DLA Piper’s Jian-Cheng Ku and Rhys Bane provide the latest updates on an ongoing employee stock option tax proposal in The Netherlands
DLA Piper’s Jian-Cheng Ku and Rhys Bane provide the latest updates on an ongoing employee stock option tax proposal in The Netherlands
‘The whole place didn’t collapse, did it?’ So quips Simon Levine, almost six years since he took on the leviathan challenge of succeeding Sir Nigel Knowles as global co-chief executive and managing partner of DLA Piper. Nevertheless Levine, characteristically self-deprecating and garrulous, especially in light of the firm not being razed to the ground, has clearly never shaken off the stigma of the succession being likened by Sir Nigel himself to Manchester United’s legend Sir Alex Ferguson stepping down. As if taking over from a man acclaimed for shaping DLA into what was once the world’s largest law firm over 18 years was not daunting enough. ‘I didn’t want to go the way of Moysey,’ said Levine at the time.
It is rare for opinion to be unanimously glowing about a law firm leader, but it was about Knowles, who in May became chief executive of listed law firm DWF in what may be perceived as arguably an even bigger challenge than what lay before him at DLA.
DLA Piper has pulled off a fifth consecutive year of profit growth for its International LLP while breaking the £2bn barrier for global turnover and exceeding £1m in profit per equity partner (PEP).
The eye-catching set of results will be a shot in the arm for the firm, even as the coronavirus pandemic continues to threaten international businesses, and builds on a similarly robust showing last year in spite of sustained investment in DLA’s infrastructure.
The accounts reveal turnover for its International LLP, which covers all non-US offices, grew 13% to £1.1bn from £974m last year. Globally, revenue hit £2.1bn from £1.9bn in 2018/19 and PEP grew 3% to £1.1m, while the non-US businesses saw a 4% PEP increase from £814,398 to £848,301.
Meanwhile, London office revenue accounted for £170m, a 5% uptick on £162m last year.
DLA’s global net profit increased 7% to £555m and net profit relating to the International LLP rose 9% to £222m from £203m last year.
Practice group-wise, litigation was the largest contributor, generating 36% of revenue at £760m, followed by corporate, which generated £570m, some 27% of the firm’s turnover.
In a bid to mitigate the impact of Covid-19, DLA in April furloughed some of its non-fee-earning staff using the UK Government’s job retention scheme. More than half of those that were furloughed have now returned with the remainder following suit once the office has reopened.
DLA also deferred its partner profit distribution round, originally slated for May, until the end of August.
DLA Piper’s EU-Greek practice draws from the widest pool of experience and track record in EU/international and domestic law to offer a full range of services to clients doing business with, in and from Greece and Cyprus. The team comprises highly-qualified legal professionals, each bringing a core level of skills and experience in domestic public and private law, energy law, M&A, as well as EU and competition law. Under the leadership of Orestis Omran, the team advises Greek and Cypriot businesses and governmental organisations, as well as international businesses active in the Greek and other regional markets.
The EU-Greek practice serves as a gateway in two directions: inbound and outbound – to and from Greece and Cyprus. The Brussels-based team is also in a unique position to represent the interests of Greek-speaking clients at the law and policy-making levels of the EU institutions in Brussels. The team works very closely with the London finance and projects team on transactional matters, including structured finance, project and privatisations work.
DLA Piper has increased profit at its international LLP for the fourth year running despite a sustained period of investing ‘tens of millions’ of pounds in office moves, refurbishments and IT systems.
A strong year for its European offices – and the implementation of new accounting standards – simultaneously saw revenue lift 18.5% to £1.09bn, although on an underlying basis it climbed about 7%, slightly up on last year’s 5% increase.
The firm’s international (non-US) revenue for the year to 30 April 2019 was up £169.9m, although £105.6m of this was attributable to changes to accounting standards which means the firm now has to account for disbursements as well as fee income. The revenue increase was nullified by a mirrored £105.6m increase in operating costs, also due to the new standards.
Stripping that out and a negligible foreign exchange impact this year, underlying revenue grew £65.9m, including £52m in Continental Europe. Wage and other inflation added £37.5m to operating costs, resulting in an 8% lift in profit to £340.8m.
DLA chief financial officer Paul Edwards told Legal Business he was pleased the firm had put together a string of strong years, following a turnover dip in 2014/15. But he was particularly happy about a fourth successive increase in profit, achieved during a period of investment for the firm.
In the 2018/19 financial year the firm invested more than £30m in its offices, including its marquee office move in London. The firm is also moving in Frankfurt and Birmingham, and has refurbished a number of its premises. That was on top of investment in IT systems, accelerated by DLA’s high-profile cyber incident in 2017. DLA’s borrowings more than doubled this year to £67.2m from £32.6m the year before.
‘We haven’t grown the bottom line simply by cost-cutting, in fact, quite the opposite,’ he said. ‘We’re talking about tens of millions of pounds of investment. I could have doubled that profit increase but then not made the investments which give you the longer term possibilities which we’re going to get.’
Key management personnel, which includes the senior partner, managing partner, members of the executive committee, international practice group heads, country managing partners and service directors took home another 9% pay increase following last year’s 22% lift, up to £48m from £44m.
Total staff numbers at the firm rose to 5,209 from 5,120, while fee earner numbers lifted to 2,187 from 2,135. Staff costs increased 5% to £347.1m.
Edwards said the first eight months of the current financial year were tracking ‘very strongly’ with activity levels higher than expected during a long-standing period of uncertainty.
‘What is pleasing for us is there is still a lot of uncertainty out there, and the UK – which is about a third of our business on the international side – obviously had a period of uncertainty, but business levels were quite active,’ he commented. ‘The caution we had baked into our budgets at the time didn’t really come through in the performance.’
In a busy week for UK buyouts, Slaughter and May advised Daily Mail and General Trust on the £49.6m acquisition from JPIMedia of i newspaper and its website by its consumer media business, DMG Media.
The Slaughters team was led by corporate partner Rebecca Cousin while an Ashurst team led by corporate partner Braeden Donnelly advised JPIMedia Group.
Donnelly told Legal Business: ‘The sale of the i newspaper to Daily Mail was a significant first step for JPIMedia in realising value for bondholders. It is also part of a wider trend we are seeing in the UK print media market where consolidation is picking up pace as media owners respond to slowing print sales and increased competition from online alternatives.’
The deal was completed on 29 November. Ashurst previously advised Johnston Press on its acquisition of the i newspaper business from Independent Print Limited in 2016.
Meanwhile, DLA Piper advised Michelin on the sale of London-headquartered restaurant reservation business Bookatable to TripAdvisor company TheFork.
The acquisition allows competitor TheFork to consolidate in the United Kingdom, Germany, Austria, Finland and Norway meaning that 14,000 restaurants on Bookatable will join the 67,000 restaurants available on TheFork.
The DLA team was led by London partner Tim Wright and Paris partner Simon Charbit while an Allen & Overy team led by Richard Browne advised TripAdvisor.
The acquisition follows Michelin’s content and licensing partnership with TripAdvisor and its subsidiary TheFork. The partnership means that Michelin guide inspectors will be grading restaurants according to the ‘stars, bib gourmand and Michelin plate’ on the TripAdvisor and TheFork websites. 4,000 restaurants in Europe will also be available on TheFork and the Michelin Guide’s digital platform.
French firm Gide advised Michelin on the partnership with a team led by partner Guillaume Rougier-Brierre.
Elsewhere, Travers Smith has advised New York Stock Exchange-listed company Noble Corporation on the acquisition of its 50%interest in the Bully I and Bully II drillship joint ventures by a subsidiary of Royal Dutch Shell for a value of $166m.
Shell will pay a final cash settlement of roughly $59m of to Noble for its two drillships. Nobel, which owns and operates fleets in the offshore drilling industry, issued a note payable to Shell which satisfied a portion of the buyout price.
The Travers team was led by corporate partner Richard Spedding and Shell was advised in-house.
Finally. Addleshaw Goddard advised the promotional products company Pebble Group on its flotation on the AIM market with a fundraising value of £135m. It is the eighth IPO on AIM this year and the largest in terms of funds raised. The firm also advised on the £28m essensys listing in May and the £57m Brickability Group IPO in September.
The Addleshaw team was led by corporate partner Richard Lee. Lee told Legal Business: ‘What it means for the group is that they are no longer a private equity owned business and they no longer have the debt structure that goes with the private equity ownership. It gives them an improved balance sheet because the funds they raised in the IPO have been used to pay off the debt which they were previously carrying.
‘There were preferred share structures in there, plus loan notes, plus bank debts and the purpose of the fundraising for the company was to clear out that debt,’ added Lee.
The equity fundraise was managed by Berenberg with Grant Thornton acting as adviser. A London Bird & Bird equity capital markets team led by Adam Carling advised Berenberg as broker and Grant Thornton as nominated adviser.
Defying the pre-Christmas lull in City laterals, Latham & Watkins last week returned to Clifford Chance to bolster its finance bench as DLA Piper expanded its infrastructure disputes team with a double hire.
Latham hired CC infrastructure and real estate veteran Stephen Curtis to its London finance team. Curtis, who had been at the Magic Circle firm since 1991 and a partner since 2000, advises on structured finance transactions in the regulated utility, infrastructure and real estate sectors, as well as corporate securitisations.
Latham partner and chair of the global structured finance and securitisation practice Sanjev Warna-kula-suriya told Legal Business: ‘Steve has a world of experience in the structured debt sector, focusing on infrastructure finance and structured real estate. That fits very well into our existing infrastructure finance capability.
‘Infrastructure spend is a very important political and economic target for governments. In the European Union, there’s a huge amount of infrastructure investment plans. From a macro perspective, there will be demand for more infrastructure investment. From a finance perspective, the changes to the regulatory capital rulings make it difficult for banks. We have been seeing alternative investment players coming in to provide the financings,’ added Warna-kula-suriya.
Latham last hired from Clifford Chance back in August 2018 when infrastructure private equity heavyweight Brendan Moylan joined the corporate team.
His was the highest profile PE move from CC to Latham since the US giant recruited practice co-head Oliver Felsenstein in 2015. Nevertheless, it is a well-trodden path, with David Walker, Tom Evans and Kem Ihenacho all having gone the same way between 2013 and 2014.
DLA meanwhile, appointed partners Bob Maynard and Caroline Pope from BCLP to its litigation and regulatory practice in London.
Maynard focuses on litigation, arbitration, adjudication, mediation, project advisory and forensic investigation work while Pope has experience in alternative dispute resolution, particularly mediation and expert determination.
DLA UK head of construction, engineering & infrastructure disputes Paul Giles told Legal Business: ‘Bob and Caroline are tier 1 partners and give a mixture of domestic UK market presence as well as international.
‘We were underrepresented in this area for a firm of our size in the UK. We have been steadily growing over the last few years. We wanted to increase our presence and profile in London but also in the international market,’ added Giles.
Other recent appointments to the construction, engineering & infrastructure disputes London team include partner Anna Mills who joined from Hogan Lovells in January 2019.
Elsewhere, TLT added partner Liz Cotton to its employment bench in Manchester. She joined from JMW where she was head of employment. Cotton has experience in contentious and non-contentious employment law issues.
TLT employment partner Ed Cotton told Legal Business: ‘Liz’s extensive experience in the retail sector is a great addition to our existing specialism in this market. We’ve built a national employment team that covers a wide range of specialisms and Liz’s experience will help to broaden this out in a number of areas.’
‘We’re seeing increasing demand from clients across a range of contentious and non-contentious issues, from redundancy and board disputes to whistleblowing and discrimination claims,’ Cotton added.
Dentons hired partner Oliver Dreher to its capital markets practice in Frankfurt. Dreher joined from CMS where he led the debt capital markets team. He has experience in advising German and international banks and other clients on bond transactions, bonded loans, registered bonds, derivatives, and clearing of financial instruments.
Further afield, Squire Patton Boggs launched a global commodities and shipping group in Singapore and hired partners Barry Stimpson and Jessica Kenworthy from Reed Smith to lead the new team.
Stimpson has over 25 years’ experience in disputes and advisory work in the international trade, shipping, offshore energy, construction and insurance sectors while Kenworthy covers complex commodity financings and ship financings. The commodities and shipping group will offer a range of legal services in international trade and shipping and across all commodity sectors.
Chairman and global CEO of Squires Mark Ruehlmann told Legal Business: ‘Barry and Jessica are an ideal fit for us – they are highly respected in their field, and well connected to the sectors and industries they advise. They are experienced in building teams and nurturing talent and have great commercial flair; and are highly collaborative in their approach to client solutions.
‘With the significant investment into our commodities and shipping group, we can continue to build on our success in Singapore, Australia and the Asia Pacific region. We will see expansion with new hires to strengthen the current team, not only in Singapore but also in the wider region and in commercial hubs such as London,’ added Ruehlmann.
City lateral recruitment picked up pace again last week as DLA Piper won back a real estate partner from Proskauer Rose, Macfarlanes hired for its financial services team and Dentons strengthened its employment bench.
Joanne Owen rejoined her old firm DLA after a three and a half-year stint in Proskauer’s City corporate team, having previously worked at DLA for nearly 20 years. She advises on institutional and corporate property matters and cross-border corporate real estate transactions. She has acted for leading private equity houses, sovereign wealth funds and private high net worth investors.
The firm has also added partner Katie Jacobson to its real estate practice in Birmingham from Hogan Lovells. Jacobson, who advises institutional investors across the retail, office and industrial sectors, will join DLA at the end of this month.
Elsewhere, Macfarlanes has hired Eversheds Sutherland financial services partner Andrew Henderson, who is set to join his new firm in early 2020.
Senior partner Charles Martin told Legal Business: ‘Andrew is an outstanding fit for us given his focus on investment management clients. He offers particular expertise in retail funds, AIFMD (alternative investment regulation) and international issues, all of which are important to many of our clients.
‘All regulated financial services businesses are dealing with a huge amount of regulatory change and active intervention from regulators. This impacts our clients in the financial services industry. They look to us for joined up advice spanning all the legal aspects of the sector that matter most to them. This almost always includes regulation and quite often means that they look to us to support them when they make important judgement calls in the regulatory field,’ added Martin.
Dentons has added to its UK people, reward and mobility team in London with the hire of employment partner Purvis Ghani from Stephenson Harwood.
Dentons’ head of UK people, reward and mobility practice, Virginia Allen, commented: ‘With [Purvis’] broad range of experience across multiple areas of employment and discrimination law, his expertise will enhance our offering which handles a full suite of UK employment, pensions, employee benefits and immigration matters for our clients worldwide.’
Meanwhile, Norton Rose Fulbright has hired tax partner Florent Trouiller for its Luxembourg office from Dechert. Trouiller has experience in cross boarder private equity and real estate investment and has advised clients on all tax aspects of capital markets and securitisation transactions.
EMEA head of tax at Norton Rose Fulbright, Dominic Stuttaford, commented: ‘In the last few years, Luxembourg’s significance as a jurisdiction for financial institutions has grown, and its tax regime has become more complex. Therefore, a strong tax capability in Luxembourg underpins our pan-European and international tax offering.’
The Luxembourg office opened in June 2017 with three partners and is now operating with more than 18 fee earners across various practice areas.
Finally, Taylor Wessing has hired back its former Dubai head of corporate and co-managing partner Osama Hassan after an eight-year stint at Pinsent Masons. He joins as the firm’s Dubai managing partner and was previously head of the Middle East group and the corporate practice at Pinsent Masons.
Managing partner Shane Gleghorn commented: ‘Osama is widely recognised in the UAE market. We have a long-established platform in Dubai and our international client base has evolved significantly in TMC and private wealth. These are areas that we are known for being strong in and Osama’s experience across family owned businesses and technology in the region are hard to compete with.’
The co-managing partner of DLA Piper’s Silicon Valley office has been let go by the firm following accusations of sexual assault by a fellow partner.
In an open letter published earlier this month (2 October), DLA partner Vanina Guerrero alleged that fellow partner Louis Lehot sexually assaulted her multiple times after recruiting her to the firm in September 2018. Lehot was the firm’s co-managing partner of its Silicon Valley office and co-chair of its emerging growth and venture capital practice, with Guerrero detailing four alleged assaults in Shanghai, Brazil, Chicago and Palo Alto.
Lehot was also alleged to have an extreme temper that included shouting and clenching his fists, while Guerrero claims DLA did nothing about her complaints for months and took her off one of her practice’s largest deals after she detailed his conduct in July.
The letter says: ‘I went from working in Hong Kong as general counsel and the top female executive at a global tech company to being abused by Mr Lehot. During my entire career I was known for my intellect, tenacity and confidence. In less than nine months at DLA Piper under Mr Lehot, I became a shell of my former self — a woman who Mr Lehot regularly told me could only get clients because I was attractive.’
Guerrero’s letter, addressed to DLA’s co-chairs Roger Meltzer and Jay Rains, also criticised the firm’s mandatory arbitration policy which she had to undertake before she could go to court: ‘Release me from forced arbitration and allow me to assert my civil claims for assault, battery, sexual harassment and retaliation in our transparent court system,’ she wrote.
DLA has since let go of Lehot. In an email to lawyers and staff last Friday (11 October), Meltzer, Rains and Americas managing partner Stasia Kelly confirmed his departure.
‘Despite the fact that the allegations have not been substantiated by the investigation to date, the firm has concluded for various reasons that it is in the best interest of the firm that we part ways with Louis Lehot,’ the email said. ‘We understand and share the deep concern about this matter, and would like to be in a position to share more detailed information. This is an ongoing legal matter, however, and therefore we cannot share further details.’
On the same day, a DLA lawyer who worked in its office as general counsel until mid-2019 published an open letter in support of Guerrero, similarly criticising the mandatory arbitration process and claiming the firm has a ‘culture of intimidation and oppression’: ‘These forced arbitration provisions give sexual predators the opportunity to abuse women without accountability or consequence. But such arbitration agreements also keep DLA’s dirty little secrets . . . well, very secret.’
The firm’s email to its staff continues by claiming it took the complaints with ‘utmost seriousness’ and immediately engaged outside counsel to investigate the matter, before it was made public, and that they are continuing to seek Guerrero’s cooperation with the investigation.
‘We are saddened that this type of allegation has arisen at our firm,’ the email said. ‘We remain steadfastly committed to our zero tolerance policy for harassment in the workplace, and the provision of training, resources and tools so that all lawyers and staff are apprised of our firm-wide protocols. Preserving our culture and guiding principles, and maintaining a safe, happy and healthy workplace is our priority.’
A busy week for lateral hires saw Dentons, Akin Gump and Squire Patton Boggs each make City hires as DLA Piper turned to Aviva to expand its pensions team.
Dentons said today (30 September) it had hired M&A and private equity partner Paul Doris from the London office of US firm Orrick, Herrington & Sutcliffe. He is the firm’s third corporate lateral hire in the last 18 months and advises financial sponsors, particularly in energy and infrastructure and in markets including Spain and Latin America.
Dentons’ UK corporate head David Collins (pictured) told Legal Business: ‘Paul’s skillset, sector focus and geographic coverage are all very much aligned to our strategy of building out a diversified corporate transactional practice in the UK which connects with our colleagues across the UK and the Dentons global platform.’
He added: ‘After what felt like a slightly extended summer break and pause in activity after a very busy first half of the year, we are back to high levels of activity across the team.’
Doris follows Dentons announcing last week it had hired restructuring and insolvency partner Richard Pallot-Cook in London. He re-joins from Simmons & Simmons and was previously a partner at Dentons.
Akin Gump, meanwhile, added two partners to its private equity practice, with Shaun Lascelles and Simon Rootsey joining the firm’s London office from Vinson & Elkins.
Partner in charge of Akin Gump’s London office, Sebastian Rice, told Legal Business: ‘We were very impressed with the work they’ve done, culturally they’re a great fit and we hope they will be a strong addition to our corporate team in terms of the clients they advise and the type of work they do.’
Akin Gump also hired finance partner Michael Gustafson to its London office from Pricoa Private Capital, where he was deputy chief legal officer. Gustafson was previously a partner at Bingham McCutchen before its London office joined Akin Gump in 2014.
‘The team who joined from Bingham McCutchen regarded Gustafson incredibly highly and he does very similar work to what we do. He’s coming back and we’re really excited to have him back,’ Rice added.
Squire Patton Boggs went both ways in London with the hire of banking partner Ian Yeo from Herbert Smith Freehills. The firm also lost employment partner Natalie Bellwood, however, to B2B IT services provider DXC Technology, where she becomes global head of employment.
Elsewhere, DLA hired Amrit McLean from Aviva, where she was propositions and sales director, as a partner to launch the firm’s pensions de-risking service. McLean has 13 years’ experience in pensions de-risking and pensions bulk annuity work.
UK head of pensions at DLA Piper Ben Miller told Legal Business: ‘There’s an awful lot of insurance that is being issued. There is a real need within the market for a really strong and comprehensive team led by somebody who has that sector experience and that’s what we’re able to do here.’
Finally, Osborne Clarke made a lateral hire from Thrings, bringing in Steve Schofield to its UK real estate practice, while in Poland, DWF appointed partner Paweł Stykowski as head of insurance in the firm’s Warsaw office. He joins from Wierzbowski Eversheds Sutherland where he headed the financial services and compliance practice.