Almost three months after King & Wood Mallesons‘ (KWM) European arm halted a recapitalisation programme that would ultimately fail, the legacy SJ Berwin partnership, which has been carrying more than £30m in debt, has moved into administration.
Andrew Hosking and Sean Bucknall from restructuring company Quantuma have been appointed as administrators to the EUME entity, after legacy SJ Berwin filed a notice to appoint administrators before Christmas, and extended it in January. The European arm’s major creditor Barclays tightened security over borrowings last August with a debenture, and beefed up provisions with another before the end of last year. Last week managing partner Tim Bednall blamed the bank as he told staff they would cease being paid.
Since the resignations of Michael Halford and three other heavyweights in October last year, the majority of the KWM EUME’s 50 top billers have resigned from the partnership, which failed to agree a recapitalisation plan in November despite support offered by from its Asia Pacific partnership. Legacy SJ Berwin merged with China’s King & Wood and Australia’s Mallesons in November 2013.
With merger talks with Morgan Lewis & Bockius coming to an end, talks with various other suitors such as Dentons also came to nothing. However KWM is likely to still maintain a presence in London and several European locations, having registered a separate LLP ‘KWM Deutschland’, so that the firm can maintain its global reach.
Various firms have benefited from KWM’s demise, the most prominent being Goodwin Procter, which took the firm’s prized funds team, headed by Halford and included 25 other lawyers in the City as well Paris heavyweight Arnaud David. The group of leavers is worth almost £15m in billings and follows the April 2016 exit of a KWM team in Paris worth £8m of billings. This equates to around 13% of KWM’s European revenue of £181.3m.
Other US firms who took on key partners include Greenberg Taurig, which nabbed big biller Steve Cowins, who joined with four other partners and their teams, while Reed Smith, under ambitious new EUME managing partner Tamara Box, is likely to take one of the largest groups of partners, fee earners and staff in London, Frankfurt and Munich.
Mid-tier firms to take on heavyweight partners include DLA Piper which took on real estate partner William Naunton and his team, while Addleshaw Goddard has former managing partner William Boss and several members of his team.
Meanwhile, the firm’s Cambridge office has moved to Bircham Dyson Bell, and a raft of other firms including Dentons, Bird & Bird, Taylor Wessing, Stephenson Harwood, Fieldfisher, Debevoise & Plimpton, Osborne Clarke and Baker & McKenzie have all picked up partners.
The folding of legacy SJ Berwin eclipses the collapse of Manchester’s Halliwells, which was Europe’s largest legal failure when it entered administration in 2010 owing about £30m to more than 500 creditors.
Read more on KWM in ‘Comment: The moment of truth arrives in the SJ Berwin saga’
For an in-depth assessment of KWM, subscribers can see our July cover feature ‘Branded’