Legal Business

Baker McKenzie steps up to associate pay war with 20% NQ salary uplift

Baker McKenzie steps up to associate pay war with 20% NQ salary uplift

Baker McKenzie has become the latest law firm to put its newly-qualified (NQ) solicitors in line for a six-digit pay package with an eye-catching 23% increase to its starting rates.

The firm announced today (17 July) it is raising its basic NQ package from £77,000 to a minimum of £95,000, with performance-related bonuses bringing earnings to over £100,000.

Bakers is the latest to follow in the footsteps of Freshfields Bruckhaus Deringer, which in May announced one of the largest real-term pay rises in the City for a decade amid increasing pressure for associate talent from US rivals.

Bakers’ package will now include a £90,000 base salary with a £5,000 sign-in bonus for all its NQs, while top performers will be eligible for a further bonus of more than £5,000.

A spokesperson said the firm had raised its NQ package ‘in line with the London market’ as part of its commitment to remunerate people ‘fairly and competitively’ but declined to disclose the range for performance-related bonuses.

The move is particularly significant coming from a firm that over the last few years has focused on cutting costs amid a push to increase profitability, with an unofficial goal to bring its profits per equity partner (PEP) to $2m.

In October last year Bakers announced a review of its London professional and business services (PBS) staff, with its chief operating officer Jason Marty saying the firm’s priority was to become ‘a more efficient organisation with competitive and sustainable profitability’.

Last month it cut 46 PBS roles, with another 33 still at risk, while in previous months it announced the opening of low-cost hubs in Florida and Buenos Aires.

The firm’s latest financial results in August last year showed PEP increased 13% to $1.44m in the year to 30 June 2018 as revenue hit $2.9bn.

That even a firm which repeatedly stressed its focus on profitability felt the need to increase its starting rate by more than £15,000 shows how intense the war for associate talent in the City has become.

A few weeks after Freshfields raised its starting rate from £85,000 to £100,000 plus bonuses, all four of its Magic Circle rivals followed suit. Clifford Chance (CC) announced a £100,000 package including bonus at the beginning of June, matched by Slaughter and May, Allen & Overy and Linklaters shortly afterwards.

But the war for talent soon widened well beyond the Magic Circle, with Ashurst announcing a 9% pay increase to £105,000 last week after firms including Macfarlanes, Travers Smith and Herbert Smith Freehills made similar moves.

marco.cillario@legalease.co.uk

Legal Business

Revolving doors: Baker McKenzie expands £40m City tax practice as Eversheds makes multiple hires

Revolving doors: Baker McKenzie expands £40m City tax practice as Eversheds makes multiple hires

In a muted week for lateral recruitment, Baker McKenzie and Eversheds Sutherland made hires in the City, while Eversheds also grew on the continent.

Baker McKenzie hired tax partner Prabhu Narasimhan to its London office. Narasimhan joins from White & Case and has experience in advising and delivering cross-border mandates, acting for corporate, private equity and family office clients globally.

Mark Delaney, head of tax, told Legal Business: ‘We went from being a tax practice with revenue of £3m about 13 years ago, to being a £40m standalone tax practice.’

The firm has 16 partners in total and has been growing in areas such as tax disputes, tax advisory, and tax planning as well as seeing an increase in tax transactional work.

‘We are continuing to see a lot of regulatory change, whether that’s Brexit, digital service tax, OECD proposals and around the international tax landscape. Legislative and regulatory change creates demand for our services. The environment for taxpayers – the corporate and the individuals – in terms of tax authority hostility is also still very prevalent,’ he added.

Eversheds, meanwhile, hired Christopher Akinrele to its banking team from Addleshaw Goddard. Akinrele will focus on leveraged finance and has experience advising financial institutions, sponsors and corporate clients in syndicated and leveraged finance transactions.

Finance partner Patrick Davis told Legal Business: ‘We operate our leveraged finance practice on a national and, more increasingly, international basis. We’re seeing a lot of demand for leveraged finance work and wanted to add high-quality bench strength to that team.’

The firm has been expanding its capabilities in the upper mid-market areas of private equity and leveraged finance as well as growing the lender side of the business and capitalising on existing institutional relationships with lender clients, with the hire of Akinrele expected to complement the lender side work the firm is involved in. Despite economic uncertainty, client demand in private equity and leveraged finance was high.

Eversheds head of finance and restructuring Simon Waller commented: ‘Volumes of syndicated debt are down. We see it as flight-to-quality, in that as banks tighten some of their credit processes up they’re looking at quality credit and the work is still around.’

Eversheds also added to its bench in Munich with the hire of Michael Prüßner from Pinsent Masons to its corporate and M&A team from Pinsent Masons. The firm now has 11 partners in its German corporate and M&A practice group.

Finally, TLT grew its banking and finance team with the appointment of Marc Gilston as partner. Gilston, who was previously at Foot Anstey, has experience working with major lenders, corporate investors and businesses.

muna.abdi@legalease.co.uk

Legal Business

Bakers makes up seven in London in bumper promotion round

Bakers makes up seven in London in bumper promotion round

Baker McKenzie has promoted 81 lawyers to partners, continuing a trend which saw several law firms increase their intake this year.

The number of promotions announced today (27 June) and effective from 1 July is 19% up on last year’s scaled back round, which saw 68 minted, and is also up by one on 2017.

Women make up almost 40% of this year’s promotions. With more than 400 women among its 1,550-strong partnership, the firm reiterated last year’s claim that it had the largest female partnership of any law firm.

Promotions in the firm’s City office are also up by one on last year to seven, making London the office with the largest intake this year. The firm added two lawyers to its London private equity practice and two to its IP/tech group, while banking, antitrust and disputes got one new partner each.

Globally, the M&A practice saw the largest intake with 15 lawyers promoted, reflecting the firm’s push to strengthen its transactional capabilities. In line with its traditional strength, tax was the second largest group with 13 promoted, while disputes came third at 11.

Bakers also announced today it has promoted 48 salary partners to its equity ranks.

The promotions come off the back of a year which saw Bakers complete 34 laterals, meaning in total the firm added 115 partners to its ranks.

London managing partner Alex Chadwick said: ‘Alongside our recent hires, this significant number of promotions in London reflects our growth plans. At least as importantly, I am thrilled to see more than half are female, which is testament to our ongoing commitment to turn gender aspirations into reality.’

Several firms have increased their partner promotion rounds this year, including all Magic Circle firms bar Slaughter and May, as well as CMS and Eversheds Sutherland.

Bakers’ London partner promotions:

Helen Brown (IP/tech)
David Hart (Private equity)
Julia Hemmings (IP/tech)
Phelim O’Doherty (Private equity)
Sarah Porter (Banking and finance)
James Robinson (Antitrust and competition)
Gemma Willingham (Dispute resolution)

marco.cillario@legalbusiness.co.uk

Legal Business

Bakers scraps 46 City business services staff roles, more at risk

Bakers scraps 46 City business services staff roles, more at risk

Baker McKenzie is the latest firm to scale down its London business support staff in favour of low-cost centres, scrapping at least 46 City roles and leaving another 33 at risk.

The move comes eight months after the firm launched a review of its London professional and business services (PBS) staff, estimated to include 350 people.

After 97 of those roles were identified as at risk, 15 people were made redundant and a further 31 were moved to different roles within the firm.  A further 18 people had previously resigned, with a spokesperson for the firm saying many of them were replaced without specifying how many.

The firm said in a statement that 33 people remain in roles at risk. The firm is seeking alternative positions for them and offering redundancy packages to those where there are not.

A spokesperson added: ‘The ongoing review in London is part of the firm’s three-year global reorganisation of our PBS functions, which includes the creation of new roles, growth in our service centres and investments in new technologies and new services. We are grateful to our people in London and globally for their engagement, professionalism and patience throughout this process to date. We continue to work with those still in roles at risk and in cases where suitable alternative roles are unavailable will offer an enhanced redundancy package.’

Shortly after launching the review of its London PBS staff in October last year, the firm announced the launch of a low-cost hub in Florida, which will be operational by 2020 and create more than 300 roles, followed by another in Buenos Aires in March this year, expected to employ 200 people.

A number of other firms have put their City support roles under review amid a move towards low cost centres.

Taylor Wessing announced in January it was considering making 13% of its 270-strong City team redundant by the end of 2020 as it looked to create 35 new business services roles in its Liverpool base. Last July, Ashurst slashed 54 of its 100-strong secretarial team and Ince & Co announced 32 redundancies, including 25 business services staff and seven fee earners.

Hogan Lovells also cut 54 of around 500 business services roles in June, moving most of them to low-cost hubs in Birmingham, Johannesburg and Louisville.

marco.cillario@legalease.co.uk

Legal Business

Market Report: Competition Litigation – Healthy competition

Market Report: Competition Litigation – Healthy competition

With the trickle of follow-on damages claims after high-profile competition investigations threatening to become a flood, Dominic Carman examines how firms are preparing their clients for battle

‘We have talked about competition litigation emerging as a work stream in civil litigation for a long period of time, but we have seen a real boom in activity over the last few years,’ says Francesca Richmond, partner at Baker McKenzie. ‘Defendants to regulatory investigations should now expect civil claims to be filed against them and account for that in their overall strategy.’

Legal Business

Sponsored briefing: The future of competition and consumer litigation – a brave new world?

Sponsored briefing: The future of competition and consumer litigation – a brave new world?

Francesca Richmond discusses recent developments in EU competition litigation

Litigation of claims to recover cartel damage is now a standard consideration when assessing risk across jurisdictions and setting corporate strategy. It is questionable whether the increase in claim activity reflects a trend to recovery for consumers and business, or simply demonstrates exploitation of opportunity by claimant law firms and funders. However, the fact remains that the volume and scale of litigation on competition issues demands strategic weight and attention.

Legal Business

‘A true leader and a good friend’ – Bakers confirms shock death of global chief Paul Rawlinson

‘A true leader and a good friend’ – Bakers confirms shock death of global chief Paul Rawlinson

Baker McKenzie is in mourning following the unexpected death of chair Paul Rawlinson, who passed away on Friday (12 April). The veteran intellectual property (IP) specialist Rawlinson took the helm of the 4,700-lawyer giant in October 2016. He took what was originally expected to be a temporary leave of absence in October last year citing exhaustion.

In a statement released on Sunday evening (14 April) a Bakers spokesperson said: ‘It is with great sadness that we convey the news of the unexpected passing of Paul Rawlinson, the firm’s global chair, on Friday.’ 

The spokesperson added: ‘The firm’s thoughts are with Paul’s wife Alison and their two children, whom the firm will be helping through these very difficult times. Our thoughts also go out to the very many friends at Baker McKenzie and outside the firm that worked with and admired Paul. For all of us Paul was a visionary, a true leader and a good friend. He will be greatly missed.’

Latin America chair Jaime Trujillo, who was appointed acting chair in October 2018, will continue in his role while a permanent successor is appointed.

Bakers-bred, Rawlinson joined the firm in 1986, making partner in 1996, and by 2004 was leading the firm’s global IP practice group, building a reputation for developing relationships with marquee clients such as Unilever, L’Oréal and British American Tobacco. In 2013 he took over as London managing partner and three years later launched his bid to replace Eduardo Leite and become the firm’s first British global chair.

Well regarded by the firm’s current and former partners, he went on to implement the firm’s 2020 strategy, which focused on integrating Bakers across three profit pools, increasing its profitability and growing the firm’s transactional practices in London, New York and China.

He was also viewed as having helped to usher in a more ambitious stance at the global giant, backed by renewed investment. Under his watch, Bakers this year posted one of its best financial performances in recent history as revenue grew 10% to $2.9bn and partner profits surged 13% to $1.44m.

marco.cillario@legalease.co.uk

Legal Business

International round-up: Bakers launches fourth low-cost hub in Argentina as Cooley targets capital markets with Hong Kong office

International round-up: Bakers launches fourth low-cost hub in Argentina as Cooley targets capital markets with Hong Kong office

Baker McKenzie is pushing on with its profitability drive having picked Buenos Aires for its fourth business service centre some five months after putting an estimated 350 London-based support staff under consultation.

On the other side of the Pacific in an unusually expansive move, Cooley has today (12 March) confirmed it will open in Hong Kong after hiring Skadden Arps Slate Meagher & Flom’s corporate partner Will Cai.

Bakers’ new Buenos Aires global services centre will open in 2020 as an independent entity and employ 200 people led by director Gabriel Pardo. Next year the firm will also open its North American low-cost hub in Tampa, Florida, which will host 300 roles.

The firm announced the North American centre within weeks of putting all of its London professional and business services (PBS) staff under consultation as it kicked off a three-year global reorganisation of its services delivery.

‘The legal industry is facing increasing competition and challenges,’ said a spokesperson for the firm. ‘This demands faster, commercially sound responses, more competitive prices, better quality, continuous innovation and higher levels of business knowledge for clients.’

Increasing profitability is a long-stated aim of the firm, which has an unofficial goal to bring profit per equity partner (PEP) to $2m. It made significant headway in that direction last year, as partner profits rose 13% to $1.44m amid 8% revenue growth to $2.9bn.

The centres in Tampa and Buenos Aires follow the opening of a service hub in Manila in 2000 and in Belfast in 2015.

Meanwhile, Cooley’ Hong Kong office will be the firm’s third in Asia and 15th worldwide, with the launch announced a few weeks after it opened a second European base in Brussels.

‘We have been talking about expanding in Asia for a while,’ Cooley’s London managing partner Justin Stock told Legal Business, pointing to the firm’s launches in Beijing last year and Shanghai in 2011.

The office will initially be focused on capital markets work with a small team led by US and Hong Kong-qualified Cai, who had been a partner at Skadden since 2014. ‘Hong Kong’s capital markets, particularly around life sciences and tech companies, is becoming really important, and given the success we have in both those sectors we need to be in Hong Kong,’ added Stock. ‘It was a relatively easy decision.’

The firm will also be looking at venture funds and investment funds, and Stock said he expected it to add several partners and lawyers quite quickly, although it will remain below the 50-lawyer mark in the short term.

Starting the year with two international office launches in as many months is highly unusual for Cooley, whose partnership has traditionally been conservative when it comes to expanding out of the US.

But its recent financial performance confirms it is a good time to invest. The firm’s revenue rose 14% to $1.23bn in 2018, while PEP grew 14% to $2.4m.

marco.cillario@legalease.co.uk

Legal Business

White & Case loses two capital markets veterans as Bakers ramps up City transactional investment

White & Case loses two capital markets veterans as Bakers ramps up City transactional investment

Baker McKenzie has kicked off 2019 with another step towards its long-stated aim of beefing up its London transactional capabilities, hiring capital markets partners Rob Mathews and David Becker from White & Case.

Veteran Mathews played a key role in White & Case’s high-yield practice and led on a number of large mandates including the $10bn refinancing of Wind Tre in 2017.

A partner at the US firm for more than a decade, Becker’s work has included representing Bank of America Merrill Lynch, Barclays, BNP Paribas, Citi, Credit Suisse, HSBC, Mizuho Bank, Morgan Stanley, RBC and Sumitomo Mitsui on the financing of Teva Pharmaceutical’s $40.5bn acquisition of Allergan Generics.

Bakers’ EMEA capital markets head Adam Farlow said the two hires would add ‘underwriter and lender side power’ on the issuer side and ensure its leveraged finance practice is more balanced.

The departures are a rare reversal in White & Case’s City expansion of late, with hires including Weil Gotshal & Manges’ well-regarded head of banking, Mark Donald in November and Herbert Smith Freehills infrastructure partner Simon Caridia the previous month.

For Bakers, Mathews and Becker are the latest in a series of hires since chair Paul Rawlinson unveiled his strategy to recruit up to 20 transactional partners in the City by 2020.

Hires last year included finance partners Matthew Dening from Sidley Austin and Matthew Cox from Ropes & Gray.

The firm last year posted one of its best financial performances in recent history as revenue rose 8% to $2.9bn and partner profits surged 13% to $1.44m in the year to 30 June 2018.

But the firm announced in October Rawlinson would step back temporarily due to exhaustion, with Latin America chair Jaime Trujillo taking over as acting global chair in the interim. There is no set date for Rawlinson’s return although the firm expects he will do so soon.

In a busy start to 2019 for the City’s lateral recruitment market, Clifford Chance announced the hire of former Barclay’s head of incentives Andrew Patterson. He originally trained at City firm Ashurst and practiced as an incentives lawyer there until his move to Barclays in 2010.

marco.cillario@legalease.co.uk

For more on Rawlinson’s strategy for Baker McKenzie, see ‘Waking the giant’ (£)