Commitment. Marriage. Honeymoon. Divorce. Conversations about single-supplier legal advisory mandates are rife with relationship-strewn analogies.
While no two arrangements are the same, most begin with a commitment from a company and its in-house legal team to reduce external legal spend and get a better handle on its multitude of legal connections.
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City recruitment picked up after a lull last week as Dentons strengthened its bench in London at the hand of Eversheds Sutherland, which saw moves both ways.
Dentons announced the hire of Howard Barrie, who re-joins the firm after several years at Eversheds Sutherland. Barrie had previously spent 19 years with Dentons in his first stint at the firm, and returns to its finance practice.
Barrie focuses on projects and project finance, as well as structured trade finance and commodity finance. Paul Holland, head of Dentons’ UK and banking finance practice, commented: ‘Paul brings an immense amount of international experience – in particular with regards to Africa – to the table, and we are confident he will help us to further enhance and grow our project finance work across the African continent and elsewhere’
Coming the other way, Eversheds made an addition to its City real estate practice in the form of Morgan Lewis & Bockius partner Paul Beausang. He was previously London head of tax at K&L Gates, and specialises in real estate tax structuring and transactional execution.
David Watkins, global co-head of real estate at Eversheds, commented on the hire: ‘The depth and market knowledge of UK real estate structuring offered by our real estate practice is a great match for Paul’s strength and expertise.’
Also in London, Hogan Lovells announced the hire of Jennifer O’Connell as finance partner to its London international debt capital markets practice. Jennifer returns to the firm from an in-house role at CACIB, the corporate and investment banking arm of the Crédit Agricole Group.
International recruitment continued apace last week, with CMS hiring Michał Mężykowski in Poland from Dentons. Mężykowski will join the firm’s banking and finance practice, bringing experience advising financial institutions with a particular focus on the real estate market. Mężykowski had been a partner at Dentons for eight years.
Across the Atlantic, Kennedys bolstered its New York office with the hire of Mark Dessi from US firm Skarzynski Black. Dessi had previously been at Sharzynski Black since 2014, and has experience representing insurers in negotiating and litigating first and third party insurance claims.
Dessi commented: ‘This move appealed to me for many reasons, including joining Kennedys’ impressive financial lines practice. Given the nature of my practice, the breadth and depth of the firm’s global network was especially important.’
Further afield, Stephenson Harwood announced the hire of Kevin Lee to its global private wealth practice. Lee will join the firm’s Hong Kong office from Zhong Lun Law Firm, where he had been since 2015.
Stephenson Harwood partner Ian Devereux commented on the hire: ‘Having a lawyer of Kevin’s quality – seen by many as the premier Canadian tax and private wealth advisor in Hong Kong – enables us to broaden the support we can provide to our clients.’
In South America, Mayer Brown announced the hire of Raúl Fernández-Briseño, who joins the firm as partner in Mexico City. Fernández joins from American firm White & Case, and has experience in transactional matters and financing, particularly in the aviation and private equity industries.
Fernández had spent nearly 20 years at White & Case and will serve as the head of M&A at Mayer Brown in Mexico City. Commenting on his move, Fernández said: ‘Mayer Brown has a sterling reputation among different industries, which view the firm as a fantastic resource for solving complex problems and steering clients through sophisticated transactions’
In its first full financial year since its transatlantic merger, Eversheds Sutherland (International) has recorded a robust increase in both revenue and profit per equity partner (PEP).
In revenue terms – which apply to the legacy Eversheds portion of the business – the firm saw a 13% increase from £438.6m to £494.6m. PEP, meanwhile, grew by a similar margin of 12% from £726,000 to £812,000 – the highest-ever PEP figure achieved by the firm.
Chief executive Lee Ranson (pictured) conceded that the positive results owed significantly to the knock-on effect of the firm’s recent international expansion, which includes the February 2017 tie-up with US outfit Sutherland Asbill & Brennan, but also asserted there had been ‘organic growth’.
Due to the merger or not, the results will be welcome after last year’s lacklustre performance, where the firm’s net profit and PEP dipped by 4% and 2% respectively as the firm shouldered the costs of the union.
On that point, Ranson commented: ‘It is particularly pleasing to see a strong uptick in profitability after a number of years of flat or negative growth – a clear validation of the success of our strategy. A year ago I said that confidence in the business is high, and it remains so as we build momentum and look forward to another year of growth.’
In February, on the one year anniversary of the US combination, Eversheds Sutherland unveiled combined global revenues as just under $1bn – a 5% increase on the year before.
The international results cap off a particularly expansive financial year for the firm, opening offices and forging alliances in Singapore, Dusseldorf, Moscow, St Petersburg, Amsterdam and Rotterdam.
While revenues are rising, Eversheds revealed a flat partnership promotion round last month. The firm made up 20 partners globally, the same figure as last year.
The results also come as the firm expands its tax practice in London, this week hiring Paul Beausang from Morgan Lewis. Beausang, who will fill the role of head of real estate tax, previously served in a similar position at K&L Gates.
Eversheds Sutherland assesses the key issues of using third-party funding in international arbitration
The use of third-party funding (TPF) has been a hotly debated topic in the international dispute resolution community for some time, with all signs pointing to its continued growth. The funding market appears to be on a constant expansion trajectory, with the number and geographic diversity of funders increasing, and new funders continuing to enter the market.
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A £100m claim brought against Eversheds Sutherland by Northern Rock Asset Management (NRAM) has been settled.
NRAM’s claim, which came to light in late 2016, alleged professional negligence in relation to advice the legacy Eversheds firm provided following a review of two annual statements for a ‘together loan’ – a combination of a secured mortgage and an unsecured loan at a single interest rate with one combined monthly payment.
The £100m claim was understood to have first been made in 2014, although progress in the early years had been slow. Eversheds and NRAM have now agreed a resolution, however, before the matter reached court.
An Eversheds spokesperson said: ‘The resolution was agreed at a mediation on 6 February 2018 and the terms are confidential.’ An NRAM spokesperson confirmed the resolution.
NRAM had claimed the annual statements Eversheds advised on in 2010 ‘did not comply with the requirements of the Consumer Credit Act’ and the advice failed to be provided within a ‘reasonable time’. It also alleged the advice meant the loans were not enforceable and NRAM became liable to repay or refund all charges and interest it had charged to borrowers.
Eversheds denied the claim and in 2016 said it was being ‘vigorously defended’.
Eversheds Sutherland’s international business has made 20 partner promotions globally, the same as last year, with more than half outside the UK.
In the UK the firm made up nine partners across Cardiff, Manchester, Leeds, Nottingham and London, where four were promoted. The 11 promoted outside the UK are in Dubai, Dublin, Hong Kong, Johannesburg, Milan, Munich, Riyadh, Rotterdam and Warsaw.
Eight of the overall promotions are female, while 11 promotions were in the company commercial practice group, four each in litigation and real estate, and one in human resources. The 20 promotions match last year’s rounds, but are down on the previous year’s 26 promotions . In December, Eversheds Sutherland US made 17 partner promotions.
Chief executive Lee Ranson commented on the international promotions round, which also includes nine legal director promotions: ‘Each of our new partners and legal directors has demonstrated outstanding technical ability in their specialist areas of law, a strong reputation within their teams and a dynamic approach to developing their client base and wider practice teams. Additionally, the breadth of geographies represented by our newly promoted colleagues reinforces our global coverage goals.’
Partner promotions have generally been mixed so far this year , with LB100 top-30 firms Taylor Wessing increasing to three promotions, Holman Fenwick Willan (HFW) increasing its round to eight partners, and Dentons recording a drop in London promotions as it took on 36 new partners globally. Elsewhere, Freshfields Bruckhaus Deringer announced it had promoted a modest five lawyers to its London partnership, while Linklaters increased the size of its promotions round for the fifth year in a row, adding 27 lawyers to its partnership.
hamish.mcnicol@legalease.co.uk
Eversheds Sutherland 2018 partner promotions in full:
Anmar Al Gharifi, company commercial, Riyadh
Gareth Ashfield, real estate, Cardiff
Nicola Brookes, company commercial, Manchester
Greg Falkof, litigation, London
Marta Gadomska-Golab, company commercial, Warsaw
Simon Harris, real estate, Leeds
Holger Holle, company commercial, Munich
Aleksandra Kunkiel-Krynska, company commercial, Warsaw
Richard Kyle, company commercial, London
Lucas Lustermans, company commercial, Rotterdam
Shalagh Massingham, litigation, Dubai
Alexander Mehdevy, company commercial, London
David Milne, company commercial, Leeds
Julia Neal, litigation, London
Terry O’Malley, real estate, Dublin
Marie O’Riordan, real estate, Dublin
Gabriele Pignatti Morano, company commercial, Milan
Mark Pipkin, human resources, Nottingham
Helen Westman, litigation, Johannesburg
Amy Yu, company commercial, Hong Kong
The one-upmanship and tactical disclosures from law firms are gradually revealing more about entrenched gender pay gaps. Next up, Eversheds Sutherland has reported that its female equity partners are paid 10% more on average, while top 50 UK firm HFW has provided breakdowns for its entire workforce.
Eversheds’ report, published today (28 March), reveals its statutory pay gap for employees is 23% on average, rising to 25% on a median basis. The bonus difference is 43% on average, dropping to 31% median.
But the firm also disclosed partner pay figures, as others including Clifford Chance (CC), Pinsent Masons and Norton Rose Fulbright have recently done. These figures show Eversheds’ female equity partners earn 10% more on average, and 8% more on a median basis. The fixed share partner pay difference is 4% more for males on average, and 6% for the median, however. The firm’s partnership is currently 27% female.
Eversheds chief executive Lee Ranson commented: ‘Our numbers, in keeping with most of our peer firms, clearly demonstrate there is work to be done here. As a profession, we must all seek to address the issues that have been thrown in to sharp relief through the gender pay reporting process.’
Earlier this week, Pinsents senior partner Richard Foley called for changes to the gender pay reporting regime ahead of next year, saying there was a perception hardening that lawyers and accountants are trying to duck the issue by not publishing their partner numbers. CC, meanwhile, reported its overall pay disparity which included total partner earnings, including any bonuses or profit share entitlements, revealing a 66% pay gap on a mean basis and 44% on a median basis.
Also publishing breakdowns today was HFW, which cited no differential in average hourly pay for its fee-earners, while its female associates are paid 5% more on average than males. The firm noted, however, that the outwardly strong numbers on female associates were in part a result of having a concentration of highly-paid associates beneath a male-dominated partnership.
The energy and shipping specialist’s statutory pay gap (meaning all staff, not including partners) sees men paid 17% more on an average basis, rising to 31% for the median. Its bonus gap is 41% more for males on average, and 54% on a median basis. Male partners at the firm earn 9% more on average, while the median gap is 28%.
HFW managing partner Marcus Bowman commented: ‘We take our commitments to diversity and inclusion very seriously, so we are very pleased that our report confirms that there is no difference in average pay or access to a bonus for male and female fee-earners at the firm. But we also acknowledge that the results show that we need to work harder to ensure gender diversity across all of our roles, particularly at the most senior levels of the firm. This is a serious challenge facing the entire legal industry and one that we are determined to overcome.’
The flurry of disclosures have been met with an increasing recognition of the difficulty of establishing benchmarks that are both meaningful and provide realistic like-for-like comparisons. Growing numbers are calling for the industry to come together to agree some common approaches. It would certainly help the ranks of innumerate legal hacks.
In a worrying trend for high-street retailers, Toys R Us and Maplin have announced their UK domestic businesses are going into administration, allowing Kirkland & Ellis and Eversheds Sutherland to land key insolvency roles.
Kirkland was led by restructuring partners Kon Asimacopoulos and Elaine Nolan, as the firm was called in to advise Moorfield as administrator on Toys R Us, while Eversheds Sutherland was led by David Gray advising PwC on the Maplin collapse.
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Newcomers to London quickly learn the rules of the escalator: stand still on the right or keep moving on the left. The risk with changing your mind is you can land flat on your face.
For Eversheds Sutherland, the consensus view is that its corporate team has stood on the right for years, moving along but hardly dashing. And why not? You still get where you are going.
The obvious answer is that the UK giant a year ago sealed its high-stakes union with US partner Sutherland Asbill & Brennan, the kind of cross-border move that makes law firms bellicose on their M&A ambitions. And after 12 months that corporate and M&A head Richard Moulton describes as very busy, he argues peers are only just catching up to the breadth the practice has achieved over the last five years, claiming it is competing with the likes of Ashurst and Travers Smith for transactional work handled outside the US/London elite. ‘We do large strategic work for clients – we’ve got some good examples – but would we like to have some more of it? Yes.’
Mergermarket statistics show the practice is busy, but reflect a mid-market machine rather than M&A thoroughbred. In 2017, Eversheds is in the top ten for announced European deals, advising on 185 ranked mandates, against 155 in 2016. However, the combined deal value at just $5.83bn compares unfavourably to competitors DLA Piper, CMS and Baker McKenzie.
Recent highlights include: at the end of 2016 advising National Grid, alongside Linklaters, on the £13.8bn sale of a major part of its UK gas distribution business; advising Charter Court Financial Services on its £550m listing on the London Stock Exchange; and acting for Capita on the £888m sale of its asset services arm.
Is the firm again committed to the City deal market after years of tilting toward regionalism and cost control?
Work in the energy, infrastructure and industrial sectors is particularly strong, including acting for BlackRock and Green Investment Group on the £423m acquisition of wind farm operations from Centrica and EIG Global Energy Partners. It also advised the US-based Chemtura Corporation on the German aspects of its €2.4bn takeover by LANXESS and more recently Royal Dutch Shell on its First Utility bid.
All respectable stuff, but you can see why critics maintain its deal team suffers from Eversheds’ generalism and lack of pronounced industry focus. The firm is cagey about breaking down financials by practice group, but says the corporate team has averaged 10% growth in the UK over the last three years.
The team in London has 18 partners, with Moulton wanting to broaden its City bench in capital markets and public M&A. It has made four hires in the past 18 months, though only one in London, with Karim Mahmud from Jones Day, as well as six internal promotions across the UK.
The firm has some credible operators, with Robin Johnson often cited as its top M&A name, while Rob Pitcher is similarly well established. Younger names to watch include Chris Halliday, while Nottingham-based Jon Cox-Brown is also well regarded.
If the evidence of Eversheds’ claimed progress is not yet abundant, the key question is if the firm is again more committed to the City deal market after years of tilting toward regionalism and cost control under former chief executive Bryan Hughes. Hughes’ successor, Lee Ranson, at least talks of a more growth-orientated agenda: ‘We make no secret of the fact we’re continually wanting to move up the food chain.’
We’ll see. Eversheds has sung this tune before and its business model can get by fine with just functional plc coverage. But if Eversheds is truly ever to leap to that left-hand fast track, it is surely now or never.
Insolvency professionals have long been predicting a wave of trouble would hit the beleaguered UK high street and it has come to pass with Kirkland & Ellis and Eversheds Sutherland securing lead roles on the collapses this week of Toys R Us and Maplin.
Toys R Us announced today (28 February) that its domestic business was going into administration following a failed attempts to secure a new buyer for the UK’s largest toy retailer after sluggish trading hit the industry over the 2017 festive season.
Kirkland also acted for Toys R Us on the Chapter 11 filing for bankruptcy of its US business in September 2017, as well as a deal with the Pension Protection Fund (PPF) that temporarily saved the company from collapse in December 2017.
Kirkland restructuring partners Kon Asimacopoulos and Elaine Nolan are advising Moorfields’ joint administrators Simon Thomas and Arron Kendall.
Meanwhile, Eversheds’ team, led by Manchester restructuring partner David Gray, is advising Maplin’s joint administrators at PwC, which is fielding a team under partner Zelf Hussain.
Eversheds in 2014 advised Maplin on the consumer electronics retailer’s £85m sale to investment house Rutland Partners. Taylor Wessing is now advising Rutland, a long-standing client which it acted for in a number of deals last year, including the sale of Brandon Hire, the acquisition of Armitage Pet Care and an investment in Omar Group.
Gray said the Maplin business would continue to trade for a number of weeks in the hope of a sale, given the strength of Maplin’s brand. He added: ‘The high street’s having a tough old time at the moment.’
PwC’s Hussain commented: ‘Like many other retailers, Maplin has been hit hard by a slowdown in consumer spending and more expensive imports as the pound has weakened. Our initial focus as administrators will be to engage with parties who may be interested in acquiring all or part of the company.’
Maplin has annual turnover of £235.8m and employs 2,335 people across 217 stores in the UK and Ireland. Toys R Us, meanwhile, has 105 stores and employs 3,000 people in the UK.
‘It’s only going to get worse,’ notes one Magic Circle partner. ‘Furniture retail, department stores and casual dining are all expected to feature among the high-street casualties over the coming months.’
Nathalie.tidman@legalease.co.uk
For more on the insolvency market see last year’s report, ‘Waiting for Carney’ (£)
