Legal Business

As foreign advisers size up Africa, CC linked to alliance bid in South Africa

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Middle East and Africa Clifford Chance
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South Africa has faced more than its fair share of economic and social challenges in recent years, but with foreign investors and international law firms attempting to tap into the wider region, the queue of firms looking to enter the country is lengthening.

Recent years have seen DLA Piper and Baker & McKenzie enter the market, while Norton Rose and Linklaters have tied up with top tier local advisers. Now the word in Joburg is that Clifford Chance (CC) is aiming to strike a similar deal to the alliance between Webber Wentzel and Linklaters, which went live on 1 February.

According to several local lawyers, CC’s discussions have focused on Bowman Gilfillan. An alliance with Bowman would offer a tie-up with a top tier South African firm and one of the leading finance practices in Africa. The full service Bowman is also a leading player in corporate and litigation and has offices across four African states, as well as an associated firm in Nigeria. Bowman chair Jonathan Scholsberg, however, denied the firm was in discussions with CC.

Local lawyers have also linked CC to Routledge Modise, the firm that was previously allied to Eversheds, though Bowman is seen as a more credible tie-up for the London firm. Partners at three separate major South African firms stated their belief that CC had investigated securing a South African partner, with one claiming the City giant’s bid was ‘the worst kept secret’ in the local profession. Another head of a local firm told Legal Business: ‘It’s well known that CC has been looking for a partner in the market.’

One CC partner contacted stating that the Magic Circle firm would not look to open its own office in Africa’s largest economy but declined to comment on a potential alliance partners or Bowman. CC opened its first office in Africa last year after launching a branch in Morocco.

A CC spokesperson declined to comment on individuals firms but provided the following statement: ‘We have been advising on significant Africa-related matters for over 30 years and are widely recognised for the breadth and quality of our expertise in the continent. Africa is an exciting and dynamic market for us and for our clients, so we continue to invest in developing our own capabilities and in deepening the privileged relationships that we have forged with a strong network of independent counsel across the continent, for example, through the recent launch of Clifford Chance’s Africa Academy.’

Expectations of more tie-ups between international firms and South African practices come amid a fluid period for the local legal market, historically the dominant hub in the region. Foreign advisers are regarded to have had considerable success moving into the market, while South African firms have widened their practices to increasingly focus across the continent.

International investors are also increasingly focusing on a host of fast-growing African states drawn by high demand for natural resources, infrastructure projects and modernising economies. While South Africa had previously dominated inward investment, foreign companies now looking to states like Nigeria, Kenya, Mozambique, Ghana and Botswana.

See the November edition of Legal Business for a special focus on Africa.

david.stevenson@legalease.co.uk

Legal Business

Major milestone for CC global MP elections as Layton, Wehrli and Carnegie go forward

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Leadership Clifford Chance
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Clifford Chance (CC) has reached the first major milestone in its global managing partner elections, with the nominations stage now closed and global head of corporate Matthew Layton, Paris managing partner Yves Wehrli and real estate finance partner Andrew Carnegie confirmed as the three candidates going forward.

Hustings will begin shortly and the first round of voting will occur in early to mid-November. Partners will expect to receive the candidates’ manifestos in the next few days.

Layton is widely tipped as the favourite for the top role, as one ex-partner told Legal Business in early October: ‘It’s a slam dunk – it’s going to be Matthew Layton. Everyone said if Matthew stands, he would be elected. He’s perceived to have done a very good job, in very difficult circumstances. People put aside their views on any particular practice area.’

The successor will take over on 1 May 2014 from Childs, who himself took over as managing partner on 1 May 2006 and has been widely credited with taking a more pro-active stance than his predecessor Peter Cornell, particularly in taking tough decisions to co-ordinate and manage its international offering.

Names put forward as possible candidates for the managing partner role had included CC’s corporate finance partner David Harkness and high-profile head of litigation and dispute resolution Jeremy Sandelson, who in early October was re-elected for a further four-year term in an uncontested election.

CC declined to comment.

sarah.downey@legalease.co.uk

Legal Business

CC on Singapore’s naughty step as Asia markets keep playing the tactical liberalisation game

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Asia Clifford Chance
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Back in the boom years, international law firms talked confidently regarding how liberalisation would soon be coming to major legal markets in the Asia Pacific region. This week provides another reminder that in reality such emerging jurisdictions have been rather more tactical – and protectionist – than starry-eyed managing partners believed back in the go-go days.

The incident in question has seen Clifford Chance (CC) publicly criticised by the Singapore justice minister for having the temerity to announce that it was offering litigation services via a formal association set up last year with the boutique Cavenagh Law.

The deal was structured under the Formal Law Alliance (FLA) regime, which allows foreign and local firms to operate an integrated platform.

Minister for law K Shanmugam earlier this month told the Singapore parliament that quotes from managing partner David Childs in July saying that it is ‘the first full-service firm in Singapore offering litigation advice’.

This, Shanmugam said, also citing an earlier press release in circulation in December 2012, ‘could be read to mean that a foreign law firm can now practice litigation in Singapore’ which would ‘not be accurate. Their representations to the public and media should be clear as to what their FLA is and is not. I think clever word game should be avoided.’ 

Shanmugam added that his officials had called in the partners of CC and local law firm Cavenagh Law, informing them ‘that their statements conveyed an inaccurate picture and should be stopped’.

Under Singaporean law, strict conditions are imposed and specific domestic law work is ring-fenced, including litigation, family law and conveyancing which can only be handled by Singapore law firms through lawyers called to the Singapore Bar.

Other liberalisation measures in addition to the FLA occurred in 2008 when Singapore introduced Qualifying Foreign Law Practice licences (QFLPs), a further step than the previous – and unpopular – joint venture regime. The first set of QFLPs were awarded to CC, Allen & Overy (A&O), Herbert Smith, Norton Rose, Latham & Watkins and White & Case. A second set was granted in February this year to Linklaters, Gibson Dunn & Crutcher, Sidley Austin and Jones Day.

A CC spokesperson issued this statement: ‘The Formal Law Alliance between Clifford Chance and Singapore litigation boutique, Cavenagh Law, allows the two firms to provide the broadest range of Singapore and international law services from one platform, ‘Clifford Chance Asia,’ with Singapore litigation representation provided through Cavenagh Law. The FLA, approved by the Ministry of Law and the Attorney General’s chambers, has at all times fully complied with all applicable regulations and will continue to do so.

‘Clifford Chance has a long-term commitment to Singapore. Since opening our office over 30 years ago, the office has advised on a number of landmark deals from Singapore across Asia Pacific and beyond and has invested in creating opportunities for Singaporean lawyers and in supporting our local legal and broader communities. Singapore has a great future as a global business and legal hub and we are proud to play our part in supporting the Republic in achieving its ambitions.’

In truth the bizarre incident – no one can seriously doubt CC’s compliance with local Bar rules and Singapore ministers must have better things to focus on – is another reminder of the tactical protectionist terms that many legal markets in emerging economies continue to employ. While India is the obvious hard-line hold-out to foreign lawyers, there has been little of the hoped for additional liberalisation in China, while Brazilian bars have generally become less open in the last three years.

The obvious question is this: as foreign jurisdictions achieve increasing levels of economic and legal sophistication how long can Western bars maintain an open door policy despite the glaring absence of reciprocal arrangements?

sarah.downey@legalease.co.uk

alex.novarese@legalease.co.uk

Legal Business

Rising star: Latham hires Clifford Chance private equity partner Tom Evans

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Strategic recruitment Clifford ChanceLatham & Watkins
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Latham & Watkins has secured another heavyweight hire in London with the announcement that Tom Evans, a newly made up partner in Clifford Chance’s (CC) private equity group, is joining the firm’s corporate department.

Evans, who has been tipped as a rising star in the private equity field, follows David Walker, former global head of private equity at CC, who left to join Latham in May. The 2033-lawyer US firm has also made a series of other high profile lateral hires this year, including Dean Naumowicz, former head of derivatives at Norton Rose Fulbright, and Simon Bushell, former co-chair of corporate fraud at Herbert Smith Freehills.The London office now has 250 lawyers including 60 partners.

Nick Cline (pictured), Latham’s London managing partner, said: ‘Tom is widely regarded as a rising star and has a broad range of experience that will make him an excellent addition to the firm and particularly our private equity practice.

‘While we have seen improvements in liquidity in European leveraged finance bank lending, accessing the high yield and US bank finance markets is increasingly attractive for European private equity deals. We have a very strong global platform and a leading financing practice that presents exciting opportunities for us to grow our top tier private equity practice.’

‘Tom’s arrival will further strengthen our presence in London, a key market for our global private equity and corporate practice,’ added Daniel Lennon, global chair of Latham’s corporate department.

Latham’s private equity clients include The Carlyle Group, Advent International, BC Partners, KKR, Charterhouse, Nordic Capital and PAI Partners. Walker’s hire was widely believed to be part of Latham’s drive to cement its relationship with the Carlyle Group in Europe, as the fund is a major client of the veteran CC lawyer.

Recent private equity deals for Latham’s London office include The Carlyle Group’s acquisitions of Addison Lee and Chesapeake Packaging, BC Partners’ acquisition of Allflex Holdings and Leonard Green & Partners’ acquisition of Topshop.

david.stevenson@legalease.co.uk

Legal Business

Election fever: Sandelson re-elected as disputes chief as global MP vote draws near

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Leadership Clifford Chance
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Set against the wider backdrop of its global managing partner contest, Magic Circle firm Clifford Chance has re-elected Jeremy Sandelson as global head of the firm’s litigation and dispute resolution practice in an uncontested election.

Having been in the role since 2009, Sandelson will serve a second four-year term. His pedigree in management with the firm is long-established, as the disputes chief previously acted as managing partner of the London litigation practice in 2003, and regional managing partner for the UK and the Middle East from 2005.

Sandelson’s appointment confirms that the rated litigator is not running for the role of global managing partner, as David Childs prepares to step down in May next year, with head of corporate Matthew Layton tipped to be in the lead.

On Sandelson’s re-appointment, Childs said: ‘Jeremy has done a terrific job as global head of the firm’s litigation and dispute resolution practice since his election soon after the start of the financial crisis, overseeing revenue growth of nearly 30% in that time. I am confident that we will see this pre-eminent practice go from strength to strength over the next four years.’

Sandelson added: ‘We will continue to invest in our strong global network, with market-leading practices in each of the world’s financial centres, and the cross-border collaboration our clients increasingly rely on as they face new challenges in a fast-changing world.’

The sounding process for global managing partner nominations is currently is expected to wind up this month, after which partners will vote on the shortlist.

sarah.downey@legalease.co.uk

Legal Business

Layton leads the field as CC set for managing partner election

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Leadership Clifford Chance
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The race to fill the shoes of Clifford Chance (CC)’s longstanding global managing partner David Childs has reached a decisive stage, with the initially reluctant Matthew Layton widely cited as the favourite as the firm takes soundings on potential candidates.

Layton is widely tipped to be running alongside three other likely candidates: Paris-based office managing partner and M&A corporate specialist Yves Wehrli; global head of tax, pensions and employment David Harkness; and City-based banking and finance partner Andrew Carnegie.

With the sounding process for nominations open, sources, including a number of ex-partners, say Layton, the firm’s global head of corporate, is the most obvious candidate for the role and one commented: ‘It’s a slam dunk – it’s going to be Matthew Layton. Everyone said if Matthew stands, he would be elected. He’s perceived to have done a very good job, in very difficult circumstances. People put aside their views on any particular practice area.’

Partners can put themselves forward to be nominated, after which the three with the greatest number of nominations will be put to a majority vote.

The successor will take over on 1 May 2014 from Childs, who himself took over as managing partner on 1 May 2006 and has been widely credited with taking a more pro-active stance than his predecessor Peter Cornell, particularly in taking tough decisions to co-ordinate and manage its international offering.

Childs led CC through a turbulent period in which its core financial services client base was ravaged in the wake of the banking crisis, contributing to a 4% fall in revenues over the last five years.

The election process has created a period of unrest for the partnership, as insiders say there has not been an obvious successor to the well-regarded Childs.

An ex-partner said: ‘He hasn’t got anybody who is going to be an obvious leader. Childs was in a way groomed by Peter Cornell and at the time was a chief operating officer. But there’s nobody who I can think who is preparing now for that role. It won’t be a litigator – there’s no way Clifford Chance would ever have a litigator running the firm.’

Based on this view CC’s high-profile global head of litigation and dispute resolution Jeremy Sandelson – another name put forward as a possible candidate – could be out of the running.

Other early contenders now viewed as unlikely to run include global head of finance Mark Campbell, and managing partner for the London and Middle East region David Bickerton, who is said to have felt he has sufficient responsibility in his current role.

The sounding process will wind up during October, after which partners will vote on the shortlist.

Legal Business

Layton leads the field as CC set for managing partner election

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Leadership Clifford Chance
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The race to fill the shoes of Clifford Chance (CC)’s longstanding global managing partner David Childs has reached a decisive stage, with the initially reluctant Matthew Layton widely cited as the favourite as the firm takes soundings on potential candidates.

Layton is widely tipped to be running alongside three other likely candidates: Paris-based office managing partner and M&A corporate specialist Yves Wehrli; global head of tax, pensions and employment David Harkness; and City-based banking and finance partner Andrew Carnegie.

Legal Business

Barclays £5.8bn rights issue sees Clifford Chance, Sullivan & Cromwell and Freshfields in the lead

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Corporate BarclaysClifford ChanceFreshfields Bruckhaus DeringerSullivan & Cromwell
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Barclays has begun the biggest capital raising by a UK bank since 2009 under which Clifford Chance (CC), Sullivan & Cromwell and Freshfields Bruckhaus Deringer will lead on its initial £5.8bn rights issue, as the global financial institution moves to plug a £12.8bn funding gap.

A team from 3017-lawyer Magic Circle firm CC led by London corporate partner Patrick Sarch and capital markets partner Simon Thomas is advising on English law for Barclays, while a Sullivan & Cromwell team in London is advising the bank on US law, led by client relationship partners George White and John O’Connor.

Deputy general counsel Michael Shaw is leading the Barclays team.

At 2332-lawyer Magic Circle rival Freshfields, US capital markets partner Sarah Murphy heads the team providing English and US legal advice to the sponsor, joint bookrunners and underwriters including Credit Suisse, BofA Merrill Lynch, Deutsche Bank, ABN Amro, J.P Morgan Securities, BNP Paribas and ING Bank.

The prospectus was published on Tuesday (16 September) and forms part of the capital raising first announced in July, after the Prudential Regulation Authority (PRA) revealed the results of its review on the capital adequacy of major UK banks and building societies and a leverage ratio target of 3%. Barclays was found to have a PRA leverage ratio of 2.2%, leaving it with a shortfall of £12.8bn.

Shaw told Legal Business: ‘The most eye-catching piece of the leverage plan is, of course, the rights issue – the biggest equity raising in the UK since the crisis. Normally when a company carries out a rights issue or a similar capital raising, it would expect to announce and publish the prospectus simultaneously. The preparation of a prospectus takes a number of weeks of intense effort to ensure, once published, it contains the information needed by shareholders and investors for their investment decision.

‘However, Barclays needed to announce the leverage plan as soon as it was agreed with the PRA on 30 July, and there wasn’t time before then to prepare a prospectus. Unusually, the underwriting had to be done based just on the announcement and using a small group of initial underwriters. Once the rights issue was public, it was possible to expand the underwriting syndicate and then prepare the necessary prospectus. It really has been a great team effort to achieve everything in the time available.’

According to the prospectus, the bank will contest a £50m fine from the Financial Conduct Authority (FCA), which said the bank had ‘acted recklessly’ in breaching rules over disclosing the value of a deal with Qatari Holdings during a cash call in 2008. The FCA issued Barclays a warning notice on Friday 13 September.

francesca.fanshawe@legalease.co.uk

Legal Business

In-house: Clifford Chance and Slaughter and May lawyers take senior roles at CMA, Shell and PwC

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In-house Clifford ChancePwCShellSlaughter and May
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Magic circle lawyers have this week filled a number of senior regulatory and in-house positions, with a Slaughter and May partner unveiled as general counsel of the new Competition and Markets Authority (CMA) and a former lawyer named Shell‘s UK legal head; while Clifford Chance‘s head of employee benefits has joined PwC as a director in its employee rewards team.

The CMA – the new body which brings together the Competition Commission and and some consumer functions of the Office of Fair Trading- yesterday (12 September) announced the appointment of former Slaughter and May partner Sarah Cardell as GC as it completes its leadership team in time for its official launch on 1 October.Cardell most recently occupied the role of partner for legal markets at energy watchdog Ofgem, having left her position as competition partner at Slaughters in March 2011. She will join new CMA executive director, Sonya Branch, who moves across from her role as the executive director at the OFT, where she has been since 2007 having left role as corporate partner at Clifford Chance.

Business secretary Vince Cable said of the appointments: ‘The appointment of this executive team is another milestone in the creation of the new CMA. [They] complete our senior executive team and are a major step in creating the new organisation.’

Shell meanwhile, has appointed another former Slaughters lawyer as its UK legal chief, as Michael Coates takes over from current head Bob Henderson. Henderson is relocating to the US next month to take up the post of associate GC of integrated gas and new business development as part of a reorganisation of the energy giant’s senior legal team.

Coates, who will assume the new role on 1 October, most recently worked as secretary to the company’s executive committee and as executive assistant to Shell chief executive Peter Voser, a role he took in 2011, having joined Shell from Slaughters in 2004.

The restructuring was led by group legal director Peter Rees QC in a bid to expose senior lawyers to different areas within the business.

The news comes shortly after Shell concluded a review of its external legal advisers in May, ‘prequalifying’ more than 150 firms to its global network, a number which will then reduce as Shell’s lawyers form closer relationships with certain firms.

Elsewhere, PwC continues to expand its 140-strong reward team with the appointment of Clifford Chance’s former head of employee benefits Daniel Hepburn. Hepburn has advised on employee rewards for over 20 years and has worked with many leading UK and multinational companies on their employee incentive arrangements. In his new role, he will advise on the design and implementation of a wide range of employee and executive incentives, including share, cash, bonus and other arrangements.

Carol Dempsey, a partner in PwC’s reward team, said: ‘Daniel joins at a crucial time as many companies are re-evaluating the way they reward their employees of all levels, while dealing with ever increasing regulation on remuneration structures and practices.’

francesca.fanshawe@legalease.co.uk

Legal Business

Glaxo reviews advisers as A&O & CC take lead roles on £1.35bn Ribena and Lucozade sale

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Adviser reviews Allen & OveryClifford ChanceGlaxoSmithKline
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As GlaxoSmithKline (GSK) reviews its preferred law firms in a decision that could see the healthcare giant create a formal panel, Allen & Overy (A&O) has won the lead role to advise on its £1.35bn sale of drinks brands Lucozade and Ribena to the Japanese consumer goods company Suntory Beverage and Food (Suntory).

A&O won the deal after a series of GSK’s preferred firms pitched for the role. The corporate team at A&O will include partners Edward Barnett and Andrew Ballheimer, with assistance from senior associate Nigel Parker and associate Matthew Appleton, alongside anti-trust partner Alasdair Balfour and employment partner Mark Mansell.

Clifford Chance is advising Suntory, led by corporate finance partner Joel Ziff, who will work alongside fellow corporate partner Robert Crothers and lead associate Katherine Moir, as well as IT partner André Duminy.

Slaughter and May is widely regarded as GSK’s go-to corporate firm, having previously advised on a string of major deals including last year’s £650m investment to increase its stake in its India and Nigeria subsidiaries; its acquisition of Maxinutrition from Darwin Private Equity in 2010; its agreement with Pfizer to create ViiV in 2009; and a €515m acquisition of the marketed product portfolio of UCB.

However, GSK also operates a list of preferred firms for its legal advice and is discussing whether to set up a formal panel. According to a GSK spokesperson the details will be confirmed at the end of this year.

A&O corporate partner Edward Barnett says: ‘We are proud and delighted to have worked with GSK on this strategic transition and contributed to achieving GSK’s stated aims of diversifying these iconic brands, provided appropriate value was realised for shareholders.’

The sale comes after GSK decided to increase its focus around a core portfolio of healthcare brands, with a particular emphasis on emerging markets, following a strategic review of Lucozade and Ribena in February this year. Annual sales of the two brands were approximately £0.5bn in 2012.

Under the agreement, Suntory will acquire global rights to the brands with the exception of Nigeria, where GSK Nigeria will continue to manufacture and distribute Lucozade and Ribena under licence from Suntory. The transaction is expected to be completed by the end of the year, subject to regulatory approvals.

jaishree.kalia@legalease.co.uk