Legal Business

Market Report: Competition Litigation – Healthy competition

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Litigation Baker McKenzie

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?

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Litigation Baker McKenzie

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

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Baker McKenzie

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

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Strategic recruitment Baker McKenzieCooley

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

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Strategic recruitment Baker McKenzie

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’ (£)

Legal Business

Deal watch: Busy year-end as Japanese group buys Swiss power grid and Malaysian funds invest in Battersea

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Dealwatch Addleshaw GoddardBaker McKenzieFreshfields Bruckhaus DeringerLinklaters

City deal teams are having a busy run-up to Christmas, with Baker McKenzie, Freshfields Bruckhaus Deringer, Addleshaw Goddard and Linklaters leading on two multibillion-dollar deals.

Bakers’ London private equity head David Allen and corporate partner Jannan Crozier led a team advising Hitachi as the Japanese conglomerate acquired 80.1% of Swiss giant ABB’s power grid division for around $6.4bn.

Hitachi’s largest ever acquisition, with an enterprise value of $11bn including net debt, saw Freshfields’ M&A partners Piers Prichard Jones and Stephen Hewes advise ABB, which will retain control of 19.9% of a business spread across more than 100 countries and employing over 130,000 people.

‘The impact of this deal will be felt for generations to come,’ Crozier told Legal Business, pointing to the ability of the Japanese group to combine its technology with the infrastructure acquired from ABB and bring energy to areas of the world where it is more difficult to get to. ‘They will be able to revolutionise the way power is brought to consumers.’

Swiss firm Homburger’s M&A partners Claude Lambert and David Oser also acted for ABB, which is looking to simplify its business structure and focus on automation technology.

The Swiss group is able to require Hitachi to buy the remaining 19.9% of the power grid business in three years’ time. Under a so called ‘put and call’ provision, Hitachi will also be able to require ABB to sell its remaining stake in the business.

‘In the short term we will provide the maximum stability to the company through this joint venture, but in three years’ time we will have the flexibility to do that,’ Crozier said. The Bakers team was supported by Tokyo partners Akifusa Takada and Yutaka Kimura.

The acquisition caps off a busy 2018 for Bakers, which was active on numerous large deals over the last few months. Earlier in December the firm acted for Unilever on its £3.1bn acquisition of malted drink brand Horlicks from GlaxoSmithKline.

Elsewhere, the redevelopment of Battersea Power Station in London provided rich pickings for a trio of City firms as Malaysia’s asset manager Permodalan Nasional Berhad and state pension fund The Employees Provident Fund took a £1.6bn stake in the £9bn project.

Addleshaws’ real estate partner Simon Tager led the team acting for Battersea Power Station Development Company on the sale of the commercial assets of phase two of the project, including a six-acre site hosting the former coal power station on the south bank of the river Thames. Addleshaws’ Leona Ahmed, Luke Harvey, Hugh Lauritsen and Lee Sheldon also worked on the deal, while the buyers instructed Linklaters’ real estate partner Patrick Plant.

Phase two, which will include Apple’s new UK headquarters, is due to complete by the end of 2020.

marco.cillario@legalease.co.uk

Legal Business

Deal watch: Bakers and Slaughters drink in £3.1bn Horlicks acquisition as AJ Bell IPO yields dividends for Pinsents and Addleshaws

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Addleshaw GoddardBaker McKenziePinsent MasonsSlaughter and May

As the market hunkers down for the festive season, GlaxoSmithKline’s (GSK) £3.1bn sale to Unilever of Horlicks has warmed the cockles of City teams from Baker McKenzie and Slaughter and May, while Pinsent Masons and Addleshaw Goddard have won key mandates on what is likely the year’s last big London listing.

The GSK deal sees it sell its malted drink brand Horlicks and other consumer healthcare nutrition brands to Unilever and includes the merger of listed GSK Consumer Healthcare India with Hindustan Unilever. GSK will also sell its 82% stake in GlaxoSmithKline Bangladesh in the deal, which is slated to complete by the end of next year.

Bakers stepped up for long-standing client Unilever on the deal, with a London team led by corporate partner David Scott alongside partners Steve Holmes, Sue McLean and Michelle Blunt, who advised on the IP and tech aspects of the deal, as well as tax partner Alistair Craig.

Indian firm Cyril Amarchand Mangaldas advised Unilever on Indian law, while Slaughter and May, with a team including partners David Johnson, Simon Nicholls and Christian Boney, acted for GSK.

Last year, Bakers advised Unilever on its acquisition of the personal care and homecare brands of Quala, the Latin American consumer goods company, as well as it joint venture with Europe & Asia Commercial Company in Myanmar.

Scott told Legal Business: ‘It was a pleasure to partner again with our great client, Unilever, and our friends at Cyril Amarchand Mangaldas, on this terrific acquisition, including an iconic brand such as Horlicks.’

Meanwhile, Slaughters earlier this year advised repeat client GSK on its $13bn acquisition of Novartis’ 36.5% stake in their consumer healthcare joint venture.

In other news, Pinsents secured a notable win to advise Manchester-headquartered AJ Bell, one of the largest UK investment platform providers, on a proposed listing on the London Stock Exchange which could raise up to £675m.

The price range for the offer has been set at £1.54 to £1.66 per ordinary share, implying a market capitalisation on admission of between £626m and £675m.

Pinsents corporate partner Julian Stanier led the team advising the company, which is also offering customers the opportunity to apply for shares via the AJ Bell website.

Stanier told Legal Business the IPO is slated to be the last big London listing of 2018 after what has been a choppy year for the capital markets.

‘It’s the same with all companies looking to list. If there is a growth story and strong management team, investors will back it, and we are confident that will be the case with AJ Bell.’

Stanier points to the customer offer alongside the institutional offer as being a point of interest.

He added: ‘The quasi-retail element is not the most common, although it has appeared before, such as in Ocado’s 2010 IPO. What’s interesting is that the whole customer offer can be done completely through AJ Bell’s website.’

Shares are due to be admitted on 12 December.

Addleshaws, meanwhile is advising Numis as sponsor, financial adviser, sole bookrunner and broker to AJ Bell on the float, led by partners Giles Distin in London and Richard Lee in Manchester.

The firm pointed to other notable listings it has worked on in the last two years, including the IPOs of Mind Gym, Sumo Digital, The City Pub Company and Ramsdens.

Distin commented: ‘Whilst UK IPO activity has generally been more muted this year, partly due to volatile market conditions and fears around Brexit, several sizeable and successful businesses have managed to complete a flotation. Like Numis, which has remained very active in the IPO market this year, we’re pleased to have been busy throughout 2018 advising on IPOs and other equity capital markets work.’

nathalie.tidman@legalease.co.uk

Legal Business

Baker McKenzie chair Rawlinson temporarily steps back due to ‘exhaustion’

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Leadership Baker McKenzie

Paul Rawlinson (pictured) has stepped back from his responsibilities as Baker McKenzie global chair due to a personal medical issue.

The firm’s executive committee announced to the partnership today (22 October) that Rawlinson will be taking a leave of absence based on the advice of his doctor and in response to exhaustion.

There is no set date for Rawlinson’s return although the firm expects he will do so soon. Latin America chair Jaime Trujillo will serve as acting global chair in the interim.

A spokesperson for the firm said: ‘Paul has decided to take a step back from firm leadership and client responsibilities to make his health and recovery his immediate priority.’

They added the firm looked ‘forward to welcoming him back soon. Out of respect for Paul and his family, we are unable to provide any additional details at this time.’

The news comes a few days before the firm’s global partnership conference in Washington DC and a few days after Rawlinson’s second anniversary at the helm of the firm. The conference will go ahead as planned.

The firm’s first British chair was in the middle of the implementation of his 2020 strategy, which has a focus on integrating Bakers across three profit pools, increasing its profitability and growing the firm’s transactional practices in London, New York and China.

The firm’s former London head, Rawlinson took over as chair from Eduardo Leite in October 2016.

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.

Bakers has also been dealing with criticism in the last few months for allowing one of its partners to take on senior roles amid accusations the partner in question sexually assaulted an associate in 2012.

marco.cillario@legalease.co.uk

For more on Rawlinson’s strategy see ‘Waking the giant’ (£)

Legal Business

Bakers launches low-cost hub in Florida… just after redundancy consultation with 300 City staff

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Baker McKenzie

Baker McKenzie has announced plans for its third low-cost centre two weeks after putting what is thought to be more than 300 City business staff under consultation in a global efficiency drive.

The firm’s new global hub in Tampa, Florida, will be operational in 2020 and create more than 300 roles – a similar headcount to the firm’s London professional and business services (PBS) staff put under review earlier this month.

Again similarly to London’s PBS staff, the new roles will cover legal services, finance, IT, knowledge management, operations, business development, marketing and communications. The firm’s two other low-cost hubs are in Manila and Belfast.

‘We were looking for an exceptional pool of talent, a meaningful cultural fit and a global outlook that will work well with our business needs – Tampa ticked all those boxes,’ said the firm’s former Washington DC and New York chief operating officer, Jamie Lawless, who will now lead the new hub.

Global chair Paul Rawlinson (pictured) added: ‘Our centres, and our plans to grow them, show we are serious about innovating to provide faster, more efficient and more cost-effective services.’

Bakers announced a three-year global reorganisation of its service delivery earlier this month. A decision has yet to be reached as to how many City roles will go as a result of the process.

Making Bakers more profitable is a long-stated aim of Rawlinson, while the firm has an unofficial goal to bring its profits per equity partner (PEP) to $2m. It made significant headway in that direction this year, as partner profits rose 13% to $1.44m amid 8% revenue growth to $2.9bn.

Such moves underline the spirit-dampening trend sweeping global law of business service staff being axed and jobs relocated to cheaper locales in efficiency drives, while lawyers are left largely untouched.

A number of firms have put their City support staff under review amid increasing pressure to maximise efficiency. In July, Ashurst slashed 54 of its 100-strong secretarial team and Ince & Co announced 32 redundancies.

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

Cynics will note that such moves happen at the same time law firms are loudly trumpeting initiatives to expand their skills beyond the law.

marco.cillario@legalease.co.uk

For more analysis on Baker McKenzie see ‘Waking the giant’ (£)