Legal Business

The Addleshaws Interview – The rebound guy

Legal Business (LB): Looking at the finances of the firm over the past five years, you are one of the LB100’s top performers. What’s the secret?

John Joyce, managing partner, Addleshaw Goddard: We’ve always had a good business. It lost its way, undoubtedly, and all we’ve done is refocus our efforts. We reintroduced focus on what the firm needed to be doing: international growth, quality work, the clients we look after and deliver in a proper way for, a sector approach… it was just bringing them all together.

Legal Business

The Scots GC debate: Force multipliers

Hamish McNicol, Legal Business: How do you build your identity and culture as a legal team? And how do you then communicate your teams’ qualities to the wider business?

Findlay Anderson, Baker Hughes Oilfield Equipment: The culture of the legal team comes from two different sources. One is the general counsel setting the rhythm for how they want their team to operate with the business. A lot of that comes down to the personality of the GC. The other factor is how the business sees its legal team: are they a hired function that sits in a corner and you call on them when you need them, or do you put them right in the middle of the decision-making of the company?

Legal Business

Revolving doors: McDermott hires Hogan Lovells private equity head as Dechert loses partners in London and Paris

The lateral market maintained momentum last week as McDermott Will & Emery hired from Hogan Lovells with both Addleshaw Goddard and Paul Hastings targeting Dechert.

McDermott added Hogan Lovells’ global private equity head Tom Whelan. Whelan, who is experienced in private equity life cycle, has worked with private equity sponsors, multi strategy funds and corporates. His work includes advising on buyouts, M&A, bolt-ons, restructurings and refinancings through to exits.

Hamid Yunis, McDermott’s London managing partner told Legal Business: ‘We are always looking to build upon the strong practices which we have in London and to add top quality lawyers who are equally focused on providing world class client service.’

Addleshaws has hired restructuring partner Paul Fleming who joins the London business support and restructuring insolvency practice from Dechert.

Fleming has been involved in cross-border work, both in restructuring and contentious insolvency matters and advises creditors including institutional lenders and bondholders, stakeholders, insolvency practitioners and directors.

Partner and head of business support and restructuring, Ged Barnes commented: ‘This is the start of an ambitious strategy for the team which will help us to capitalise on our international offices.  Paul’s expertise in cross border insolvencies, funds recovery work and complex, high value insolvency litigation is a great fit with our existing practice.’

Meanwhile, Burges Salmon hired partner Stuart McMillan to its banking team from DLA Piper. He has worked in energy and infrastructure finance and advised banks and borrowers on project finance, acquisition finance and real estate finance deals involving cross-border financing. He will help develop the general Scottish banking practice as well as the firm’s infrastructure, real estate and energy offering.

Burges Salmon managing partner, Roger Bull told Legal Business: ‘Stuart is extremely high quality with a great reputation in the market. From our perspective, he’s got great experience in relation to finance and projects along with some of the other sectors that we’ve been focusing on like energy and renewables. He has those particular skills that will assist and drive our client offer forward in Edinburgh.

‘Banking is performing well. We’re having strong performance across the firm so far this financial year. The banking team are ever expanding their remit, expertise and focus which is very much aligned with Stuart’s appointment,’ added Bull.

Elsewhere, Fieldfisher has hired Paul Stockley as its new co-head of oil and gas. He joins the energy and natural resources group in London from Womble Bond Dickinson where he was head of oil and gas.

Stockley said: ‘The firm’s reputation for all forms of energy and natural resources work is already well-established across the industry and I am encouraged by its ambitious plans for future growth. I look forward to being a part of those plans, leveraging off a tremendous brand and platform.’

Paul Hastings has added to its Paris office with the hire of corporate partner Charles Cardon from Dechert. He has a focus on takeovers, M&A, private equity, and capital markets transactions.

Cardon advises public companies in their takeover bids, issuance of securities, governance matters, disclosure requirements and relationship with shareholders, as well as corporate law matters.

Meanwhile, in Brussels, Alston & Bird has added senior privacy and cybersecurity partner Wim Nauwelaerts from Sidley Austin.

Privacy and cybersecurity co-chair Jim Harvey commented: ‘Privacy and cybersecurity continue to be increasingly critical issues for CEOs and boards, especially among US-based multinationals that view data protection as a global issue.

‘Wim is an internationally recognised attorney in the EU privacy and cybersecurity arena with a well-earned reputation as a trusted voice in advising senior executives in the US, Europe, and elsewhere on strategic business decisions and initiatives involving their companies’ most valuable data assets,’ Harvey added.

Legal Business

Case study: Addleshaw Goddard

Back in 2014, not many – if any – would have predicted Addleshaw Goddard would boast one of the highest percentage growth rates in profit per equity partner (PEP) across the Legal Business 100 over the next five years. But with PEP increasing 13% to £730,000 in the 2018/19 financial year, PEP has risen an impressive 87% over that time.

Top-line growth between 2014 and 2019 is similarly impressive, up 61% to £275.4m, topped by a 14% increase year-on-year. In the five years leading up to 2013/14, turnover for Addleshaws had dipped 1% as the global financial crisis weighed heavily. PEP also fell 11% in 2013/14 due to exceptional expenses including partner restructuring and a written off conditional fee agreement – hence the low starting base for the dramatic growth in partner profits over the last five years.

Legal Business

Addleshaws exceeds wildest five-year revenue dreams with 14% bump to £275m for 2018/19

Addleshaw Goddard managing partner John Joyce ‘would never have dreamed’ the firm would grow by more than 60% since his appointment in 2014.

But despite that strong growth trajectory, as well as profit per equity partner (PEP) growth of 89% and a £90m improvement in its cash position to £59m of reserves since the 2013/14 financial year, Joyce (pictured) said the plan is simply to ‘press on’.

‘We get people asking us, “What are you going to do with all that cash?” and the answer’s “keep it”,’ he told Legal Business. ‘We’ll do nothing with it, absolutely nothing.’

Revenue at Addleshaws for the 2018/19 financial year rose 14% to £275.4m, its second consecutive year of double-digit growth and including a near-25% uplift in income from international offices. Profit at the firm exceeded £100m for the first time, a 16% increase, as PEP rose 12% to £727,000.

Chief financial officer Colin Brown said there was above-budget growth across every jurisdiction and division, with England and Scotland up 13% and the GCC and Asia between 20% and 25%. The energy, financial services, health and life sciences, retail and consumer, and transport sectors made up 60% of the firm’s turnover.

Brown pointed to investments over the last five years, which has seen the number of partners grow by 50% to more than 250 and overall headcount growth in lawyers and business services staff of 40%. ‘That is clearly driving some of that growth but a lot of it’s also catering for growth and making sure we can support our clients. We are having to invest substantially, both in our teams and our infrastructure, to drive this momentum and maintain it.’

Joyce added: ‘We’ve achieved more than we could ever have imagined possible. In a sense that gives you an appetite to go on and do more – we’re not going to sit back.’

In June, the firm opened its first continental European office in Hamburg with the hire of a five-partner team from Bryan Cave Leighton Paisner (BCLP), its sixth office outside the UK and twelfth overall. The firm expects to add another German office in the near-term.

Key mandates during the financial year included advising Volkswagen on global alliance and contracting arrangements with Ford for the supply of commercial and electric vehicles; on the £642m hostile bid by DNO for Faroe Petroleum – the largest AIM-listed company takeover in 2018; and for GSK in its long-running product liability case relating to antidepressant Seroxat.

Joyce said investment in the City was a key priority with the firm looking to raise its profile in London, as well as further growth in its other offices. Brown added that the turnaround in the cash position was to give the firm flexibility to both invest and weather potential storms.

‘We’re all aware of the challenges. We thought some were really going to impact last year – they didn’t – who knows if they might this year? Whenever it does, we know there are some firms out there with quite weak balance sheets and this does provide us with an opportunity to do things in a market where other firms might not be as strong as us.’

Legal Business

Dealwatch: Kirkland and CMS drink in $3bn pub group takeover as Slaughters and Latham analyse Moody’s disposal

In the customary rush to get deals over the line before the summer lull, the City and US elite have this week lined up on big-ticket transactions including the sale of Moody’s Analytics to Equistone and Slug & Lettuce owner Stonegate’s $3bn acquisition of pub company Ei Group (EIG).

Kirkland & Ellis fielded a team led by corporate partners David Holdsworth and Stuart Boyd to advise buyer Stonegate as it acquired EIG, the largest owner of pubs in the UK. Stonegate, which was formed when funds managed by private equity group TDR acquired 333 managed pubs from Mitchells & Butler, also owns high street brands including Walkabout and Yates.

CMS advised EIG with a team led by partners Gary Green and Gordon Anton. An Ashurst team led by M&A partner Tom Mercer advised Nomura International, Goldman Sachs International and Barclays, the buyer’s financial advisers, on the recommended cash offer.

Meanwhile, Slaughter and May advised longstanding client Moody’s on the sale of its Moody’s Analytics Knowledge Services (MAKS) business to Equistone Partners Europe Limited, a deal which is expected to close later this year.

Latham & Watkins acted for Equistone on the deal, with a team led by London corporate partner David Walker and including London finance partner Charles Armstrong.

Co-head of Slaughters’ infrastructure group, Michael Corbett, told Legal Business: ‘It’s a significant reflection of Moody’s evolving strategic priorities. They’re in the business of producing high value analytical services to their customers, and the so-called knowledge services that’s been disposed of was non-call for Moody’s activities. It was consistent with a strategic repositioning. It was significant because it’s a global business with a multitude of jurisdictions involved and that always creates some complexity in a context of a carve-out business disposal.’

He added that M&A has shown decent levels of activity in spite of the effect the current political uncertainty has had on sterling.

‘A lot of the work we do has a cross-border element and frankly a majority of the work we do is not necessarily domestic UK, but overseas assets and global businesses,’ said Corbett.

MAKS provides outsourced research and analytical support to banks, asset managers and consulting firms through delivery centres in India, Costa Rica, Sri Lanka and China. The sale proceeds and repatriated offshore cash will be used to repurchase around $300m of Moody’s outstanding stock.

Freshfields Bruckhaus Deringer and Addleshaw Goddard also this week landed lead mandates as the European arm of Australia’s Macquarie Group acquired British telecoms company KCOM in a £627 million cash-only deal.

Freshfields advised (MEIF) Macquarie European Infrastructure Fund 6 with a team led by corporate and M&A partners Stephen Hewes and Andrew Hutchings.

Addleshaw’s corporate partner Richard Lee and employment partner Jonathan Fletcher Rogers led the team advising KCOM group which operate in Hull, Yorkshire.

Finally, Linklaters’ partner Richard Coar led a team advising SSE Renewables, Copenhagen Infrastructure Partners and Red Rock Power on the refinancing of the 588MW Beatrice offshore wind farm off the coast of Scotland. The firm said the deal shows a strong need for offshore wind assets established by an experienced sponsor group. Norton Rose Fulbright advised a consortium of 29 commercial and institutional lenders and 24 hedging banks in the deal, led by the firm’s head of energy, infrastructure and natural resources in London, Rob Marsh.

Legal Business

‘Necessary bandwidth’: Addleshaws lures deal finance veteran from McDermott

Amid a quiet month for the lateral recruitment market in London, Addleshaw Goddard made the most significant play, bolstering its City banking practice with the hire of leveraged finance partner Peter Crichton from US firm McDermott Will & Emery. Well known in the deal community, Crichton joins Addleshaws’ active mid-market practice led by Alex Dumphy.

Crichton’s career as an acquisition finance lawyer saw him act for AIB, HSBC, The Royal Bank of Scotland and Santander on Caledonia’s acquisition of the drinks business Liberation Group in 2016 and AIB, HSBC and Santander on the refinancing of the Jockey Club. He has spent around 16 years advising on the debtor side of the loan markets and specialising in leveraged finance, becoming partner at DLA Piper and CMS Cameron McKenna Nabarro Olswang before joining McDermott before the three-way merger took effect in 2017.

Legal Business

Addleshaws enters continental Europe through BCLP Hamburg hires

Despite having launched five international offices in Asia and the Middle East since 2012, top-20 UK law firm Addleshaw Goddard had no presence in continental Europe until last month. That was when it announced the hire of five partners from Bryan Cave Leighton Paisner (BCLP) to spearhead a launch in Hamburg.

The hires include the two founders of legacy Bryan Cave’s German offices in 2007, Eckart Budelmann and Michael Leue. Partners Martin Lüderitz, Maximilian Karacz and Hubertus Schröder joined the duo in the move from BCLP, alongside five other lawyers.

Legal Business

Addleshaws launches first European base in Hamburg with five-partner BCLP hire

Addleshaw Goddard will open its first continental European office in Hamburg with the hire of a five-partner team from Bryan Cave Leighton Paisner (BCLP).

Addleshaws said today (8 May) it will open its sixth office outside the UK next month, with five lawyers joining partners Exkart Budelmann, Michael Leue, Martin Lüderitz, Maximilian Karacz and Hubertus Schröder in the move from BCLP.

Budelmann and Leue founded the legacy Bryan Cave offices in Germany in 2007, with Leue serving as managing partner in Germany. Addleshaws’ Hamburg office will focus on M&A and private equity, commercial, employment, international trade and litigation advice.

The UK top-20 law firm has long been interested in the German market, with merger talks between Addleshaws and German firm Luther called off in mid-2017. Last year, Addleshaws managing partner John Joyce told Legal Business the firm wanted to expand in any possible way and in any possible location following a sustained period of growth and the early signs of a successful Scottish merger with HBJ Gateley.

Of the Hamburg opening, Joyce commented: ‘Germany is one of the world’s largest importers and exporters and the opening of an office there is a decisive first step in our plans for continental Europe, which in due course may involve other European jurisdictions given the strong preference by many businesses for a fully integrated service.’

Leue said: ‘Today’s announcement has all the key ingredients for clients in Europe, the USA and further afield who will be attracted by the advantages of working with a competent and growing European business rooted in the German market with strong links into the City of London. We are excited about joining Addleshaw Goddard and the possibilities to leverage our local expertise on a global scale.’

A BCLP spokesperson commented: ‘Germany is a core part of our firm, where we have more than 45 lawyers who work across three offices, Berlin, Frankfurt and Hamburg, and with the rest of our firm to provide our clients with an efficient and high quality service.’

They added: ‘Roland Fabian, country managing partner for Germany, will continue to lead our offices there and oversee our strategic plans in the country, where we have grown rapidly in the last five years. We are sorry that two of our corporate partners based in Hamburg, Eckart Budelmann and Michael Leue, will be leaving us to start a new office elsewhere, and we wish them well.’

Hamburg follows openings in Singapore, Dubai, Oman, Qatar and Hong Kong for Addleshaws since 2012. Last year, the firm turned to Bryan Cave’s merger partner, Bryan Leighton Paisner, for the hire of that firm’s then-Asia head, Bob Charlton, with Addleshaws looking to triple the size of its Asia capability to at least 12 partners.

Revenue for the 2016/17 financial year was up 23% to £242m from £197m, while profit increased 36% to £87m. Since 2012/13, Addleshaws’ revenue has increased 45%, while profit is up 68% over that same period. The financial results were bolstered by the inclusion of its Scottish merger with HBJ Gateley – a £20m firm which formally combined with Addleshaws on 1 June 2017 – but also includes organic growth, with England up 11%, Scotland 9% and the foreign exchange-impacted international arm 7%.