Legal Business

Revolving doors: Addleshaws and Hogan Lovells boost ranks as Matrix targets Freshfields and Olswang construction head exits

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Strategic recruitment Addleshaw GoddardHogan LovellsMatrix Chambers
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In a busy week for laterals, Addleshaw Goddard, Hogan Lovells and Herbert Smith Freehills (HSF) have boosted their international ranks, while Matrix Chambers and Penningtons Manches have hired in the City.

Addleshaws has developed its Asia corporate focus with the hire of Andrew Yang in Hong Kong. Yang, who joins Addleshaws from Goodwin Procter, advises on all aspects of M&A and commercial transactions for small to medium enterprises, listed companies, venture/growth funds and other financial institutions based throughout the Asian region.

Nigel Francis, head of Addleshaws’ Asia practice said: ‘The continuation of outbound investment from Chinese organisations as well as the promised economic reform that will ultimately lead to investment in China’s state owned enterprises represent exciting future opportunities. Andrew’s experience aligns perfectly with these plans and means our Asia practice will be well placed to capitalise as these opportunities arise.’

Meanwhile Hogan Lovells has continued its Australia expansion with the hire of Matthew Johnson, who joins the firm from Clayton Utz. Johnson, who was closely involved with Clayton’s China practice, will focus on private and public M&A, private equity, equity capital markets and corporate advisory in addition to working with the firm’s energy and resources sector teams.

Closer to home, HSF has bolstered its Paris offering, hiring real estate partner David Lacaze from Paul Hastings. Lacaze’s clients include financial institutions and investment funds. Donald Rowlands, head of HSF real estate UK/EMEA said: ‘The addition of David to our Paris team will be crucial to helping us deliver on our ambitious plans for the growth of our European real estate practice and will complement the investments we have made in Germany and Madrid to augment our top-tier UK and French practices.’ However, going the other way, HSF lost two associates and a special counsel to White & Case down under, following the US firm’s 10 partner hire to launch in Australia, earlier this year. HSF senior associates Adeline Pang and Ged Cochrane, and of counsel Michelle Keen will be made up to partner when they join White & Case later this year.

In the City, Penningtons Manches has expanded its construction and infrastructure practice with the addition of Francis Ho from Olswang.

Ho was head of construction at the firm. Recent deals include the redevelopment of Battersea Power Station, the construction of a major new Premier League stadium in London and the redevelopment of The Langham Hotel in Marylebone.

Finally, Freshfields Bruckhaus Deringer has lost two high-profile names this week. In addition to the departure of M&A partner Ben Spiers to Simpson Thacher & Bartlett, Matrix Chambers hired Raj Parker, head of the firm’s insurance and reinsurance team as an associate member.

David Scott, partner at Freshfields said: ‘Whilst he is retiring from Freshfields Bruckhaus Deringer, he is not retiring full stop, as he is going to return to the Bar and he will practice at Matrix Chambers. I have no doubt that Raj will have a very interesting and varied mix of work whilst he is there and we wish him all the best for his future career around the corner at Matrix Chambers.

kathryn.mccann@legalease.co.uk

Legal Business

Addleshaws launches arbitration against former real estate chief Haywood

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Litigation Addleshaw Goddard
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Management at Addleshaw Goddard has launched arbitration proceedings against former head of real estate Mark Haywood, two years after he quit for Nabarro.

High-profile real estate specialist Haywood was recruited by Nabarro for the launch of its Manchester office, alongside partners Nathan Jansen and Monica Brij in 2014.

Nabarro, which recently confirmed it is set to combine with CMS Cameron McKenna and Olswang, has agreed to cover the costs of the dispute, which is valued at approximately £5m.

Details of the case emerged in a firm board report circulated by Addleshaws managing partner John Joyce in October.

Addleshaws has instructed XXIV Old Buildings’ Alan Steinfield QC, while Haywood is represented by Lewis Silkin and Serle Court’s John Machell QC. The usual grounds for suing partners for damages include loss of future revenue or loss of a key client.

A former Addleshaws partner said the advantage of using arbitration in this instance is that it is ‘inherently confidential, so you don’t wash your dirty laundry in public’.

‘Whatever the pluses and minuses are, he was Addleshaws man and boy, and they put him on gardening leave for a whole year. What does it show? A lack of confidence in the business. He had good clients and was a good operator, but nothing exceptional.’

They added: ‘Why would you do it? That’s John’s way. If you step outside what John can deal with, that’s the reaction. You should let people leave. Clients don’t like it. It shows a huge lack of confidence that you’re so worried about something like this.’

Since Haywood’s departure, Addleshaws has tightened the rules around partner exits. The firm’s original partnership deed had a ‘bottleneck provision’, which meant no more than seven equity partners could leave without board consent in one financial year. However, earlier this year the firm changed the provision to extend it to fixed-share, or ‘category A’ partners. Other changes include the introduction of ‘bad leaver’ provisions and restrictive covenants relating to fee-earners.

Addleshaws and Nabarro declined to comment.

sarah.downey@legalease.co.uk

Read more in: ‘Welcome to the John Joyce show: Addleshaws’ head aims to push national firm centre stage’

Legal Business

Addleshaws launches arbitration against former real estate chief Haywood

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Litigation Addleshaw Goddard
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Nabarro to cover costs of defending claim two years after lateral hire

Management at Addleshaw Goddard has launched arbitration proceedings against former head of real estate Mark Haywood, two years after he quit for Nabarro.

Legal Business

Addleshaws restarts salary review for all staff and pledges to backdate increases

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Addleshaw Goddard has restarted its delayed salary review for all staff, including the annual review of fixed profit share for salaried partners, and the next profit distribution for equity partners.

In August the firm said it would freeze its salary review until the autumn as a result of Britain’s vote to leave the EU. The decision to restart the review was made at a board meeting last Thursday (20 October).

An Addleshaws spokesperson said: ‘We said we would re-visit this around the half year point when we expected to have a more complete picture and given levels of activity and improvements we have seen of late we are sufficiently confident to press ahead. We will be backdating all increases to 1 September.

He added: ‘Individual decisions will be communicated during early November and any salary increases including backdated payments will be processed in the December payroll.’

Last week Legal Business revealed that senior management at the firm was in talks to delay staff salary reviews further, while divisions were challenged to cut internal travel costs by 50%.

It was understood that the delay on salary reviews would have left associates hardest hit, with discussions as to whether they would see salaries backdated to September, and whether any new salaries would potentially only go live from 1 January or later.

In addition, divisions within the firm have been told to cut internal travel in half, with travel costs between the Leeds and Manchester offices and the London office being closely scrutinised.

Last month Gowling WLG restarted its delayed salary review, which was backdated to July 2016 and was applicable to all staff excluding fixed share and equity partners.

Berwin Leighton Paiser has also decided to freeze its pay and bonuses until November. In June managing partner Lisa Mayhew told staff in an email the reason was ‘political and financial uncertainty in the UK following the recent vote to leave the EU.’

kathryn.mccann@legalease.co.uk

Legal Business

Addleshaws mulls delaying salary reviews again as divisions told to halve travel costs

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Senior management at Addleshaw Goddard is putting further cost-cutting measures in place, with talks to delay staff salary reviews further, while division heads have been told to cut UK travel costs by 50%.

It is understood that the delay on salary reviews will particularly impact associates, who are unlikely to see their salaries backdated to September, as any new salary only potentially going live from 1 January 2017 or later.

In addition, divisions within the firm have been told to cut internal travel in half, with travel costs between the Leeds and Manchester offices and the London office being closely scrutinised.

An Addleshaws spokesperson said: ‘We have seen an encouraging uptick in activity across the business and will be going back to staff by mid-November, when we’ve said we should have as good a picture as we can get about the year and therefore be in a position to decide our approach to salary increases, including partner remuneration.

‘As for the travel, we’re always being challenged to deliver operational efficiencies, including travel spend, through alternatives like video conferences, but there is no moratorium on travel, just encouragement, as always, to be thoughtful.’

In August Addleshaws confirmed it had frozen its salary review until the autumn as a result of Britain’s vote to leave the EU. The delay includes an annual review of fixed profit share for salaried partners, as well as the next profit distribution for equity partners.

The move followed Berwin Leighton Paisner’s decision to freeze pay and bonuses until November. In June managing partner Lisa Mayhew told staff in an email the reason was ‘political and financial uncertainty in the UK following the recent vote to leave the EU.’

Meanwhile, last month Gowling WLG restarted its delayed salary review, which was backdated to July 2016 and was applicable to all staff excluding fixed share.

kathryn.mccann@legalease.co.uk

Legal Business

Perspectives: Mark Hastings

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Profile Addleshaw Goddard
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I always wanted to be a criminal barrister. I grew up watching Rumpole.

At university I read classics, did the conversion and worked out I didn’t want to be a barrister at all. They’re a different breed to me – I enjoy people and interaction. It was obvious to me it suited me better to be a solicitor.

Legal Business

Brexit blues: Addleshaws and Gowling WLG freeze pay as a result of referendum vote

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Both Addleshaw Goddard and Gowling WLG have frozen their August salary reviews until the autumn as a result of Britain’s vote to leave the EU.

As first revealed by RollOnFriday, Addleshaws will freeze salary reviews for staff but will also delay its annual review of fixed profit share for salaried partners, as well as postponing the next profit distribution for equity partners. However, staff bonuses for last year’s performance, which saw the firm hit the £200m revenue mark for the first time, as well as a 38% jump in profits per equity partner (PEP) from £491,000 to £679,000, will still be paid out in September.

A spokesperson said: ‘Like many other businesses in the UK, we have seen Brexit have an impact on activity levels in the short period since the referendum. As a consequence we have decided to defer decisions on staff salary reviews and partner remuneration – usually scheduled for August – until early autumn, when we will have clarity on anticipated improvements in activity.’

Similarly Gowling WLG has also confirmed it will delay its 2016 salary review until the autumn, but added that bonus payments, for 2015/16 for those eligible were paid as usual in the July payroll and summer promotions had gone ahead as planned.

The move follows Berwin Leighton Paisner’s decision to freeze pay and bonuses until November. In June managing partner Lisa Mayhew told staff in an email the reason was ‘political and financial uncertainty in the UK following the recent vote to leave the EU.’

Earlier today it was revealed Simmons & Simmons has made lawyer cutbacks in its London office, with the firms real estate practice the worst hit. A spokesperson for Simmons refused to say how many redundancies had taken place.

kathryn.mccann@legalease.co.uk

Legal Business

Merger mania: Addleshaws and CMS discussed combination before entering current talks

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Despite both firms now being in merger talks with other suitors, Legal Business understands CMS Cameron McKenna and Addleshaw Goddard considered merging with each other earlier this year.

Although discussions have since come to nothing, it is understood CMS Cameron McKenna approached Addleshaws for a possible tie-up.

CMS, the global brand of ten member firms, posted profits for 2015/16 of £735m, while Addleshaws saw a profit bump of 5% to pass the £200m mark this year.

Both firms have been repeatedly linked to mergers this year. CMS is currently understood to be in talks with Olswang in a move that would bolster its European IP and technology offering. The firm has had recent merger successes. Its combination with Scottish firm Dundas & Wilson in 2014 led to a boost in revenues of around 8.4%, expanding its energy and financial institutions sectors.

Addleshaws, which currently has four UK offices and a presence in Hong Kong, Singapore, Dubai, Oman and Qatar, has been clear about its goal to achieve £250m turnover by 2017/18. It posted fees of £201.8m for the 2015/16 financial year.

The firm was in talks to combine with Scots firm Maclay Murray & Spens, which were called off in March this year. Addleshaws is currently in discussions with Virginia-based law firm Hunton & Williams.

Both CMS and Addleshaws refused to comment.

This week Legal Business revealed that Addleshaws saw a significant uplift in its revenues with a bump of between £5-10m resulting from a settlement in the long-running Boris Berezovsky litigation.

matthew.field@legalease.co.uk

For the full story on Addleshaw Goddard under John Joyce, read: ‘Welcome to the John Joyce show: Addleshaws’ head aims to push national firm centre stage’

 

Legal Business

Berezovsky settlement revealed as ‘fee uplift’ to Addleshaws revenues

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Litigation Addleshaw Goddard
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An uplift of between £5-10m from a settlement relating to the long-running Berezovsky litigation helped bump Addleshaw Goddard over the £200m turnover mark in 2015/16, Legal Business can reveal.

The news comes as a High Court judge has ruled the late Russian oligarch’s estate is ‘hopelessly insolvent’ with £34m remaining while creditors’ claims run into hundreds of millions of pounds. The judge outlined financial facts in a ruling on the latest stage of litigation involving insolvency trustees and Boris Berezovsky’s former partner, Elena Gorbunova.

Earlier this month, Addleshaws announced it had surpassed the £200m revenue mark, with turnover up by 5% to £201.8m, which managing partner John Joyce attributed to a strong performance from the firm’s transactional practice, as well as a strategic plan set in motion two years ago to improve business focus, performance and returns.

An Addleshaws partner told Legal Business an email was circulated to the firm two weeks ago from Joyce (pictured) outlining that the figures showed a good performance underpinned by strong corporate and transactional activity, and confirmed revenues included an element of uplift from fees recovered from the Berezovsky litigation.

Addleshaws won the case last summer against the administrators of Berezovsky’s estate and secured over £12.6m in ‘hard earned’ fees at London’s High Court.

However the trustees appealed the decision and an undisclosed settlement was made in December. That sum is said to range between £5m and £10m – enough to push Addleshaws revenues over the £200m mark.

An Addleshaws spokesperson said: ‘We pointed out in our year end press announcement that last year’s figures included an element of uplift in fees paid for work executed in previous years but which couldn’t be recognised until last year. That detail is confidential, but even without any uplift we were pleased to record a rise in income and profits.’

sarah.downey@legalease.co.uk

For more on Addleshaw Goddard under John Joyce, read: ‘Welcome to the John Joyce show: Addleshaws’ head aims to push national firm centre stage’

Legal Business

Cracking the whip: Addleshaws Joyce forced into action to push through recent partnership changes

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Noted for introducing a more assertive style of management to Addleshaw Goddard since being elected as managing partner two years ago, it has emerged that John Joyce had to coax fixed-share partners to vote on recently agreed changes to the firm’s partnership deed.

While a spokesperson for the firm said when the proposals had been voted through that ‘the commercial bargain between the partners remains fundamentally unchanged’, the process of obtaining partnership approval now appears to have been less than straightforward. One partner at the firm has told Legal Business that upon discovering many of the firm’s fixed-share partners had not yet voted, emails were sent out by Joyce ahead of the vote to the entire partnership to ensure sufficient participation.

The partner said: ‘Joyce sent round an email basically saying, “I see you haven’t voted. If you don’t vote for this, you must not believe you have a career here”. It was very aggressive.’

However, a spokesman for the firm said in a statement: ‘There were no messages along those lines and so the picture being painted isn’t accurate.’

Under current rules the firm requires 50% of the partnership to vote, of which 75% is required to pass through any changes. This means a minimum of 38% of the total partnership was required to approve the changes.

Changes were first floated in October last year and had gone through several rounds of consultation before being put to a vote at the start of July. Speaking to Legal Business before the vote Joyce (pictured) said that ‘consultation had been done to death’ but ‘some points were taken on board.’

While the majority was secured, the firm would not state how many partners had approved the changes, which come into effect on 1 May 2017.

Currently 87 of Addleshaw’s 189 partners are full-equity partners and, as part of the voted through changes, the firm is moving toward an all-equity partnership model. While fixed share partners have now been given more powers and rights, including participating in elections for the remuneration committee, it is believed that resistance to the changes largely centred on new restrictions on partners leaving the firm.

The original deed had a ‘bottleneck provision’, which meant no more than seven equity partners could leave without board consent in one financial year. The provision has now been extended to fixed-share, or ‘category A’ partners. Other changes include the introduction of ‘bad leaver’ provisions and restrictive covenants relating to fee-earners.

sarah.downey@legalease.co.uk

For more on Addleshaw Goddard under John Joyce, read ‘Welcome to the John Joyce show: Addleshaws’ head aims to push national firm centre stage’