Legal Business

Covington continues European expansion with Frankfurt private equity launch

Covington continues European expansion with Frankfurt private equity launch

Global 100 player Covington & Burling is taking a shot at the German private equity market, launching an office in Frankfurt after taking a six-partner team from Heymann & Partner, which has shut down after 12 years.

Focusing on private equity, tech and healthcare, the firm’s third European base opened on 3 April and counts eight partners and ten other lawyers, led by former Heymann corporate partner Henning Bloss, among its ranks.

Legal Business

Covington strengthens in Europe with Frankfurt launch as Dentons takes chunk of ailing Australia player

Covington strengthens in Europe with Frankfurt launch as Dentons takes chunk of ailing Australia player

Covington & Burling is to deepen its European footprint with the opening of a new office in Frankfurt – the firm’s third office in the region – while Dentons has taken on 17 partners from domestic Australian firm DibbsBarker.

The US firm has announced today (28 March) the opening of a new Frankfurt branch, which will be led by eight partners, including six from Heymann & Partner and two Covington partners from the firm’s Brussels and New York offices.

The new Frankfurt outpost will open on 3 April and focus on corporate work, including M&A, private equity, finance and restructuring, outsourcing and other technology transactions. M&A and private equity specialist Henning Bloss from Heymann & Partner will lead the new office, accompanied by Thomas Heymann, the founder of the German firm.

The move underlines Covington’s decision to develop its European presence, after last year becoming the second law firm to open an office in Dublin in light of the 2016 Brexit referendum.

Timothy Hester, Covington’s chair, said: ‘Our new German team is of outstanding quality and will provide important synergies with the firm, including our London and Brussels offices and will allow us to serve the needs of our clients who have legal issues in Germany.’

M&A partner Heymann echoed Hester’s sentiments, adding: ‘We are convinced that adding Covington’s strengths and global reach will benefit our clients in an increasingly global market, especially with matters in the US, Asia and the UK.’

Covington enjoyed a fruitful year in 2017, boosting its London top line by 16% from $69.5m to $80.5m after strategic hires in the city. Meanwhile, firmwide revenue increased by 13% to $945.5m after opening new offices in United Arab Emirates and South Africa.

Meanwhile, Dentons has also expanded its international operations in Australia by bringing over 17 partners from local firm DibbsBarker, which will wind down its operations after more than 130 years.

The two firms have reached an agreement that will see Dentons acquire 10 partners in Sydney, two in Melbourne and five in Brisbane across its financial services, real estate and corporate practices from 1 May.

DibbsBarker managing partner Stephen Purcell said Dentons was ‘an excellent firm where our partners will continue to deliver high-quality legal services. Being part of a firm with global reach and an innovative approach to legal solutions will further enable our partners to amplify their offering for clients into the future.’

Dentons combined with 500-lawyer Gadens in 2016, securing a presence in Sydney, Perth and Port Moresby in Papua New Guinea.

thomas.alan@legalbusiness.co.uk

marco.cillario@legalbusiness.co.uk

Legal Business

Brexit boost continues for Dublin as Covington launches life sciences team in Ireland

Brexit boost continues for Dublin as Covington launches life sciences team in Ireland

A Brexit-driven boost to Dublin as a professional services hub has been much discussed and now appears to be materialising as Covington & Burling has confirmed that it is the second international law firm to launch locally following last year’s referendum vote.

The Dublin launch, which is still subject to regulatory approval, will focus on regulation, pharma and life sciences and be overseen by London-based EU life sciences partner Grant Castle and technology partner Daniel Cooper.

Maree Gallagher, who is currently of counsel at Irish practice Beauchamps, will also join Covington locally. Gallagher, who has over 20 years’ experience in regulatory work in the pharma and life sciences sectors, also founded the boutique Maree Gallagher Associates in 2004. The 840-lawyer Covington has substantial resources to back its expansion, with the Washington DC-bred firm generating revenues of $838.5m in the 2016 financial year.

The Dublin market is still awash with rumours about which foreign law firms may launch in the Irish capital following the Brexit vote last June. Pinsent Masons became the first foreign law firm to make a concrete commitment earlier this year when it confirmed that it would launch a greenfield site with three partners, each from different firms, focusing on financial services and technology.

Pinsents’ team includes outsourcing partner Andreas Carney from Matheson, corporate partner Dennis Agnew from ByrneWallace and funds partner Gayle Bowen from Walkers.

At the time, Pinsents’ senior partner Richard Foley told Legal Business that the move was primarily due to the development of Dublin as a major international hub, commenting: ‘It wasn’t a Brexit thing. We felt that, given Dublin’s reputation as a key global hub in financial services, technology and pharmaceuticals, it was an obvious place for us to look in.’

It is believed that a number of other foreign law firms, including DLA Piper, have sized up a Dublin move amid expectations that a local branch will help ease access to the EU after Britain leaves the grouping. The number of foreign solicitors registering to practise in Ireland has already surged since the 2016 vote.

However, entering the local market will be complicated for foreign law firms by the relatively high profitability of top Dublin law firms and an unwillingness of veteran partners to move between peers.

kathryn.mccann@legalease.co.uk

Legal Business

Lawyers On Demand set to break into the Middle East with Dubai launch

Lawyers On Demand set to break into the Middle East with Dubai launch

Lawyers On Demand (LOD), Berwin Leighton Paisner’s(BLP) freelance lawyers spin-off, is due to launch in the Middle East with a new Dubai office, breaking into an increasingly competitive legal market.

It is understood that the opening is on track for early autumn.

The launch will be overseen by Brett Menadue, new managing director for the Middle East operation, hired by LOD in May in anticipation of the launch.

Already based in Dubai, Menadue was formerly chief legal officer at Mara Global Technology and a previous director of legal and compliance at Nokia in Dubai.

Foreign investors in Dubai need a local sponsor in order to open a business outside of the free zones. BLP’s own office is based in the Dubai International Financial Centre (DIFC). However, regulatory, commercial and legal requirements for law firms to establish in the area differ from those for other types of businesses.

The freelance law service is based on three models: lawyers working on-site with clients under a secondment-style service, lawyers ‘on call’ in flexible secondments as and when required, and project-based ‘managed solutions’ – which include LOD teams assigned to specific projects.

The opening of LOD’s first Middle East office would mark significant growth by the consultant lawyer business over its first decade.

Founded in 2007 with 10 lawyers as one of BLP’s separate business, LOD’s UK turnover doubled in 2010. In 2012, LOD spun out from BLP to become an independent entity.

It now counts over 600 lawyers in eight offices: London, New York, Singapore, Hong Kong, Brisbane, Melbourne, Perth, Sydney.

In the years since it became financially independent in 2012, LOD has grown, recording an 18% upsurge in turnover for the 2015/16 financial year, when revenues rose from £12.3m to £14.6m.

In 2016, the new law pioneer business also merged with Australia-based AdventBalance, a similar flexible lawyering service, with offices in Singapore and Hong Kong, which secured LOD a presence in Asia. AdventBalance was formed from a merger between Sydney’s Advent Lawyers and Perth’s Balance Legal. John Knox, former A&O head of business development founded Advent Lawyers.

Multinationals including Mastercard, Visa, AstraZeneca, DHL, FedEx and Microsoft now run their Africa businesses from Dubai. The DIFC has also cemented the emirate’s prominent position on the regional and global stage, and became home to 447 registered financial institutions in 2016.

Some law firms which have faced increasing difficulties in strictly conservative neighbouring Arab states, such as Abu Dhabi, have relocated to Dubai. Latham & Watkins, Herbert Smith Freehills (HSF), Simmons & Simmons and Hogan Lovells are among firms which have consolidated their UAE presence in Dubai.

Recent US firms to set up in Dubai include Mayer Brown, with its new Dubai office in June 2016, and Shearman & Sterling, which has operated in Dubai since 2015.

Covington opened its Dubai office in June this year, with the addition of Chadbourne & Parke’s project finance team.

Winston & Strawn opened a Dubai arm in November 2015. Its Middle East managing partner Campbell Steedman told Legal Business thatdespite having suffered significantly from the effects of the financial crisis and the subsequent plunge in oil prices, Dubai remains ‘a haven of regional political security and economic stability, and any new entrant to the legal market will be welcomed by the regulator authorities’.

‘The market is still quite traditional, and established practices and teams generally dominate. That does not mean there is no space for a new entrant, but it will be challenging as the market remains highly competitive,’ Steedman added.

This month, BLP posted mixed financial results for the year, but attributed its revenue growth to strong performances across the business. In particular, the firm highlighted LOD’s substantial growth over the year. The business’ most recent financial results reveal turnover rose 18% during 2015/16. BLP’s own revenues climbed 7%.

LOD’s Companies House filings in February this year indicated a £255,000 spend on new technology during 2016.

Georgiana.tudor@legalease.co.uk

Legal Business

Cleary, CC and Covington lead as EC fine Google €2.4bn for abuse of dominance in online shopping comparison

Cleary, CC and Covington lead as EC fine Google €2.4bn for abuse of dominance in online shopping comparison

The European Commission (EC) has today (27 June) fined Google €2.4bn for abuse of dominance as a search engine, illegally promoting its own comparison shopping service above others in breach of antitrust law, creating expectations of a raft of damages claims based on the finding.

 The EC told the global company to end its illegal conduct within 90 days or face penalties of up to 5% of Google’s parent company Alphabet’s average daily worldwide turnover.

Cleary Gottlieb Steen & Hamilton competition partner Maurits Dolmans and Brussels partners Thomas Graf and Robbert Snelders acted for Google. Julia Holz co-ordinated Google’s in-house defence.

Clifford Chance partner Thomas Vinje represented 15-company consortium Fairsearch which submitted evidence in relation to rival shopping services in the case, including as Foundem, TripAdvisor, Expedia and Trivago. 

Covington & Burling’s Miranda Cole advised Expedia, TripAdvisor and Trivago. 

Today, Fairsearch stated that the decision ‘sets a powerful precedent’ that the EC can use to restore competition on other specialised online search services, such as those for travel.

Competition chief Margrethe Vestager said that Google’s strategy for its comparison shopping service had not just attracted customers ‘by making its product better’ than rivals but instead had ‘abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors.’

Google’s activity was ‘illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate.’ It also ‘denied European consumers a genuine choice of services and the full benefits of innovation,’ she said.

The EC also said that as a result of its practices, Google’s comparison shopping service is far more visible to consumers in Google’s search results than rivals’ comparison shopping services, which are pushed down and less visible.

A Google spokesperson said today that the company will consider appealing the decision. It said that its shopping comparison service connects ‘users with thousands of advertisers, large and small, in ways that are useful for both.’

 

While the EC could have fined Google up to 10% of its annual global turnover, Peter Willis, EU competition co-head at Bird & Bird described the case as ‘significant’ partly for being largest EC fine to date on a single company.

‘It’s likely to be portrayed as another instance of the Commission bashing US tech companies’, but the EC’s position ‘will be that it has fined Google not because it is a large US tech company, but because it has abused its dominant market position by squeezing out its rivals in related markets’, he added.

There is likely to be ‘a series of damages claims brought by the rivals that were excluded from the market by Google’s conduct.  They will be able to use the decision as the basis for a damages claim before the national courts.’

The EC’s decision will ‘establish Google’s liability and a damages claim will in principle be limited to establishing the loss,’ Willis added.

In 2004, the EC fined €497m Microsoft for illegally leveraging its dominant position.

Google’s search engine provides search results to consumers who pay for the service with their data, according to the EC. Nearly all of Google’s revenues come from advertising, many shown on a consumer search.

The EC said that Google’s search algorithms had ‘systematically’ promoted its own comparison shopping service to consumers at the top of the page on a Google search while demoting rival comparison shopping services.

The decision followed a seven year investigation into Google’s online shopping comparison service.

Foundem originally accused Google in 2009 of lowering its ranking on the search engine in favour of its own companies.  In July 2016, the EC released a statement of objections that Google abused its dominant market position by ‘systematically favouring its comparison shopping service in its search result pages.’

Google later sought to defend its position on the basis that the accusations and evidence represented just ‘the interests of a small number of websites.’

Kent Walker, general counsel at Google, has blogged that the EC’s case ‘doesn’t fit the reality of how most people shop online.’ Walker argued that rather than looking for products on a search engine, consumers reach merchant websites in many different ways such as social media websites and online advertisements.

There are currently two separate investigations pending into Google, one regarding its use of the Android operating system and another into its AdSense service. 

tom.baker@legalease.co.uk and miriam.kenner@legalbusiness.co.uk

Legal Business

Cleary defends Google in face of potential €1bn EC antitrust shopping market abuse fine

Cleary defends Google in face of potential €1bn EC antitrust shopping market abuse fine

The European Commission’s (EC) probe of Google’s online shopping practices is reported to be closing in coming months with a potential €1bn (£875m) fine, in a case in which Clifford Chance (CC), Cleary Gottlieb Steen & Hamilton and Covington & Burling all act. 

For seven years, the European regulator has been investigating allegations that Google favours its own online shopping price comparison services above others on its search engine, abusing its dominant market position in breach of antitrust law.

According to media reports, the Brussels-based agency is nearing a decision on a fine against the company.

In 2009, UK price comparison website Foundem accused Google of lowering its ranking on the search engine in favour of its own companies. At least 30 other similar complaints soon followed from companies such as Microsoft, Expedia and TripAdvisor.

The fine is expected to break the EC’s previous record in relation to an technology company antitrust breach after it fined Intel €1.06 billion in May 2009 for granting favourable rebates to companies such as Dell, HP, and Lenovo, for acquiring all or nearly all of their chips from Intel. 

The EC opened this Google antitrust case in 2010. In July 2016, the EC formally stated that Google ‘has abused its dominant position by systematically favouring its comparison shopping service in its search result pages.’ Google denied the allegations and delayed its response.

The EC is concerned that Google promotes its own services its rivals’ cost to the ‘detriment of consumers’ who have to pay more due to resulting market distortion. It also claims that Google’s conduct ‘stifles innovation’ in the market for online shopping.

The EC also sent a statement of objections to Google in relation to advertising. According to the EC, Google restricted the ability of certain third party websites to display search advertisements from its competitors. The three firms are also involved in this separate investigation.

Alphabet Group, a holding company, has owned the US multinational conglomerate and other Google subsidiaries since a corporate restructure in 2015.

Cleary’s London-based competition partner Maurits Dolmans and Brussels partners Thomas Graf and Robbert Snelders act are defending Google. Google’s internal competition lawyer Julia Holz co-ordinates the company’s in-house defence.

Led by partner Thomas Vinje, CC is advising Fairsearch, a 15-strong consortium with allegations against Google in the case. Covington & Burling’s Miranda Cole acts for Expedia, TripAdvisor and trivago.

In December 2016, Google’s UK and Ireland legal chief Emma Jelley left the company to join tech start-up Onfido as general counsel.

Jelley had overseen the company’s legal affairs in the UK and Ireland for eight years.

tom.baker@legalease.co.uk

 

 

 

Legal Business

A tale of two firms: K&S London turnover drops by 8%, while Covington ups City revenue by 9%

A tale of two firms: K&S London turnover drops by 8%, while Covington ups City revenue by 9%

King & Spalding‘s London revenue dipped by 8%, while Covington & Burling‘s City turnover went the other way, improving by 9% for the calendar year 2016.

King & Spalding’s City income is down to $42.6m from $46.5m in 2015, despite the firm’s global turnover increasing by nearly 4% to $1.1bn.

The lawyer headcount of the firm in London also dropped from 53 to 47, as the US firm’s London revenue per lawyer (RPL) increased by 3% from $877,358 the year before to $906,382 in 2016.

The firm’s London head Garry Pegg said: ‘While we saw a modest reduction in headcount last year and therefore an expected decrease in revenue, we continue to prioritise efficiency and productivity.’

Key mandates for King & Spalding in 2016 include representing Aldersgate Investments on the £2.4bn Global Switch deal in December last year, as well as GlaxoSmithKline on its strategic collaboration with Germany-based Miltenyi Biotec in March 2016.

Last year King & Spalding also hired Jones Day’s head of employment Jules Quinn, and relocated disputes partner John Savage QC to London from Singapore. Savage was made a Queen’s Counsel last month.

Meanwhile, Covington’s London revenue, which accounts for 8% of the firm’s global turnover, increased by 9% from $63.6m to $69.5m. Lawyer headcount at Covington also decreased marginally in the US firm’s London office from 85 to 83, including one less partner.

Globally, Covington’s RPL hit $1m for the first time last year, while revenue was up by 13%, around $96m, to $838.5m.

Covington recently hired five partners from King & Wood Mallesons’s collapsed EUME arm including KWM’s high-billing head of litigation Craig Pollack.

Pollack was one of the biggest billers at KWM’s City office and advises investment banks, hedge funds, public companies and high net worth individuals.

Major mandates include advising a major Russian telecoms provider in post-LCIA arbitration enforcement proceedings across various jurisdictions, and defending a star hedge fund manager in a Financial Conduct Authority investigation into regulatory breaches.

Other former King & Wood Mallesons partners to move to Covington include Alex Leitch, Greg Lascelles, and Elaine Whiteford.

georgiana.tudor@legalease.co.uk

Legal Business

KWM latest: K&L Gates and Orrick take Munich partners as Covington poised to take top litigator Pollack and team

KWM latest: K&L Gates and Orrick take Munich partners as Covington poised to take top litigator Pollack and team

US firms K&L Gates, Covington & Burling and Orrick, Herrington & Sutcliffe are the latest to take on partners from the beleaguered European practice of King & Wood Mallesons (KWM).

K&L Gates has hired corporate partner Franz Schaefer, alongside counsel Martina Ortner and associate Christoph Kuster from KWM’s Munich office.

Schaefer is dual-qualified in Germany and New York, and specialises in M&A and corporate law. Among his client base he counts printing press manufacturer Koenig & Bauer AG which he has counselled for more than 10 years, Sino-German Ecopark Group and the Nasdaq-listed Monotype group, a leading provider of typefaces. The move follows K&L’s hire of KWM’s investment management partner Hilger von Livonius in July as a founding member of K&L’s Munich office.

Orrick also confirmed it has hired partner Christoph Brenner, who is currently head of corporate in Germany. Brenner will also join from KWM’s Munich office.

Meanwhile KWM head of litigation Craig Pollack (pictured) has agreed to join Covington & Burling, and will take partner Louise Freeman and a group of associates with him. It is understood Covington’s partnership will vote on Pollack’s hire later this week.

Pollack was one of the biggest billers at KWM’s City office and advises investment banks, hedge funds, public companies and high net worth individuals.

DLA Piper and Greenberg Traurig have also taken on teams from the legacy SJ Berwin practice, which is carrying more than £30m in debt and is expected to enter administration in January.

DLA Piper will take on real estate partner William Naunton and several members of his team including partners Cornelius Medvei, Bryan Pickup, Ed Page, George Burrha and Jeremy Brooks. Managing associate Omer Maroof will also join as a partner. They join alongside eight other lawyers and three trainees, and are expected to join DLA mid-January.

Naunton is a significant biller for KWM, having billed almost £4m for the firm in the last year. When he joined KWM alongside Clive Jones and former Eversheds partner Cornelius Medvei in late 2014, the team was seen as key to KWM’s aim to expand its structured, high-end real estate offering. On joining DLA, he will become co-head of the UK real estate group.

However, Jones will join Greenberg Traurig. Alongside Jones the US firm also hired private equity funds partners Steven Cowins and Marc Snell, M&A partners Michael Goldberg and David Fitzgerald and partner Matthew Priday along with their teams.

Cowins is one of KWM’s top billers, having joined SJ Berwin in 2005. He specialises in real estate funds and joint ventures and counts Crown Estate among his clients. Goldberg and Priday focus on commercial real estate investment and have British Land on their client roster.

These are the latest in a long line of defects from KWM’s European business; heavyweight biller Michael Halford has last month joined Goodwin Procter with the other funds partners Ajay Pathak, Ed Hall, Shawn D’Aguiar and Patrick Deasy.

Corporate finance partner Andrew Wingfield and former managing partner Rob Day joined Proskauer Rose. The pair’s resignation, along with Halford’s exit and Jonathan Pittal also handing in his notice caused KWM to halt its recapitalisation plans in October.

Former KWM managing partner William Boss was hired earlier this month by Addleshaw Goddard, alongside Simon Tager and Michael Scott. Meanwhile former senior partner Stephen Kon confirmed last week he would retire from the law.

Reed Smith is another firm in talks with several partners, while KWM’s own Asian arm is trying to secure a European presence through an office spin-off. Although it had expressed interest in a merger deal, Dentons has since pulled out of discussions.

georgiana.tudor@legalease.co.uk

For more on King & Wood Mallesons, subscribers can read ‘Branded’ for an in-depth look at the firm

Legal Business

KWM head of litigation and major biller Pollack in talks to join Covington

KWM head of litigation and major biller Pollack in talks to join Covington

King & Wood Mallesons‘ head of litigation Craig Pollack is in talks to move to US firm Covington & Burling.

Pollack (pictured) was one of the biggest billers at KWM’s City office and advises investment banks, hedge funds, public companies and high net worth individuals.

Major mandates include advising a major Russian telecoms provider in post-LCIA arbitration enforcement proceedings across various jurisdictions, and defending a star hedge fund manager in a Financial Conduct Authority investigation into regulatory breaches.

Should he sign the dotted line, he will join a spate of partners to depart KWM for Covington since last year, including Alex Leitch, Greg Lascelles, and Elaine Whiteford.

If he leaves he will be the latest in a long line of defects from KWM’s European business; heavyweight biller Michael Halford has recently joined Goodwin Procter and will be joined by funds partners Ajay Pathak, Ed Hall, Shawn D’Aguiar and Patrick Deasy.

Corporate finance partner Andrew Wingfield joined Proskauer Rose, while former managing partner Rob Day is also to move to Proskauer. The pair’s resignation, along with Halford’s exit and Jonathan Pittal also handing in his notice caused KWM to halt its recapitalisation plans in October. 

Following the quartet’s resignations the European partnership looked to its Chinese and Australian counterparts for a rescue deal.

The tabled deal required around 60% of the European partnership to commit to a 12 month lock-in and a contribution of around £14m in capital. This meant around 70 of 120 partners had to agree. However, this was not successful, as only 21 partners agreed to the deal. The firm is now exploring its options, with a merger or pre-pack administration reported as two of these options.

sarah.downey@legalease.co.uk

Read more analysis in the comment piece: ‘Comment: The moment of truth arrives in the SJ Berwin saga’ or our cover feature: ‘Branded: Inside the troubled takeover of SJ Berwin’

Legal Business

Singles in the City: Goodwin and Covington promote one partner each in London

Singles in the City: Goodwin and Covington promote one partner each in London

US firms Goodwin Procter and Covington & Burling have revealed this year’s partnership promotion figures with both firms promoting one each in London.

Goodwin announced private equity lawyer Gemma Roberts has been made up in its round of 15 promotions bringing the firm’s City partner headcount up to 12. Roberts has a particular focus on the middle market and corporate mergers and acquisitions, representing private equity and venture funds, management teams, corporates, financial institutions and entrepreneurs. Roberts joined Goodwin from Kirkland & Ellis in 2014.

The firm’s partner promotions were focused on Goodwin’s flagship Boston office with technology and life sciences lawyers Laurie Burlingame, Caitlin Murray, Qing Nian, Victoria Elman and Jared Fine; real estate lawyers Blake Liggio and Patrick Hurley; ERISA and executive compensation lawyer James Mattus; and white collar lawyer Abim Thomas.

New York saw two promoted to partner with IP lawyer Daniel Margolis and private equity lawyer Michael Andrescavage making the cut alongside two in Washington, finance lawyer Kyle Tayman and litigation lawyer Brian Burgess, and technology and life sciences lawyer Alessandra Simons in San Francisco.

Covington promoted a more modest 13 to partner with life sciences lawyer Brian Kelly bringing the firm’s London partnership headcount up to 23. Kelly focuses on EU food, drug and healthcare regulatory law, public and administrative proceedings, internal investigations, European Union law and product liability and safety.

Kelly joins lawyers nine promoted to partner in Washington. Corporate lawyer Sean Akins, IP lawyer Erica Andersen, media and data privacy lawyer Elizabeth Canter, real estate lawyer Heather Haberl, litigation lawyer Henry Liu, anti-corruption lawyer Jennifer Saperstein, employment lawyer William Woolston, public policy lawyer Roger Zakheim and litigation lawyer David Zionts. San Francisco based insurance litigator Gretchen Hoff Varner and New York’s compensation lawyer Jenna Wallace were also awarded partner status.

madeleine.farman@legalease.co.uk