Legal Business

Herbert Smith Freehills shakes off post-merger politics in favour of sole global corporate head as Ferraro takes over

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Setting aside the notoriously difficult post-merger politics of selecting one partner to run a core practice area, Herbert Smith Freehills today (15 April) announced that former Freehills joint global head of corporate Mike Ferraro will take over as sole head.

Former Herbert Smith partner and co-head Patrick Mitchell will, after four years as head of corporate, take up a new role as head of the firm’s infrastructure practice in both the UK and EMEA. Mitchell will work closely with Andrew Clark, head of projects for Australia and Asia, in the continued development of what the top 10 firm describes as ‘this strategically important practice.’ Mitchell will also maintain his role in developing the firm’s presence in Germany.

The appointment marks a shift from the post-merger dual global management team put in place in the summer of 2012, and the reshuffle is said to have come after the firm recognised the need for a single head to achieve its longstanding corporate ambitions. Sonya Leydecker, who takes over as joint CEO with former Freehills managing partner Mark Rigotti on 1 May, told Legal Business: ‘It is important to have one person to look over the whole thing.’

The firm has also appointed corporate partner Alvaro Sainz to the newly-created role of regional head of practice (RHoP) for EMEA. Sainz will work alongside Ferraro and fellow corporate RHoPs, Austin Sweeney in Asia, Andrew Pike out of Australia and senior partner of funds Scott Cochrane in the UK.

Global head of M&A Stephen Wilkinson will also be taking on an enhanced role to focus on driving growth in the M&A practice across the UK, Europe and the US.

In his former role, Melbourne-based corporate partner Ferraro managed the London and Australian corporate teams after Herbert Smith combined with Freehills. Before joining Freehills, Ferraro was chief legal counsel at BHP Billiton. He will continue to be based in Melbourne for his new role, which takes effect on 1 May 2014.

The statement from the firm said: ‘Mike has been joint global head of corporate with overall responsibility for the London and Australian corporate teams since the merger of Herbert Smith and Freehills, and in that time has made a major contribution to the performance of those regions.’

Leydecker added: ‘The global corporate practice is of huge importance to the future success of the firm. These management changes will allow for greater join up across our network as we continue to compete successfully for the top cross-border deals. With Mike as global head supported by a strong team around him we are confident of achieving these objectives.’

In a sign of what can be expected further down the line, the post-merger dual UK-US leadership of Hogan Lovells recently came to an end with joint chief executives Warren Gorrell and David Harris set to stand down from their respective roles in June 2014, when Washington DC-based partner Stephen Immelt takes over as sole CEO, while London-based partner David Hudd will become deputy CEO.

Jaishree.kalia@legalease.co.uk

Legal Business

‘There’s no-one of the scale to rival us’ – HSF’s new litigation head talks strategy

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Litigation Herbert Smith Freehills
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Justin D’Agostino has taken over as global head of dispute resolution at commercial litigation heavyweight Herbert Smith Freehills. Here the Asia-based lawyer talks to Legal Business about joining the dots of an expanding practice.

What effect will a Hong Kong-based disputes head have on the global practice?

Being based in Asia gives me a good opportunity to be in the middle of it all; it’s a positive from that respect. It will be different having the global head not being based in London but we have very strong local disputes managers in London. I will be joining the pieces across the globe.

What areas would you like to strengthen?

From a practice point of view I’m looking at where the growth areas are. Disputes is at the heart of the firm. Corporate crime and investigations is a big growth area: we appointed a new head, Kyle Wombolt last year and he’s done really well.

International arbitration is growing all the time, the practice is very busy but we have room to grow. Two of our arbitrators have taken silk, which is a game changer.

Which regions would you like to move into?

I’d like to exploit the axis between Asia and the US. Arbitration with [New York-based partner] Larry Shore, and mainstream litigation with [New York managing partner and litigator] Tom Riley. There’s a lot of investment from China to the States and vice versa. Disputes arise from those investments and investigations.

How have you reacted to the senior departures within the disputes practice?

We have a very deep bench, even just in London. In late March we appointed Tim Parkes to take ownership of the commercial litigation practice in London. He’s a heavyweight and an important appointment. Tim is but one of a number of partners of that ilk, the heavy bench is still there in London. One of the things that all firms need to do is invest in the next generation of heavyweights as well.

US firms in London are increasingly disputes focused, are you worried about growing competition?

The depth of bench in the main offices is second to none. Our unique selling point is the global platform, if you’re doing a big cross-border dispute, we have that depth.

Obviously the market’s moving and there’s competition, but there’s no-one of the size and scale to rival us in London and globally.

david.stevenson@legalease.co.uk

Legal Business

Q&A with HSF’s new global head of disputes Justin D’Agostino

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Litigation Herbert Smith Freehills
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Justin D’Agostino has taken over as global head of dispute resolution at commercial litigation heavyweight Herbert Smith Freehills. Here the Asia-based lawyer talks to Legal Business about joining the dots of an expanding practice.

What effect will a Hong Kong-based disputes head have on the global practice?

Being based in Asia gives me a good opportunity to be in the middle of it all; it’s a positive from that respect. It will be different having the global head not being based in London but we have very strong local disputes managers in London. I will be joining the pieces across the globe.

Legal Business

IPO Fever: Just Eat float gifts Herbert Smith Freehills and Linklaters with £700m listing

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Corporate Herbert Smith FreehillsLinklaters
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With Pets at Home and Poundland having only days ago made their London Stock Exchange debut, Just Eat yesterday (17 March) announced its intention to float, gifting Herbert Smith Freehills (HSF) and Linklaters with a high profile corporate mandate valued at between £700m to £900m.

HSF corporate partner Chris Haynes and US-qualified global head of capital markets Steve Thierbach are leading a team for 2001 Danish start-up Just Eat, which also includes associates Jessica He and Bridget Castle.

The deal comes after both Haynes and Thierbach recently advised on the £1.6bn float of Bolton success story, white goods company AO, alongside corporate partner Mike Flockart.

That listing exceeded its predicted market capitalisation of around £1bn upon listing.

Magic Circle firm Linklaters is acting for chief underwriters Goldman Sachs and JP Morgan Securities, with corporate partner Iain Wagstaff and associate Niamh Liddy to advising on English law, while City-based Mike Bienenfeld and associate Megan Schellinger are providing US law advice.

In 2013, Just Eat recorded a strong financial performance within the UK, the company’s largest business, recording a 67.4% increase in revenue to £68.8m from £41.1m in 2012.

Its move to list on London’s main market is indicative of a wider uptick in UK IPO activity in recent months, with Poundland having closed with a valuation of £925m last Wednesday (13 March).

Last year also saw IPOs raise $18.7bn globally constituting a substantial increase on 2012, which raised $4.7bn according to Dealogic.

Sarah.downey@legalease.co.uk

Legal Business

Diversity – Herbert Smith Freehills commits to 30% female partners by 2019

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Set against a backdrop of initiatives including the 30% Club’s drive to improve senior female representation on UK boards, Herbert Smith Freehills (HSF) has announced today (13 March) that by 2019 women will make up 30% of its partnership.

The top 10 UK firm, which currently has a female partnership ratio of around 20%, has said it will bring in the changes in two stages: by May 2017 at least 25% of the partnership will be women, followed by 30% in May 2019.

A statement from the 2,323-lawyer firm said that its objective is to achieve gender balance by widening the ‘talent pool’ from which partners at the firm are promoted. ‘The targets are an important step in helping to create a level playing field for both men and women who aspire to become partners,’ the statement said.

The targets will be backed by targeted career development, sponsorship, mentoring and coaching programmes, as well as unconscious bias and inclusive leadership development training for partners and senior leaders.

The firm, which in December appointed Sonya Leydecker as joint chief executive (CEO), will also incorporate active diversity and inclusion committees across the firm, facilitating women’s networks and membership of the 30% Club in London and Hong Kong.

Outgoing joint CEO David Willis said: ‘These targets have tangible benefits for the whole business – as well as promoting the best talent, they will help us meet the needs of our clients and bring diverse perspectives to our business and the business of clients.

‘In order to create a fully diverse and inclusive culture, we need to challenge ourselves to make measurable progress; just as we measure progress in any part of our business.’

Other firms to have set similar targets include Pinsent Masons, which aims to hit a 25% female partnership by 2018, with an aim to reach 30% after that. Baker & McKenzie last year announced its plan to double its female partnership to 30%, while Hogan Lovells and Eversheds are also targeting 30%.

In 2011, the Davies Report called for strong action from UK companies to redress gender imbalance on UK boards, suggesting that they should aim for a target of 25% female representation by 2015.

David.stevenson@legalease.co.uk

Legal Business

Asia: Herbert Smith rethinks Singapore; EY targets major Asia expansion; CC leads $1.93bn South Korea deal for Carlyle

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The most notable headlines to emerge from Asia this week include Herbert Smith Freehills (HSF) deciding not to renew its coveted qualifying foreign law practice (QFLP) licence in Singapore, while EY has announced plans to expand throughout the region.

Meanwhile, Clifford Chance‘s private equity practice has demonstrated its ties to key client Carlyle, despite high-profile exits in London, with a sizeable deal in South Korea.

For HSF, the decision not to renew its QFLP came after a series of recent departures from the Singapore office, set against the prescriptive growth targets set by the Singapore ministry of the law that underpin the granting of the QFLP to foreign firms.

HSF has a long history in Singapore, going back 25 years. According to Singapore managing partner Michael Walter, the firm remains committed to the city but he added: ‘To renew our licence we would have had to sign up to specific growth plans. We weren’t prepared to do that so we chose not to pursue the renewal.’

Departures include the head of south-east Asia disputes, Maurice Burke, who left in February for Hogan Lovells. The firm also lost energy lawyer Charles Ball to Reed Smith’s Singapore office last year.

Other departures include Freehills former Singapore managing partner John Dick, who left for EY in November 2013.

With HSF unable to offer domestic law services in the city state, it will now pursue a local alliance. ‘The options we’re looking at include joint law ventures and formal law alliances with domestic Singapore firms,’ said Walter.

‘The Singapore ministry of law has granted us a six month extension to the end of October, after which the firm will have new arrangements in place to support our ambitions and those of our clients in Singapore and the wider region,’ he added.

‘An expiry date of the 31 October gives us a bit more time to get an alternative in place. I’m pretty comfortable with that.’

Firms that have been successful in getting their QFLPs renewed for another five years include Allen & Overy, Clifford Chance, Latham & Watkins and Norton Rose Fulbright. White & Case only secured a one year extension to its licence, which will be extended by another four years if the firm is able to meet targets set by the Singapore ministry of law.

‘Over the last few months we have been actively engaged with the ministry of law, the attorney general’s chambers and the economic development board on matching our business plan with Singapore’s focus on ensuring that Singapore is a centre for international transactional and arbitration work,’ said Stephen McWilliams, managing partner of Lathams’ Singapore office.

Meanwhile, the hire of John Dick by EY last year was clearly the precursor to larger expansion plans, with the Big Four accountancy giant announcing plans last week to expand its legal services business throughout Asia over the coming year. EY has said it is looking to expand its offering across Singapore, Vietnam, Hong Kong, Korea and Indonesia, subject to regulatory requirements.

Earlier this year the firm entered the Chinese market via the acquisition of Shanghai-based law firm Chen & Co. So far the only other major accountancy firm that has a legal presence in Asia is Deloitte, through its tie-up with Chinese law firm Qin Li law firm.

In a statement, EY said: ‘EY Law operates in 40 countries around the world, with more than 1,000 lawyers…and is continuing to grow globally. From 15 January, our Greater China practice has had 50 lawyers operating out of Shanghai, Beijing and Hong Kong (and growing) as part of our multidisciplinary service offering.’

Finally, while Clifford Chance’s global private equity practice has suffered of late after losing its principal Carlyle Group relationship partner David Walker to Latham & Watkins last year, followed by Kem Ihenacho in February, the firm ran a major deal for this key client out of Korea this week. Corporate partner Simon Cooke led, alongside Seoul managing partner Hyun Kim, on a deal that saw Carlyle buy fire protection and security company ADT Korea from Tyco for $1.93bn.

The deal is the largest private equity buyout in Korea since 2008 and although subject to regulatory approval, is expected to close in the second quarter of this year.

david.stevenson@legalease.co.uk

Legal Business

Regulatory coup: Herbert Smith Freehills hires Deutsche Bank’s global head of compliance

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In a major regulatory hire for Herbert Smith Freehills (HSF), the top 10 LB100 firm has hired Deutsche Bank’s global head of compliance, governance and regulatory affairs Andrew Proctor to join its global financial services regulatory practice.He is expected to join in June.

Prior to his position at Deutsche Bank, Proctor (pictured) was head of the enforcement division at the Financial Services Authority (FSA), now the Financial Conduct Authority, and has held senior positions at the Hong Kong Securities and Futures Commission as well as the Australian Securities Commission.

Proctor will advise HSF’s financial services clients, utilising his experience at Deutsche Bank to attract banks which find themselves under ever increasing regulatory pressure. He will advise on contentious and non-contentious matters and his hire sees the firm bulk up in the space left by financial regulatory lawyers Martyn Hopper – also a one-time FSA enforcement head – and Nikunj Kiri, who left for Linklaters last year.

‘This is a very significant strategic development for us,’ said Sonya Leydecker, global head of disputes at the firm and co-chief executive officer elect.

‘Having Andrew on board will add a unique level of experience and sophistication to our financial services regulatory capability. Andrew’s experience, standing, market insight and energy represent an opportunity for our growing financial services regulatory practice to develop and innovate our client offering in this important market sector,’ Leydecker added.

david.stevenson@legalease.co.uk

Legal Business

LB100 firms review partnership model as HMRC’s LLP changes loom

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The impact of HM Revenue & Customs’ decision to overhaul the way salaried partners are taxed is being felt across the City as a number of leading firms confirm they are reviewing their arrangements, although some of the largest Legal Business 100 firms have come out to categorically deny the changes will have any effect at all.

Firms including Herbert Smith Freehills, Ashurst, TLT, DWF, Weightmans, and Trowers & Hamlins have all confirmed to Legal Business that they are reviewing their partner remuneration arrangements in anticipation of the new rules, which will mean partners with under 25% of their salary attached to profits will be regarded as having a ‘disguised salary’ and treated as employees by tax authorities in a move expected to add thousands of pounds onto firms’ tax bills.

In response to the overhaul, which HMRC stated at the end of February will come into effect in April 2014 despite protests from the industry, Hogan Lovells is understood to be currently considering the changes but no final decisions had been made at the time of going to press, while Herbert Smith Freehills said it is ‘looking into how [the changes] will impact us’.

While top 15 LB100 firm Ashurst says it will ‘not ask for any additional capital’ it is ‘reviewing the structure of remuneration packages’, according to a spokesperson, and at Simmons & Simmons, which has 85 non-equity partners, a spokesperson added: ‘[The firm] eagerly awaits further guidance that was due to be issued, which will assist in assessing whether changes to the remuneration or capital structure are required.’

Of the Magic Circle firms, Linklaters and Slaughter and May have very few non-equity partners – 28 and four respectively according to figures provided for the Global 100 – and both firms said they expect no real impact from the latest measures.

Allen & Overy, which has 85 non-equity partners, told Legal Business that it expects the proposals to have ‘no significant impact on us as all our partners share in the profits of the firm’.

Partners with under 25% of their salary attached to profits will be regarded as having a ‘disguised salary’.

Magic Circle rival Freshfields Bruckhaus Deringer, which had only 29 non-equity partners at the last tally, stated that none will be affected by the changes, although it declined to say why.

With 166, Clifford Chance has by far the most non-equity partners of the Magic Circle firms, but was the only one to decline to comment on its plans.

Of the firms that have announced substantive changes so far, TLT has requested that each of its 60 fixed-share partners contribute £20,000, a move that will boost its funds by a minimum of £1.2m. ‘We will put in place external funding for fixed-share partners if needed, to support any capital contribution,’ a spokesperson for the firm said.

National firms Trowers & Hamlins and Weightmans are both expected to require fixed-share partners to inject capital following a consultation.

Norton Rose Fulbright, CMS Cameron McKenna, Dentons and Macfarlanes all refused to comment.

sarah.downey@legalease.co.uk

Legal Business

LB100 firms review partnership model as HMRC’s LLP changes loom

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Salaries AshurstDWFHerbert Smith FreehillsTLTWeightmans
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The impact of HM Revenue & Customs’ decision to overhaul the way salaried partners are taxed is being felt across the City as a number of leading firms confirm they are reviewing their arrangements, although some of the largest Legal Business 100 firms have come out to categorically deny the changes will have any effect at all.

Firms including Herbert Smith Freehills, Ashurst, TLT, DWF, Weightmans, and Trowers & Hamlins have all confirmed to Legal Business that they are reviewing their partner remuneration arrangements in anticipation of the new rules, which will mean partners with under 25% of their salary attached to profits will be regarded as having a ‘disguised salary’ and treated as employees by tax authorities in a move expected to add thousands of pounds onto firms’ tax bills.

Legal Business

Life During Law: James Palmer

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Life During Law Herbert Smith Freehills
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I don’t believe people that do well have an unerring right to succeed and it’s entirely down to their own abilities. Loads of incredibly able people don’t hit the right spot. I was very lucky that I started working as a lawyer doing something that I turned out to be good at. I could easily have done something else. I applied because I didn’t know what else to do.

Law attracts people who are not just in it for money, but want that sense of professionalism and intellectual curiosity, and also people who want to work with other people. I became more entrepreneurial as I became older, but whether I am entrepreneurial, I’m not sure. I’m a team person, not a classic entrepreneur.