Legal Business

Signs of intent – Freshfields shrugs off US caution to secure high-stakes West Coast launch

Signs of intent – Freshfields shrugs off US caution to secure high-stakes West Coast launch

Observers of Freshfields Bruckhaus Deringer have grown used to the City giant undercutting bold claims for its US strategy with half-hearted execution but the London leader has belied that image to announce an audacious launch in the key West Coast legal market.

The announcement today (1 July), sees the Magic Circle firm recruit five senior lawyers from major US firms to launch a practice in Silicon Valley, under the leadership of Davis Polk & Wardwell securities partner Sarah Solum.

The team is rounded out by Sidley Austin partner John Fisher, who specialises in technology and life sciences M&A, Latham & Watkins tax partner Maj Vaseghi and Wilson Sonsini Goodrich & Rosati disputes partner Boris Feldman. Wilson Sonsini litigation associate Doru Gavril joins as a partner.

The seven-partner outpost will include Freshfields partners Pamela Marcogliese (capital markets) and Alan Ryan (antitrust), who are transferring from the firm’s respective arms in New York and Brussels. Freshfields’ other US practice is in Washington DC.

The move is only the second time that a Magic Circle firm has dared to venture into the key West Coast legal market since Clifford Chance made its ill-fated move in the region with a team from Brobeck, Phleger & Harrison nearly 20 years ago.

The move will be seen as a doubling down on Freshfields’ headline-grabbing recruitment of a four-partner M&A team from Cleary Gottlieb Steen & Hamilton led by highly-rated deal veteran Ethan Klingsberg (pictured) at the end of 2019.

Commenting on the move as US corporate head, Klingsberg put out a suitably bullish spin: ‘Combining this dream team of talent with our global platform and our high-powered teams in New York and DC enables us to respond to the needs of Bay Area clients. These needs are global, complex and demanding of constant focus and creativity. Just as Bay Area clients are fearless in their approach, so is Freshfields. We are committed to serving our clients with the broad and deep resources that their strategic plans merit.’

Such sentiments would until recently have been dismissed as laughable by US rivals but Freshfields’ recent moves have attracted plenty of grudging respect.

While California’s technology-heavy sector has become one of the more lucrative legal markets in the world after 20 years of exponential growth from iconic Silicon Valley companies, it has also proven a very tough market for out-of-town law firms to crack.

Freshfields was known to have previously flirted with taking on a productive West Coast team years ago from the collapsing Dewey & LeBoeuf but the group ultimately went to Weil, Gotshal & Manges.

The latest two team hires in New York and Silicon Valley will be seen as evidence that Freshfields is finally moving to make the kind of sustained investments in the US that a camp of its key corporate partners have long championed.

US strategy is also due to be a key issue in this year’s looming leadership election to replace senior partner Edward Braham. The latest move at least suggests that the progressive wing of the firm is winning the argument.

While there has been much talk of a team forming around German partner Helmut Bergmann, possibly including partners David Sonter and Jennifer Bethlehem, other potential figures to watch include corporate partner Alan Mason and Asia head Georgia Dawson.

alex.novarese@legalease.co.uk

For more analysis on Freshfields’ direction and leadership see last year’s cover feature, The devil you know

For our take on its recent New York M&A push, see our recent Deal View column

Legal Business

Corporate losses continue for Freshfields as Latham makes public M&A play in London

Corporate losses continue for Freshfields as Latham makes public M&A play in London

Kirkland & Ellis topped M&A rankings for Europe last year, bringing in a total of $224.2bn in deals, while Freshfields Bruckhaus Deringer came in second at $221.7bn. Little wonder then that rival Latham & Watkins has targeted Freshfields for its most significant London lateral hire in some time, bringing in public M&A rising star Sam Newhouse.

It is inevitable that public M&A work in London – long-considered the preserve of the Magic Circle – has become the latest hunting ground for ambitious US players as an alternative to private equity and funds-driven corporate work. White & Case is well-established in the area and Weil, Gotshal & Manges has made no secret of its desire to find talented company for veteran Mike Francies, as it did with the hire of David Avery-Gee from Linklaters last year.

Legal Business

Freshfields and Slaughters drafted as Government reveals details of Covid-19 business support package

Freshfields and Slaughters drafted as Government reveals details of Covid-19 business support package

The UK Treasury and Bank of England (BoE) have called in their go-to counsel Slaughter and May and Freshfields Bruckhaus Deringer as they iron out details of the multibillion-pound support scheme to underwrite British business through the coronavirus crisis.

The UK Government announced last week the Covid-19 Corporate Financing Facility to help companies with cash flow as the rapid spread of the virus has forced governments to put a third of the world’s population in shutdown.

Under the scheme, the BoE will buy short-term bonds to ensure businesses making a material contribution to the UK economy can continue to pay staff and suppliers, upon the condition that they demonstrate they were financially-healthy before the crisis. The facility will operate for an initial period of 12 months.

Slaughters’ finance partners Matthew Tobin, Oliver Storey and Guy O’Keefe are advising the Treasury alongside corporate partner Nilufer von Bismarck (pictured) and state aid partner Isabel Taylor. Slaughters’ core role to Whitehall echoes its high-profile mandate during the financial crisis when it advised the Treasury on a wide-ranging bank bailout.

A Freshfields team led by financial services chief Michael Raffan is acting for the BoE, the Magic Circle firm’s most celebrated client.

The scheme is one of several unprecedented economic measures disclosed by the Government in response to the unfolding crisis. UK Chancellor Rishi Sunak announced on Friday (20 March) a coronavirus job retention scheme to offer all employers access to a grant covering up to 80% of the average wage to prevent widespread layoffs.

Businesses will not be expected to pay VAT for a quarter until the end of June and will not be liable for VAT deferred during that period until the end of the 2020/21 financial year.

Speaking to Legal Business about the measures, Hogan Lovells head of public law and policy Charles Brasted said they were ‘directly feeding into what our clients are thinking about in terms of how they can maximise what they retain over the next few months’.

‘It’s almost inevitably not the end of it, it’s not a one-off package,’ he added, saying that new measures will be likely to address the self-employed: ‘A lot of the measures at the moment work easily if you are on pay as you earn but not so easily if you are self-employed, and the government is looking closely about what it can do [on that front].’

marco.cillario@legalease.co.uk

Click here for all our latest coverage on the on-going coronavirus crisis

Legal Business

More gloom for Freshfields as another disputes partner exits after internal investigation

More gloom for Freshfields as another disputes partner exits after internal investigation

Freshfields Bruckhaus Deringer has suffered yet another setback after disputes partner Tom Snelling was dismissed from the partnership following an internal investigation.

The move will be an unwelcome addition to the City giant’s woes as the legal industry and the world at large grapples with unparalleled reversals wrought by the ever-escalating coronavirus pandemic.

A Freshfields spokesperson would not give full details of Snelling’s departure, only commenting: ‘We can confirm that following the conclusion of an internal investigation, it has been agreed with Tom Snelling that it’s in the interests of both him and the firm that he leave the partnership. His last day was 19 March (Thursday).’

Snelling, who made partner in 2010, is the second disputes partner to be ousted from Freshfields in the space of three months after Nicholas Williams, a partner since 2017, left the firm on 11 December after the firm launched an internal probe into personal misconduct allegations.

That dismissal came in the same week the Freshfields partnership voted in new enforcement protocols that meant partners who receive a final warning for personal behaviour issues could face an automatic fine equal to 20% of their profit share for 12 months.

The reforms were aimed at curbing harassment of staff and came in the wake of the public embarrassment Freshfields faced in October when the Solicitors Disciplinary Tribunal (SDT) fined former partner Ryan Beckwith £35,000 and ordered him to pay £200,000 in legal costs following a high-profile hearing concerning sexual activity with a junior lawyer in his team.

While the Solicitors Regulation Authority decided against appealing a decision many deemed lenient, Beckwith in February filed a High Court appeal against the SDT’s finding against him.

A firm-wide programme to improve culture and behaviour has also resulted in a set of principles – ‘Show respect, be there for one another, be positive role models, and be open with one another’ – as a means of tackling these problems.

While this latest exit could be seen as an affirmative move in clamping down on unacceptable working practices, it also shines an unfortunate light on a firm now with a succession of partner terminations for misconduct.

Nathalie.tidman@legalease.co.uk

 

 

Legal Business

‘Smarts and experience’: Freshfields adds more NY firepower with Latham tax hire

‘Smarts and experience’: Freshfields adds more NY firepower with Latham tax hire

Freshfields Bruckhaus Deringer has built on the momentum of its recent Manhattan hiring spree with the addition of tax partner Lori Goodman from Latham & Watkins.

The move is another boon for the City giant’s lofty US aspirations after the much vaunted acquisition last October of a four-partner Cleary Gottlieb Steen & Hamilton team, led by prominent M&A veteran Ethan Klingsberg.

Goodman, whose practice focuses on compensation and benefits aspects of M&A, private equity, disclosure, and corporate governance, will be joining Freshfields’ US executive compensation and employee benefits practice. She was made up to partner in 2015.

She has advised public company clients such as Spotify Technology and The Container Store Group and financial sponsor clients including Leonard Green & Partners, Odyssey Investment Partners and Energy Capital Partners. She also advised on the 2019 Peloton IPO.

Matthew Herman, Freshfields US managing partner, said Goodman’s hire would build on the firm’s increasing M&A, activism defense, shareholder litigation and corporate governance work since its recent hires: ‘Adding Lori to the equation is critical to delivering to our clients the sophisticated legal skill and judgment they demand.’

Ethan Klingsberg, Freshfields US head of M&A, added: ‘I’m impressed by Lori’s smarts and experience. I’m further thrilled that she provides innovative structuring advice on handling of awards and incentive plans in the full spectrum of M&A transactions, whether it’s a public company merger, a takeover of a start-up, or a financial sponsor transaction.’

The hire of Goodman also sees something of a revolving door between Freshfields and Latham, the Magic Circle firm having sustained a significant blow in the City last week after influential rising star Sam Newhouse quit for the US powerhouse. It was viewed as Latham’s most significant move into the UK public company M&A space since the hire of Allen & Overy’s well-liked M&A partner Ed Barnett in 2017.

nathalie.tidman@legalease.co.uk

Legal Business

Beckwith takes SDT misconduct decision to High Court appeal

Beckwith takes SDT misconduct decision to High Court appeal

Former Freshfields Bruckhaus Deringer partner Ryan Beckwith has filed a High Court appeal against the Solicitors Disciplinary Tribunal’s (SDT) finding against him in a case of sexual misconduct.

The appeal follows last October’s high-profile judgment that Beckwith knew or ought to have known that the junior member of staff he had sexual activity with was intoxicated and her judgement impaired and that he knew or ought to have known that his conduct was inappropriate

Nick Brett, Beckwith’s solicitor at Brett Wilson, confirmed the appeal in a statement: ‘On Wednesday 19 February 2020, Mr Beckwith filed grounds to appeal against the decision of the Solicitors Disciplinary Tribunal dated 30 January 2020 and it would not be appropriate to comment further pending the hearing in the High Court which will be listed in due course.’

Beckwith’s appeal comes after the Solicitors Regulation Authority (SRA), which brought the case to the Tribunal for prosecution in June 2018, earlier this week said it would not be appealing the sanctions handed down of a £35,000 fine and an order to pay legal costs of £200,000.

Earlier this month, the SDT released its written judgement explaining that the controversial decision to fine instead of ban Beckwith was because his misconduct was ‘a lapse in his judgement’ and ‘unlikely to be repeated’.

In the judgement, the SDT said that Beckwith’s misconduct did not pose a future risk to the public and that: ‘There had been no clients involved and there was no suggestion that the work of the respondent was anything other than highly competent. Nor did it consider that the respondent posed a future risk to the reputation of the profession,’ the judgment added.

The sanctions were made in light of the tribunal’s decision that ‘this was a one-off incident where there was no suggestion that he [Beckwith] had coerced or manipulated Person A [the junior lawyer]. It was not the applicant’s case that the respondent had deliberately plied Person A with drink with a view to getting her into such an intoxicated state that she would then engage in sexual activity.’

‘Nor was it the case that he had used his position of seniority and authority to engineer the sexual encounter,’ the decision added.

The tribunal found that, although Beckwith had ‘engaged in inappropriate conduct in circumstances where his judgement had been affected by the amount of alcohol he had consumed,’ it did not find that the circumstances of the case were such that a restriction order was necessary in order to protect the public.

nathalie.tidman@legalease.co.uk

Legal Business

Freshfields loses key rising star Newhouse as Latham renews City M&A push

Freshfields loses key rising star Newhouse as Latham renews City M&A push

In the latest blow to the UK Magic Circle, Latham & Watkins has hired one of Freshfields Bruckhaus Deringer’s brightest young partners, Sam Newhouse.

The US giant confirmed today (25 February) its most significant move in the UK public company M&A space since the hire of Allen & Overy’s well-liked M&A partner Ed Barnett in 2017.

One of the Magic Circle firm’s M&A partners hitting their early-40s prime, Newhouse was both popular and much tipped for his work with energy clients including Total and Essar.

In October last year, Newhouse led a Freshfields team advising Neptune Energy on its acquisition of Edison E&P’s UK and Norwegian producing, development and exploration assets from Energean Oil & Gas. The team also advised Neptune Energy on its acquisition of ENGIE E&P in February 2018.

A Freshfields lifer, he joined the City firm in 2003 as a trainee, qualified in 2005 and made partner in 2013.

marco.cillario@legalease.co.uk

Legal Business

#MeToo: SRA decides against Freshfields’ Beckwith misconduct sanctions appeal

#MeToo: SRA decides against Freshfields’ Beckwith misconduct sanctions appeal

The Solicitors Regulation Authority (SRA) has decided not to appeal the sanctions handed to former Freshfields Bruckhaus Deringer restructuring partner Ryan Beckwith by the Solicitors Disciplinary Tribunal (SDT) for misconduct last October.

The decision brings to a close a long-running and uncomfortable saga for the Magic Circle firm after Beckwith’s sexual activity with a junior member of his team was found to be in breach of principles two and six of the solicitors’ code of conduct, requiring solicitors to ‘act with integrity’ and ‘behave in a way that maintains the trust the public places in you and in the provision of legal services’.

The tribunal handed Beckwith a £35,000 fine and ordered him to pay legal costs of £200,000 in connection with the incident that took place in 2016 after copious alcohol consumption at an after-work drinks.

The financial penalty was not the suspension some were expecting, although the loss of Beckwith’s job (he resigned from Freshfields the morning of the ruling) and question marks over his employability in the City are arguably the real penalties. Beckwith had been on indefinite leave from Freshfields since December 2017.

An SRA spokesperson said the regulator was committed to tackling the issue of sexual harassment: ‘We refer allegations of serious misconduct to the Solicitors Disciplinary Tribunal and it is they who reach findings and decide on sanctions. We are able to appeal their decisions if specific legal grounds are met. Following a review of the judgement in this case and having taken legal advice, we have decided not to appeal.’

Earlier this month, The SDT published its judgement explaining the reasons behind the sanctions, entitling the regulator to appeal the decision within 21 days. In the ruling, the SDT said that Beckwith’s misconduct ‘was caused by a lapse in his judgement that was highly unlikely to be repeated’ and did not find he posed a future risk to the public.

‘There had been no clients involved and there was no suggestion that the work of the respondent was anything other than highly competent. Nor did it consider that the respondent posed a future risk to the reputation of the profession,’ the judgment stated.

The partnership of Freshfields Bruckhaus Deringer last December voted in sweeping reforms to its handling of misbehaviour, including financial penalties, as a way of mitigating the #MeToo fallout.

The move to establish a conduct committee followed a consultation and implements new enforcement protocols that mean partners who receive a final warning about their behaviour could face an automatic fine equal to 20% of their profit share for 12 months. The model is similar to those that have been successfully rolled out elsewhere in professional services, such as accountancy and consultancy firms.

nathalie.tidman@legalease.co.uk

Legal Business

Freshfields under financial and reputational fire in Germany as cum-ex tax scandal rolls on

Freshfields under financial and reputational fire in Germany as cum-ex tax scandal rolls on

Marco Cillario and Nathalie Tidman report on Freshfields’ role in the tax scandal rocking Germany

It is not often that a law firm makes headlines outside the legal media, yet the name Freshfields Bruckhaus Deringer is rapidly becoming a regular feature of German newspapers. That is bad news for the City giant. How bad, many are currently trying to assess.

Legal Business

‘Unlikely to be repeated’: SDT justifies sanctions in Freshfields’ Beckwith misconduct case

‘Unlikely to be repeated’: SDT justifies sanctions in Freshfields’ Beckwith misconduct case

The Solicitors Disciplinary Tribunal’s (SDT) controversial decision to fine instead of ban Freshfields Bruckhaus Deringer partner Ryan Beckwith was because his misconduct was ‘a lapse in his judgement’ and ‘unlikely to be repeated’.

The SDT published today (4 Feburary) its judgment detailing its full reasons after the tribunal last October fined Beckwith £35,000 and ordered him to pay costs of £200,000 for engaging in sexual activity with a junior female colleague in circumstances in which she was ‘intoxicated to the extent that her judgement was impaired’.

In the ruling, the SDT said that Beckwith’s misconduct ‘was caused by a lapse in his judgement that was highly unlikely to be repeated’ and did not find he posed a future risk to the public.

‘There had been no clients involved and there was no suggestion that the work of the respondent was anything other than highly competent. Nor did it consider that the respondent posed a future risk to the reputation of the profession,’ the judgment added.

The sanctions were made in light of the tribunal’s decision that ‘this was a one-off incident where there was no suggestion that he [Beckwith] had coerced or manipulated Person A [the junior lawyer]. It was not the applicant’s case that the respondent had deliberately plied Person A with drink with a view to getting her into such an intoxicated state that she would then engage in sexual activity.’

‘Nor was it the case that he had used his position of seniority and authority to engineer the sexual encounter,’ the decision adds.

The tribunal found that, although Beckwith had ‘engaged in inappropriate conduct in circumstances where his judgement had been affected by the amount of alcohol he had consumed,’ it did not find that the circumstances of the case were such that a restriction order was necessary in order to protect the public.

It describes the fine of £35,000 as ‘appropriate and proportionate in all the circumstances’.

The Solicitors Regulation Authority (SRA), which referred Beckwith to the SDT for prosecution in late June 2018, is weighing whether to appeal the decision.

An SRA spokesperson said: ‘We are reviewing the judgment and will then decide on next steps. We have 21 days from today, publication day, to lodge any appeal, if there is one.’

In October, the tribunal found Beckwith’s behaviour was in breach of principles two and six of the solicitors’ code of conduct, requiring solicitors to ‘act with integrity’ and ‘behave in a way that maintains the trust the public places in you and in the provision of legal services’.

nathalie.tidman@legalease.co.uk