Legal Business

Jones Day’s EMEA private equity ambitions grow with hire of BLP’s Weir and McKeeve

Recognised as a strong choice for UK mid-market buyouts and cross-border transactions, Jones Day’s London private equity team has expansive ambitions with the hire this week of Berwin Leighton Paisner (BLP) corporate finance partner Michael Weir on the heels of former BLP colleague Raymond McKeeve.

Weir, who was made a partner at BLP in 2012 and specialises in private equity with a particular leaning towards large real estate funds, joins the top 10 Global 100 firm three months after McKeeve, who he worked with on mandates including Dunedin’s £44m buyout of Red Commerce in 2011, and Darwin Private Equity on its £10m acquisition of organic baby food business Plum Baby in 2010.

He will work no doubt be working closely with Jones Day’s London-based partner Neil Ferguson, a rated private equity lawyer with a particular focus on real estate related transactions including joint ventures, fund formations and reconstructions. Adam Greaves, head of Jones Day’s UK private equity practice, said: ‘[Weir’s] impressive industry experience, particularly working with large real estate funds, will significantly add to the firm’s existing capabilities and adjacent service lines.’

The hires come as 2357-lawyer Jones Day, which in the UK is rated by Legal 500 as a sixth-tier private equity practice (in common with BLP), looks to extend its capability across Europe, with now said to be a good time to do it.

Greaves told Legal Business: ‘In a boom market it is hard to get good people to answer the phone. Now people are more receptive.’

Jones Day is looking increasingly to the emerging markets, with Greaves adding: ‘An increasing number of private equity firms and other asset managers are looking beyond their traditional markets to high-growth and emerging economies, including countries whose legal systems are still maturing.

‘This creates opportunities for global law firms like Jones Day, with capabilities across all relevant and adjacent service lines, to deliver real value and the addition of Raymond will help us do that.’

Further European growth is on the cards and this year Jones Day enjoyed a 4% increase in revenues in 2012-13 and a 5% increase in profit per equity partner (PEP) to $1.7bn and $915,000 respectively.

In January, the firm hired a banking team from White & Case into its German office, including Annica Lindegren, Ulf Kreppel and Nick Wittek.

As for BLP, the firm is regrouping and consolidating after a difficult year that has seen its profits drop by almost 40%.

Recent departures include Richard Todd, who left the 786-lawyer firm to join Mayer Brown’s banking and finance group earlier this week; former Managed Legal Services head Patrick Somers who has joined DLA Piper and contentious tax head Liesl Fichardt who left for Clifford Chance.

david.stevenson@legalease.co.uk

sarah.downey@legalease.co.uk

Legal Business

Back to school: lateral hire market picks up with renewed vigour as autumn arrives

BLP sees three partners depart; London hires hit double figures for September

The lateral hire market in the City picked up sharply in September, with the number of notable hires announced in the first few weeks of the month comfortably into double figures.

Berwin Leighton Paisner (BLP) saw a gloomy summer draw to a close with the departure of three significant names: head of managed legal services Patrick Somers to DLA Piper; contentious tax partner Liesl Fichardt to Clifford Chance; and commercial technology specialist Adam Rose to Mishcon de Reya.

Legal Business

Financial results 2013: BLP reveals PEP slump of 39%

Following an unusual waiting game that has ensured Berwin Leighton Paisner’s profit figure has remained a topic of growing interest since the financial reporting season ended, the top 50 firm has confirmed that its profits are down by nearly 40%.

The 786-lawyer firm has revealed a 39% drop in profit per equity partner (PEP) from £660,000 to £401,000 and a 38% drop in net profits to £39.4m. This is the most significant drop in PEP of the LB100 top 50 firms over the past year, following 332-lawyer Trowers & Hamlins, which saw its PEP fall by 37% to £304,000. It is the second largest drop in PEP of both halves of the LB100 after Manches in 93rd place, which recently confirmed it is in merger talks with Penningtons and which saw its PEP fall by 43% to £134,000.

BLP’s profit drop also comes in a year that saw the firm’s revenue fall by 5% to £233m, placing it just inside the LB100 top 20 at number 19, the worst financial performance of the top 25 law firms.

The results follow the firm’s sustained and aggressive lateral hiring programme, particularly during 2010 and 2011, together with office launches in jurisdictions including Germany and Beijing.

A spokesperson for the firm said: ‘2012/13 was a year of integration and consolidation following rapid international growth. We did continue with investments but suffered from the weak transactional market which had an impact on turnover, PEP and profit.’

The confirmation of this drop in profitability has been preceded by the departure of a number of big-name lateral hires including contentious tax head Liesl Fichardt, who left for Clifford Chance this month, and head of private equity Raymond McKeeve, who left for Jones Day in August.

Other recent departures include Managed Legal Services head Patrick Somers, who joined DLA Piper this month, and Allen & Overy leveraged finance partner Andrew Bamber, whose destination is as yet unknown.

The firm this year completed a redundancy round, which in May resulted in the loss of 102 jobs including 58 legal staff and 44 secretarial staff with the aim of reducing salary costs by 15%.

david.stevenson@legalease.co.uk

Click here for further comment on the lingering enigma of BLP’s bad year 

Legal Business

Comment: The lingering enigma of BLP’s bad year

Comment: The lingering enigma of BLP’s bad year

Success is a mysterious beast. Hard to define, built up over years and often the result of a formula even its creators struggle to understand. But failure, well, that’s simple. When a law firm runs into difficulties you can point to bickering partners, problem offices, a weak client-base or an unworkable strategy. Whatever it is, there’s usually a clear narrative to explain the situation.

As such, the current rough patch at Berwin Leighton Paisner (BLP) is striking less in itself than because the firm seems surprised by – and unable to entirely explain – the situation.

When BLP announced in May that it was consulting on deep redundancies, by many accounts even a number of senior partners at the firm were caught unawares. After all, this is one of the most upwardly mobile firms of the last decade, having in 2001 secured probably the most successful UK merger since Clifford Turner hooked up with Coward Chance. BLP then substantially delayed announcing its financial performance – and still appears unsure on the exact profitability picture for 2012/13. It is clear that profits have fallen sharply and revenues are down 5% – by some margin the worst performance this year in the top 25.

Obviously, trading conditions are dire but, given BLP’s enviable long-term performance, the economy hardly explains it. Recent years have seen successful expansion at BLP in high-end litigation and tax – two classic hedge product lines – while the firm’s core real estate business was until now widely viewed as having had a sensational recession, colonising the top of the market as large City firms scaled back in property.

Corporate and finance are more of a mixed bag. Some felt its lucrative real estate finance team never recovered from an unpopular decision to move the team into its property practice, or the related departure of a five-partner team led by Mark Waghorn to Simmons & Simmons. Likewise, the promiscuous lateral recruitment maintained since the early 2000s ushered in too many questionable CVs alongside the genuine talent (though there is nothing remotely new about junior equity partners at BLP moaning about laterals and income guarantees).

As best as can be worked out, what is at play is a combination of some softening in its property practice, a few key clients reducing the work going to the firm and the expense of its belated international push, and that guarantee-backed lateral programme.

Yet BLP still struggles to articulate the situation or the steps taken to remedy it. Aside from its excessive affection for partner recruitment, BLP has been one of the most distinctive and impressive performers of recent years, a track record that its recent difficulties shouldn’t obscure. BLP also asserts that its 2012/13 performance was a ‘blip’ with the firm posting a strong first quarter in the current financial year. But it should acknowledge what has caused this current reverse, draw the line and concentrate on regaining its entrepreneurial form without delay. The ‘nothing to see’ mantra is not only unconvincing, it just leaves the mystery to unhelpfully linger.

alex.novarese@legalease.co.uk

Legal Business

Clifford Chance snares BLP’s contentious tax head

Clifford Chance snares BLP’s contentious tax head

Senior exits from Berwin Leighton Paisner (BLP) continue apace as Clifford Chance has confirmed the hire of Liesl Fichardt, the head of BLP’s contentious tax practice.

Announced today (4 September), the loss is a blow to the tax team at the 782-lawyer BLP as heavyweight Fichardt, who joined the firm in 2008, is a veteran of the legal market. Acknowledged in the Legal 500 as a ‘masterful team head,’ she also practised as a tax barrister for 13 years before joining Dorsey & Whitney in 2006.

The news comes just two weeks after the announcement that corporate finance partner and global head of private equity Raymond McKeeve departed to join US firm Jones Day’s London office, while longstanding head of the commercial and technology group, Adam Rose, is to join Mishcon de Reya after 23 years at the firm.

Financially, the firm has reported a drop in revenues of 5% down to £233m, the worst financial performance of the top UK 25 firms. However, there is still no word on its profits, although profit per equity partner understood to be down by at least 35% to £430,000.

On Fichardt’s appointment, David Harkness, global head of Clifford Chance’s tax, pensions and employment practice, said: ‘Liesl’s extensive contentious tax and trial experience will be a valuable addition to our existing strong tax team both in London and globally. The current tax environment is becoming ever more complex for large organisations as they face greater amounts of legislation, including the General Anti Avoidance Rule, an enhanced disclosure regime and shifting public and government expectations.’

‘As a result we are seeing increasing demand from clients for advice and help on resolving their tax disputes and we expect this is an area that will continue to grow for the Firm’s market leading practice.’

Fichardt added: ‘CC’s leading reputation in tax and global reach will enable me to provide quality advice to clients in dealing with and resolving their tax disputes in the UK and internationally.’

‘Their offering combines unrivalled expertise in taxation and regulatory matters, extensive experience in dealing with tax authorities in resolving disputes and litigating in the courts and the ability to advise clients in a commercial and sensible manner on how best to deal with risk – within one global team.’

Sarah.downey@legalease.co.uk

Legal Business

The lingering enigma of BLP’s bad year

The lingering enigma of BLP’s bad year

Success is a mysterious beast. Hard to define, built up over years and often the result of a formula even its creators struggle to understand. But failure, well, that’s simple. When a law firm runs into difficulties you can point to bickering partners, problem offices, a weak client-base or an unworkable strategy. Whatever it is, there’s usually a clear narrative to explain the situation.

As such, the current rough patch at Berwin Leighton Paisner (BLP) is striking less in itself than because the firm seems surprised by – and unable to entirely explain – the situation. When BLP announced in May that it was consulting on deep redundancies, by many accounts even a number of senior partners at the firm were caught unawares.

Legal Business

Compliance drive – BLP’s financial services partner joins Barclays investment arm as EMEA head

Compliance drive – BLP’s financial services partner joins Barclays investment arm as EMEA head

As leading retail and investment banks bolster their internal compliance functions it has emerged that Berwin Leighton Paisner’s (BLP) financial services partner Nick Kynoch has joined Barclays Investment Bank as the head of regulatory compliance for Europe, the Middle East and Africa (EMEA).

The hire comes after Hector Sants, former chief executive of the Financial Services Authority, joined Barclays in December to the newly-created role of head of compliance and government and regulatory relations, overseeing all compliance activities across Barclays, meaning for the first time all compliance staff within the bank report to one individual and operate independently of business and regional management teams.

The status of compliance teams has been elevated within major banks in the wake of a number of scandals including Libor-rigging and mis-selling of payment protection insurance, in which Barclays has been implicated.

Barclays’ careers page says: ‘A career in compliance today is particularly interesting and high profile given the scale of regulatory change facing in the financial services industry and challenging economic conditions. We face tougher and more intrusive regulatory conditions than ever before.’

In April, Deutsche Bank, which has also faced allegations over Libor-rigging, announced the appointment of Clifford Chance partner Daniela Weber-Rey as chief governance officer and deputy global head compliance in its Frankfurt office.

Kynoch, whose clients included Bank of New York Mellon and Northern Trust, joined BLP from Mayer Brown in 2011 during a period when the firm was building its financial services and markets group through a series of lateral hires. In the same year, BLP hired DLA Piper’s former financial services head Daren Allen and former Pinsent Masons regulatory partner Jacob Ghanty, both of whom remain at the firm.

Kynoch left BLP in April, meaning his departure pre-dates that of private equity head Raymond McKeeve, who, it emerged last week, is leaving to join Jones Day in London. Other high profile lateral hires to have left the firm this year include leveraged finance partner Andrew Bamber, who joined from Allen & Overy in 2009 and corporate partner Patrick Somers who joined from Hammonds in 2005.

BLP’s financial services team is highly regarded, led by rated partner Sidney Myers.

This latest departure comes after the firm reported a drop in revenue of 5% down to £233m with profit per equity partner understood to be down by at least 35% to £430,000.

A spokesperson for BLP said the firm had no comment to make on the departure other than to wish Kynoch well.

david.stevenson@legalease.co.uk

Legal Business

BLP loses head of private equity Raymond McKeeve to Jones Day

With all eyes on Berwin Leighton Paisner (BLP) the news that corporate finance partner and global head of private equity Raymond McKeeve has left to join US firm Jones Day’s London office could, in many ways, not have come at a worse time.

Acknowledged by Legal 500 as ‘a leading private equity specialist’ McKeeve advises many of the leading private equity houses, including Blackstone Private Equity, Darwin Private Equity and KKR.

McKeeve, who joined BLP in 2009 during a sustained period of intense lateral hiring by the firm was, alongside Graham White, a leading figure in Linklaters private equity team before joining Kirkland & Ellis in 2006. He joined BLP after a period working as an investment professional for property mogul Robert Tchenguiz.

At Jones Day he will be working with Adam Greaves, Jones Day’s UK private equity chief, who said he is ‘delighted to welcome a lawyer of Raymond’s calibre to our growing EMEA private equity and finance practice’. Partner-in-charge of London for Jones Day, John Phillips, added: ‘With Raymond’s wealth of experience advising the private equity community both in the UK and internationally, he will be an exceptional asset to our global private equity client base especially in this changing and increasingly complex deal environment.’

McKeeve’s departure from BLP comes after it emerged last month that lateral corporate and finance hires Patrick Somers and Andrew Bamber had both left the firm. BLP is also engaged in a redundancy consultation which saw it cut 102 jobs last month.

Financially the firm has reported a drop in revenues of 5% down to £233m, the worst financial performance of the top UK 25 firms. However it has remained tight lipped on its profits, with profit per equity partner understood to be down by at least 35% to £430,000.

 

david.stevenson@legalease.co.uk

Legal Business

Real estate round up: Hogan Lovells, BLP and Nabarro show credentials while Mishcons makes key hire

Real estate round up: Hogan Lovells, BLP and Nabarro show credentials while Mishcons makes key hire

Unsurprisingly, what little major real estate work that is around has found its way to the usual trio of law firms – Berwin Leighton Paisner, Hogan Lovells and Nabarro. And while the usual suspects continued to do what they do best, 2012 Legal Business real estate team of the year, Mishcon de Reya, has strengthened its team with a key lateral hire.

Hogan Lovells is representing fellow international firm CMS Cameron McKenna over plans to move its entire London operation to the newly developed Cannon Place site above Cannon Street station, where it has agreed to take a 25-year lease, when it vacates its existing premises at Mitre House in 2015. The scheme is a joint venture between international real estate firm Hines and Network Rail.

The Hogan Lovells team was led by real estate partner Dion Panambalana, alongside infrastructure and project finance partner Gillian Thomas, while Berwin Leighton Paisner’s commercial real estate partner Alan Wight represented the team acting for the landlord.

An enthusiastic Panambalana said: ‘We are delighted to have been selected to act for CMS Cameron McKenna on what is one of the major lettings of 2013. We think the space is great too.’

Elsewhere, Nabarro advised wealth and investment manager Walker Crips on the establishment of its regulated short-term lending fund launched last week.

As the first regulated bridging finance investment fund in the UK, the initiative is designed to generate a target annual income of 8.4% by providing credit to short-term lending companies specialising in residential property, essentially giving a predictable and sustainable income to investors and much needed capital to property developers, said James Allen, manager of the fund at Walker Crips.

Nabarro’s head of alternative investment funds Andrew Wylie said: ‘We have worked hard with Walker Crips to create a unique fund in the regulated market. As well as being regulated by the Financial Conduct Authority, the fund is also a Tax Elected Fund with a structure that satisfies the rules set out by HM Revenue & Customs for this type of product.’

‘Whilst being tailored to bridging finance in this case, we believe the structure we have created could be applied successfully in other lending markets.’

Meanwhile, Mishcon de Reya has hired Olswang’s head of construction Nick Lane as a real estate partner. Lane will join on 2 September and will sit within the firm’s property litigation group as a contentious construction specialist.

His appointment is part of Mishcons growth strategy in disputes, or as Kevin Gold told Legal Business in May, a growth strategy in which it aspires to become ‘one of the leading litigation firm in London.’

Mishcon, with growth rates making it the envy of its peers of late, currently has a three-year strategy for 2013-16 in which has a rather conservative revenue target of £100m by 2016. Its turnover is currently £88.4m.

Speaking of Lane’s appointment, head of real estate Nick Doffman said: ‘Contentious work accounts for more than half of the firm’s business and has become an area of strength for our real estate department.’

‘Our property litigation team has performed beyond expectations during the downturn, and Nick will be instrumental in helping us to grow our existing contentious construction capability.’

Sarah.downey@legalease.co.uk

Legal Business

One trick pony – BLP to retain MLS in wake of partner departures

‘Two people leaving doesn’t mean the whole business collapses,’ says Neville Eisenberg, Berwin Leighton Paisner’s (BLP) managing partner of 14 years, of the latest departures to hit the firm and, in particular, its Managed Legal Services (MLS) division.

MLS, which has struggled to make any headway in its model of absorbing in-house teams and effectively taking over the running of their legal function, has lost Patrick Somers, Thames Water’s relationship partner who helped to lead the project, as it also emerged that the firm’s star lateral hire Andrew Bamber, an acquisition finance partner who joined from Allen & Overy in 2009, has left the firm.

Corporate partner Keith Stella has taken over the Thames Water relationship, working alongside corporate head John Bennett, who has been heavily involved since the beginning of the project.

As is becoming a feature of BLP 2013, the firm is as tight-lipped about the circumstances behind the partners’ departure and their destination as it is about its profit figure this year (said to be down by up to 50%), inevitably resulting in speculation that things are worse than the firm would like the market to believe.

Somers helped to set up MLS in 2010, having joined BLP in 2005 from Hammonds, now Squire Saunders, where he was head of corporate. The model was a bold move and to a great extent ahead of its time, coming as it did well before the Legal Services Act made innovative business models a near everyday occurrence.

The division’s first instruction seemed to herald great things, involving taking on almost the entire legal operations of Thames Water, worth an estimated £5m, leaving only general counsel Joel Hanson with the company.

This contract, a coup for BLP, saw the top 20 firm take over the work from Thames Water’s legal panel, which included A&O, Ashurst, Dentons, DLA Piper, Freshfields Bruckhaus Deringer and Linklaters.

However, unlike BLP’s innovative and market leading flexible staffing model Lawyers on Demand, in which the firm has an 80% stake and generated £9m last year, MLS has subsequently failed to repeat this initial success, missing out on mandates from Yorkshire Water and Colt Technology Services. By comparison, single service retainer models such as Eversheds has with Tyco have fared moderately better. When BLP lost out on Colt’s business in 2011 it was notably to Greenberg Traurig Maher on a single services employment law deal.

Having failed to take off as a concept it appears entirely sensible that MLS is now regrouping around Thames, and also focussing on a more moderate approach to helping existing clients.

More surprisingly, the firm seems determined to retain the idea of MLS as a separate business line, albeit it seems to bear little resemblance to the original concept. Eisenberg told Legal Business: ‘The orientation is changing a bit, previously we were concerned with new opportunities outside of the firm’s regular business. We’re re-orientating the MLS towards our existing clients and developing solutions for them. It’s a slight change in emphasis but MLS continues.’

david.stevenson@legalease.co.uk