Legal Business

Financials 2020/21: HFW breaks £200m revenue barrier as profits soar by 30%

Financials 2020/21: HFW breaks £200m revenue barrier as profits soar by 30%

HFW has continued to perform resiliently in the face of the pandemic, today (9 August) posting a 3% rise in revenue to £200m and a striking 30% increase in profit per equity partner to £683,000.

There were healthy increases across the board: net profit shot up more than 26% to £59.7m, profit per lawyer was up by 30% to £123,000 and revenue per lawyer grew 6% to £413,000.

The firm attributed the positive results to a spike in client demand across its specialist sectors, namely: aerospace, commodities, construction, energy and resources, insurance and shipping.

Asked by Legal Business if the firm’s profit hike was a reflection of reduced costs as a result of the pandemic, HFW managing partner Jeremy Shebson said: ‘We certainly saw an overall reduction in costs last year – particularly in relation to international travel, practice development and overheads – which obviously had a positive impact on our profit. But we’ve also seen the benefits of an increased focus on resource management and making sure that we are operating efficiently and effectively as a global firm.’

HFW has established an effective hedge that makes it resistant to global uncertainty –  revenue is heavily diversified, with over 60% of the firm’s income generated from outside the UK. There were some eye-catching international performances too – HFW’s Kuwait office grew 40%, Abu Dhabi was up 38%, Geneva was up 24% and Shanghai expanded by 18%. London, meanwhile, saw revenue increase by 7%.

The firm also benefited from its contentious practice bias, with 70% of the business underpinned by disputes matters.

Richard Crump, HFW senior partner (pictured), concluded: ‘Becoming a £200m business is a major milestone in our continued growth as a firm, and to have recorded what is our best ever year under such extraordinarily challenging circumstances is a real testament to the talent and dedication of the people we are fortunate to have at all levels across HFW.’

In other results, at the end of July fellow insurance specialist Clyde & Co unveiled a similarly solid set of financials. Revenue at the firm grew 2% to £639.6m, while both overall profits and PEP grew by roughly 8% each to £153.5m and £715,000 respectively.

Legal Business

HFW bounces back with profit and turnover growth in a strong 2019/20

HFW bounces back with profit and turnover growth in a strong 2019/20

HFW produced a strong showing over the last financial year, its latest financial results reveal, with profits rebounding and revenues up after a muted performance in 2018/19.

Profits were up to £47.3m this year after dipping 9% to £43.3m the previous year, while profit per equity partner recovered 11% to £526,000 following a 11% deficit in the 2018/19 results. Revenue, meanwhile, also grew: up 9% to £195.2m, while revenue per lawyer rose 7% to £389,000. 

The engine rooms of the firm’s growth were its global construction group, which increased revenues almost 20%; its aerospace group, which increased output 13%; and its shipping group, which contributed with a 12% rise in output. The recovery from last year’s showing means the firm has grown revenue by over 40% in the last five years, while approximately two-thirds of the firm’s turnover is now generated outside the UK. The firm’s Abu Dhabi, Brussels, Geneva, Houston, Kuwait City, Piraeus, Riyadh and Singapore offices were among those to up revenues by over 15%.

The firm will hope the latest results are a sign of return on investment, with HFW expanding considerably in recent years. Since 2016, the firm has added 11 international offices and since 2018 the firm has hired 20 partners globally, with London, Paris and Hong Kong among the recent beneficiaries.

Despite the standout year, managing partner Jeremy Shebson (pictured) is cautious of what lies ahead: ‘Things have obviously changed significantly over the past six months. We have been very proud at how quickly and well the firm adapted to the challenges of Covid-19, but we are anticipating a more challenging period.’

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Revolving doors: Simmons and CMS make City banking and pensions hires as Gibson Dunn bolsters its Paris bench

Revolving doors: Simmons and CMS make City banking and pensions hires as Gibson Dunn bolsters its Paris bench

In another muted patch for City laterals, Simmons & Simmons and CMS were the only firms to hire in London last week as Gibson Dunn & Crutcher recruited to its employment bench and HFW hired in Hong Kong.

Simmons has added to its international banking practice with the hire of Kirsty Barnes, Gowling WLG’s head of banking and finance in the UK.

With 20 years’ experience in the financial markets sectors Barnes has experience in leveraged and acquisition finance, real estate finance and corporate lending transactions.

Head of Simmons’ banking group Peter Manning told Legal Business: ‘Kirsty has done work for Barclays, Lloyds and RBS. She does work for a couple of private equity style funds and has done some leveraged finance work. All of those were really important for us. We thought she would be a good personality and cultural fit for us.

‘She’s very keen to move the practice forward and shares our vision on what that means. We remain committed to doing work for the traditional clearing banks as well as credit funds and the alternative lenders. We’re very much committed to changing the way we deliver our services,’ Manning added.

Meanwhile, CMS has hired pensions partner Tim Green from DWF where he was the national head of its pensions teams.

Green advises trustees, sponsors, government bodies and providers in all aspects of pensions law with particular expertise in retail, energy, nuclear, transport, public and charitable sectors.

Head of pensions at CMS Mark Grant told Legal Business: ‘Tim’s got a great track record of building a practice. We’re in growth mode and this is part of our national growth story. We’ve grown by 30% in pensions in the last two years and this is a continuation of that.’

Elsewhere, Gibson Dunn has hired Ashurst’s Paris former employment head Nataline Fleury to back its European strategy.

Fleury has a particular focus on employment law issues affecting restructuring transactions, acquisitions and disposals. Fleury will be joined by associates Claire-Marie Hincelin and Charline Cosmao, also from Ashurst.

Chairman and managing partner Ken Doran commented: ‘Nataline has strong credentials and is very well regarded in the legal and business communities.  We know her well as we have partnered with her on several client matters over the past year.  She is the perfect person to lead our effort to add a labour and employment capability to our thriving Paris office.’

Finally, HFW has hired senior corporate finance partner Wing Cheung in Hong Kong. He has defected from Locke Lord where he was the Hong Kong managing partner.

Cheung specialises in capital markets, M&A, private equity and other transactional work. He advises clients on corporate and commercial matters, including initial public offerings and M&A and has experience in regulatory enforcement and compliance.

Cheung’s hire is part of HFW’s expansion of its global corporate and finance practices. Earlier this year the firm launched a transactional practice in China and made hires including lateral hires in Hong Kong and Singapore.

Hong Kong office head Patrick Yeung said: ‘This is a major boost to our transactional offering in Greater China and the wider region. Wing brings a wealth of experience of high-end corporate finance, and has an outstanding reputation for his technical expertise and exceptional client service.’

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Revolving doors: Former Quinn white collar head sets up City boutique as Shearman and HFW make Paris corporate plays

Revolving doors: Former Quinn white collar head sets up City boutique as Shearman and HFW make Paris corporate plays

Quinn Emanuel Urquhart & Sullivan’s former white-collar crime and corporate investigations head in London Robert Amaee has launched a boutique – Amaee Law – in what has been a muted week for City laterals.

Elsewhere, firms have bolstered their European offices with Shearman & Sterling and HFW hiring corporate partners in Paris and Watson Farley & Williams adding to its employment bench in Munich.

Amaee’s firm specialises in financial crime, government enforcement, international investigations and compliance. It advises on UK financial crime law for companies, senior executives and high net worth individuals on fraud, bribery and money laundering as well as on internal investigations.

Amaee also previously served as head of anti-corruption, proceeds of crime and international assistance at the Serious Fraud Office.

Meanwhile, Shearman has hired M&A partner Thomas Philippe to its corporate team in Paris. Philippe, who joins from US rival Mayer Brown, specialises in private equity, advising financial sponsors on their investments and leveraged buyouts.

Philippe told Legal Business: ‘The firm has already created strong capabilities in private equity in other offices like London, Italy, German, the US and the Middle East. The idea was to complement this with a private equity specialist in Paris to be able to develop the network. I’ll be able to bring my expertise and client portfolio to boost and enhance the Paris activity and the relationship with the other private equity professionals across the network.

Philippe pointed to a growing private equity market in Paris and the emergence of new players as key trends. ‘There are a lot of deals on the Paris market and the higher the value is, the more competition there is. You don’t have that many attractive targets for large value deals, so that makes the competition more intense than the small-cap market,’ he added.

Also in Paris, HFW grew its global transactional offering with the hire of former Paul Hastings corporate partner Aline Poncelet. With 25 years’ experience, Poncelet advises on French corporate, M&A and capital markets, share issues, takeover bids, financial services and corporate governance. She acts for listed and private corporations, insurance companies, financial institutions, fintech and investment funds. She will work closely with HFW’s Paris finance team, including partners Diane de Mouy, Jean-Marc Zampa and Richard Jadot.

HFW said that the hire of Poncelet, the second transactional partner acquisition in the last two weeks after aviation finance lawyer Asheesh Das from Elix Aviation Capital, is part of a broader push in its corporate and finance practices.

HFW Paris office head Guillaume Brajeux told Legal Business: ‘Aline’s extensive experience advising and representing clients in complex M&A and corporate matters is a perfect complement to our existing practices. The strengthening of our transactional offer has been a priority for our Paris office, and Aline’s arrival is an important contribution to its development.’

In Munich, Watson Farley & Williams appointed employment partner Philipp Byers from Lutz Abel where he was head of the employment law practice group, advising on workplace privacy and employment law compliance issues. He brings with him two associates.

Byers said: ‘With its highly-regarded German employment law team and international focus, WFW represents a superb platform from which I can both improve the service I offer my existing clients and expand my practice. I greatly look forward to working closely with all my new colleagues, especially employment partners Nikolaus Krienke and Andreas Wiegreffe.’

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HFW brings on board Ince shipping team to launch Monaco office

HFW brings on board Ince shipping team to launch Monaco office

HFW is to launch a Monaco office after hiring a team from Ince led by partners Ian Cranston, Andrew Charlier and Marco Crusafio. The team, which specialises in shipping, yachts, business aviation, international trade, commodities, energy and insurance, will include legal directors Ian Fisher and Ruth Monahan. The team is set to join in early September.

Cranston had been Ince’s Monaco office head, while Charlier was previously global head of yachts. He has more than 30 years of experience advising on transactional yacht, business aviation, and corporate and commercial matters. Crusafio specialises in shipping, international trade and commodities disputes.

Global senior partner Richard Crump said: ‘Monaco has always had a strategic interest for us because of its strong trading, shipping and yachts business, which are core parts of our practice globally. The arrival of this excellent team will continue the significant international development of HFW.’

Head of shipping Paul Dean said: ‘We’ve been interested in the Monaco market for quite some time, but we were only ever going to make a move if we could bring them on board – they’re the clear market leaders and we wouldn’t settle for anything less. These hires further enhance our ability to provide first-class advice to shipping, maritime and yachting clients in key markets around the world, and illustrates our deep and longstanding commitment to the sector.’

The firm have added seven shipping partners and a senior consultant in the past four months, including shipbroker Chris Jones in Singapore. Since 2016 the firm has opened 11 international offices and merged with US firm Legge Farrow in 2017. The firm now has 20 offices in five continents and has ambitious plans to enhance core sectors, services and jurisdictions.

Legal Business

HFW profits drop 9% as investment costs weigh in ‘tough’ market

HFW profits drop 9% as investment costs weigh in ‘tough’ market

UK top 50 firm HFW has had a tougher year which saw revenues flatline as profits and profit per equity partner (PEP) tumbled 9% and 11% respectively.

Revenue stagnated, dipping slightly to £178.9m, while profits suffered a more severe decrease to £43.3m. PEP fell from £542,000 last year to £481,000 this year.

‘It’s been the cost of investment and the lead time,’ HFW senior partner Richard Crump (pictured) told Legal Business. ‘We’ve been growing a lot over the last three to four years in terms of offices in places like Abu Dhabi, and it can increase cost.’

Managing partner Jeremy Shebson added: ‘We’re in the middle of a growth journey, we hired a new employment team in Australia and they’ve started well, so there’s signs these investments will come good.’

Disputes resolution accounted for 71% of the firm’s overall revenue, with corporate and finance the second and third largest contributors at 14.5% and 12% respectively. This year’s results follow the firm last year recording an 8% rise in revenue and a 12% hike in profits.

The longer term has seen HFW revenues grow 28% over the last five years, while a reduction in UK dependence saw the firm produce 61% of its revenue outside the UK in 2018/19. The international revenue comes from 19 offices outside the UK, with affiliations in Saudi Arabia and Brazil among the most recent international additions.

And while a return on these investment remains the primary cause for the slowdown, Shebson added: ‘Throughout markets generally it’s been tough out there, but in terms of clients and international work, it’s been good for us.’

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HFW ramps up litigation prospects with £25m funding deal and analytics partnership

HFW ramps up litigation prospects with £25m funding deal and analytics partnership

HFW has scored a litigation ‘win-win’ after adding both a £25m litigation funding deal and a litigation analytics partnership to its practice.

The firm announced today it was partnering with both litigation start-up Solomonic, which launched commercially at the start of the year and uses court data for predictions and case research, and with litigation funder Augusta Ventures.

HFW’s partnership with Solomonic will give its lawyers access to the system in return for their expertise in commercial litigation, from which Solomonic hopes to improve its system with new modules and jurisdictions.

HFW disputes professional support lawyer Nicola Gare (pictured) told Legal Business: ‘Because of our jurisdictional locations and practice areas we are going to work with [Solomonic] to develop the programme.’

She added: ‘We are very keen on partnering with what we perceive as equally dynamic and innovative companies, particularly where the benefit is really for the end client and also for the lawyers. I see this as a win-win, both for the associates and lawyers in the firm and also our end clients. The capabilities of Solomonic will enhance and make our lawyers research more creative, certainly more efficient and support them in that process.

Solomonic chief revenue officer Edward Bird told Legal Business the company will in turn work with the firm to design the interface of the products. He said there was demand from corporate clients for richer and stronger data to inform and support litigation decisions.

‘Corporate organisations treat litigation increasingly as a business decision and to do that they need to have the kind of information that they would have available for other business decisions.’

Solomonic co-founder Gideon Cohen added: ‘HFW is the ideal firm to help us develop Solomonic. It is not just HFW’s enviable litigation volume and record of success; the firm’s significant global reach, with leading practices in key disputes jurisdictions around the world, will also be invaluable in helping us expand our offering internationally.’

HFW’s partnership coincides with a £25m litigation funding deal with Augusta Ventures, who earlier this month closed a similar deal with Pinsent Masons.

The deal offers non-recourse funding with no requirement to repay fees. Augusta only receive payment from the defendant if the claim is successful.

HFW litigation and innovation partner Brian Perrott said: ‘This deal with Augusta provides improved accessibility to dispute resolution funding for our clients. For the funding of disputes with Augusta we have agreed preferential terms that will save our clients time, money and mean they pay nothing if their claim fails.’

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HFW continues Middle East growth drive with Saudi Arabia association

HFW continues Middle East growth drive with Saudi Arabia association

HFW has continued its Middle East expansion after striking an alliance with Saudi Arabian firm Mohammed Al Khiliwi.

Named partner and leader of the Riyadh outfit, Al Khiliwi, will join HFW’s partnership as part of the agreement, subject to authorisation by the Solicitors Regulation Authority. HFW insurance partner John Barlow, who splits his time between Riyadh and Dubai, is set to relocate full-time to the new office

For HFW, the association ties into a wider push to align the firm’s Middle East practice with its six global sector lines: aerospace, commodities, construction, energy and resources, insurance and shipping.

Richard Gimblett, head of HFW’s Dubai office, told Legal Business: ‘We know Mohammed from previous dealings so we know he’s a quality lawyer. He has a practice with a heavy dispute resolution focus, too, which perfectly aligns with what we do.’

Richard Crump, HFW’s senior partner, described the region as a ‘priority’ for each of the firm’s sectors, and said the Middle East ‘is fast becoming a major centre for international dispute resolution, which is a key part of our practice globally.’

Al Khiliwi’s arrival builds on an acquisitive 2018 for HFW, with the firm adding 24 new partners across Abu Dhabi, Brussels, Dubai, Hong Kong, Houston, London and Rio de Janeiro.

HFW was particularly expansive in the Middle East last year, most notably in the hire of Reed Smith’s managing partner for the region, Vince Gordon. Corporate partner Tania de Swart followed Gordon from Reed Smith to HFW.

The firm then strengthened the newly-opened Abu Dhabi outpost in November by hiring former Bird & Bird defence and infrastructure partner Richard Lucas to lead the office.

Throughout 2018 HFW also made key hires in Singapore, London and the USA. The firm also broke new ground by launching a standalone consultancy arm, branded HFW Consulting.

At a time when other firms, such as Herbert Smith Freehills, Clifford Chance and Latham & Watkins, have scaled back in the Middle East, HFW’s continued growth in the region comes amid robust overall performance. The firm’s revenue for the 2017/18 financial year was up 8% to £179.1m, thanks in part to its international offices accounting for 60% of overall turnover, up from 55% the previous year.

Gimblett added: ‘If you don’t have a sector focus in the Middle East then investment becomes a lot more speculative, it’s a difficult market out here at the moment. It’s a much more mature market too, so you need to offer something special.’

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‘The right opportunity’: HFW reacts to client demand with strategic consultancy business

‘The right opportunity’: HFW reacts to client demand with strategic consultancy business

Maritime and insurance specialist HFW has set up a standalone consultancy arm, branded HFW Consulting.

The new business, launched today (3 October), will be headed up by the firm’s director of learning and development, Chris O’Callaghan, and will initially focus on Middle Eastern, Asian and Australian clients.

O’Callaghan is currently the only permanent member of staff overseeing the new arm, but relevant partners or business services professionals will be pulled in to advise on certain client matters.

It will offer advice to clients on a broad range of issues, including training programme design, talent management, cyber security, executive coaching, team building, risk, benchmarking, public relations and reputation management.

The firm said it had been providing ad hoc consulting services to ‘several clients for more than a year’ and therefore the new business was simply formalising what it was already doing.

O’Callaghan told Legal Business: ‘It’s true that a lot of firms are looking at doing something like this at the moment, but for us this is the right opportunity to add value to the client relationships we have, particularly outside of Europe where the markets are more mature.’

HFW senior partner, Richard Crump, added: ‘Clients know that we understand their business and their sector, and trust us to provide commercial as well as legal advice. Broadening those relationships to include consulting services is a natural next step, and means that we are even better able to provide clients with the best and most commercially effective advice possible.’

With the launch, HFW has become the latest firm to move into non-legal business, with City outfit Mishcon de Reya announcing last month it had created a brand management arm.

The new business, which Mishcon claimed was the first of its kind to be launched by a ‘leading’ UK law firm, offers advice on brand licensing, IP strategy and reputation management.

To lead the new arm, Mishcon hired Daniel Avener, formerly the chief executive of brand management group CAA/GBG.

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International round-up: HFW opens in Abu Dhabi as Morgan Lewis hires new Tokyo head

International round-up: HFW opens in Abu Dhabi as Morgan Lewis hires new Tokyo head

HFW has added a fifth office in the Middle East, launching in Abu Dhabi after a double-partner hire from US firm Reed Smith.

Finance and corporate partners Vince Gordon and Tania de Swart have made the switch, with Gordon previously acting as Reed Smith’s managing partner for the Middle East.

Gordon has over 13 years’ experience in the region and specialises in debt capital markets, M&A, joint ventures and project finance among other areas. De Swart also focuses on corporate and commercial work, and has clients from a broad range of sectors such as defence, aviation, construction, hospitality and education.

HFW senior partner Richard Crump commented: ‘The Middle East is critically important to all of our industry groups and is also establishing itself as a key hub for international dispute resolution. It is one of the fastest-growing parts of our business globally.’

The new Abu Dhabi outpost brings HFW’s Middle East lawyer headcount to 50, including 19 partners. It also brings the firm’s overall international office count to 20.

Tamara Box, Reed Smith managing partner, told Legal Business that the firm was very much ‘still on point’ with its Middle East strategy, and pointed to the hire of former Pinsent Masons regional head Sachin Kerur in July.

She added: ‘We have set out to relaunch what we were doing in the Middle East and everything we have done so far has been part of that strategy. We think that the region is a much bigger play for us going forward.’

Elsewhere, Morgan Lewis & Bockius has also made a double partner hire in Asia, bringing in corporate partners Motonori ‘Moto’ Araki and Mitsuyoshi ‘Mitsu’ Saito to its Tokyo office.

Both partners are transferring from Morrison & Foerster, with Araki being appointed managing partner of the Tokyo hub.

It is a happy return for Araki, who was previously a partner at Morgan Lewis until 2007. His practice primarily involves M&A, IP and international dispute resolution.

Saito has a similar mix of specialisms, offering corporate, dispute resolution and employment advice to both Japanese and non-Japanese clients. In terms of industry sectors, Saito’s clients typically operate in electronics, IT, chemistry, manufacturing and pharmaceuticals.

Steve Browne, Morgan Lewis’ global corporate head, commented: ‘Our clients require the services of lawyers who are skilled in handling both local and global matters, and the arrival of Moto and Mitsu perfectly fills those needs.’

Withers has also announced a series of hires both in Tokyo and Hong Kong. A total of six partners have joined the firm, with funds partners Koji Yamamoto and Omori Yoshiyuki joining Withers’ Tokyo base from Deloitte. Junko Shiokawa, another funds partner who is joining from offshore firm Harneys, will split her time between Tokyo and Hong Kong.

A real estate team led by partners Gerald Fujii, Naoki Ueyama and Steven Wheeler has also joined, with Fuji arriving from White & Case’s Tokyo office. Ueyama and Wheeler respectively arrive from local Japanese firms Masuda & Partners and Kaynex.