The Global 100 – The stories of the year

High-stakes recruitment, financial pressures and Europe’s largest law firm collapse – here is a recap of the stories that defined the global legal market through the past 12 months.

2016

August

• Proskauer Rose saw two of its London partners leave for Gibson, Dunn & Crutcher and Morrison & Foerster (MoFo). Gibson Dunn hired private equity and M&A partner James Howe, while MoFo recruited Proskauer private investment funds partner Oliver Rochman.
• Ashurst halted its quarterly profit distribution to partners following disappointing financial results that saw profit per equity partner drop by 19%. Former partners told Legal Business the firm had also failed to pay out its February quarterly partner drawings last year and a hefty tax bill in January contributed to the decision.

September

• Dentons‘ European arm requested its partners raise between €6m and €7m in order to cut bank debt. European partners (not including the UK) were asked to contribute €100,000 each over a two-year period.
• Ashurst endured another wave of partner exits, with partners leaving the firm throughout the month to join global competitors. Paul Hastings was the main beneficiary, picking up structured finance partners Michael Smith, Diala Minott and Cameron Saylor.
• King & Wood Mallesons European and Middle East senior partner Stephen Kon stepped down mid-term. At this stage, KWM had been without a managing partner since William Boss vacated the position at the beginning of 2016.
• White & Case hired a ten-partner project finance team from Herbert Smith Freehills (HSF). In Australia the new White & Case outpost in Melbourne was set to be led by former HSF Asia head of finance Brendan Quinn, whose team was estimated to control around £30m of business by a senior White & Case partner.
• Cadwalader, Wickersham & Taft confirmed it would close its Beijing and Hong Kong operations by the end of 2016, cutting 25 staff including four partners.
• Clyde & Co senior partner James Burns announced he was to step down as senior partner to take on a new board-level role at the firm, becoming its head of the Americas on 1 November.
• Cleary Gottlieb Steen & Hamilton elected New York-based funds partner Michael Gerstenzang as managing partner, replacing Mark Leddy.
• Norton Rose Fulbright (NRF) announced a tie-up with Vancouver practice Bull Housser, the firm’s third Canadian merger since 2011. Bull Housser was a 92-lawyer firm specialising in projects and transactions in various sectors, including energy and mining.
• Morgan, Lewis & Bockius hired a team consisting of 23 lawyers from Dentons to launch in Shanghai. Among the partners making the switch was Dentons’ former Asia managing partner, Mitch Dudek.
• Reed Smith appointed Tamara Box as EUME managing partner, after carving up the role previously held by Roger Parker.

October 2016: Mark Rigotti was promoted to HSF’s sole chief executive

 

 

October

• After weeks of speculation, CMS Cameron McKenna, Nabarro and Olswang voted to combine on 1 May 2017, taking on the CMS brand and giving Camerons over 1,000 partners and revenues of around £450m in the UK.
• King & Wood Mallesons elected corporate partner Tim Bednall as the firm’s EUME managing partner, replacing William Boss. It also announced the result of its EUME senior partner election, with Michael Cziesla coming in for the longstanding Stephen Kon. The firm lost its highly-regarded head of funds in Germany, Sonya Pauls, to Clifford Chance (CC).
• Herbert Smith Freehills‘ global partnership council informed co-chief executive Sonya Leydecker of its intention to put forward fellow co-chief executive Mark Rigotti as the firm’s sole chief executive.
• Eversheds appointed Lee Ranson as the firm’s chief executive after a three-week period in which no other candidate was nominated. Ranson previously acted as the firm’s managing partner.

November

• King & Wood Mallesons looked to be on the brink of collapse after a deal to recapitalise the business failed. Its Asian arm agreed to provide the cash needed in exchange for partners consenting to a 12-month lock-in and a capital contribution of £14m, including £60,000 from each salaried partner. However, only 21 EUME partners voted in favour of the deal, triggering an effective firesale of its European business.
• Meanwhile, Dentons emerged as a potential saviour for King & Wood Mallesons‘ beleaguered European arm, as management at both firms held merger discussions.
• New York and Washington firms Kaye Scholer and Arnold & Porter announced a merger to create a $1bn firm, the largest law firm combination of 2016. The merger saw the firms renamed Arnold & Porter Kaye Scholer, comprising more than 1,000 lawyers across 13 offices.
• Wall Street firm Simpson Thacher & Bartlett made a rare London hire, recruiting Freshfields Bruckhaus Deringer‘s high-profile partner Ben Spiers to its M&A practice.
• Arnold & Porter and Withers both profited from partner exits at Olswang ahead of its merger with CMS Cameron McKenna and Nabarro. Former head of telecoms and Asia managing partner Rob Bratby joined Arnold & Porter’s London office, while corporate partner Azlinda Ariffin-Boromand joined Withers’ City office.
• Dentons unveiled plans to merge with Central American firm Muñoz Global. The combination gave Dentons a presence in Costa Rica, Nicaragua and Panama.
• Slaughter and May announced that finance partner Paul Stacey would be named as the firm’s new executive partner for a five-year term. Stacey replaced Richard Clark, who retired from the firm after a four-year term.

December

• In a bid to save its ailing European practice, King & Wood Mallesons China bid for an out-of-administration purchase of certain legacy SJ Berwin offices, including Dubai, Germany, Italy and Spain. Meanwhile, partners continued to stream out of KWM with Reed Smith taking on the bulk of the firm’s financial regulation team.
• Royal Dutch Shell implemented a rule that all new legal matters must be priced using ‘appropriate’ fee arrangements following an April 2016 panel review. Capped fees, fixed fees and contingency fees had all already been in place for litigation work since 2014.
• Eversheds partners voted to approve a merger with US firm Sutherland Asbill & Brennan, creating a combined firm with over 2,300 lawyers across 61 offices in 29 countries.
• Ashurst partners voted in favour of replacing quarterly profit distributions with a single yearly payment. The changes required a 50% vote to pass and resulted in a £1m net increase in capital contribution by the partnership.
• Slaughter and May announced associate salary increases of up to 10% following a review of the firm’s pay structure. The Magic Circle firm reiterated its commitment not to pay on the basis of performance and to maintain its no-billable-hours culture following an employee survey.
• Latham & Watkins made a major hire, bringing in Herbert Smith Freehills‘ global energy co-head John Balsdon to lead the firm’s City finance team. Balsdon had been a partner at HSF since 2002, specialising in energy finance in the oil and gas sector.

October 2016: CMS Cameron McKenna, Nabarro and Olswang voted to combine on 1 May 2017

 

 

2017

January

• King & Wood Mallesons‘ European arm officially entered into administration carrying over £30m in debt, becoming Europe’s largest ever legal failure.
• Goodwin Procter hired Freshfields Bruckhaus Deringer’s US securities and commercial litigation partner Marshall Fishman. Fishman was recruited to head up Goodwin’s New York commercial and financial litigation practice.

February

• Herbert Smith Freehills filed a lawsuit against eight White & Case-bound partners in the Supreme Court of New South Wales. With HSF’s partnership deed naming White & Case as a ‘specified competitor’, the firm argued the former partners should not be allowed to join within six months of their resignations.
• Herbert Smith Freehills, Clifford Chance and Weil, Gotshal & Manges all unveiled plans to reduce their Middle East practices. HSF and CC confirmed plans to close their respective Qatar offices, while Weil Gotshal announced it was to close its Dubai arm.
• In its second major US merger in four years, Norton Rose Fulbright secured a tie-up with 400-lawyer New York firm Chadbourne & Parke. The merger saw Chadbourne’s $250m practice bolted onto NRF’s US arm under a verein structure. The deal gave NRF access to new offices in Mexico City, São Paulo and Istanbul.
• Slaughter and May made only the second lateral hire in the firm’s history, appointing Herbert Smith Freehills head of pensions Dan Schaffer. Schaffer joined Slaughters’ pensions and employment group after seven years at HSF.
• Freshfields Bruckhaus Deringer voted in favour of a deal to bring in a five-partner buyout team from Ashurst’s Paris arm. The team was collectively responsible for a book of business worth around £8m.
• Sidley Austin made a bold move for a seven-partner private equity team from Kirkland & Ellis‘s Munich office. Veteran partner Volker Kullmann joined with fellow corporate partners Björn Holland, Christian Zuleger, Nicole Schlatter and Marcus Klie, as well as finance partner Markus Feil and tax partner Roderic Pagel.

January 2017: King & Wood Mallesons’ European arm officially entered into administration

 

 

March

• Herbert Smith Freehills claimed victory as an Australian Supreme Court judge ruled that the eight partners due to join White & Case were able to join immediately, but not as partners. The ruling further stipulated that the partners would not be able to contact their previous clients.
• Ahead of the three-way merger between CMS Cameron McKenna, Olswang and Nabarro, 300 support staff lost their jobs following a redundancy consultation. Of the 950 support staff across the three firms, 650 staff were offered roles in the combined firm.
• King & Wood Mallesons‘ administrators Quantuma published a report into the financial affairs at the defunct firm, revealing that unsecured creditors were set to lose £33.5m. KWM’s biggest unsecured lender was Barclays.

April

• Colin Passmore was re-elected as Simmons & Simmons‘ senior partner for a third term after six years in the role. Passmore defeated the firm’s head of Asia, Paul Li, and will continue in his role for another four years.
• Freshfields Bruckhaus Deringer saw six partners exit after the firm underwent a revamp of its finance practice. Five City partners and one New York partner left the firm after a strategic review prompted a rethink of its product offering.
• DLA Piper closed its Canberra office, marking the firm’s third office closure in a month after already shutting down its operations in Tbilisi and Berlin.

May

• The court battle between Herbert Smith Freehills and eight of its former partners ended as the firm reached a settlement with the departing group. Under the terms of the settlement, the White & Case-bound partners will be restricted by a set of injunctions that were imposed at a previous hearing, including a condition that prohibits them from soliciting their former client bases.
• Following a partnership vote, Clifford Chance voted through a round of changes to its remuneration, introducing more flexibility to pay top-billing partners. As a result, a select few were in line to push their earnings to over £2m.
• Proposals emerged at Freshfields Bruckhaus Deringer to cut its 103-strong German partnership by up to 20 partners by 2020. Current and former partners said the plan was to establish more international practices and step away from local work.
• In London Wilmer Cutler Pickering Hale and Dorr picked up experienced Freshfields Bruckhaus Deringer patent litigator Justin Watts, whose clients have included Rolls-Royce, Johnson & Johnson, Bristol-Myers Squibb and Schlumberger.
• Mayer Brown and Simpson Thacher & Bartlett both made London leadership changes, as private funds partner Jason Glover replaced Gregory Conway as City managing partner at Simpson Thacher, while litigator Sally Davies replaced Sean Connolly as senior partner of Mayer Brown’s office in the capital.

June

• The merger between Norton Rose Fulbright and Chadbourne & Parke was delayed due to a ‘few material conflicts.’ NRF global chief executive Peter Martyr stated that the combination process included an in-depth review of potential conflicts and as a result the firm was looking to resolve some identified issues. However, in the same month NRF and Australian firm Henry Davis York agreed to merge. The combined firms will consist of 160 partners in Australia with offices in Brisbane, Canberra, Melbourne, Perth and Sydney and it is due to go live later this year.
• Ashurst‘s hopes of stabilising its European practice were dealt a body blow as Gibson, Dunn & Crutcher recruited a four-partner team from its Paris arm. The partners, Jean-Pierre Farges, Pierre-Emmanuel Fender, Eric Bouffard, Bertrand Delaunay and finance counsel Amanda Bevan will launch a French litigation and finance practice for Gibson Dunn.

LB

tom.baker@legalease.co.uk

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