Legal Business

‘At the forefront of changes in our market’: A&O targets 100 more recruits in Belfast

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Innovation Allen & Overy
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Three years on from the launch of its Belfast legal and support services centre, Allen & Overy (A&O) has exceeded headcount targets and has unveiled plans to recruit a further 100 new staff over the next five years.

Launched in late 2011, the Northern Ireland office exceeded its 2014 headcount target of 300 employees earlier this year, currently housing 380 staff, including around 320 non-lawyers and 60 lawyers, making it the firm’s third largest office worldwide.

Over the next five years, the firm aims to hire a further 70 legal staff and 30 support staff in a bid to optimise revenues.

A spokesperson for the firm told Legal Business that the number of matters going through its Legal Services Centre (LSC) in Belfast doubled in the financial year ending April 2014, whilst revenues tripled, although the firm declined to provide figures to support this.

Earlier this year, the firm confirmed the project was contributing significantly to its bottom line thanks to greater efficiency savings. At the beginning of 2013, the firm moved a number of support roles out of Europe and the US into Belfast, which also led to a fall in staff costs.

A&O global managing partner Wim Dejonghe (pictured) said: ‘The new roles reflect the success of our Belfast operation, with the office continuing to grow ahead of expectations. That success is largely down to the quality of the people that A&O has been able to recruit in Northern Ireland. As the global economy continues to improve, we see opportunities to continue to grow the wider business and Belfast plays a crucial role in facilitating that growth.’

Jane Townsend, partner and head of the LSC, added: ‘The way in which we deliver our service to clients continues to change rapidly. The LSC in Belfast has given us a real and tangible competitive advantage and we have won significant mandates as a result. This additional resource will ensure we can meet this growing demand and that we remain at the forefront of changes in our market.’

The legal services centre in Belfast is headed by partner Jane Townsend, and predominantly carries out large volume work such as banking and regulatory litigation, corporate and due diligence, with its main competition being second tier firms.

In our leadership insight feature, published this week, senior partner David Morley told Legal Business that the success of the legal and support services centre in Belfast has given management the political capital to try other successful innovations, such as contract lawyer business Peerpoint, which launched last year.

jaishree.kalia@legalease.co.uk

Legal Business

Into Africa: A&O launches Johannesburg office with Bowman Gilfillan team

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Africa Allen & Overy
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Having been speculated over for some time, Magic Circle firm Allen & Overy (A&O) has, today (8 August), announced its entrance into South Africa with the launch of an office in Johannesburg, and hired a seven-strong banking and finance team from local firm Bowman Gilfillan.

The office will be led by former Bowman Gilfillan banking head Lionel Shawe, and A&O partner Michael Duncan, who will be relocating to Johannesburg.

Set to open on 20 October, the firm anticipates the office will house around 40 lawyers in 2015. For the launch, Shawe and Duncan will be joined by a group of banking and finance lawyers from Bowman Gilfillan, including Khurshid Fazel, Lisa Botha, Sibusiso Zungu, Lindani Mthembu, and Alistair Collins. The firm added that finance lawyer Anthony Colegrave will join the team later in the year.

In early September the firm was reported to be getting closer to launching a South Africa base following the hire of Shawe from Bowman Gilfillan. The launch makes A&O the first Magic Circle firm to officially set up shop in the South African market without an association with a local firm, although Linklaters was the first of the group to enter the region in 2012 when it formed an alliance with local firm Webber Wentzel.

Explaining the move, A&O global managing partner Wim Dejonghe said: ‘Johannesburg has become a key hub for local and international banks, development institutions, institutional investors and funds looking at investment and finance opportunities in Sub-Saharan Africa. Building on the success of our launch in Casablanca, Johannesburg is a continuation of our carefully targeted investment in Africa and emerging markets more generally. It offers a fantastic opportunity to take our Africa platform to the next level’.

Tim Scales, head of Allen & Overy’s Africa group, said: ‘This opens an exciting new chapter for A&O’s Africa Group.  Lionel, the foremost banking and finance lawyer in South Africa and Mike, one of the leading lights in A&O’s global banking practice, are a powerful combination and we are very excited by the depth, quality and energy of the wider team. This will give us a unique platform to pursue opportunities in the banking, finance, projects, energy, infrastructure and mining sectors both in South Africa and elsewhere in Sub-Saharan Africa’.

Scales added the firm was seeing increasing interest in Africa from clients across its network, which was a key driver for the launch.

He added: ‘With the opening of our office in Johannesburg, we will now be able to offer clients a seamless service across sectors, combining a global presence and specialisation with a premium local team. This also provides our team in South Africa with access to an unrivalled international platform and the opportunity to advise companies that are world leaders on some of the most significant transactions in the region’.

sarah.downey@legalease.co.uk

Legal Business

Three years after Northern Rock, A&O and Freshfields lead on Virgin Money IPO

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Corporate Allen & OveryFreshfields Bruckhaus Deringer
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Magic circle duo Allen & Overy (A&O) and Freshfields Bruckhaus Deringer have won roles to advise Virgin Money on its forthcoming London initial public offering (IPO).

Sir Richard Branson’s retail banking arm has announced it will raise £150m from its London Stock Exchange listing to facilitate the company’s development, boost capital and support growth plans including recruitment and staff retention.

A&O is advising Virgin Money, led by corporate partners Andrew Ballheimer and David Broadley, while Freshfields is advising the underwriters, led by corporate partners Mark Austin and Julian Makin.

Bank of America Merrill Lynch and Goldman Sachs are joint sponsors, joint global co-ordinators and joint bookrunners, while Barclays Bank and Citigroup Global Markets are joint bookrunners, and Keefe, Bruyette & Woods is the joint lead manager.

Virgin Money, which acquired a part of lender Northern Rock from the Government in 2011, will sell a portion of its existing holding of ordinary shares, and an offer of new ordinary shares to be issued by the company. The offer is expected to result in a free float of at least 25%.

The bank will also return £50m of the proceeds to HM Treasury as part of its payment agreement for its acquisition of the ‘healthy’ part of Northern Rock in 2012. A&O’s Ballheimer also advised Virgin Money on that deal, while Freshfields advised Northern Rock.

Virgin Media said ‘the net proceeds of the offer will also be used for general corporate purposes as well as to satisfy the payment due to HM Treasury in respect of the contingent consideration payable as part of the company’s acquisition of Northern Rock in January 2012’.

Virgin Money is the latest of a string of British banks, or ‘challenger banks’, to announce their intention to list after Aldermore, OneSavings and TSB also opted to float earlier this year. These listings come as these British banks seek to acquire a larger chunk of the retail banking market from UK’s major financial lenders.

jaishree.kalia@legalease.co.uk

Legal Business

Dealwatch: Phones 4u, with £105m profit and ‘cash in the bank’, enters administration with CC, A&O and CMS acting

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Corporate Allen & OveryClifford ChanceCMS
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Allen & Overy (A&O), Clifford Chance and CMS Cameron McKenna have all landed key roles advising on the administration of high street retailer Phones4u.

With PwC acting as administrator, the company went into administration on Sunday [14 September] after the withdrawal of EE, O2 and Vodafone products from its stores, placing 5,596 jobs and more than 700 outlets at risk.

Owned by pan-European private equity house BC Partners, a statement from the company said on Sunday: ‘Following the decisions of Vodafone and EE, Phones 4u has no option but to seek the appointment of administrators from PwC’.

The statement continued:’Phones 4u is a profitable, well-managed business with 550 standalone stores, employing 5,596 people. The company has a turnover of over £1bn, EBITDA of £105m for 2013 and significant cash in the bank.’

A&O restructuring and corporate insolvency partner Ian Field is leading a team advising Phones4u alongside the firm’s managing partner of the global restructuring and insolvency group Mark Sterling.

Clifford Chance is understood to be advising the lenders of the company’s rolling credit facility on the administration with a team led by finance partner Charles Cochrane.

CMS Cameron McKenna is also advising on the mandate, and is acting for the security trustee, ING Bank, with corporate recovery and restructuring partner Martin Brown advising.

Shortly before the administration, Moody’s downgraded its outlook over the company’s ability to repay its debts following Vodafone’s decision to not renew its network agreement with Phones 4u, which represented more than 20% of the latter’s revenues and gross profit.

Sarah.downey@legalease.co.uk

Legal Business

Dealwatch: A&O, Travers Smith and Pinsent Masons lead on Lloyds’ £400m Keepmoat homebuilder sale

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Corporate Allen & OveryPinsent MasonsTravers Smith
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Allen & Overy (A&O), Travers Smith and Pinsent Masons have all secured leading roles advising on Lloyds Banking Group’s £400m sale of Doncaster-based homebuilder Keepmoat to private equity houses Sun Capital and TDR Capital, as the part-nationalised lender continues to dispose of its non-core assets.

Travers Smith private equity partner James Renahan and tax partner Russell Warren advised Keepmoat’s management on the sale, a sustainable community regeneration business with sales of nearly £1bn last year.

The deal comes as Travers Smith is set to lose its leading private equity heavyweight Phil Sanderson, who is moving to join Ropes & Gray.

A&O corporate partner George Knight led a team including corporate associates Hugh Robinson and Chloe Johnson on advising the seller. Meanwhile, Pinsent Masons’ corporate partner Helen Ridge led a team including legal director Anna Whetham and corporate finance partner Barry McCaig on advising the buy-out duo Sun Capital and TDR Capital.

The acquisition by Sun Capital, of which former PizzaExpress owner Hugh Osmond is a leading partner, and TDR Capital is ‘designed to support the long-term growth ambitions of Keepmoat and is a significant investment at the time of increased demand for new and improved homes and communities’.

Completion is expected to occur by the end of November this year and is subject to regulatory clearances.

Other windfall instructions gained by leading City firms on the government’s privatisation of Lloyds, which was rescued by the UK taxpayer in 2008, includes Magic Circle pair Slaughter and May and Freshfields Bruckhaus Deringer advising UK Financial Investments Limited (UKFI) on the HM Treasury’s disposal of a 6% stake in Lloyds, worth around £3.3bn, last year.

Sarah.downey@legalease.co.uk

Legal Business

‘This is the future’ – A&O sees further growth of contract lawyer arm as it hires new head from Deloitte

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Innovation Allen & Overy
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Following the launch of its innovative contract lawyer business ‘Peerpoint’ last November, Allen & Overy has made a move to develop the high-end service further, today (5 September) announcing the hire of Richard Punt, the managing partner for clients and markets at accountancy giant Deloitte, as Peerpoint’s chief executive officer.

Punt, who leads the strategy practice’s impact programme at Deloitte, will join Peerpoint in November where he will work with chief operating officer Ben Williams and focus on new business development both with clients and within the firm. This will include international expansion of the business and the extension of the scheme by recruiting lawyers outside the magic circle firm’s alumni network.

Punt is expected to be remunerated the same way as a partner, although the firm would not say whether he will take a share in the Peerpoint’s profits.

As revealed by Legal Business last November, the launch of the Peerpoint model saw A&O-vetted freelance lawyers deployed to handle a range of fixed-term needs, including covering maternity leave or fulfilling secondment requests. The service aimed to provide lawyers ranging in experience from the equivalent of a senior associate to partner level, with the initial plan to draw on former A&O lawyers who want to work flexibly.

Having started out with around 10 lawyers who were employed on a contract basis and paid the pro-rata equivalent of a full-time employee, Peerpoint now houses around 30 lawyers while smaller pilots operate in Australia and Hong Kong.

Allen & Overy global managing partner Wim Dejonghe (pictured) told Legal Business maintaining growth is a key objective: ‘We are seeing increased client demand – we need to invest in our offering and move to the next phase. I’d be surprised if you don’t see substantial growth in the coming years – I don’t have a specific target – but we need a larger group of lawyers in this model.’

He added: ‘I don’t think you see a lot of initiatives like this at the level at which we play. But this is the future – breaking down the workstreams and making sure you have the most efficient offering for the client. Peerpoint is at the heart of that.’

Research conducted by A&O earlier this year demonstrated the rate of change occurring within the legal market, as 63% of respondents said they have used contract lawyers in the past two years, while three-quarters (74%) said they expect to use contract lawyers over the next five years.

sarah.downey@legalease.co.uk

Legal Business

A&O joins US firms on Walgreens’ acquisition of Alliance Boots

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US firms Allen & Overy
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US advisers take the lead on £5.6bn takeover of UK institution

The Walgreen Company has instructed New York law firm Wachtell, Lipton, Rosen & Katz and Allen & Overy (A&O) to handle its acquisition of the remaining 55% of Nottingham-based chemist Alliance Boots in a £5.6bn deal.

The pharmacy giant already has a 45% stake in the group, which owns UK high-street favourite Boots, which it acquired in August 2012. This new deal will create the combined entity of Walgreens Boots Alliance, with more than 11,000 stores in ten countries and a portfolio of retail and business brands.

Legal Business

A&O closer to launching new South Africa office with Bowman team

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Africa Allen & Overy
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Allen & Overy (A&O) is getting closer to becoming the first Magic Circle firm to launch a South Africa base following the hire of banking head Lionel Shawe from local firm Bowman Gilfillan, along with a team of partners.

The firm is understood to have been in talks with several Bowman partners for some time now with Shawe leaving his former firm last week (29 August) to join A&O for the firm’s launch in South Africa.

Shawe previously headed Bowman’s banking and finance team, and joins A&O with expertise in mining and aircraft financing transactions, acquisition and leveraged financing, real estate financing, securitisation, capital markets and debt restructuring transactions.

An A&O partner said details of the office launch date are still being organised and are subject to the partnership vote, which is to be confirmed. The source also confirmed that partner and former banking chairman Michael Duncan, will be relocating to head up the new office.

This will leave around 12 banking partners in the firm’s City practice. Duncan’s experience includes advising on structuring, syndicated loans, acquisition financing, Islamic finance, asset financing, restructurings, derivatives and commercial paper programmes, and trade finance. He has been a London-based partner in A&O’s finance practice since 1987.

The launch would make A&O the first Magic Circle firm to officially set up shop in the South African market without an association with a local firm, although Linklaters was the first of the group to enter the region in 2012 when it formed an alliance with local firm Webber Wentzel.

A&O said in a written statement: ‘Africa is a strategically important region and one that we continue to monitor very closely for further growth opportunities. We are regularly approached by interested parties across the continent but we have nothing to announce at this time.’

Bowman was not available for immediate comment at the time of press. The firm’s exits follow the departure of Bowman energy specialist and oil and gas head Lizel Oberholzer who joined Norton Rose Fulbright in August to strengthen the its energy practice in South Africa

Other firms to expand in South Africa include Baker & McKenzie, which in late May opened an office in Johannesburg with lawyers and staff from Dewey & LeBoeuf, after acquiring local competition firm Vani Chetty. Simmons & Simmons also forged a presence in the region through an alliance with Fasken Martineau in a bid to enhance its respective African offerings.

Jaishree.kalia@legalease.co.uk

Legal Business

Trainee retention round up: Slaughters leads Magic Circle as A&O keeps on 82% of trainees

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Trainee retention Allen & Overy
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All of the Magic Circle firms have unveiled their trainee retention rates for the September 2014 intake with Allen & Overy (A&O) being the last to announce a retention rate of 82%, giving Slaughter and May the highest rate of the pack at 97% with Clifford Chance at the back with 75%.

A&O made 43 offers to a total intake of 50, of which 41 accepted, which is a significant boost from last year when the firm posted a retention rate of just 72%. A&O was also the last Magic Circle firm to announce its rates last year when it made offers to 45 out of 51 applicants, of which 39 accepted.

A&O’s rate puts the firm on par with rival firm Freshfields Bruckhaus Deringer, which also posted an 82% retention rate earlier this month. Group leader Slaughter and May’s level of 97% however, was closely followed by Linklaters which posted 93%.

Clifford Chance (CC) had the lowest trainee retention rate in the Magic Circle, and one of the lowest among City firms, keeping on 75% or 40 out of 53 of its autumn intake; a 5% decrease on the firm’s 80% rate this time last year.

Other City rivals also posted strong retention rates. Herbert Smith Freehills retained 41 qualifiers out of a cohort of 47 trainees for the autumn intake, giving it a retention rate of 87%. The result follows strong results posted by the top-ten firm in January, when it announced it would keep 38 out of 42 trainees, giving it a spring retention rate of 90%.

Berwin Leighton Paisner kept pace with HSF, posting an 83% retention rate. The firm, which posted bumper financial results this year with a 35% rise in profit per equity partner to £542,000, retained 15 out of 18 final-seat trainees. In the spring intake, the firm also matched HSF keeping hold of 16 out of 18 newly qualified lawyers, a retention rate of 89%.

City firm RPC kept on all 15 trainee solicitors this summer who applied to qualify this year, constituting the second time the firm has achieved a 100% rate since 2010. On the other hand, Norton Rose Fulbright kept on 17 of its 22 September trainees or 77%, down from 92% in this year’s May qualification round. While, CMS Cameron McKenna posted more modest results with a retention rate of 67.2%, with the firm’s London office keeping the lion’s share of trainees.

Of the US firms, Mayer Brown retained ten or 67% for its September 2014 intake, from a total of 15 applicants, while fellow private equity specialist firm Weil, Gotshal & Manges continued in the same manner it has adopted in recent years, and kept on all 11 London trainees in its autumn 2014 cohort.

Mayer Brown also announced in July that it will cut its September 2016 trainee intake by half, taking in just ten applicants compared to their usual intake of 20.

Jaishree.kalia@legalease.co.uk

Legal Business

Wachtell, A&O and Gibson Dunn lead on Walgreens acquisition of Boots

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Corporate Allen & OveryWachtell, Lipton, Rosen & Katz
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The largest drug retailer in the US, Walgreens, has instructed Wachtell, Lipton, Rosen & Katz and Magic Circle firm Allen & Overy to handle its full combination with Nottingham-based chemist Alliance Boots.

Walgreens board of directors has exercised an option to complete the acquisition of the remaining 55% of Alliance Boots after an initial 45% investment completed in 2012. The $9bn deal will create a pharmacy-led retailer with more than 11,000 stores in 10 countries. Walgreens expects to close the transaction in the first quarter of 2015, with the combination also set to establish the world’s largest pharmaceutical wholesale and distribution network with more than 370 distribution centres delivering to more than 180,000 pharmacies, doctors, health centres and hospitals in 20 countries.

Walgreens Boots Alliance will be headquartered in Chicago, declining to carry out a tax inversion that would have added to the $1bn in savings planned by end of 2017. Walgreens said in a statement that the combined size and scale of the companies will help the two to expand supply while addressing the rising cost of prescription drugs in America and worldwide.

The A&O team was led by Amsterdam corporate partner Justin Steer, alongside the office’s head of competition Paul Glazener.

Stefano Pessina, executive chairman of Alliance Boots, said: ‘The expected creation of the new enterprise will represent the most significant milestone in the history of Alliance Boots and, importantly, a very positive step for the health care industry as a whole. Together with Walgreens, we have already made good progress over the past two years and I strongly believe that the merger will bring significant growth opportunities for both mature and emerging markets.’

Investment banks Goldman Sachs and Lazard acted as financial advisers on the transaction. Gibson Dunn’s New York corporate partners Eduardo Gallardo and Dennis Friedman were enlisted by Lazard.

Tom.moore@legalease.co.uk