural advocate, even if I didn’t. I fell into law, frankly; I studied history at university.

Legal Business

The business of saving lives

‘Every week two women are killed by their partners and three commit suicide due to domestic abuse.’

With such a chilling opening line, it is no wonder that Travers Smith’s submission for CSR Programme of the Year at the 2021 Legal Business Awards stopped the judges in their tracks.

Legal Business

Sponsored briefing: Interview with Doug Bryden (partner and head of risk and operational regulatory) and Heather Gagen (partner, dispute resolution)

What are your backgrounds in terms of advising and acting for clients on ESG-related risks?

Doug Bryden (DB): I have advised clients in relation to a broad spectrum of risks for many years, from environmental to business ethics (including modern slavery and human rights) and on related governance and boardroom responses. The prevailing trend now is to view these operational, reputational and legal issues through the lens of ‘ESG’. The consolidation of these risks under a single banner is proving extremely useful in both explaining those risks to boards as well as streamlining a stronger, better considered management response. On one hand my job as an ‘ESG lawyer’ is to help clients promote ESG awareness within a business and to ensure compliance with an ever-increasing range of ESG regulatory obligations. However, this needs to be carefully balanced against the threat of novel legal risks that ESG programmes and associated public disclosures create. Much of my practice and Heather’s is focused on achieving outcomes which sensibly protect an organisation from such legal risks, without undermining the real opportunities and progress that better ESG management creates.

Legal Business

Financial results 2020/21: Travers overcomes Covid blip as revenue spikes 15% and PEP surges 22%

The financial performance of Travers Smith has seen a dramatic double-digit bounce-back as turnover increased 15% to £185.7m and profit per equity partner soared 22% to £1.22m. The eye-catching PEP result came even as the number of full equity partners remained broadly flat at 57 compared with 56 last year.

The provisional results for the year ended 30 June 2021 announced today (9 August) will be a welcome return to form after last year’s disappointing showing when the firm suffered a 1% revenue drop to £160.9m, stymying a decade-long run of uninterrupted turnover growth. PEP also fell 20% to £1m, with the results being adversely affected by a reporting period that ran to the end of June, rather than April, giving the firm greater exposure to the pandemic downturn.

Travers’ managing partner Edmund Reed attributed the figures to continued investment in the business, including building across core areas of asset management, M&A and dispute resolution and investigations. ‘This has enabled us to attract a number of significant instructions from clients, which have kept our teams busy. None of us were expecting that we would be living and working under lockdown restrictions for such a long period of time. The way our people performed during the crisis continues to be amazing: by supporting each other both professionally and personally, every team across the firm has contributed to produce these excellent results. I am very proud of what we have achieved through this extraordinarily difficult period.’

‘The next 12 months will no doubt present new challenges, but we go into our new financial year in very good shape, confident in our model, and with a healthy pipeline of work. I am grateful for the support and trust placed in us by both our people and our clients,’ added Reed.

The firm promoted seven lawyers to the partnership during the year, across the focus areas of dispute resolution, private equity and financial sponsors funds, finance and financial services and markets.

In July, the firm also said it had recruited infrastructure finance specialist Ben Thompson from Weil, Gotshal & Manges to work closely with the corporate team led by Spencer Summerfield, Mohammed Senouci and Jonathan Walters.

Travers offered up a long list of desirable mandates for the year across its asset management, M&A and disputes and investigations practice areas.  Teams acted for longstanding client Medicxi, the European life sciences investment firm, on a €200m structured secondary transaction, Investec Bank on one of the first ESG-linked subscription facilities in Europe and Nortel Networks UK Pensions Trust on a further buyout, bringing the total value of transactions between the Nortel Networks UK Pension Plan and Legal & General to over £2.5bn.

M&A highlights include advising Inflexion on its partnership investment in Digital Wholesale Solutions, a leading independent unified communications and cloud platform provider, currently a division of Daisy Group, and Macquarie Capital Principal Finance on its acquisition of a majority stake in Wavenet Group Holdings Limited. Disputes teams have handled matters including Hewlett Packard Enterprise on fraud claims amounting to $5bn, with parallel criminal proceedings in the US, arising out of the $11bn acquisition of Autonomy in late 2011.

The firm also points to a number of technology projects developed by its in-house team, which have created significant efficiencies and cost savings for clients.  These include Etatonna, the first legal industry data labelling AI platform, which labels concepts in contracts for the purpose of automated document review, and its first product, a free force majeure app for clients.

Commenting on the results, senior partner Kathleen Russ (pictured) was bullish: ‘Our continued success reflects our firm’s stellar reputation in our core areas and is a testament to the hard work, resilience and commitment of everyone in the firm. Our teams have been there for our clients every step of the way throughout the pandemic. At the same time, many of our people continued to do inspirational things – helping those in need and contributing to the wider community, while at the same time doing all they could to support each other. I am incredibly proud of our firm and grateful to our teams for all their efforts.’

nathalie.tidman@legalease.co.uk

Legal Business

Life During Law: David Patient

My father was a consultant obstetrician, his brother was an accountant, but I was rubbish at science and didn’t like maths. I was pushed down this corridor – ‘why don’t you do law?’ I knew absolutely nothing about it and no-one in our family had been a lawyer.

Some of my best friends still are people I met at university. A lot of them have gone off to do other things but one of them who has remained a close friend from the very first evening we met is a senior corporate partner at Allen & Overy, Richard Hough. Really lovely guy.

Legal Business

End of an era for Travers as Reed to succeed Patient as managing partner

David Patient is to hand the Travers Smith managing partner baton to private equity partner Edmund Reed, the firm announced this morning (16 November).

Reed, a partner in Travers’ private equity and financial sponsors group and member of the firm’s partnership board since 2013, will assume the role on 1 July 2021.

The popularity of Patient (pictured), who was originally elected to the helm in January 2015 to succeed Andrew Lilley  was marked in 2018 when he stood unopposed to be elected for a second three-year term .

His successor Reed joined Travers in 1994 becoming a partner in 2005 and, between 2000 and 2004, he was an investment manager at Phoenix Equity Partners. He is credited with playing an active part in the management of the firm and the development of Travers Smith’s business strategy, alongside his M&A experience with a focus on private equity and real estate deals.

His clients include private equity firms Phoenix Equity Partners, Inflexion and Patron Capital, and large corporates including Ascential Group and Foster + Partners.

But for the fallout of the coronavirus pandemic, Patient has steered the firm through six years of revenue growth and has been instrumental in refocusing the professionalism of the firm without sacrificing its much-prized culture.

Patient and former senior partner Chris Hale were also the forces behind the firm’s highly successful Paris office as a route to more English law work on the continent for UK private equity clients and to build a referral network.

Travers had enjoyed nine consecutive years of revenue growth, with the tenth marred by the impact of having a reporting period running to the end of June rather than April, meaning greater exposure than most peers to the pandemic downturn. This resulted in a 1% revenue dip to £160.9m, 11% slump in net profit and 19% fall in profit per equity partner (PEP) to £1m.

Senior partner Kathleen Russ said: ‘Edmund is an outstanding strategist, who combines a deep understanding of the benefits of the firm’s independence, culture and ethos with innovative thinking and a highly commercial perspective. This is a period of transformation for the legal industry and with those challenges come opportunities. I very much look forward to working alongside Edmund as we move into a period of innovation and evolution and as we embrace these developments to build on the firm’s current success and reputation in the market.’

Russ also commended Patient for his ‘thoughtful leadership’ of the firm through the coronavirus pandemic.

Patient said: I would like to congratulate Edmund on his appointment as our next managing partner. With his in-depth knowledge of Travers Smith, business acumen and diversity of experience he has all the qualities to make an outstanding managing partner. I am extremely pleased to see him take up this key leadership role in the firm.’

Reed added: ‘Travers Smith is a vibrant and dynamic firm, with fantastic clients and a terrific team of highly skilled lawyers and business services professionals. Over the last few years, under David’s leadership, we have built an outstanding business focused on our market-leading capability in asset management, M&A and disputes.

‘I am also proud of the way that the firm looks after its people, not just through the current pandemic, but in the wider sense including the significant progress we are making on diversity and inclusion.’

nathalie.tidman@legalease.co.uk

For more on Travers Smith’s success under David Patient, read ‘Defying gravity – Inside the improbable rise of Travers and Macfarlanes’ (£)

Legal Business

‘Not out of the woods yet’: Coronavirus puts the kibosh on Travers’ decade of revenue growth amid profit dive

Travers Smith has suffered one of its biggest financial setbacks due to the coronavirus pandemic, recording an 11% slump in net profit and a 20% fall in profit per equity partner (PEP), its provisional results revealed. 

The provisional figures, announced on Thursday (30 July) show a 1% revenue drop to £160.9m from £162.5m last year, stymying a decade-long run of uninterrupted turnover growth. PEP fell to £1m, with the results being adversely affected by a reporting period that ran to the end of June, rather than April, giving the firm greater exposure to the pandemic downturn. 

The numbers are a far cry from last year, when Travers celebrated its tenth consecutive year of revenue growth with an 11% increase in turnover as PEP grew by 4% to £1.25m. In 2018/19, revenue had seen a 70% increase over five years.

Speaking to Legal Business this morning (Friday 31 July), managing partner David Patient (pictured) noted the drawback of the entire last quarter of the financial year taking place during the crisis, but was characteristically upbeat in the face of adversity 

You’ve got to put things in context. Wind back to the dark days of lockdown, it was surreal watching the pandemic sweep across the world, and it hit us very quickly. Back then, I had three questions: Will we be able to work? Will the clients need us? Will we get paid? And the answers, thankfully, were: Yes we can, yes they did, and yes we did, said Patient, adding that he was proud of how the firm’s people were able to make a success of lockdown. 

One should not simply assume that law firms will have uninterrupted growth. Every so often, something serious comes along, like the global financial crisis 0f 2008/9. We had been bracing for turbulence in this current year as we left Europe and expected growth to be flat or decline. We mustn’t forget Brexit, but this crisis has overshadowed everything.’ 

Upsides for the year included investment in technology that enabled staff to adapt to enforced working from home, as well as advising on a raft of matters. This included advising Hewlett Packard on fraud claims amounting to $5bn and criminal proceedings in the US arising from the $11bn acquisition of Autonomy in late 2011. 

Deal highlights included advising Rothesay Life on its £3.8bn buy-in of the Asda Group Pension Scheme, Willis Pension Scheme on a longevity swap transaction with Munich Re to manage risk on around £1bn of pension liabilities and EQT on the sale of its Credit business segment to Bridgepoint. 

Travers introduced what Patient called ‘prudent financial measures… to protect our business’. In April, the firm reduced monthly drawings for all partners and deferred partner profit distributions until the longer-term trading position becomes clear.  

The firm has not accessed the government’s Job Retention Scheme all and members of staff have been kept on full pay throughout the lockdown. Travers has deferred its annual salary review until later in the year, but it has awarded firm-wide bonuses, albeit at a reduced rate. 

It made up five new partners on 1 July across the corporate and equity capital markets, derivatives & structured products, dispute resolution, employment, and finance teams, and also posting a 90% retention rate for its autumn 2020 newly qualified lawyers.    

Patient refused to be downcast: ‘We are not out of the woods yet and I wonder how far we are even into them. The situation is challenging and will continue to be challenging, but I’m a glasshalffull man. There are significant clouds on the horizon, but the outlook is good.’ 

nathalie.tidman@legalease.co.uk