Bird & Bird has bolstered its Budapest operations by adding a 20-strong Weil, Gotshal & Manges team, bringing the US firm’s presence in Hungary to an end.
Both parties insisted that the two-partner team move on 1 February was the result of an ‘amicable arrangement’ between the firms rather than headhunting by Bird & Bird.
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The UK’s top law firms have begun disclosing figures on gender pay gaps, with an initial round of numbers showing City giant Linklaters has the biggest gulf between male and female earnings.
The Magic Circle firm on Wednesday (7 February) published its figures for gender pay bands, as required under legislation introduced last year, which showed Linklaters paid its male staff members nearly 60% more in bonuses than women. The firm’s female employees were paid on average 23.2% less than male colleagues. The gap widened to 39.1% when the median figure was considered.
Linklaters’ figures were published as three more top 50 law firms today (8 February) unveiled equivalent numbers: Pinsent Masons, Taylor Wessing and Bird & Bird.
Taylor Wessing had the smallest gap, as the average hourly pay was 13.48% higher for men, rising to 32.1% on a median basis. In comparison, female staff at Bird & Bird earned on average 14.5% less per hour than their male counterparts, a figure that grows to 27.6% when earnings are ranked on a median basis.
The average pay gap at Pinsents was significantly higher at 22.4%, which the firm said was due to its regional office network resulting in lower rates for bottom-earners. However, the firm had the lowest median gender pay gap of the group at 22.4%.
CMS has already announced its figures, demonstrating that the average UK hourly earnings rate for women is 17.3% lower than men, while the median average hourly rate was 32.8% lower. CMS had the lowest mean average gap in terms of bonuses at 26.9%, while the firm’s median gap was at 30.4%.
Figures for the group were lower than the mean and median pay gap for the legal sector overall, which the Office for National Statistics estimates at 24% and 25.7% respectively.
The disclosures cover all business support staff and associates and demonstrate the position as of 5 April 2017. All UK companies with more than 250 staff are required to publish such figures by 4 April 2018.
All the law firms profess confidence that they are paying male and female employees the same for equivalent jobs. They gave broadly similar reasons for their gender pay gaps, pointing to the fact that there were more women in less well-paid roles and a higher number of part-time female lawyers.
At Linklaters, women made up 79.2% of staff in the lowest-earning quartile – which includes secretarial and junior business team positions. In this quartile, the pay gap was 5.96% in favour of women. But in the upper quartile of earners at the firm, women accounted for 44.9% and earned 6.5% less than men.
‘We are confident that we pay men and women fairly for equivalent roles,’ stated Linklaters in a formal announcement, adding that there was a ‘more significant gender imbalance within our lower pay quartile’. ‘This also feeds into our bonus figures because the bonus potential for our secretarial and junior business team roles is generally lower than for our legal and more senior business team roles.’
Bird & Bird – where bonuses paid to women were on average 33.5% lower than those paid to men – stressed that the bonus gap also reflected the higher number of part-time female employees. Only two men worked part-time at the firm last year, compared to 60 women. ‘Unlike the pay gap figures, which are based on hourly rates, the bonus figures are the actual sums paid. This means that those who work part-time or have been on maternity leave for part of the bonus year will have lower bonuses than men carrying out an equivalent role,’ said the firm.
Cynics will argue that law firms have ducked the key issue as they are not required to disclose the gap in earnings between male and female partners. And law firms being fond of preaching high standards while taking the low road of pragmatism are collectively taking it upon themselves to report as little as possible. The jaded may also note that years of publishing poor numbers on female partnership ratios has had little discernible impact on the advancement of women.
While top 20 LB100 firms Bird & Bird and Clyde & Co both boosted their operating profit in the 2016/17 financial year, LLP accounts show that Bird & Bird also saw its debt grow while Clyde & Co’s rising partner numbers contributed to management and highest-paid member numbers barely increasing.
Bird & Bird’s LLP accounts showed pre-tax profit rose 9% to €103.5m in the year to April 2017 and the highest-paid member brought home €1.08m, up from last year’s €962,000. Turnover was also up 5% to €360.7m.
However the firm also saw net debt soar 24% to €49.3m. However, the firm’s chief financial officer Richard Olver told Legal Business the debt had been reduced to €30m as of 31 October last year.
He added that the increase in debt in 2016/17 was partly due to the figure being ‘slightly understated the previous year due to the financial arrangement for our new London base’, and partly the increased level of business and ‘clients paying more slowly’.
Bird & Bird moved to new premises at 12 Fetter Lane in September 2016. Last year the cost of the new building, equipment and computers was reported at €17m and the firm’s accounts showed debt tumbling 15% to €39.5m.
Olver added that the firm had since April 2017 implemented a ‘concerted effort’ to secure payments from debtors and asked partners to contribute more quickly without increasing the amount of capital required from them.
Bird & Bird has also unveiled its half-year financial results for the 2017/18 financial year, showing turnover rose 6% against the same period last year to €177m. On a like-for-like basis, the increase was 9%, the firm said.
‘The growth has been quite widespread across the areas we are focused on – the core sectors which are changed by technology,’ said chief executive David Kerr. Profit before tax was also up 7% to €52m in the first half of the financial year.
Meanwhile, insurance heavyweight Clyde & Co also filed its LLP accounts this week, recording a 14% uptick in turnover from £447m to £511m. The firm’s operating profit also saw a boost, rising from £117.4m to £124.8m.
Clyde’s highest-paid member took home slightly less than last year however, pocketing £1.37m instead of 2016’s £1.39m. The relatively static figure is explained by a healthy 16% upturn in the number of partners at the firm, which rose from 262 in 2016 to 305 in 2017.
The firm’s key management personnel, described in the accounts as ‘all designated members and a number of senior members and senior managers’ also took home less than last year. In 2016, £12.5m was distributed to the group, compared to £12.4m this time round.
The accounts show that Clyde took out over £76m in new bank loans in 2017, a significant increase on 2016 when the firm took out £10m. But despite the rising bank debt, Clyde’s cash position is more secure, with cash at bank and in hand growing from £18.2m to £28.3m. Clyde has also paid back £30m of the debt, meaning £36m of the loan is outstanding.
An increase in staff costs reflected an increase in headcount for Clyde, with the global number of fee-earners rising from 1,699 to 1,780 and the number of support staff growing from 1,324 to 1,494. Overall, staff costs went up 18% to £237.4m.
Weil, Gotshal & Manges will close its Budapest office after its 20-strong Hungarian team agreed to join Bird & Bird in the latest chapter of the UK top 20 firm’s international expansion.
In what both firms described as the result of an ‘amicable’ discussion, Weil’s Budapest managing partner David Dederick will co-lead Bird & Bird’s local operations from 1 February.
Partner Konrád Siegler will join him together with three counsel, 10 associates and five trainees, bringing Bird & Bird’s Budapest headcount to 29 and making the office a key hub in the firm’s south-eastern European operations.
‘We have reached a very amicable arrangement with Weil, and I am absolutely sure the good and strong relationship will be maintained,’ said Bird & Bird international disputes head Peter Knight, who will head the Budapest operations together with Dederick. However, he denied there were any arrangements in place for a formal collaboration between the two firms on specific projects.
Weil’s former team will complement Bird & Bird’s traditional capabilities in tech and comms, IT, data and IP along with a financial services presence. The team will have a sector focus in energy and utilities, life sciences and healthcare.
Dederick specialises in cross-border M&A, private equity and real estate operations, while Siegler’s practice focuses on finance and capital markets transactions.
‘Budapest will become a pivotal centre to increase our work in eastern Europe and the Balkans and be a powerful centre in central Europe alongside Warsaw, sitting very comfortably with our German presence,’ added Knight. Bird & Bird also has two smaller offices in Slovakia and Check Republic.
A spokesperson for Weil said the firm would ‘continue to support the office during a transition period and would look to refer appropriate work to them’, adding: ‘Over the years, our Budapest office has been involved in milestone transactions in Hungary. We are very proud of all that our colleagues have achieved, and we know they will continue to accomplish great things.’
The announcement marks the latest act in Bird & Bird’s global expansion, one of the key factors behind the firm’s 162% revenue growth over the last ten years .
Last year the firm signed a co-operation agreement with noted Chinese shop AllBright and announced plans for a San Francisco base , as well as launching a second Dutch base in Amsterdam .
As for Weil, the Budapest closure comes one year after the firm announced it was shutting its Dubai arm . The US giant also lost a four-partner Silicon Valley corporate team to Hogan Lovells last spring .
After 26 consecutive years of revenue increases Bird & Bird, which has grown its top line by 162% over the last decade – largely through international expansion – has moved its Asia ambitions further forward by teaming up with noted Chinese firm AllBright Law Offices.
Although the deal is no more than a non-exclusive co-operation agreement, it will see AllBright gain a base in London. The firm will open its operation within Bird & Bird’s Fetter Lane headquarters next year, staffed in the medium term by a permanent representative.
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Bird & Bird continues to invest in its international operations, launching its second Dutch office in Amsterdam 16 years after opening in The Hague.
However the new base, operative in January 2018, will not have any permanent staff but act as a hub for the firm’s lawyers to meet with Amsterdam-based clients as well as providing a flexible working space.
Netherlands managing partner Marcus Huisman told Legal Business the firm saw Amsterdam as a logical step. ‘There is a need to be close on a regular basis to our clients and prospects. International clients arrive at Schiphol Airport [in Amsterdam] and we want to offer them the opportunity to meet us there.’
He also pointed to the relocation of the European Medicines Agency from London to the Dutch capital in April 2019 as the most recent development encouraging the firm to open the new space. ‘We have a strong footprint in that sector, and this provides us with new opportunities.’
Bird & Bird’s office in The Hague numbers 80 lawyers, around 20 of them partners, focusing mainly on IP, telecoms, IT, corporate, energy and tax.
Huisman said there was a ‘broad feeling’ that the firm’s energy, corporate and fintech operations would find more opportunities with a base in the capital, and the firm was also looking closely at the Dutch media sector, which is very much Amsterdam-based.
‘We don’t think the new space should be limited to a few partners or associates,’ added Huisman. ‘We want a collective effort to make it a success.’
Bird & Bird’s main operations in The Netherlands will remain in The Hague, where the country’s telecoms regulator and Supreme Court are located and many IP matters decided on. A division of the Unified Patent Court is also expected to be established in the city next year.
This is the third announcement concerning Bird & Bird’s international operations over the last two months. It signed a non-exclusive co-operation agreement with Chinese firm AllBright Law Offices at the beginning of the month and also announced it would open a representative office in San Francisco next year, its first base in the States.
Meanwhile, Herbert Smith Freehills (HSF) is to open a second base in Sydney to house its alternative legal services team and most of its Australian business services staff from 2018.
The firm said the opening of the ‘innovative business service hub’ means ‘a much more sustainable occupancy cost for the firm in Australia’ and will help modernise the way its people work.
About 230 staff will relocate from the firm’s office at Castlereagh Street to the new premises in Macquarie Park at Talavera Road in the first half of next year, including chief operating officer Nicole Bamforth.
‘This enables us to markedly reduce the amount of space we lease in 161 Castlereagh Street with a number of the floors we currently occupy being relinquished to the building’s owners for re-leasing,’ said HSF chief executive officer Mark Rigotti. ‘The per-metre cost-saving is materially significant. The business case in making this move is unquestionable.’
It has achieved long-term revenue growth through sustained international expansion – particularly in Asia in recent years – but Bird & Bird has made what it will consider a significant step forward for its ambitions in the region – a non-exclusive co-operation agreement with leading Chinese firm AllBright Law Offices.
The deal, which will see both firms work together on a preferred supplier arrangement, will enable Bird & Bird to build deeper relationships with Chinese clients. As part of the agreement, Allbright Law Offices will gain a base in Europe, with the firm opening its own operation within Bird & Bird’s Fetter Lane headquarters, staffed in the medium term by a permanent representative.
Speaking to Legal Business, Bird & Bird chief executive David Kerr said the primary objective from AllBright’s perspective is to look after clients as they internationalise.
‘Everything they are doing in terms of setting up the rep office in London and working with us is designed to meet that requirement. We are maintaining our inbound to China operation. Of course we may co-operate in particular areas with Allbright on serving those client needs. Each firm has got some clear objectives.’
Justin Walkey, Bird & Bird’s Asia chair added: ‘We don’t have key performance indicators in terms of revenue targets. The objective here is to build deeper relationships with Chinese clients and the success or otherwise of our enterprise will be whether the Chinese clients want to buy those services. The focus is on China going global.’
According to Bird & Bird, the move to establish a co-operation agreement with AllBright is the latest chapter in the firm’s Asia-Pacific strategy, which has seen the firm launch in five cities including Hong Kong, Beijing, Shanghai and more recently Sydney. The firm also has co-operation agreements in place with firms in Malaysia, South Korea and Indonesia.
AllBright has 17 offices in mainland Chinese cities, and has more than 1,800 lawyers globally. It is regarded as solid player in the PRC in most commercial practice areas, particularly in IP, a core focus for Bird & Bird. However, both parties confirmed the agreement does not affect Bird & Bird’s existing co-op with IP specialist Lawjay Partners in China, nor does it affect AllBright’s existing arrangement with Stevenson Wong in Hong Kong.
Earlier this year Bird & Bird recorded its 26th year of turnover growth, with global revenues for 2016/17 up 5% to €361m from €343.8m, translating to an 11% increase in sterling from £273.8m to £303.2m. In Asia Pacific, the firm has experienced an 18% increase in turnover over the last 18 months.
The technology-focused firm attributed the performance to what it described as double-digit growth in its key practice areas of corporate, IP and employment.
kathryn.mccann@legalease.co.uk
For more on Bird & Bird’s international strategy and David Kerr’s leadership, read ‘David made Goliath – Kerr on Bird & Bird’s re-invention as a leading global TMT shop’
Top-50 insurance specialist Kennedys has made an ambitious bid to further increase its global footprint, today (2 October) announcing the opening of new offices in Paris and Bangkok.
With the launches in France and Thailand, Kennedys has brought its tally of new international offices opened this year to nine.
The Paris outpost is led by a four-partner team hired from French litigation boutique BOPS Avocats and focuses on insurance disputes.
Co-founder and the former senior partner of BOPS Avocats, Christian Bouckaert, is heading the new Paris office, alongside partners Alexis Valençon, Aurélia Cadain and Nicolas Bouckaert.
Kennedys and BOPS Avocats have a shared history, jointly acting on a number of cross-border cases over the years and also possess a significant overlap in important clients.
Kennedys’ senior partner Nick Thomas (pictured) told Legal Business: ‘A Paris office has been important for us all along. It’s important for us to be where clients want us to be, it’s not simply a case of throwing a dart at a map!’
Outside of Europe, Kennedys has tapped into a major south-east Asian market through its Thailand launch, building on its pre-established presence in Singapore and Hong Kong.
The firm’s new two-partner office in Bangkok also has an insurance litigation element, with the outpost being led by Suraphon Rittipongchusit, a former partner of DLA Piper’s Bangkok insurance and litigation department.
Alongside Rittipongchusit is fellow partner Supreedee Nimitkul, who is a corporate and commercial specialist with over 20 years’ experience. Completing the team is senior associate Tassanu Chutikanon and Ian Johnston, a foreign qualified lawyer who relocates from Kennedy’s Singapore office.
On the Bangkok launch, Thomas added: ‘Clients had told us that there was only one other insurance firm there and that they didn’t have any choice. They wanted the product that we’ve got.’
Despite the Paris office being its first office opening in mainland Europe this year, Kennedys has made serious strides in expanding its global operations throughout 2017. The firm has opened in the US through its merger with insurance firm Carroll McNulty & Kull and also added offices in Australia, Mexico and formed a formal association in Italy.
Meanwhile, Bird & Bird has also revealed plans today to open a representative office in the US.
The new hub, based in San Francisco, will advise clients on international disputes, intellectual property and data privacy issues.
David Kerr, chief executive of Bird & Bird, told Legal Business: ‘We have seen a huge request from clients to have lawyers in that time zone and we think that demand is growing.’
International law firms have returned from the summer break in acquisition mode, with Berwin Leighton Paisner, Bird & Bird, Taylor Wessing, Reed Smith and Pinsent Masons all hiring in London and Asia, while Sidley, Dentons and Osborne Clarke are expanding their continental European footprint.
Berwin Leighton Paisner (BLP) has this morning (11 September) announced the appointment of three new international disputes partners to further strengthen its litigation and corporate risk (LCR) practice.
George Burn joins BLP from Vinson & Elkins as head of international arbitration later this month, while Gavin Margetson, formerly of Herbert Smith Freehills, has been hired to lead the firm’s regional arbitration hub in Singapore. Based in London, Richard Chalk is an international disputes and investigations partner, who was previously at Freshfields Bruckhaus Deringer in London and Hong Kong.
BLP global head of LCR Nathan Willmott said these appointments are a direct result of a recent LCR strategy review. ‘The strategy review was an important milestone for us as a department. With so many of the team involved, it’s meant our future really is a collective effort. These hires all demonstrate our intent to get on with the job and start delivering on a global scale’.
Bird & Bird has added to its equity capital market capabilities with the hire of Clive Hopewell and Adam Carling from Charles Russell Speechlys (CRS).
Hopewell will lead the practice expansion in London, building on the Middle East contacts made while heading CRS’s operations in Bahrain. Speaking to Legal Business, he said: ‘Bird & Bird has a very substantial presence in Europe, Asia and Australia. The firm has an established office in Abu Dhabi and an established presence in Dubai. I’ll go there two or three times a year to help introduce them to clients.’
Carling has experience in Africa and has advised on mining deals on the continent. Neil Blundell, head of Bird & Bird’s London corporate group, said the hires would ‘further increase our reputation in the mining and oil and gas sectors’.
Meanwhile, Taylor Wessing turned to Paul Hastings to bring Mark Rajbenbach into its real estate team.
Keith Barnett, head of real estate at the firm – which now has more than 60 lawyers in its core London real estate group and more than 100 working on real estate across the London base – said the addition of Rajbenbach was ‘very exciting for our team, particularly in corporate real estate and the hotels area’.
Rajbenbach was at SJ Berwin & Co before joining Paul Hastings, and his clients have included Invesco Real Estate, Starwood Capital, Evans Randall, Hilton, London & Regional, Schroders and RRAM Energy.
Elsewhere, Reed Smith has hired Leith Moghli as a partner in its global private equity and investment funds practice in London. Moghli left Kirkland & Ellis in April, where he had been a salaried partner since October 2014 in the funds practice.
Pinsent Masons has appointed Chris Richardson to lead its new forensic accounting service (FAS). He joins the firm after 16 years in the fraud investigations team at EY.
In Brussels, Sidley Austin has hired Wim Nauwelaerts from Hunton & Williams. Nauwelaerts advises on EU and international data protection and privacy compliance, including preparation for the new General Data Protection Regulation (GDPR).
He told Legal Business: ‘Sidley Austin is one of the prominent firms in Brussels and I am very excited about the prospect of expanding their global data protection practice.’
Also in Europe, Dentons strengthened its M&A and capital markets practices with the addition of Shaohui Zhang, who joins as head of the China desk in Luxembourg from Allen & Overy, and Antonella Brambilla in the corporate and M&A practice in Milan from local firm Chiomenti.
Dentons Italy managing partner Federico Sutti told Legal Business: ‘In Italy we see signs of recovery in equity capital markets. Antonella has the standing and the experience to allow Dentons to play a role in this in the near future.’
Finally, Osborne Clarke has announced the opening of a new office in Stockholm, led by Fredrik von Baumgarten and Henrik Bergström. Von Baumgarten joins from his own firm Baumgarten Byström Rooth & Partners and was previously a partner at Nordic firms Hannes Snellman and Vinge, while Bergström was previously at Bird & Bird.
Simon Beswick, international chief executive at Osborne Clarke, said: ‘Not only is Sweden the third most active M&A market in Europe and growing faster than most other European economies, it’s a key market for many of our core sector clients.’
The Sweden office means the firm now has 25 international bases in Europe and Asia.
Bird & Bird‘s profit per equity partner (PEP) has risen for a second consecutive year, leaping 11% to £503,000, in line with the firm’s revenue growth, following a double-digit rise in corporate, intellectual property and employment work.
The technology and intellectual property-focused City firm’s net income rose to £52.8m over the year from £45.4m the previous year.
Since returning to growth in 2015/16, the firm’s PEP has increased 10.9% from £448,000. The growth coninuted even after the firm invested around £15m (€17m) on its new 12 Fetter Lane headquarters.
Bird & Bird’s top equity partner earned £905,000 this year.
In contrast, however, PEP grew by only 1% in 2015/16, from £448k to £454k. Turnover was then £273.8m, up 6% from 2014/15. Reported revenue for 2016/17 was £303.2m, up 11% from last year’s £273.8m.
On a five-year view, Bird & Bird’s profitability this year remained at 2.7% below its 2011/12 levels, five years ago, when PEP stood at £517,000. Turnover, meanwhile, increased to £303.2m over the same five year period.
CEO David Kerr told Legal Business: ‘We get involved in complicated technology matters other firms struggle with.’ ‘I am very pleased with our performance given that other firms were struggling while we were not. Our focus on technology has proven successful.’
Over the year, the firm advised Nokia on its patent dispute with Apple, which settled in May, and Capgemini’s divestment of its IBX Business Network to Tradeshift, which created the world’s largest business commerce platform. It also acted on ARM’s £10m investment in Blu Wireless Technology to help it accelerate the rollout of 5G networks.
The firm also completed 26 lateral hires in the financial year and promoted 16 lawyers to partnership, bringing the total number of partners to 291 across its 28 offices in Europe, Middle East and Asia Pacific.
‘We have a very clear vision and a very clear mission. Partners seek us out and want to join us specifically for our focus on technology and our strategy. That makes it much easier for them to integrate: it is not just partners wanting to change firm, they know our strategy, they know what firm they are joining,’ Kerr said.
Lawyer numbers rose slightly from 1,084 to 1,141.
On the regulatory side, Bird & Bird also advised the European Commission and UK government on changes to data protection regulation, the UK government on the investigatory powers bill, and the European Commission on the effectiveness of EU rules on state aid for research, development and innovation.
The firm said this demonstrated it was helping ‘set the legislative agenda in the areas where we operate’.
