Legal Business

Financials 2017: Tough markets see CMS growth stall as group revenues dip below €1bn

Financials 2017: Tough markets see CMS growth stall as group revenues dip below €1bn

A year of turbulence and tough markets in Europe has apparently taken its toll on the region’s legal market with CMS seeing growth stall with group revenues hitting €999m for 2016.

The revenue figures include CMS’ ten member firms that are combined together under a European Economic Interest Grouping. The firm said that without currency fluctuations it would have posted like-for-like revenues of €1.05bn, constituting a 4.1% increase in combined income. However, on face value it represents a minor dip on the previously reported revenues of €1.01bn for 2015.

The results mark the end of a period of substantive growth for CMS, which posted an 8% turnover increase in 2015. The combined revenue will place the firm just outside the top 25 law firms in the world based on turnover.

The network, which launched in 1999, over the year also saw office launches in Tehran and Hong Kong, filling out a 70-office network across 39 countries. CMS also earlier this year expanded its practices in Latin America with the addition of three local firms to its network in Chile, Peru and Colombia.

The results, however, do not include the headline-grabbing union of CMS’s UK member Cameron McKenna with Nabarro and Olswang. The three UK firms combined as a single partnership from 1 May 2017 in the largest-ever legal union by lawyer numbers in the UK.

The CMS grouping comprised 3,000 lawyers ahead of the latest UK merger, including major European firms such as Germany’s Hasche Sigle and Bureau Francis Lefebvre, though the grouping has made increasingly prominent use of the CMS branding in recent years reflecting a drive to integrate.

Stephen Millar (pictured), UK managing partner of CMS, attributed the results to a ‘very busy’ transactional market ‘despite the current volatility’. Millar also insisted that the global market ‘remains in good health and continues to show resilience’.

A key transactional mandate that CMS acted on was the £13.6bn sale of National Grid’s gas distribution business, where CMS advised a consortium of infrastructure investors.

tom.baker@legalease.co.uk

For in-depth analysis on the merger of CMS Cameron McKenna, Nabarro and Olswang click here.

Legal Business

Emerging empires – Bakers, CMS and DLA Piper rise up the ranks as global giants march on

Emerging empires – Bakers, CMS and DLA Piper rise up the ranks as global giants march on

Ella Marshall and Jonathan Armstrong assess the latest EMEA rankings from The Legal 500

The market continues to evolve in Europe’s key heartlands, as a band of expansive globalised firms spread out their tentacles, while another grouping of more transactionally-driven players strip down their businesses with an eye on profitability. Following the recent publication of The Legal 500 Europe, Middle East & Africa (EMEA) 2017 edition, we look at the winners and losers among major international law firms this year.

Legal Business

CMS network promotes 48 to partner, with Nabarro and Olswang making up two each

CMS network promotes 48 to partner, with Nabarro and Olswang making up two each

Ahead of the triple merger on 1 May, the CMS global network including Nabarro and Olswang have announced their partner promotions for 2017, with females making up 27% of the worldwide total.

The 44 partners made up by the global CMS network mark a significant increase on last year, when 31 lawyers were promoted globally. In that round, women made up 39% of the total new partners, and therefore that figure has slipped since last year. However in terms of UK-based promotions, women make up 40% of new partners.

In this year’s round, associates have been made up in a variety of practices spanning CMS’ 26 worldwide offices. In the UK, David Bridge and Olswang’s Luke Pardey have been promoted in the firm’s dispute resolution and arbitration practice, with Caroline Kurup being made up in employment and pensions. CMS’ real estate practice has been expanded with fellow UK lawyers David Crossley (Nabarro), Amy Norton and Kirsten Partridge, with Olswang’s Helen Wallis being made up in IP. Nabarro’s Jack Shepherd has been promoted in the firm’s corporate practice, while Paul Silver and Duncan Turner have been made up in TMT.

CMS Cameron McKenna senior partner Penelope Warne (pictured) commented: ‘Providing opportunities for progression for all our employees is a key priority for our business. The broad range of countries and practice and sector groups in which the promotions have taken place is testament to the strength and confidence we have in our global business.’

Earlier this year it emerged that 300 support staff roles were set to be cut, ahead of the CMS Cameron McKenna, Nabarro and Olswang three-way merger. The decision came after a consultation which ran from 16 January to 3 March, with 650 of 950 support staff members being offered roles in the combined firm.

tom.baker@legalease.co.uk

Read more: ‘Sale of the century – Has Camerons picked up a bargain with Olswang and Nabarro?’

CMS partner promotions in full:

Kerstin Block, banking, Germany
Andrea Zubović-Devedžić, banking, Bosnia and Herzegovina
Ulrich Becker, corporate, Germany
Tobias Grau, corporate, Germany
Daniel Jenny, corporate, Switzerland
Christoph Lächler, corporate, Germany
Falk Lichtenstein, corporate, China
Jochen Lux, corporate, Germany
Daniela Murer, corporate, Italy
Jack Shepherd, corporate, United Kingdom
Herman van Aerts, corporate, Netherlands
Michael Wangemann, corporate, Germany

Marquard Christen, competition, Switzerland

Francesca Sutti, competition, Italy
Dieter Zandler, competition, Austria
Florian Block, compliance, Germany
David Bridge, dispute resolution, London
Horia Draghici, dispute resolution, Romania
Pierre Ducret, dispute resolution, Switzerland
Luke Pardey, dispute resolution, London
Jorge Sánchez, dispute resolution, Spain
Sophie Berg, employment and pensions, Belgium
Caroline Kurup, employment and pensions, London
Sofia Mateus, employment and pensions, Portugal
César Navarro, employment and pensions, Spain
Đorđe Popović, energy, Serbia
Randall Walker, energy, UAE
Thomas Böhm, insurance, Austria
Paola Nunziata, IP, Italy
Helen Wallis, IP, London
David Crossley, real estate, London
Johanna Hofmann, real estate, Germany
Christiane Kappes, real estate, Germany
Amy Norton, real estate, Edinburgh
Álvaro Otero, real estate, Spain
Kirsten Partridge, real estate, Glasgow
Thorsten Schätzlein, real estate, Germany
Jozsef Varady, real estate, Hungary
Herman Boersen, tax, Netherlands
Stephane Bouvier, tax, France
Mark Cagienard, tax, Switzerland
Pierre Carcelero, tax, France
Dimitar Hadjiveltchev, tax, France
Diego de Miguel, tax, Spain
Johann Roc’h, tax, France
Christophe Vézinhet, tax, France
Paul Silver, TMT, London
Duncan Turner, TMT, Edinburgh

Legal Business

Comment: There’s value in CMS’ purchase and one big hurdle ahead

Comment: There’s value in CMS’ purchase and one big hurdle ahead

In the wake of the eye-catching tie-up of CMS Cameron McKenna, Nabarro and Olswang, Legal Business noted last year that the gnomic messages around the union made it a hard one to judge. And even after a detailed assessment of the largest UK legal merger ever, as we undertake for this month’s cover feature, it’s not easy to put the pieces together.

In part that is because CMS Cameron McKenna as the firm driving the effective takeover has become a difficult player to judge or benchmark against peers. While the CMS network has grown robustly in recent years, Camerons itself has often shed revenues since the banking crisis.

The insistence on positioning the CMS network as a fully-fledged entity to the point of providing financial benchmarks on a group-wide basis only further muddies the water. Personally I would say it has been counter-productive in branding terms as neither fish nor fowl but I will not labour the matter here.

What is apparent on closer observation is that Camerons has been a proactively managed businesses in the New Normal era, keeping an increasingly tight grip on its partnership, back office and costs.

Such operational rigour helped the firm pull off its 2014 takeover of Dundas & Wilson with considerable success and further strengthened the hand of the leadership team of Penelope Warne and Stephen Millar. And the Olswang and Nabarro takeover has more than shades of the Dundas deal, providing a chance for Camerons to pick up assets marked down after a periods of drift and strategic impasses.

That hint of distress – particularly notable with Olswang – hardly bodes ill. The history of legal mergers has seen plenty of productive unions in which a weaker partner backed themselves into a corner.

Knowing who is calling the shots brings clarity to the transaction, and putting assets up for sale provides the chance for the acquirer to realise value. And Olswang and Nabarro bring something substantive to the table. Combining the three to create a £430m practice with muscular industry coverage across energy, media, tech, financial services and real estate with economies of scale and a decent balance sheet is hard to query, even before you consider its huge international reach. Even the ex-partners, peers and mourning Olswang veterans with a sentimental view of a firm that was always a stronger brand than business do not question the logic of the union.

The biggest issue hanging over the merger has to be over the ability to focus three partnerships that have collectively failed to build revenues in recent years.

Even allowing for a low-growth environment, this trio have leaked market share, damaging in an era in which many mid-pack players are not just surviving, they are thriving. Camerons’ equity partner/fee-earner ratio is already eye-wateringly high for a major law firm. The danger is that rigorous operational management morphs into outright financial engineering and scale just allows the giant to sustainably fail for longer.

Providing CMS UK is alive to that very real risk, it has a huge opportunity to seize, bigger than you could imagine any of the three firms having independently. In the face of an uncertain legal market, it has taken the bold step. Audacity does not take you all the way, but it goes pretty far.

alex.novarese@legalease.co.uk

Read more in: ‘Sale of the century – Has Camerons picked up a bargain with Olswang and Nabarro?’

Legal Business

CMS ends Slovakia alliance and sets sights on Bratislava opening

CMS ends Slovakia alliance and sets sights on Bratislava opening

CMS‘ UK and Austrian member firms have called time on their alliance with Slovakian law firm Ruzicka Csekes, with plans to open a Bratislava office later this year.

The Slovakian firm of 40 lawyers had been in association with CMS Cameron McKenna and Austrian member firm CMS Reich-Rohrwig Hainz for five years, but now CMS is planning to launch its own fully integrated office in the country.

The alliance will end on 31 May 2017 and Camerons and Reich-Rohrwig Hainz aim to have an office in place by the summer with a newly created Slovak team of lawyers.

The firms have not decided whether the new office will be a joint venture, similar to the offices run by CMS in Russia or Istanbul, or a standalone office managed under the Camerons LLP or by Reich-Rohrwig Hainz.

A new office in Bratislava would bring the CMS group total to 66 worldwide. CMS operates as a European Economic Interest Group of firms, which includes 10 European members.

According to the firm’s latest LLP accounts, the share of joint venture turnover attributable to Camerons UK business was around £4m for the financial year ending 2016, up from £3.7m the previous year.

The UK business also operates further Central and Eastern European offices. Expansion in the region was originally led by executive partner Duncan Weston, prior to his appointment as managing partner in 2008. Camerons currently has offices in the region in Czech Republic, Poland, Ukraine, Bulgaria, Romania and Hungary.

CMS recently added three new member firms from Chile, Peru and Columbia to its international group – increasing the total number of member firms in CMS to 13 earlier this month.

matthew.field@legalease.co.uk

Legal Business

CMS continues international growth with addition of three South American firms

CMS continues international growth with addition of three South American firms

CMS has added three new member firms from Chile, Peru and Columbia to its international group – bringing the total number of member firms in CMS to 13 and leaving the combined firm with 65 offices worldwide.

The three firms will join as CMS Carey & Allende in Chile, CMS Grau in Peru and CMS Rodríguez Azuero Contexto Legal Abogados in Columbia. The move adds to CMS’s Latin American presence in Brazil and Mexico.

The new additions leave CMS with 65 offices in 38 countries and will bring the firm’s headcount to more than 6,000 staff and 880 partners.

The three firms join as members of the original ten-firm European grouping, which includes CMS Cameron McKenna in the UK and CMS Hasche Sigle in Germany. CMS Carey & Allende will add a 45 lawyers in Santiago to CMS’s South American presence, while Peruvian firm CMS Grau will add 100 lawyers in Lima and CMS Rodríguez will add a 65-strong team in Bogotá and Medellin.

CMS executive partner for global development Duncan Weston said: ‘Our aim is to integrate leading firms that share our strategic vision, which is based on a client-centric approach – in-depth knowledge of our clients’ businesses and an understanding of their specific needs. With our combined expertise, we will offer our clients high-quality service, across all sectors and around the world.’

The new firms are only the latest additions to CMS’ international presence. The group launched a new joint office in Hong Kong that will feature partners from both the German and UK firms last year, as well as a new office in Iran at the start of 2016. Additionally, CMS Cameron McKenna’s upcoming merger with Nabarro and Olswang will add an international office in Singapore.

The CMS group reported more than €1bn in turnover last year, which the firm said represented a turnover increase of 8% on the previous year.

matthew.field@legalease.co.uk

Legal Business

CMS returns to Hong Kong to enhance Asia disputes practice

CMS returns to Hong Kong to enhance Asia disputes practice

wiegand, nicolas_(small)CMS opened in Hong Kong in September through its German branch CMS Hasche Sigle, re-entering the city as part of an international arbitration push.

The initial focus of the office will see the development of a dispute resolution practice by arbitration partner Nicolas Wiegand (pictured) who relocates from Munich.

Legal Business

‘Huge opportunities’: CMS launches in Hong Kong in Asia arbitration play

‘Huge opportunities’: CMS launches in Hong Kong in Asia arbitration play

International law firm grouping CMS has today (1 September) opened in Hong Kong through its German arm CMS Hasche Sigle, strengthening its presence in Asia to three offices.

The office will initially focus on dispute resolution and M&A under Hasche Sigle international arbitration partner Nicholas Wiegand. CMS plans to extend its service offerings in the new office and establish a banking and finance practice in the office in 2017 through UK-based firm CMS Cameron McKenna.

CMS has had a presence in China since the 1990s and already has two offices of around 30 lawyers each in Shanghai and Beijing. CMS Cameron McKenna also previously had a Hong Kong office which wound down in 2003. 

Wiegand becomes the head of the new office having previously been based in Munich. He has experience working on arbitrations relating to Hong Kong, China, Singapore, South Korea, Australia, Thailand, Vietnam and Japan, and also sits on arbitration panels in Hong Kong, Shenzen and Dubai.

CMS executive chairman Cornelius Brandi said: ‘We look for markets that offer the greatest business potential for us. Geographic expansion is often part of our client´s growth strategy. So, we move primarily into regions where we expect that there will be future opportunities for them.’

The new office follows the firm’s most recent venture into Iran, with the firm becoming the first international law firm to launch a dedicated office in Tehran. The office is also led by partners of CMS’s German branch.

Hasche Sigle managing partner Hubertus Kolster said: ‘We see huge opportunities for the future throughout the entire South-East Asia region. Hong Kong itself, and especially China and of course the entire Asia-Pacific region have very dynamic economies and are a focal point for international investors.’

CMS Cameron McKenna managing partner Stephen Millar earlier this year confirmed to Legal Business that the firm was targeting expansion in Asia, aiming to boost its presence in the region to contribute up to 30% of revenues. Executive partner Duncan Weston is also understood to be examining plans for future associations in South America.

matthew.field@legalease.co.uk

Legal Business

Financials 2015/16: Revenue growth slows at CMS as group posts 8.4% lift

Financials 2015/16: Revenue growth slows at CMS as group posts 8.4% lift

CMS has reported revenue and profit growth for 2015, with turnover increasing 8.4% year-on-year to £735.2m, and profits up 6.8%. The revenue figure includes fees from CMS’s ten member firms which operate under the CMS brand as part of a European Economic Interest Grouping.

Figures released today (10 June) show revenue growth has slowed, as the group last year reported 11% revenue growth and profits up 3% off the back of two mergers in 2014.

CMS UK senior partner Penelope Warne (pictured) said: ‘Although Brexit has presented some challenges and uncertainty in the UK market, we have maintained a strong and successful business.’

She added: ‘We have had significant growth in corporate and banking, where we have achieved double digit growth, and that has been tremendous. I think that each year, more and more, as we work within CMS, we become more integrated.’

Major deals for CMS have included advising AMP Capital on a joint acquisition of a £365m stake in Angel Trains and acting on an international banking consortium led by KfW IPEX-Bank and UniCredit on the €1.2bn refinancing of the bank loans of VTG Aktiengesellschaft.

CMS Cameron McKenna elected its new managing partner Stephen Millar in February this year. The energy partner succeeded long-standing chief Duncan Weston in May, who had been in the role since 2008. Weston has been appointed CMS executive partner for global development, with a mandate to build relationships with potential future partner firms.

CMS has made significant changes in the past few years, focusing in on energy, life sciences and financial services. Millar also recently played a central role in driving through CMS Cameron McKenna’s merger with Scottish firm Dundas & Wilson in 2014. CMS von Erlach Henrici also concluded a merger in 2014, with Swiss law firm ZPG Avocats.

In his election manifesto Millar promised to globalise the business, targeting expansion in the Middle East, Asia and North America. At the start of 2016 CMS Hasche Sigle announced an outpost in Tehran, making it the first international law firm to launch in Iran after sanctions were lifted on the nation.

Millar said: ‘There has been a wide spread acknowledgement that the last six months has been a challenging market, so we are really pleased to see this significant growth – as for what others do we will have to wait and see.’

He added: ‘In terms of Dundas & Wilson the integration has given us a much higher turnover in the UK, and what it’s allowed us to do is pursue a number of very good client opportunities. We’ve really seen that come through with some of the key accounts. That was the aim of the merger and this has started to deliver.’

Other LB100 firms to release results early this season include Fieldfisher which posted a 7% increase in firmwide revenues for 2015/16, up to £121.5m from £113.3m. Osborne Clarke posted a 23% rise in global revenues to €236.3m, while TLT posted a 15% turnover lift to £71.6m in May.

matthew.field@legalease.co.uk

 

Legal Business

White & Case appoints management as Verrier re-elected while CMS hands Brandi a second term

White & Case appoints management as Verrier re-elected while CMS hands Brandi a second term

Both White & Case and CMS announced yesterday the re-election of their executive chairmen with Hugh Verrier taking the role on for a third time at the US firm while CMS’ Cornelius Brandi was elected for a second term.

Verrier, who was elected to his first term as chairman in 2007, will start another four-year term on 1 September. Having won re-election, the project finance partner also made appointments to the firm’s executive committee, gifting places to London managing partner Oliver Brettle (pictured), São Paulo-based Donald Baker, and banking partner David Koschik in New York. The body is responsible for decision making for the 38-office firm and will see the trio take up their positions on 1 September 2015.

The firm also carried out elections for its other management body, the partnership committee. The eight partners elected to the body comprise: New York partners James Hayden, David Hille, Someera Khokhar and Heather McDevitt, Frankfurt’s Jochen Artzinger-Bolten, Paris-based M&A partner François Leloup, Jacquelyn MacLennan based in Brussels, and Jason Yardley in London. The eight partners will also serve on the Compensation Committee and the New Partners Committee.

Verrier said: ‘I am grateful for the opportunity to lead White & Case for the next four years. As we move forward, we are focused on smart growth and strengthening our capabilities in key markets, attracting and retaining the best talent, and building relationships with clients to support their evolving needs.’

Meanwhile, CMS re-elected executive chairman Cornelius Brandi for a second four-year term. The role is responsible for the firm’s growth and strategic direction, something which Brandi claimed was given backing by his re-election.

Brandi said: ‘Over the years, CMS has achieved a dominant position in transactional work. Our excellent 2014 financial results, with a year-on-year revenue increase of 11%, reflect this. The results show that we have substantially increased our market share in jurisdictions we want to be in. Additionally, the level and quality of mandates that we receive have continually improved. CMS is on the right track.’

michael.west@legalease.co.uk