Legal Business

Clydes senior partner Konsta to step down as firm grows revenue 11% in 2018/19

Clydes senior partner Konsta to step down as firm grows revenue 11% in 2018/19

Clyde & Co senior partner Simon Konsta (pictured) is to step down from his role in October just over half way into his five-year term.

The firm announced today (10 June) that Konsta will hand over to arbitration co-chair Peter Hirst, as it reported its 21st consecutive year of revenue growth to £611m in the year to 30 April, up 11% on £551.3m last year.

The firm will not disclose profit figures until next month, although Konsta said they too have increased on last year.

Konsta, who had been elected to the role in October 2016 following an uncontested election, told Legal Business: ‘My decision is, in my mind at least, relatively straightforward: I have been in a leadership role for the best part of 11 years now.’

He pointed to the firm building a £600m+ business with offices all over the world and to the fact that there was ‘so much more to be done to unlock the value within that infrastructure’. ‘As senior partner, you have a huge amount on your plate – whether it’s board meetings, travel, remuneration [review], year closing. The challenge to myself was: professionally and personally, how can I operate most effectively for myself and for Clyde?’

He concluded that the best way forward for him was to now focus on the firm’s insurance practice and professional liability defence capability: ‘There is something to drive home now and that’s where I want to focus – drive home our effectiveness in those areas rather than the broader church.’

Following Konsta’s decision to step down, Hirst was elected to the role after a vote by the global partnership, although Konsta would not say whether others stood in the election.

Konsta was first elected senior partner of Barlow Lyde & Gilbert in 2008 and led the firm into its merger with Clyde & Co in 2011. He then settled for a place on Clydes’ senior management board after Clydes’ former senior partner Michael Payton took up the position at the merged entity. He was also global head of the firm’s signature insurance practice group since 2013. His election to senior partner followed his predecessor James Burns’ own resignation in September 2016.

During his three years as senior partner, Clydes grew revenue 36%, adding £160m to its top line. It opened offices in Chicago and Washington DC, Mexico City, Los Angeles, Kuala Lumpur, Auckland, Orange County, Muscat and Bristol. This year it launched in Hamburg and Dublin.

On this year’s financials, Konsta said: ‘For the first time we have 50% of our revenue coming from outside the UK, which has been an objective for some time; 23% of our revenue is coming from the Americas. Given our focus on growing in that region, that’s very gratifying.’

Legal Business

‘Makes sense’ – Clyde & Co becomes latest English firm to launch in Dublin

‘Makes sense’ – Clyde & Co becomes latest English firm to launch in Dublin

Clyde & Co has become the latest UK firm to enter the Republic of Ireland, opening a base in Dublin for its Irish law insurance practice.

In a move announced today (13 May), insurance partner Garrett Moore has relocated from London to Dublin to ensure he continues practising Irish law ‘whatever the outcomes of Brexit’.

Moore will initially be the only lawyer operating from the office. The firm’s five other Irish-qualified lawyers will continue operating from London and Manchester. ‘We have been working in Ireland for nearly ten years now,’ Moore told Legal Business. ‘We have reached a critical mass whereby we have a number of clients, so it makes sense to have a brick-and-mortar presence in Dublin. It also provides certainty from the perspective of Brexit.’

Clyde’s announcement follows a number of other law firms launching in the Irish capital since Britain voted to quit the European Union in June 2016, opening the prospect for Ireland to become the only English-speaking common law jurisdiction fully integrated into the EU. The number of lawyers qualifying in Ireland has also grown significantly in the last three years.

Fieldfisher launched a Dublin base last month, following in the footsteps of firms including DLA Piper, Lewis Silkin, Simmons & Simmons, Covington & Burling and Pinsent Masons.

For Clyde, the Dublin opening follows the launch of its second German office in Hamburg in February last year. The firm also deepened its domestic footprint in 2018 with the launch of an office in Bristol.

Legal Business

Sponsored briefing: The lawyer’s lawyer

Sponsored briefing: The lawyer’s lawyer

The risks and exposures facing law firms have dramatically changed over the last decade. The legal industry now faces a significantly more complex risk landscape and one that will continue to evolve as technology transforms the way firms operate.The risks and exposures facing law firms have dramatically changed over the last decade. The legal industry now faces a significantly more complex risk landscape and one that will continue to evolve as technology transforms the way firms operate.

That is certainly the view of Sarah Clover, partner in Clyde & Co’s specialist lawyers’ liability practice. She believes that while the risk landscape is already more complex than ten years ago, new products and services will shape and test the boundaries of liability, and law firm’s regulatory and ethical obligations.

Clover says: ‘Working alongside our clients to identify the current and future threats facing their organisations, it is apparent that law firms continue to face pressure from consolidation, globalisation, increased regulation and ethical dilemmas, but in the near future this list will continue to grow rapidly.

‘As law firms find ways to operate using technology, automation, data analytics and artificial intelligence, to name a few, their exposures will become increasingly more complex.’

Clyde & Co’s specialist lawyers’ liability practice has defended the interests of law firms for over 40 years. The team has in it a large number of solicitors whose practices are dedicated to lawyers’ liability and regulatory work. Firms will be familiar with the work of partners such as Richard Harrison, Andrew Blair, Fergal Cathie, Neil Jamieson, James Preece, Tony Nurse-Marsh, Clive Brett, Tom White and Helen Rowlands. The current team’s roots stem from lawyers’ professional liability, their predecessors having drafted the first solicitors’ professional liability policy in 1928 and devised the first professional liability insurance scheme for solicitors in the mid-1970s.

It has acted in a series of landmark cases that have developed professional liability law. A very few of the notable highlights include:

  • The Football League v Edge Ellison [2006] EWHC 1462 (Ch), led by Clover, which looked at the boundary between legal and commercial advice.
  • Paragon Finance plc v Freshfields [1999] EWCA Civ 955, led by former Barlow Lyde & Gilbert senior partner Richard Dedman, which concerned the extent of the implied waiver of privilege by a client suing his solicitor.
  • More recently, Solicitors Regulation Authority v Leigh Day & ors [2018] EWHC 2726, led by Fergal Cathie, was the most high-profile and longest-running disciplinary prosecution ever brought by the Solicitors Regulation Authority.

Although the team has acted for over 40 of the top 50 law firms over many years, they will not descend into specifics, client confidentiality and discretion being of paramount importance to them.

Current risk landscape

According to Clover, some of the key threats currently facing law firms include:

Globalised civil exposures: The threat of civil claims is nothing new, but law firms are increasingly facing claims of greater severity and complexity. As firms operate in a more globalised marketplace, a growing number of liability claims traverse jurisdictional boundaries. Law firms must also grapple with a changing litigation environment, not least the growing prevalence of litigation funders who view professional liability claims as an attractive hunting ground.

Regulatory exposures: These represent perhaps the biggest shift in the last decade. The threat of regulatory investigation and enforcement is now as high as that in respect of civil claims. Indeed, civil and regulatory claims can feed off one another, with firms often facing parallel proceedings, which throw up a myriad of issues. Firms must now also navigate ever-more burdensome regulatory self-reporting obligations and an increasingly politicised atmosphere. In recent years this has led individuals at large firms to be brought before parliamentary committees in the full glare of the media spotlight and often without the procedural safeguards that a more formal regulatory process would entail.

Criminal exposures: Broadening criminal liability regimes, particularly in the tax sphere, have the potential to snag law firms. In line with other professional advisers, there is also concern about getting embroiled in criminal investigations brought against a law firm’s clients.

Data issues: Data breach issues are a core risk for all organisations and law firms are no exception. Firms must ensure they have the systems and controls in place to manage the risks posed by the introduction of the GDPR regime as well as the changing modus operandi of increasingly sophisticated cyber criminals. As recent history has shown, a significant data breach has the potential to destroy a firm.

In line with the increasingly global nature of exposures, Clyde & Co’s specialist lawyers’ liability team now boasts the largest global professional liability practice, and regularly acts in international and cross-border claims for global law firms.

Clover explains the reason for having an extensive global team: ‘Litigating overseas presents a number of challenges for organisations, including law firms. In addition to the practical difficulties of securing local representation and managing the translation process, firms must navigate cultural differences, local court systems, procedural requirements and the selection of local experts. Having boots on the ground is essential to consistent delivery of the highest quality service to our clients.’

Recognising that law firms face a broad range of exposures and challenges, Clyde & Co has developed a reputation as ‘the professional’s professional’, handling, in addition to civil claims, disciplinary and regulatory issues, a long list of other advisory work for professional services firms, including employment, bribery and sanctions, partnership and other corporate structures, as well as  commercial and intellectual property advice. It has also built up a leading practice advising on the structuring of insurance and reinsurance arrangements for global professional service networks.

‘Our close-knit team works in tandem to draw on each other’s expertise and ensure our clients are equipped to face the evolving risk landscape that continues to threaten the operations of the world’s leading law firms,’ concludes Clover.

Sarah Clover has been a partner at Clyde & Co since 1992. She has specialised in lawyers’ professional liability for 30 years and advised on a wide range of professional liability claims against lawyers, including claims involving corporate finance, tax, pensions, commercial and residential property, litigation and commercial contract. She also advises clients on regulatory and disciplinary issues, risk management and policy coverage. Sarah has a wealth of experience in mediation and other forms of alternative dispute resolution.

For more information, please contact:Sarah Clover

Sarah Clover, partner, Clyde & Co

T: 020 7876 6386

Legal Business

Clydes sacks veteran partner after ‘inappropriate behaviour’ investigation

Clydes sacks veteran partner after ‘inappropriate behaviour’ investigation

The trend of large firms dismissing partners for wrongdoing following internal investigations continues with Clyde & Co today (12 October) announcing the dismissal of a senior partner after investigating complaints of ‘inappropriate behaviour’ from two female lawyers.

The partner – based outside the firm’s City HQ – was dismissed by the firm on 28 September following an internal investigation. Legal Business understands that no non-disclosure agreements (NDA) have been signed in relation to the complaints, and that the firm has self-reported to the Solicitors Regulation Authority (SRA).

A Clydes spokesperson said: ‘We hold ourselves to the highest standards of behaviour and expect all of our partners and staff to act with integrity, maintain high ethical standards and to respect local and global regulatory environments at all times.

‘Allegations of inappropriate behaviour were made against a partner. When the allegations came to light we carried out an internal investigation. The outcome of the investigation is that the partner has been dismissed from the firm with immediate effect. Out of respect for the privacy of those concerned we will not be commenting further.’

A spokesperson for the SRA said: ‘We will look at all the available evidence before deciding on the appropriate action.’

This dismissal echoes the similar sacking of Quinn Emanuel Urquhart & Sullivan partner Mark Hastings in May this year. Hastings was fired after an independent investigation into ‘inappropriate behaviour’, based on accusations by two staff members. Mishcon de Reya’s Alison Levitt QC carried out the probe, with her findings presented on 26 April. Hastings was expelled without compensation on 8 May.

Hastings has already found new work however, with Mayfair litigation boutique announcing yesterday (11 October) it had hired him, in spite of an ongoing SRA investigation.

Elsewhere, a Baker McKenzie partner left that firm in February after allegedly sexually assaulting an associate. A review by Simmons & Simmons found a ‘number of shortcomings’ in Bakers handling of the incident.

Meanwhile, eight law firms are known to be under some form of SRA investigation related to circumstances surrounding NDAs and harassment, including at least three major firms.

For more on the issue of City law’s handling of NDAs, see ‘Draining the swamp – Do NDAs represent a #MeToo problem for the profession?’


Legal Business

Life during law: Simon Konsta

Life during law: Simon Konsta

My father is Greek, my mother was English. There’s been no law in the family, much more of a trading background on my father’s side. But there is a wonderful circularity between his old Greek shipping mates that would be in my environment as a child, and the fact that Clyde & Co is the world’s number one marine firm.

I had an open mind going into articles. I was lucky to have a seat in Paris, which is disputes and arbitration. A combination of that plus the domestic disputes work I did, I just preferred it to corporate or real estate.

Legal Business

Clyde & Co grows revenue for second decade running as profitability sees double-digit increase

Clyde & Co grows revenue for second decade running as profitability sees double-digit increase

After a year of major international expansion, Clyde & Co has recorded another robust round of revenue growth with the firm’s top line rising 9% to £551.3m year-on-year.

The 2017/18 result means the firm’s revenue has grown by nearly 200% on a ten-year track – Clyde’s turnover in 2008 stood at £185m.

Profitability also saw a significant boost, increasing 10% to £140.5m. Profit per equity partner (PEP) was also up, climbing 2%, a success in relative terms when considering the firm added 63 new partners through lateral hires and promotions during the last year.

Clyde’s chief financial officer Duncan Crowdy told Legal Business that only around 1% of the firm’s revenue growth was due to currency fluctuations, a significant reduction on last year when roughly 6% was linked to currency. For this reason, chief executive Peter Hasson considers this year’s result a stronger showing than last year’s, despite revenue increasing 14% in 2016/17.

Hasson commented: ‘It’s another set of good results in a challenging environment. Growth is getting pretty hard to achieve, it’s not an environment where it is easy to increase prices.

‘The insurance sector was extremely solid as always. But two of the other standout areas were construction, particularly in the Asia-Pacific region, and the energy sector in both disputes and transactional work.’

Half of Clyde’s business is now derived from outside the UK, while the Americas region accounted for 20% of the firm’s revenue, up 4% on last year’s share. This is a result of Clyde’s fervent expansion in the region, with the firm opening three offices in the Americas in the last year: Mexico City and Los Angeles in 2017 with the addition of Orange County at the beginning of this year.

Hasson also highlighted the firm’s Canadian operation, noting that the region has seen a 20% hike in revenue over the last year, due to a strong performance in the insurance sector.

Other office openings for Clyde in the last year included a Bristol hub, which was established in May. The firm also entered Hamburg in February after hiring a four-partner team from insurance and shipping rival Ince & Co.

A major factor in Clyde’s swelling partnership ranks was the 15-strong team it picked up from now-defunct US firm Sedgwick at the end of last year. In addition to 15 partners, 65 other lawyers and staff jumped ship to Clyde’s, joining the firm’s offices spanning San Francisco, Los Angeles, Orange County, Chicago, New York and Miami.

Hasson told Legal Business that the firm has set a target to generate 5% of its revenue from ‘services or products that we weren’t able to offer at the end of last year’. The target ties into the firm’s new data analytics lab, launched in December 2017. The lab, which is overseen by insurance partner Mark Wing, is run in conjunction with University College London (UCL) to develop services for clients.

Legal Business

Clyde & Co launches new UK office in Bristol with three lateral disputes hires

Clyde & Co launches new UK office in Bristol with three lateral disputes hires

Ever-expansive Clyde & Co has deepened its domestic footprint with the launch of an office in Bristol, south west England, and the arrival of three new partners to staff it.

The new office, which opened its doors today (1 May), is Clydes’ tenth in the UK and will be focused on professional and financial disputes in addition to infrastructure work.

Among the incoming partners is Ian Peacock, a professional indemnity litigator who joins from Womble Bond Dickinson, the recent transatlantic tie-up of UK shop Bond Dickinson and US firm Womble Carlyle Sandridge & Rice.

Peacock, who is credited with setting up Bond Dickinson’s Bristol-based insurance practice in June 2000, typically represents solicitors, accountants, brokers and financial advisers.

Also joining is John Eastlake from Kennedys’ London office. Eastlake served as the firm’s head of professional indemnity in London, and largely mirrors Peacock’s client-base.

Completing the trio is Peter O’Brien, who was previously a partner at Bristol-headquartered Clarke Wilmott. O’Brien has over 14 years’ experience in construction industry disputes, representing both contractors and sub-contractors in the energy and infrastructure spheres.

The Bristol office will also soon boast five associates, with three focused on professional and financial disputes and two on projects and construction.

The new outpost will be seen as a significant strengthening of the firm’s already robust professional and financial disputes group. The group, now consisting of more than 150 lawyers in the UK, sees Clydes recognised as a leader in the professional liability space.

Robert Hill, employment partner and Clydes’ chair of the UK board, told Legal Business: ‘Bristol is a strong centre for liability disputes, a large number of insurers and brokers have set up there in the last few years. It was the obvious missing office for us.

‘Our view of the regional offices has always been insurance-based but we have also grown out other practices. In Manchester for example we added employment, marine cargo and property. It’s not out of the realms of possibility that Bristol could develop in a similar way.’

Simon Konsta, Clydes’ senior partner, added: ‘Bristol is a key centre for professional and financial disputes and infrastructure work, so having John, Ian and Peter on board gives us a great foundation, as well as a platform for further growth.’

The Bristol opening marks Clydes’ second new office of 2018, after announcing in February that it was setting up a four-partner Hamburg office.

However last year was particularly expansive, as the firm launched new offices in Los Angeles, Mexico City, Washington and Chicago.

Legal Business

Who Represents Who: Firms that will be affected by the fall of Carillion

Who Represents Who: Firms that will be affected by the fall of Carillion

For more information on Who Represents Who, contact:
David Burgess,
Publishing Director, The Legal 500

Legal Business

Revolving doors: Clyde & Co launches in Hamburg with four-partner Ince team

Revolving doors: Clyde & Co launches in Hamburg with four-partner Ince team

Germany has today (12 February) taken centre stage in the European lateral recruitment market with Clyde & Co announcing the launch of a new office in Hamburg on the back of a four-partner team hire from insurance and shipping rival Ince & Co.

Clyde will be launching its second German office after Düsseldorf later this year, with Ince’s former head of English law Daniel Jones and head of admiralty and energy Eckehard Volz.

Litigation and arbitration expert Tim Schommer and cargo claims specialist Volker Lücke will also join Clyde from Ince, bringing the firm’s Germany partner headcount to six.

Based in Hamburg office since 2008, Jones has been acting for German and Scandinavian shipowners in contentious matters in London maritime arbitration and the English courts. He was also a member of Ince Consultancy, the firm’s non-legal arm launched in 2016 to offer financial, tax and project structuring advice.

Volz joined Ince in 2007 and works on shipping, marine and offshore matters, while Lücke qualified at the firm in 2006 and helped setting up its yacht practice. Schommer joined Ince as a newly qualified German lawyer in 2005 and specialises in in handling shipbuilding, ship repair, yachting and trade disputes.

The news marks the latest chapter in Clyde’s international expansion of late. The firm launched in Los Angeles , Mexico City, Washington and Chicago last year.

As for Ince, senior partner Jan Heuvels said the firm was in a ‘strong position to deal with the increasing mobility of lawyers, which is prevalent within the market’.

‘Over the last two years we have successfully restructured our business, including the adoption of a hybrid lockstep remuneration model that rewards our highest performing partners. This will inevitably result in certain partners seeking other opportunities.’

Heuvels announced the appointment of three new partners in Hamburg. Associates Götz Rahne, Christian Reinert and Martin Malinowski will be promoted to the partnership later this year, meaning the firm will have 13 partners and 23 other fee earners in Germany from 1 May 2018, spread between Hamburg and Cologne.

‘Our Hamburg office is blessed with a depth of talent and events such as this provide opportunities to reinvigorate our team and allow our lawyers to develop further in a collegiate environment,’ added Heuvels.

Meanwhile, north of the channel competition partner Satyen Dhana left CMS last week for Simmons & Simmons’ EU, competition and regulatory group.

Hogan Lovells appointed Tom McFarlane as EMEA head of transfer pricing. He joins from professional services firm Alvarez & Marsal, where he led the transfer pricing and tax-efficient supply chain management practice in London. He previously spent six years at KPMG.

Elsewhere Addleshaw Goddard brought its UK financial regulation partner headcount to six with the appointment of consumer finance specialist Clare Hughes will from Eversheds Sutherland and Lorna Finlayson, former head of Burness Paull’s financial services regulatory practice.

Legal Business

LLP round-up: Bird & Bird debt soars as rising partner count freezes top pay at Clyde & Co

LLP round-up: Bird & Bird debt soars as rising partner count freezes top pay at Clyde & Co

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.