Legal Business

Revolving doors: CC partner seconded to Takeover Panel, 2Birds, PwC and Farrer hire in London, while K&E adds to Germany

Revolving doors: CC partner seconded to Takeover Panel, 2Birds, PwC and Farrer hire in London, while K&E adds to Germany

Law firms are strengthening their European practices, with Bird & Bird, PwC and Farrer & Co all hiring in London, Kirkland & Ellis in Germany, while a Clifford Chance (CC) partner was appointed to a high-profile panel role.

James Bole, promoted to CC’s M&A partner two months ago, has been named as the new secretary of the Takeover Panel, on a two-year secondment from September. Bole is CC’s first Takeover Panel appointment for a decade. He will replace Addleshaw Goddard partner Simon Woodin the role.

Bird & Bird appointed banking and finance partner Samrad Nazer in its London office, as part of its growth plan in acquisition and leveraged finance work.

Nazer has now joined from US firm Locke Lord, where he was head of banking and finance, with particular expertise in energy & utilities, fintech and sport. He advised on both lender and borrower side, within corporate finance, corporate lending and structured finance.

Nazer said he relished the opportunity to ‘work for a more developed, international platform and have a more focused strategic direction within the banking and finance practice’, adding that he will work to develop both Bird & Bird’s banking and finance practice in London and the firm’s offices across the globe.

Tom Ince has joined PwC’s employment law team as a partner from Reed Smith, where he was  deputy practice group leader of the global employment law practice and a partner.

At PwC he will lead on outsourcing-related employment matters. He said: ‘Businesses are facing unprecedented changes in their workforce, whether that is due to increased regulation across the globe or the changing nature of the workplace.’ Tom Kerr Williams joined the employment team from DLA Piper in April 2016.

Private client firm Farrer & Co has hired Rachel Mainwaring-Taylor as a London partner from Hunters Solicitors. She specialises in personal tax and succession planning, both in the UK and internationally, and advises clients on trust structures, wills and cross-border estates. She is experienced in working with international families.

Meanwhile in Germany, Kirkland has hired Attila Oldag as Munich corporate partner from Gütt Olk Feldhaus. A partner at the firm since 2013, Oldag advises German and international companies and financial investors on private equity and M&A transactions.

The latest addition to the firm’s German corporate practice, after private equity specialist Volkmar Bruckner joined from Weil, Gotshal & Manges in May, three in 2016 and Joerg Kirchner from Latham & Watkins in 2015.

Marco.cillario@legalbusiness.co.uk

Legal Business

Partner promotions: Gowling and Farrer appoint five each in strong rounds for women

Partner promotions: Gowling and Farrer appoint five each in strong rounds for women

LB100 firms Gowling WLG and Farrer & Co have carried out their latest promotion rounds, with 80% of both Farrer and Gowlings’ promotions being women.

Effective from 1 May 2017, senior associates Marie Bates, Laura Conduit, Charlotte Fraser, Elizabeth Jones and Oliver Piper will become partners at Farrers.

Each new partner has a different expertise, with Bates specialising in M&A, joint ventures and reorganisations. Conduit is a London residential property expert and Fraser is focused on disputes. Jones has a background in advising on charity governance while Piper is a private wealth lawyer.

With this latest round, Farrer boosts the total percentage of women partners to 37%, with 73 partners in total. Promotions are slightly down on last year when six senior associates were made up. However, the percentage of female appointments has grown from last year’s figure of 50%.

The number of promotions at Gowlings has significantly increased from last year, jumping from two to five. In last year’s round, the firm appointed two directors to its partnership, namely Chris Towle and Michael Twining.

This year’s process sees Sarah Galvin, Elizabeth Gane, Samantha Holland, Felicity Lindsay and Mark Stephenson elevated to partnership, with four of the five new partners women. Galvin and Lindsay are appointed from the firm’s 300-strong real estate practice while Holland and Stephenson come from the dispute resolution group. Gane will become a partner in the firm’s pensions team, bringing with her an extensive background advising trustees and employers on pensions issues. All the new partners will also assume their roles on 1 May 2017.

Gowling chief executive David Fennell (pictured) said: ‘Our new partners advise clients in some of our most successful practices and sectors. They have all demonstrated energy, innovation and commitment in helping these clients achieve their business objectives over a number of years.’

tom.baker@legalease.co.uk

Partner promotions in full:

Farrer & Co:

Marie Bates – corporate

Laura Conduit – real estate

Charlotte Fraser – dispute resolution

Elizabeth Jones – charity law

Oliver Piper – private wealth

Gowling WLG:

Sarah Galvin – real estate

Felicity Lindsay – real estate

Samantha Holland – dispute resolution

Mark Stephenson – dispute resolution

Elizabeth Gane – pensions


 

Legal Business

SDT clears News of the World lawyer of spying claims

SDT clears News of the World lawyer of spying claims

The Solicitors Disciplinary Tribunal (SDT) has dismissed claims against Farrier & Co partner Julian Pike, a solicitor accused of advising News International that it should spy on lawyers who were acting for victims of phone hacking.

Pike, who is Farrer & Co’s head of reputation management, was accused of instructing the publisher of the now-defunct News of the World to spy on high-profile representatives for victims of phone hacking Charlotte Harris and Mark Lewis who worked at Taylor Hampton and Mishcon de Reya respectively at the time.

According to the ruling, Pike had sent a 2010 email to Tom Crone, his primary contact at News International, describing Harris and Lewis as ‘deeply untrustworthy.’

The tribunal said: ‘While it was correct that surveillance was not illegal, absent exceptional circumstances, the spectre of solicitors carrying out surveillance on each other was repugnant.’

However, the SDT’s ruling stated: ‘The tribunal was not satisfied to the required standard that the respondent had failed to behave in a way that maintained the trust the public placed in him.’

It added that in the circumstances the tribunal could not be sure to the requisite standard that the decision to advise News of the World to mount surveillance was made without proper justification.

The decision brings to an end a long investigation, which initially started in December 2011 following a complaint made by Lewis to the Solicitors Regulation Authority (SRA).

Despite dismissing the charges against Pike, the SDT ordered that Pike should pay £20,000 in costs. The ruling asserted that Pike had not brought the proceedings before himself, but he should pay costs due to the proceedings being ‘in the public interest’ and that the £20,000 sum was a ‘modest contribution.’

Pike told Legal Business: ‘I am obviously pleased that this matter is now behind me. As a litigator, while you may know what the right outcome should be, there is never any such guarantee.

‘On this occasion, the right conclusion has been reached. However, it’s disappointing the process should take five years. Such delay should be unacceptable.

‘The decision on costs can only be described as bizarre given the tribunal made no criticism of me and found I did not bring the matter on myself. I have been advised that I have a very strong argument in favour of an appeal which is under consideration.’

A Farrer spokesperson added: ‘He can now put the stress of the past five years behind him and concentrate on building his practice.’

tom.baker@legalease.co.uk

Read more in the feature: ‘Shock and Flaw – is Leveson workable?’

Legal Business

Phone hacking fallout continues as Farrers reputation head faces prosecution by SRA

Phone hacking fallout continues as Farrers reputation head faces prosecution by SRA

The Solicitors Regulation Authority (SRA) is set to prosecute Farrer & Co‘s head of reputation management, Julian Pike, over allegations of advising News International that it should spy on lawyers who were acting for victims of phone hacking.

Pike is accused of advising News International, the publisher of the now-defunct News of the World, that it should spy on solicitor Mark Lewis and barrister Charlotte Harris – both high-profile representatives for victims of phone hacking who worked at Taylor Hampton and Mishcon de Reya respectively at the time.

The allegations are now subject to a hearing before the Solicitors Disciplinary Tribunal and ‘are as yet unproven’, a statement said on the SRA website.

It certified that ‘there is a case to answer’ in respect of the allegations, which stipulate that in late March Pike gave advice to the effect that his client should undertake or commission surveillance of a solicitor and employed barrister acting for the claimants to civil proceedings brought or anticipated against his client without proper justification.

Then in early May it was alleged that Pike commissioned a private investigator to undertake investigations lawyers acting for claimants on civil proceedings brought or anticipated against his client without proper justification.

The case is set to be heard by the SDT in the coming weeks.

A report released by BBC’s Newsnight further alleged Pike requested that Harris and Lewis be put under surveillance. Pike appeared before the Leveson Inquiry in 2011 and gave evidence that he knew the paper’s defence of rogue reporters did not stand up to scrutiny.

Recently it was revealed that Clifford Chance won the high-profile instruction from Linklaters to defend Rupert Murdoch’s News International in its hacking litigation, constituting the fourth time the media giant has switched its lawyers for this case.

sarah.downey@legalease.co.uk

Read more in the feature: ‘Shock and Flaw – is Leveson workable?’

Legal Business

‘I was impressed by the firm’: Farrer & Co turns to CMS Cameron McKenna financial control chief to boost growth

‘I was impressed by the firm’: Farrer & Co turns to CMS Cameron McKenna financial control chief to boost growth

Private client-focused firm Farrer & Co has made concerted efforts to polish its growth strategy, and has recruited CMS Cameron McKenna‘s head of financial control Julian Eastlake to develop the firm’s financial direction in a bid to optimise profits and sustain the growth of the partnership.

Having joined Cameron McKenna from accountancy giant PricewaterhouseCoopers’ UK arm in 2009, Eastlake was responsible for leading the firm’s financial accounting, as well as delivering its annual budget process, and production of monthly profit and loss reporting for the Board and management. He also had oversight of tax compliance and of partners’ tax affairs, and assessed the firm’s back-office sourcing options, recommending it outsource 70% of support functions.

It also led to the firm’s deal with outsourcing provider Integreon, the largest of its kind worth just under £600m, in May 2010 where the firm outsourced its entire support staff function, including finance, human resources and IT. It further made roughly 9% of its support staff redundant and relocated another 21% to either Bristol or India. Last year, the firm subsequently scaled back its staff outsourcing agreement with Integreon just three years into its ten-year contract.

Eastlake started at the City-based Farrer & Co earlier this month and is working in an estimated 18-strong team. He has been tasked with engaging and motivating the partnership to understand key commercial issues including effective pricing and matter management policies. Further responsibilities include providing financial analysis and insight to all stakeholders including recommendations for improvements, efficiencies or potential business opportunities.

The deployment of Eastlake comes as the firm this year recorded modest financial results, with revenue flat at £50.7m, which still constitutes a 25% increase since 2009, and a 3% rise in profit per equity partner to £440,000.

On his move, Eastlake told Legal Business: ‘I was impressed by the firm and the people I met during the interview process. My role at CMS was reasonably broad but it was within a larger firm and a larger team. There were some limitations in that capacity as to what I could do. Here, I feel I will have broader scope, and the ability to work more closely with partners and with the firm’s direct strategy. It’s a flatter structure, if you like, than it was at CMS’.

Other prominent hires of late includes experienced trial lawyer and property litigation partner Siobhan Jones from Penningtons Manches who joined the disputes team in July.

sarah.downey@legalease.co.uk

Legal Business

Financials 2013/14: Penningtons Manches, Lewis Silkin and Farrer & Co post results

Financials 2013/14: Penningtons Manches, Lewis Silkin and Farrer & Co post results

A trio of LB 100 firms have posted financial results for the 2013/14 year, with newly combined Penningtons Manches revealing revenue of £46.6m while profit per equity partner (PEP) came in at £268,000.

For Penningtons, it’s been a year of significant change. In October the firm took over troubled private client firm Manches as the latter entered into administration. The agreement saw 265 Manches employees, including 46 partners officially move to Penningtons in a pre-pack deal brokered by PwC. However, the combined firm this year has only three additional equity partners compared to Penningtons total prior to the takeover in 2013.

Manches had been earmarked for a merger by the LB100 last summer, after falling 11 places to 93 with revenues down 13% to £26.3m and PEP by 43% to £134,000. Penningtons ranked higher at 82, bringing in £32.5 million with a PEP of £275,000.

Nearly ten months on since the takeover, and having acquired offices in Reading and Oxford, managing partner David Raine is feeling positive about the move so far and says: ‘Integration has gone really well with Manches. The previous life seems an age ago. Most of us are under one roof now but it feels longer than six months. The teams are working together in the same sectors – that’s been a great help and heartening to see people sharing assistance and cross selling.’

The firm’s business services division accounted for 40% of fee income, while real estate and private client generated 24% and 36% respectively. Raine adds: ‘We’re delighted with how various parts of the firm did better, particularly with all the disruption from the combination with Manches. There were office moves, changes with IT systems … there was a lot happening.’

Meanwhile, city firm Lewis Silkin posted disappointing results, and recorded broadly flat revenue that rose just 1% to £41.4m, while PEP significantly dropped 15% from £344,000 to £291,000. A breakdown of the firm’s financials saw its employment reward & immigration practice generate 40% in fee income while its media brands and technology practice accounted for 25%.

Lastly, private client-focused Farrer & Co recorded a slight decline in revenue to £50.7m from £50.8m, while profit per equity partner increased by 3% to £440,000.

Sarah.downey@legalease.co.uk

Legal Business

Don’t blame your shareholders for tax avoidance decisions, Farrer & Co report warns FTSE 100 bosses

Don’t blame your shareholders for tax avoidance decisions, Farrer & Co report warns FTSE 100 bosses

Company directors facing scrutiny over their low corporate tax bill are not able to effectively blame their decisions on their duty to shareholders, a Farrer & Co legal opinion sent to FTSE 100 companies has said.

The opinion, sent yesterday (9 September) to the chief executives of the UK’s largest companies, was commissioned by the Tax Justice Network and concludes that ‘the idea of a strictly “fiduciary” duty to avoid tax is wholly misconceived’. The TJN, which circulated the opinion, was prompted by fears that UK business leaders are justifying their decision to find tax loopholes on the need to maximise profits for shareholders.

The opinion, primarily written by tax barrister David Quentin who has since left Farrer & Co to join Stone King, finds that there is a duty to promote the success of the company, but this should not be construed solely in the context of maximising distributable profits.  ‘It is not possible to construe a director’s duty to promote the success of the company as constituting a positive duty to avoid tax,’ Quentin concludes.

The TJN has been engaged in a policy of persuading companies to pay their fair share of tax for many years. ‘For years we’ve been hearing from directors that it’s our duty to avoid tax. Our hands are tied,’ said John Christensen, director of the TJN.

‘Directors are given the duty to exercise sound judgement. They are not given the duty to maximise profits. The law says exercise judgement. It doesn’t say that they are under any obligation to avoid tax,’ added Richard Murphy, director of Tax Research.

The impact of this legal opinion on directors and their tax advisers alike may be far-reaching, as the pressure on corporates intensifies in the wake of the public outcry over the low tax bill of companies such as Amazon and Google.

However, one tax partner at a City firm warned: ‘If a company’s right to reduce its tax bill is sufficiently compromised, we could see the flight of companies to lower tax jurisdictions.’

david.stevenson@legalease.co.uk

Legal Business

Still the divorce capital of the world – Supreme Court orders businessman to hand over assets in key ruling

Still the divorce capital of the world – Supreme Court orders businessman to hand over assets in key ruling

The landmark divorce battle between Yasmin and Michael Prest has come to an end as the Supreme Court  today (12 June) ruled Prest should hand over properties held by companies under his control.

The ruling – the most significant divorce case to reach the UK’s highest court since the 2010 judgment in Radmacher v Granatino – has been touted as instrumental in establishing whether London remains a key forum for resolving big-money divorce cases. The case has also been watched for its impact on the court’s treatment of the corporate veil, which protects company assets.

The background to the long-running dispute – Prest v Petrodel Resources – is well-trodden. In 2011 the High Court ruled that wealthy oil trader Mr Prest was worth at least £37.5m and should pay his ex-wife a £17.5m settlement. Included in that settlement was a £4m house in west London owned by one of Mr Prest’s companies, which Mr Justice Moylan ordered to be transferred in part payment of the settlement. However, last October Lord Justices Rimer and Patten allowed an appeal by the oil trader’s companies, ruling that on principal shareholders are not entitled to treat their companies’ assets as their own.

In today’s decision in favour of the appeal by Mrs Prest, represented by Farrer & Co and 1 Hare Court’s Richard Todd QC alongside Daniel Lightman and Stephen Trowell, seven Law Lords unanimously found that the disputed properties could be counted in the divorce settlement.

Farrer partner Jeremy Posnansky QC commented in a statement: ‘This is a great result for Mrs Prest and for others who might find themselves in a similar position. The Supreme Court’s decision will ensure that dishonest husbands can’t cheat their wives and flout court orders by hiding behind a web of deceit and a corporate façade. It puts reality and fairness back into this area of family law.

‘The court has made clear that the fact that properties are held in the name of a company doesn’t always mean that they’re owned by the company. At the same time, the Court has adhered to established company law principles which will preserve the sanctity of the vast majority of corporate structures which are used for normal and legitimate purposes. I’m delighted that Mrs Prest’s calm determination to achieve a fair and realistic outcome has been rewarded.’

Giving the leading judgment, Lord Sumption ruled while the Court was entitled to disregard the corporate veil in limited circumstances, in this case that principle did not apply and the only basis on which the companies could be ordered to convey the disputed properties to Mrs Prest is that they were held by the companies on trust for Mr Prest, who was represented by Jeffrey Green Russell and QEB’s Tim Amos QC.

Mr Prest paid for the properties with his own money and delivering the ruling Sumption said: ‘The court is entitled to draw all proper inferences against a party whose conduct shows that he has something to hide.’

The corporate veil is one of the underpinning principles of company law and means that directors cannot ordinarily treat company assets as their own.

The decision will be seen as preserving London’s status as a key centre for resolving high value family disputes as well as protecting the fundamental principles of company law.

caroline.hill@legalease.co.uk

Click here for the full judgment.

 

Commenting on the case:

 

Frances Hughes, Hughes Fowler Carruthers

‘It is brilliant news for family lawyers. No one in their right minds was expecting the piercing of the corporate veil to be upheld because there’s a decision about it years ago. In fact, no one had been piercing the corporate veil for years, it’s just nonsense that the family judges had been doing much of this at all. What is also not surprising is the nuptial settlement point and the interpretation of section 24.

‘What is surprising is they have found another way to ‘nail the bastard’. The history of family law is not that its idiots that don’t understand things, it’s that they have these people who are absolutely determined not to pay and they want to nail them. It’s all about nailing the non-payer. They found this way which doesn’t bear an awful lot of scrutiny in which they say, ‘well, we can make a finding’. Its wonderful news. They’ve gone as far as they possibly can in saying ‘these doors are closed, but there’s a door over there, and we’re not just pointing to the door, we’ve opened it for you’.

‘Judges are trying really hard to be helpful to somebody litigating against someone determined not to pay.’

 

Sandra Davis, head of family law at Mishcon de Reya

‘On the facts of this case the Supreme Court’s decision is a fair one.

‘Leaving to one side the facts of this particular case, there remain many legitimate wealth planning, protection and preservation reasons why a husband and a wife may choose to transfer marital or solely owned assets to corporate structures. If this happens prior to a marriage or was an agreement reached during it, the court will hold the husband and wife to those arrangements if the marriage ends.

‘As in the case of Petrodel v Prest, the problem arises when these structures are arranged unilaterally by one of the spouses. In that case it is usually the wife who will be seriously disadvantaged unless she is able to finance a costly legal wrangle to prove either impropriety, or that assets which appear to belong to a company are in reality held on trust for her husband.’

 

Jane Craig, head of family law at Manches

‘Family lawyers will welcome the decision. If the court had held up [the Court of Appeal’s decision] it would have been a substantial injustice for the wives of manipulative husbands who don’t give proper financial disclosure.

‘The Supreme Court made it clear that family law isn’t outside the general law and that there’s a law in relation to piercing the corporate veil and going behind a company structure that applies to family law in the same way it does to any other branch of the law.

‘This judgment says that husbands who don’t give proper financial disclosure can expect the courts to look very carefully at the evidence and to draw adverse inferences.’

 

Robin Charrot, family partner at national law firm Mills & Reeve

‘The Supreme Court handed down its ruling on the Prest vs Petrodel Resources case today, and restored the original decision for the companies to transfer various properties to Mrs Prest. This ruling means that, in a divorce, people will not be able to withhold their assets from their spouses just because they have previously transferred them into companies.

‘This ruling will severely limit the availability of this so-called ‘cheat’s charter’.

‘However, it is important to note that the reason used for the ruling was not the same as that used by the original trial judge. The Supreme Court specifically stated that they were not piercing the corporate veil, and that family courts cannot simply give company assets to wives just because the sole owner and controller of the company is the husband.’

 

Philip Carrington, commercial litigator at Herbert Smith Freehills

‘From the viewpoint of the commercial litigator, the decision is important, [particularly] in the context of fraud cases where invariably you’re faced with a complex corporate structure set up by defendants, usually off shore. To prove the case or enforce the judgment, you obviously need to look beyond the fraudster to his company. The decision is of importance to commercial litigators as well as family law practitioners.’

 

Withers family partner James Copson

‘The Supreme Court has delivered a chink of light through the corporate veil.  It should be emphasised that this is strictly limited to family law cases, which are, by their very nature, in a special category distinct from arm’s length commercial arrangements.’