Legal Business

LLP accounts: Strong returns for CC leadership with bumper 38% pay rise as Eversheds executives see take home remain static

LLP accounts: Strong returns for CC leadership with bumper 38% pay rise as Eversheds executives see take home remain static

Clifford Chance’s (CC) 13-strong executive leadership team took home £22m in the 2017/18 financial year, according to the firm’s filings with Companies House.

It means the firm’s leaders have seen remuneration swell by 38% since last year, when the group of 13 pocketed £16m.

It also represents a drastic leap given that CC’s executive remuneration only inched upwards in £1m increments between 2014/15 and 2016/17.

The considerable financial package is likely related to CC’s healthy overall performance – the Magic Circle firm added £83m to its top line last year, bringing turnover to £1.623bn. This was accompanied by an above-trend increase in profit per equity partner (PEP), growing 16% to £1.6m.

Despite these highlights, the firm’s pay to its highest-earning member has remained flat on last year at £3m. There was revenue growth in all geographies, with continental Europe seeing a 6% uptick to £538m. The Middle East was up by 10% from £49m to £54m, while the Americas increased 6% to £215m.

Total staff costs rose 2% from £693m to £707m, in spite of a 6% dip in average associate numbers, which fell from 2,262 to 2,135. The average partner headcount was also down, decreasing by 10 to 558.

In contrast there were fewer reasons for Eversheds Sutherland International’s leadership team to be cheerful, as the firm’s LLP accounts revealed a payment package static on last year .

Senior leaders took home £4.8m for the 2017/18 financial year, a 20% decrease on last year’s £6m package. However, there was a reduction in executive committee members from five to four during the last year, meaning senior leaders are still taking £1.2m per head. Although a considerable cut at face value, it is marginally less than 2016/17 when executive remuneration was slashed by 22% .

Eversheds Sutherland’s highest-earning member in the non-US business took home 9% more than last year, an increase from £1.4m to £1.52m. This is in line with a wider boost to average remuneration per member, up 11% from £391,000 to £434,000.

The firm’s overall financial outlook is robust, with global revenue increasing 14% to £496m. The UK business played a key role, with a 14% turnover hike to match as the practice generated £396m.

Eversheds Sutherland’s European practice also performed well in 2017/18 as revenue grew 25% to £64m, however the ‘rest of world’ (again not including the US, which has a separate LLP) saw turnover fall 8% to £36m.

tom.baker@legalease.co.uk

Legal Business

Banking and finance focus: Back to the future

Banking and finance focus: Back to the future

‘The truth is no-one’s got the faintest idea what finance practices will look like in the future,’ shrugs Tony Bugg, Linklaters’ head of banking, when asked to describe a top City finance practice in 2030. Of the dozens of London finance chiefs and partners to whom Legal Business posed the question, Bugg’s take is at least one of the more candid.

If the last decade is any guide, the finance world will be girding itself for more wrenching change. The post-banking crisis environment has seen a dramatic increase in regulation and oversight of banks and helped encourage the growth of institutions filling the void as senior lenders retrench.

Legal Business

‘An international guy’: Ouwehand wins Clifford Chance race to become first non-London senior partner

‘An international guy’: Ouwehand wins Clifford Chance race to become first non-London senior partner

Clifford Chance has elected Amsterdam head Jeroen Ouwehand as its first ever senior partner based outside the City.

The news comes after Ouwehand, who also leads the firm’s continental European litigation and dispute resolution practice, was hotly tipped internally as being the successor to Malcolm Sweeting.

The first round of partnership voting last week saw two of the five hopefuls drop out – UK-based insurance head Katherine Coates and former capital markets chief David Dunnigan – leaving Ouwehand pitted against London head David Bickerton and ex-Europe chief Yves Wehrli.

Ouwehand has been office managing partner in CC’s Amsterdam office since 2015 and was a member of its partner selection group from 2010-2015.  He will take up his four-year term as senior partner on 1 January.

‘For an international firm like Clifford Chance to have never had a senior partner outside of London is surprising,’ one Clifford Chance partner told Legal Business. ‘Ouwehand is an international guy, and that’s seen as a positive.’

The election of Ouwehand also heralds another break with tradition, which has typically seen finance partners take up the role. Stuart Popham led the London banking practice before taking over as senior partner (previous senior partners Keith Clark and Michael Bray were also banking lawyers).

Sweeting commented: ‘Jeroen will make an excellent senior partner for the firm. During his career at Clifford Chance, he has demonstrated a deep commitment to our clients, a sharp understanding of how the world they operate in is changing, and what that means for our firm, our clients and our markets.  As we focus on our future, and how we realise our vision globally, this ability to integrate effectively an external perspective with the dynamics of our partnership and wider firm will be crucial.’

Ouwehand said: ‘This is a fantastic firm, with huge opportunities ahead of us.  I am greatly looking forward to working alongside my fellow partnership council members, with Matthew [Layton, managing partner], the partnership and all of our talented colleagues across the firm to ensure that we are constantly challenging ourselves to anticipate and respond to changing global and economic realities, to the march of technology and an increasingly complex legal landscape.’

nathalie.tidman@legalease.co.uk

Legal Business

Hello from the other side: CC private equity star Mahon to join Simpson Thacher

Hello from the other side: CC private equity star Mahon to join Simpson Thacher

In a significant blow to Clifford Chance’s M&A practice, Simpson Thacher & Bartlett has enticed private equity star Amy Mahon to its London office.

Mahon, who emerged as the most widely-cited female partner for private equity in Legal BusinessAlphas feature earlier this year, has been acknowledged by her peer group as ‘the most visible woman at Clifford Chance’ .

A partner at Clifford Chance for 10 years, Mahon had forged relationships with a client base including Apax, KKR Infrastructure, Hermes and EQT. Having trained at CC, she also bolstered her credentials with a two-year stint at Macquarie before re-joining the Magic Circle firm at partner level.

She specialises in UK and cross-border M&A, leveraged buyouts, infrastructure and consortium transactions, acting for financial sponsors including private equity firms, infrastructure funds and investment banks. She follows a path from CC to Simpson Thacher already trodden in 2009 by playmaker Adam Signy and Jason Glover in 2010 .

In Mahon, Simpson has secured the services of one of the most widely sought-after PE players. She was rumoured to be in talks with Latham & Watkins and at the time of the Alphas feature was described by one recruiter as: ‘loyal to CC but could go anywhere she wants.’

Bill Dougherty, chairman of Simpson Thacher’s executive committee, said: ‘[Amy’s] extensive experience advising private equity firms and investment banks, particularly within the infrastructure space, makes her an excellent addition to our London team and further enhances our ability to tackle the largest and most complex transactions for clients both in Europe and across the globe.’

‘Amy is a perfect fit for our London team having already worked on a number of market-leading transactions on behalf of longstanding Simpson Thacher private equity clients,’ said Jason Glover, managing partner of the London office. ‘Her impressive track record as a top M&A practitioner will further bolster our global M&A capabilities and add additional depth to our bench of exceptionally skilled London-based lawyers.’

Standout recent mandates for Simpson Thacher’s M&A team have included advising Melrose Industries on the hostile offer for GKN plc, advising KKR on its US$8bn buyout of Unilever’s global Spreads business and acting for Silver Lake on its acquisition of ZPG plc for US$3bn.

Nathalie.tidman@legalease.co.uk

For more on Amy Mahon and why she has a problem with Adele, read her recent Life During Law interview here

Legal Business

Two European candidates remain as CC’s senior partner contest goes down to three

Two European candidates remain as CC’s senior partner contest goes down to three

The likelihood of Clifford Chance’s (CC) next senior partner being based outside London has surged after the first round of voting.

UK-based insurance head Katherine Coates and former capital markets chief David Dunnigan have dropped out of the race to become Malcom Sweeting’s successor  at CC, after none of the five candidates secured more than 50% of votes in the first round.

The three remaining candidates include former London head David Bickerton, ex-Europe chief Yves Wehrli and continental Europe litigation head Jeroen Ouwehand. The second round of votes closes today (12 November) but the election could be extended if none of the candidates get the backing of more than half of the partnership.

Little known outside the firm but well established within its contentious practice, Amsterdam managing partner Ouwehand is now considered the favourite by some after several partners insisted for months a non-London based senior partner would help build the image of the firm as a global outfit.

The election of Ouwehand or Wehrli would also mean a break with recent tradition which has seen the firm’s finance partners handed the role. Both Sweeting and his predecessor Stuart Popham led the London banking practice before taking over as senior partner (previous senior partners Keith Clark and Michael Bray were also banking lawyers).

But with well-liked finance partner Bickerton still in contention, it remains hard to call. The extension of the race to a second round underlines this year’s particularly competitive contest. Sweeting won the election after the first round in 2010 and then stood unopposed when re-elected in 2014. Managing partner Matthew Layton also stood unopposed for his second term, which began in May this year.

The two candidates who dropped out of the race had held global management roles for years, with Dunnigan leading the firm’s capital markets practice for 12 years until 2014. Coates, who heads both the London financial institutions group and the global insurance sector team, would have been the firm’s first female senior partner.

marco.cillario@legalbusiness.co.uk

Legal Business

EasyJet GC completes ITV round-trip for head of legal job

EasyJet GC completes ITV round-trip for head of legal job

ITV has appointed easyJet group general counsel (GC) Kyla Mullins as its new head of legal, filling a role vacated by the experienced Andrew Garard in July.

Mullins returns to ITV having previously been its group legal director between 2000 and 2007. She also had spells as GC at EMI Music and energy company Mitie before joining budget airliner easyJet in 2015.

ITV’s chief executive Carolyn McCall commented: ‘Kyla brings great commercial and strategic experience and acumen as well as a proven track record in the media and entertainment sectors. I am sure she will be a great addition to the management board and a fantastic leader for her team.’

Mullins’ arrival fills a crucial gap in ITV’s in-house legal team after the departure of former GC Garard in the summer. He joined ITV as GC in 2007 and continued to provide assistance to ITV after his departure, including helping the company find his replacement.

Garard oversaw a key ITV panel review in May 2015, which sought to extend its eight-firm roster by up to four more. Historically, firms including DLA Piper, Hogan Lovells and Reed Smith have advised ITV.

Mullins is replaced at easyJet in an interim capacity by Clifford Chance (CC) partner Daud Khan. Khan was only promoted to the Magic Circle firm’s partnership in May this year and was based in CC’s London office, focusing on corporate and M&A.

Khan’s highlight matters at CC include advising BBVA’s investment in Atom Bank’s £149m capital raising and Chinese conglomerate Fosun on an investment in travel agent Thomas Cook.

In December 2015, easyJet lost its then-head of legal and compliance, Andrew Winterton, to taxi app company Karhoo. Winterton had been in his position for nearly a decade after joining from Virgin Atlantic Airways. The former Clyde & Co lawyer was succeeded in his position by Rebecca Mills.

tom.baker@legalease.co.uk

Legal Business

Five stand as CC kicks off senior partner race but early favourite Sandelson not in contention

Five stand as CC kicks off senior partner race but early favourite Sandelson not in contention

Leadership at Clifford Chance (CC) has over the last 20 years swung wildly between prestige and poisoned chalice but the just-launched race to become the London giant’s new senior partner shows no shortage of candidates.

Former London head David Bickerton (pictured) and ex-Europe chief Yves Wehrli launched their bids to become CC’s next senior partner, Legal Business has learnt. Other prominent figures in the race to replace Malcolm Sweeting after eight years include insurance head Katherine Coates, former capital markets chief David Dunnigan and continental Europe litigation chief Jeroen Ouwehand.

The five candidates presented their pitches to the partnership in recent days and the vote will take place by the end of October. Sweeting’s second term expires at the end of the year.

Despite being widely tipped as a popular candidate, former litigation head Jeremy Sandelson is not on the ballot.

This leaves well-liked finance partner Bickerton, who stepped down as London head in 2017 after eight years, as a strong candidate. Nevertheless, with five experienced candidates, it remains an open race.

The role has traditionally been in the hands of influential finance lawyers, befitting CC’s heritage as one of Europe’s elite debt counsel. Both Sweeting and his predecessor Stuart Popham led the London banking practice before taking over as senior partner (previous senior partners Keith Clark and Michael Bray were also banking lawyers).

The other two London-based candidates have held global management roles for years, with Dunnigan leading the 557-partner firm’s capital markets practice for 12 years until 2014. The election of Coates, who heads both the London financial institution group and the global insurance sector team, would send a strong message from a firm which has long been seeking to improve gender balance. Despite a target for women to make up 30% of the partnership set back in 2009, CC counted 18.2% female partners in 2017.

The election sees Paris managing partner Wehrli on the ballot again after he lost to Matthew Layton in the race to managing partner in 2014. According to one former CC partner, Wehrli’s candidacy to senior partner has been floated for years. After he lost to Layton, many said the Frenchman would be better suited for an ambassadorial rather than an executive role. He led CC’s continental European practice for four years before stepping down in April, replaced by Charles Adams.

Some partners have in recent months pointed to the fact that a non-London based senior partner would help build the image of CC as a global outfit, giving some support to Wehrli and Amsterdam managing partner Ouwehand.

Not sitting on the management committee, the senior partner role was traditionally considered to carry less weight than practice heads but the sprawling nature of CC’s management has often meant strong figures in the role like Popham could wield considerable clout.

As such, Sweeting is said to have played a key role in supporting Layton’s objectives, such as changes to the firm’s remuneration structure. A former partner said: ‘When there is a big change, it is really the senior partner going around with the partnership council, talking to everyone, making sure their voices are heard, ensuring check and balance.’

The senior partner race comes at an interesting moment for CC’s development in a global legal industry increasingly defined by US law firms. Despite the Magic Circle in general having a subdued period of trading since the banking crisis a decade ago, CC under the leadership of Layton is acknowledged to have had some success in boosting productivity and paring back its notoriously flabby management ranks.

To have a hope of securing its global ambitions, the new senior partner will have to help galvanise an institution that has struggled to sustain the dash and clarity of its 1990s incarnation. Quite a challenge. Quite a prize.

marco.cillario@legalbusiness.co.uk

Legal Business

Deal watch: Rich pickings for Links as insurance and education sectors mark busy autumn for City elite

Deal watch: Rich pickings for Links as insurance and education sectors mark busy autumn for City elite

It has been a busy few weeks for Linklaters’ transactional team as the firm scooped spots on two multibillion pound deals, in the insurance and education sectors respectively.

Corporate partners James Inglis and Nick Rumsby joined Magic Circle rivals Clifford Chance (CC) and Slaughter and May as US insurance broker Marsh & McLennan agreed to acquire the entirety of UK listed rival Jardine Lloyd Thompson (JLT) for £4.9bn.

Slaughters’ senior partner Steve Cooke, corporate partner Richard Smith and finance expert Ed Fife led the team advising Marsh & McLennan in a transaction that Smith described as ‘a vote of strong support for the UK’.

Linklaters advised Jardine Matheson, the 40% shareholder of JLT, which is backing the transaction alongside JLT’s board. The public shareholders will meet to approve the transaction next month.

CC’s corporate partners Tim Lewis and Katherine Moir advised JLT.

‘What Marsh & McLennan and JLT have shown is that it is possible to create a very successful business in this market,’ Smith told Legal Business. ‘These companies have been the best performers among the competition: that’s why bringing them together makes sense.’

Long-standing friend firm from across the pond, Wachtell, Lipton, Rosen & Katz, worked alongside Slaughters advising on the US side of the deal, led by Dan Neff and Greg Ostling. Davis Polk & Wardwell advised on the financing.

Meanwhile, Linklaters’ sponsor partners Alex Woodward and David Martin acted alongside Clyde & Co on investment firm Jacobs Holding’s £2bn acquisition of private education group Cognita.

‘This is a landmark transaction for the education sector, which demonstrates the increasing prominence of global school groups and their attractiveness to investors,’ said Clydes’ co-head of education Ross Barfoot, who led the team alongside fellow corporate partner Simon Gamblin. A team of 60 lawyers worked on the transaction across Clydes’ London, UAE, Madrid, Sao Paolo, Hong Kong and Singapore offices.

Linklaters’ leveraged finance partners Ed Aldred and Dan Gendron led on the debt financing side and tax partner Mavnick Nerwal also supported on the deal.

Established in 2004, Cognita operates more than 70 schools across eight countries in Europe, Asia and Latin America, employs 7,000 teachers and support staff and educates more than 40,000 children.

marco.cillario@legalease.co.uk

Legal Business

Deal watch: City high-flyers land jumbo £4.4bn BA pension deal as Blackstone’s buying spree continues

Deal watch: City high-flyers land jumbo £4.4bn BA pension deal as Blackstone’s buying spree continues

City heavyweights Allen & Overy (A&O), Clifford Chance (CC) and Eversheds Sutherland have landed key roles on Legal & General’s £4.4bn buy-in of the British Airways pension scheme as advisers cash in on a brace of Blackstone deals.

UK insurer Legal & General is taking on £4.4bn of historic pension liabilities relating to the Airways Pension Scheme (APS) in a bulk annuity designed to reduce risk in the scheme.

A&O and Eversheds are advising the trustees, with A&O’s team led by insurance partner Philip Jarvis and counsel Kate McInerney. For their part, Anthea Whitton and Francois Barker are heading the Eversheds team.

The CC team advising Legal & General is being led by corporate partner Katherine Coates and pensions partner Sarah McAleer.

The deal also covers existing longevity reinsurance contracts of roughly £1.7bn entered into by APS via a captive insurer with Canada Life Reinsurance and PartnerRe, which were incorporated into the buy-in arrangement. Closing of the deal will mean that APS is now 90% hedged against all longevity risk.

‘This deal is very significant in the market and part of a trend of which there are push and pull factors,’ one City partner told Legal Business. ‘On the push side, there are trustees out there looking to de-risk and on the pull, market conditions are making deals like this economically viable transactions.’

APS was established in 1948 and it was closed to new members from 31 March 1984. The scheme had 24,196 members, of whom 1.4% were active members, 3.6% deferred members and 95% pensioners.  At the end of March 2018, APS had assets totalling £7.6bn.

Elsewhere, the blistering private equity market saw A&O win the mandate to advise private equity giant Blackstone on its €1bn acquisition of a majority stake in Baltic bank Luminor. The deal involves funds managed by Blackstone and other institutional investors acquiring a 60% stake in the bank, with Nordic banks Nordea and DNB each retaining a 20% stake.

A&O’s private equity partner Karan Dinamani led on the deal – the Magic Circle firm’s inaugural deal for Blackstone on the buyout side – which builds on a long-standing relationship acting for Blackstone’s lenders on real estate transactions.

Commenting on the frothy PE market, Dinamani told Legal Business: ‘A lot of private equity players are looking to acquire right now and the London market is roaring. The fact that a private equity player is acquiring a majority in an European Central Bank regulated bank makes the deal interesting and complex.’

With €15bn of assets, Luminor was created in 2017 through a combination of Nordea and DNB’s operations in the Baltics.

Meanwhile, a £1.5bn deal that saw Blackstone Property Partners and Telereal Trillium acquire Network Rail’s commercial business estate sealed roles for Kirkland & Ellis, CC, Eversheds and Gowling WLG.

CC and Eversheds acted as legal advisors to Network Rail, with CC’s team comprising partners Franc Peña, Angela Kearns and Adrian Levy and Nick Bartlett leading for Eversheds.

Kirkland and Gowling advised buyers Telereal and Blackstone, with the Kirkland team led by corporate partner Michael Steele and including corporate partner Carlos Gil Rivas. Mike Twinning led the Gowling team.

The portfolio includes 5,200 properties, the majority of which are converted railway arches.

The sites are being sold on a leasehold basis, with Network Rail retaining access rights for the future operation of the railway. The proceeds are being put towards the UK railway upgrade plan.

nathalie.tidman@legalease.co.uk