Legal Business

HSF hikes associate pay package to £105k as firms jostle for talent

Posted on |
Associates Herbert Smith Freehills

Herbert Smith Freehills (HSF) has joined the ranks of firms upping their associate pay commitments, boosting its compensation package to £105,000 including salary and bonuses.

The figure is a 13% increase on the £93,000 the Anglo-Australian firm announced last year. Though the firm would not disclose the underlying basic salary, the new structure is meant to place greater emphasis on associates’ performances and less on post-qualified experience (PQE).

‘It is important that we continue to attract and retain the best talent to deliver the service our clients expect and deserve,’ said HSF executive partner Ian Cox. ‘Newly-qualified associates – along with all our junior associates – represent a key pool of talent and the future of the firm.’

Despite the new focus on performance, HSF stressed the changes will not mark a radical departure from the associate salary structure introduced in 2018, when the firm announced that associates with two years PQE can earn up to £114,000.

The announcement comes after Linklaters became the last of the Magic Circle to unveil a significant pay hike yesterday (1 July), boosting the cash payable to NQs to £100,000 after Freshfields Bruckhaus Deringer went first in May with a big increase.

While the battle over associate pay continues to unfold, US players are still significantly ahead on associate remuneration.

thomas.alan@legalbusiness.co.uk

Legal Business

Herbert Smith Freehills partner reported to SRA for threatening sexual harassment claimant

Posted on |
Legal regulation Herbert Smith Freehills

A woman who filed a sexual harassment case against her employer was allegedly told by a Herbert Smith Freehills (HSF) lawyer the case would end her career.

City finance associate Nathalie Abildgaard was awarded £270,000 in April after settling a sexual harassment case against her employer IFM Investors. However Abilgaard wrote in a submission to the Women and Equalities Committee a HSF lawyer had engaged in ‘aggressive and intimidating behaviour.’

Although not named in the document, the firm confirmed that employment partner Andrew Taggart has since been reported to the Solicitors Regulation Authority (SRA).

The written evidence details how Taggart had allegedly stressed to Abildgaard’s lawyer that if she stood in the witness box her career in the City’s finance industry would be effectively over. In her submission Abildgaard accuses Taggart of using words to the effect of: ‘If Nathalie goes on the witness stand tomorrow, her and her partner’s credibility will be so shuddered they will never be able to work in the financial industry in London again.’ Taggart was alleged to have concluded that ‘Nathalie is toast.’

Although Abildgaard reported Taggart to the SRA in January over his handling of the defence of her claims, Taggart has not yet been contacted by the SRA.

In a statement, HSF said: ‘We are aware that Ms Abildgaard has made a complaint to the SRA. This process is at its early stages and we will be fully co-operating with the SRA.’

Meanwhile, a spokesman for the SRA said: ‘We are aware of the situation and getting all the relevant evidence in place.’

Abildgaard’s case was settled without the controversial use of non-disclosure agreements (NDAs) which have recently received increased scrutiny. A report by the Women and Equalities Committee on discrimination and harassment in the workplace published yesterday (11 June) condemned the ‘routine cover-up’ of discrimination allegations by employers.

Currently the SRA is investigating 19 cases related to the use of NDAs and 13 cases related to sexual harassment.

thomas.alan@legalease.co.uk

Legal Business

Herbert Smith Freehills to scale back German operation with Berlin office closure

Posted on |
Herbert Smith Freehills

Herbert Smith Freehills (HSF) will be closing its Berlin office by the end of the year, reducing the firm’s German footprint to Frankfurt and Düsseldorf.

The 10-lawyer office was first opened in 2013 and is currently led by corporate partners Dirk Hamann and Ralf Thaeter. All associates, trainees and business services staff in Berlin have been given the option to transfer to the firm’s other German offices.

HSF managing partner Nico Abel said in a statement: ‘After careful consideration and consultation, we have decided to close our office in Berlin. So that we are best placed to meet current and future challenges, and make the most of opportunities, we must ensure we have the right capability in the right locations. We want to concentrate our future growth in Frankfurt and Düsseldorf, as these are the markets with the greatest opportunities for the firm and our clients.’

Traditionally international firms have focused on Munich and Frankfurt rather than Berlin, with HSF’s Berlin exit suggesting a refocusing along similar lines. Notable exceptions include Dentons and Greenberg Traurig, who both have a meaningful presence in the German capital.

The German retreat also follows a curtailed London promotion round for the Anglo-Australian firm, with four partners being minted in the City. However the global round was an increase on last year, with 22 lawyers being added to the firm’s partnership overall.

‘Germany continues to be a key strategic market for the firm, and we remain strongly committed to growing our leading practice in the region,’ Abel added. ‘We are confident that we can continue to provide the same quality and breadth of service to our clients in Berlin.’

thomas.alan@legalbusiness.co.uk

Legal Business

Herbert Smith Freehills curtails London promotions in 22-strong global partnership round

Posted on |
Partnership promotions Herbert Smith Freehills

Herbert Smith Freehills (HSF) has unveiled an increased 22-strong global partner promotions round for 2019, however this includes a reduction in London appointments.

Overall, it is a significantly larger round than last year, when 17 lawyers were promoted globally, with six in London. But the promotions, effective 1 May 2019, see only four partners minted in London, with six each made up in EMEA, Asia and Australia.

Eight of the 22 new partners are female, equal to 36%. Although the proportion of female promotions is better than many firms, it is still a sharp fall from 2018, where an overwhelming majority (82%, 14 out of 17) were female.

Of the four London promotions, half of them qualify into the firm’s finance practice: Pedro Rufino Carvalho, who specialises in energy and infrastructure finance, and John Chetwood, who offers restructuring and insolvency expertise.

Miriam Everett, who has a data protection and privacy slant, will be an addition to HSF’s City corporate practice. Rounding off the London promotions, Chris Ninan qualifies into the firm’s esteemed disputes group with a background in financial services regulation.

HSF chief executive Mark Rigotti (pictured) described the new partners as ‘future leaders of our firm’ and added: ‘These new partners are outstanding lawyers and have built deep relationships with clients, developed a wealth of expertise, and demonstrated a real understanding of our firm values and culture. Their diverse skills and experiences will further enhance the strength of our global network.’

Last week, UK top-25 competitors Eversheds Sutherland and Fieldfisher unveiled their partnership rounds, with the firms globally promoting 27 and 17 partners respectively.

The full list of HSF partner promotions:

Pedro Rufino Carvalho, finance, London
John Chetwood, finance, London
Miriam Everett, corporate, London
Chris Ninan, disputes, London
Marius Boewe, competition, Düsseldorf
Tomás Díaz Mielenhausen, real estate, Madrid
Laurence Franc-Menget, disputes, Paris
Marcel Nuys, competition, Düsseldorf
Nick Oury, disputes, Dubai
Daniel Vowden, competition, Brussels
Jeremy Birch, disputes, Hong Kong
Natalie Curtis, disputes, Singapore
Tomas Furlong, disputes, Singapore
Matthew Goerke, corporate, Jakarta
Calvin Ho, corporate, Beijing
Adelaide Luke, competition, Hong Kong
Adam Charles, corporate, Melbourne
Kate S Cahill, disputes, Sydney
Natalie Gaspar, employment, Melbourne
Katherine Gregor, corporate, Melbourne
Melissa Swain-Tonkin, corporate, Brisbane
Kwok Tang, corporate, Sydney

tom.baker@legalease.co.uk

Legal Business

Deal View: Herbert Smith Freehills’ corporate team – credibility and polish only get you so far up the table

Posted on |
Deal View Herbert Smith Freehills

‘It’s like the rivalry between Fulham and Chelsea,’ notes one former Herbert Smith Freehills (HSF) partner of his old club’s oft-cited tension between corporate and disputes. ‘Fulham fans think of Chelsea as one of its biggest rivals. Chelsea fans think of Fulham as that nice team down the road.’

No prizes for guessing that it is corporate that represents the plucky underdog in this reading. At a glance, such a comparison seems uncharitable. HSF’s corporate team is ranked in The Legal 500’s second tier for premium M&A deals, alongside Allen & Overy and Clifford Chance; most peers still regard its City corporate team as the best outside the Magic Circle. The legacy Herbert Smith also has a history stretching back to the 19th century as one of London’s prominent corporate solicitors, long before its embryonic disputes team invented the modern City model of running litigation as a substantive business line in the 1970s.

Legal Business

Disputes round-up: White & Case continues hiring drive with RBS litigation head as HSF partner appointed deputy High Court judge

Posted on |
Litigation Herbert Smith FreehillsWhite & Case

White & Case is continuing its bid to add firepower to its London disputes bench with the hire of The Royal Bank of Scotland (RBS)’s former head of litigation and investigations Laura Durrant as a partner.

Meanwhile, Swiss disputes firm LALIVE is opening an arbitration-focused office in London and Herbert Smith Freehills’ (HSF) litigation partner Adam Johnson QC has been appointed a deputy High Court judge.

Durrant started her career as an associate with HSF in 2006, before opting to move in-house to RBS in 2010 where she went on to occupy a number of roles. Most recently, she acted as the banking giant’s head of litigation, regulatory and investigations.

For White & Case, Durrant’s arrival continues a recent trend of hiring ex-banking lawyers. The firm brought in fellow litigation partner Chris Brennan in June, after previous spells at Lloyds Banking Group and the Financial Conduct Authority.

It also marks a concerted attempt by the expansive US firm to aggressively hire for its City disputes bench to enable it to contend with the Magic Circle. Last month, the firm enlisted contentious construction and engineering partner David Robertson to its arbitration team from Bryan Cave Leighton Paisner (BCLP) and Cadwalader, Wickersham & Taft litigation partner Steven Baker to its commercial litigation practice.

John Reynolds, White & Case disputes partner, told Legal Business: ‘We have made a concerted effort to bring in the right people for the banking litigation team, we’ve made four laterals in the area this year. The combination between Chris, myself and Laura I feel fantastically optimistic about, we all get on really well.’

Charles Balmain, head of EMEA disputes for White & Case, commented: ‘As we continue to compete toe-to-toe with the magic circle, it’s exciting to welcome an experienced and accomplished lawyer like Laura, who has a strong market profile and excellent relationships with key figures in the banking industry.’

Elsewhere, Withers has taken advantage of the recent exodus at the newly-formed Bryan Cave Leighton Paisner, appointing legacy Bryan Cave’s head of arbitration Emma Lindsay.

Lindsay, who will be located in Withers’ New York office, is a dual-qualified international disputes lawyer and typically represents corporates and sovereigns across a range of jurisdictions.

Peter Wood, head of Withers’ disputes division, said: ‘Her arrival at the firm extends our international arbitration capabilities to the US. With Emma in place in New York, we can now offer our clients expert arbitration advice across the US, Asia and Europe.’

After the emphatic endorsement of being appointed to Queen’s Counsel in 2017, HSF litigation partner Adam Johnson QC has now been elected to serve as a deputy High Court judge.

Johnson QC will act on a four-year term and is expected to sit for around 30 days a year, dealing with complex cases which would otherwise be undertaken by permanent High Court judges. He has substantial experience from his time at HSF, joining the firm in 1988 and acting on high-profile mandates such as representing RBS in the litigation arising out of the 2008 rights issue.

Out of a total of 32 deputy High Court judges appointed, only four were solicitors. Picked alongside Johnson QC was Bristows’ competition and regulatory head Pat Treacy, former Powell Spencer and Partners lawyer Margaret Obi, and former Thompsons partner Mary Stacey.

Johnson QC told Legal Business: ‘I have been practising law for over 30 years and the profession has given a lot to me, so there is a sense that it was important for me to give something back. As a solicitor I hope that the expertise I have had in that role will provide a slightly different and valuable perspective.’

Finally, Swiss outfit LALIVE has announced that it is opening an office in London. The new outpost, which will be focused on commercial and investment treaty arbitration, will be led by a two-partner team consisting of Marc Veit and Timothy Foden.

Veit has been with LALIVE since 2014 while Foden has recently joined the firm after previously acting as of counsel at Quinn Emanuel Urquhart & Sullivan.

LALIVE has bucked recent fears by placing its faith in the UK as a post-Brexit arbitration hub. Veit commented: ‘We believe that the UK will remain a key location for international arbitration post-Brexit. London’s attractiveness as a seat for international arbitration may actually increase as third parties may see England as being a more neutral venue outside of the EU.’

tom.baker@legalease.co.uk

Legal Business

HSF’s corporate ambitions take hit after losing seasoned trio to Morgan Lewis

Posted on |
Strategic recruitment Herbert Smith FreehillsMorgan, Lewis & Bockius

Herbert Smith Freehills’ (HSF) rhetoric of improving corporate capabilities has taken a blow after a trio of transactional partners left for the London office of US firm Morgan, Lewis & Bockius.

The departures include HSF’s head of London private equity, Mark Geday, who had been at the firm since 1996, alongside corporate partners Nicholas Moore and Tomasz Wozniak. They will come as a disappointment for HSF, particularly after the firm made concerted efforts to promote the success of its corporate practice over the last year.

All three partners have substantial experience working together in both HSF’s London office and its Moscow outpost. They have a strong client book spanning a range of sectors, including asset management, technology, natural resources, TMT and consumer products.

Morgan Lewis chair Jami McKeon said the trio’s client experience deepens ‘the ability of our leading corporate and business transactions practice to facilitate the kinds of deals that are critical to our clients’ global growth strategies.’ She added: ‘Their sophisticated insight into business environments will make them trusted advisers to our clients with multinational interests.’

HSF unveiled an uninspiring 1% growth in turnover to £926.8m in July, but chief executive Mark Rigotti was keen to highlight the performance of its corporate division. Its transactional team acted on some heavyweight mandates, most notably representing Sky during takeover bids by 21st Century Fox and Comcast, worth £18.5bn and £22bn respectively.

HSF said in a statement: ‘We can confirm that Mark Geday, Nicholas Moore and Tomasz Wozniak are retiring from the partnership. We thank them for their contribution to the firm, both during their time in Moscow and London, and we wish them well.’

tom.baker@legalease.co.uk

Legal Business

Top-line growth no longer a priority as profit jumps 12% at HSF

Posted on |
Financial results 2017/18 Herbert Smith Freehills

Herbert Smith Freehills (HSF) chief executive Mark Rigotti says the days of focusing on revenue growth ‘are gone’ after the firm revealed today (4 July) less than one percent turnover growth for 2017/18 against a 12% increase in profit per equity partner (PEP).

Revenue at HSF during what it described as a period of encouraging growth was £926.8m, barely up on last year’s £920.5m. HSF’s profits, meanwhile, rose 8% to £277.2m and PEP was up from £760,000 to £852,000. The firm’s financial figures are not currency-adjusted but foreign exchange impacts were described as marginal.

HSF chief executive Mark Rigotti told Legal Business the discrepancy between revenue and profits was ‘because we focused on client relationships, we’ve had some big ones come home for us this year. Clients are putting pressure on prices, the old days of putting rates up and focusing on revenues are gone’.

In terms of highlights, Rigotti pointed to strong regional performances. HSF’s Paris office has achieved a 30% increase in revenue over the last five years, while turnover in Madrid and Germany saw similar increases. HSF’s alternative legal services hub based in Belfast, where revenue has grown by 90% on a five-year basis, was also performing well

The most robust regional performance was in New York, however, where the office saw a 40% climb in revenues over the last year. It is no secret that HSF has been seeking a US tie-up, and Rigotti said HSF was building up new financial services capability in New York.

But he played down immediate possibilities of a transatlantic merger: ‘Our strategy is clear – focus on and strengthen our current US client relationships; continue a strengthening of our New York office and position for sensible strategic combination opportunities. About 25% of our clients are US-based so we will continue to serve them.’

Rigotti was also keen to highlight the performance of the firm’s corporate department, due to HSF’s perception as a disputes-heavy outfit. The corporate division acted on nearly 120 cross-border deals with a combined value of $200bn in 2017, most notably representing Sky during takeover bids by 21st Century Fox and Comcast, worth £18.5bn and £22bn respectively.

HSF’s results follow a mixed financial performance at the Anglo-Australian firm last year when revenue grew 11% but profits marginally fell.

Comparing HSF’s results to the early benchmark set by major City firms makes for unfavourable viewing – Clifford Chance (CC) recorded a 5% income hike to £1.623bn, with PEP up by nearly 16%, while Ashurst reported a modest 4% uptick in revenue to £564m, alongside 11% growth in PEP.

HSF also announced yesterday (3 July) a shake-up of its compensation packages for UK associates, moving away from a PQE system to a more merit-driven setup.

The firm introduced ‘career milestones’ whereby pay will be determined by performance. The total cash potential for junior associates, which incorporates NQ to 2 PQE, is £92k-£114k. HSF has also scrapped annual performance reviews in favour of a more flexible approach based on regular feedback and conversations.

Rigotti said the shake-up wasn’t designed to reward any particular in-demand practice areas: ‘We feel it is fair to those that are making a bigger contribution to be rewarded. We needed flexibility to be able to achieve that.’

tom.baker@legalease.co.uk

Legal Business

Full disclosure: Links and HSF usher in personal relationship policies in bid to face #MeToo demons

Posted on |
Herbert Smith FreehillsLinklaters

City firms Linklaters and Herbert Smith Freehills (HSF) have been spurred into action by the swathe of sexual misconduct allegations that in recent months have plagued the industry, launching personal relationship disclosure and whistleblowing initiatives within a fortnight of one another.

In early May, Linklaters issued ‘guidance on how to manage relationships at work’, with the imperative that partners and staff disclose any relationship with colleagues to an office, group or practice head, or someone in HR, in order to manage ‘actual or potential’ conflict of interest.

Legal Business

‘A unique buzz’: Herbert Smith to exit Finsbury Square to set up in Canary Wharf

Posted on |
Innovation Herbert Smith Freehills

Herbert Smith Freehills (HSF) is set to relocate nearly 500 of its City workforce to a new office in Canary Wharf, as the firm moves out of its Finsbury Square base.

The move, announced today (17 May), will see 495 staff – including the majority of HSF’s London business services staff – relocated to the new office on Bank Street in September.

HSF will close its secondary base in Finsbury Square while keeping its UK headquarters at Exchange House on Primrose Street.

HSF says that the Wharf will reduce the proximity between services and clients, while still retaining valued members of the workforce, with a move further afield potentially signalling staff losses.

The move followed a postcode analysis in which Stratford, White City and Croydon were all considered before Canary Wharf was chosen.

Speaking to Legal Business, HSF managing partner Ian Cox lauded the benefits of the move: ‘The advantage is locating all these teams in a much more flexible way. When we went through the process, we looked at other locations and solutions but wanted to retain who we could’.

The firm followed a similar course in Australia, moving part of its Sydney workforce to a new office in Macquarie Park, which opened its doors in April.

HSF also recently announced that staff should disclose personal relationships with colleagues, while also introducing a third-party whistleblowing platform.

On the new office, Cox added: ‘The initial feedback has been very positive, Canary Wharf has a very unique buzz’

thomas.alan@legalbusiness.co.uk