Legal Business

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

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Financial results 2018/19 HFW

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.’

thomas.alan@legalease.co.uk

Legal Business

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

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Dispute resolution HFW

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.’

muna.abdi@legalease.co.uk

Legal Business

HFW continues Middle East growth drive with Saudi Arabia association

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Middle East and Africa HFW

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.’

tom.baker@legalease.co.uk

Legal Business

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

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Innovation HFW

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.

tom.baker@legalease.co.uk

Legal Business

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

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International HFWMorgan, Lewis & Bockius

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.

tom.baker@legalease.co.uk

Legal Business

Highly-rated SFO GC to join Kingsley Napley while HFW breaks US duck

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Strategic recruitment HFWKingsley Napley

Serious Fraud Office (SFO) general counsel (GC) Alun Milford (pictured), who was widely tipped as the agency’s successor to former director David Green, is joining Kingsley Napley as a partner from next year.

Milford has a storied career in public prosecution, beginning at the Crown Prosecution Service in 1992. He then joined the Attorney General’s Office in 2004, where he dealt with contempt of court and unduly lenient sentences. Later occupying a role with the Revenue and Customs Prosecutions Office, Milford subsequently became GC at the SFO in April 2012.

Milford has a strong reputation in white collar circles, with Kingsley Napley’s senior partner Stephen Parkinson earlier this year describing him as ‘the safe bet’ to succeed Green as SFO director. Green, who this month joined Slaughter and May, was ultimately replaced by former FBI deputy GC Lisa Osofsky in June.

Milford will be the firm’s twelfth criminal litigation partner, working on white collar crime, as well as international investigations, sanctions, compliance and enforcement matters. Department head Louise Hodges commented: ‘After a successful career encompassing some of the most senior roles prosecuting crime and fraud in England and Wales, Alun brings with him a unique perspective and experience which will complement the talented partners and lawyers in the team.’

The delay in Milford’s arrival until next year is likely due to regulatory approval, as illustrated by his ex-colleague Green’s protracted move to Slaughters, which was held up for six months by the Advisory Committee on Business Appointments.

Elsewhere, HFW has broken new ground by making its first ever US lateral hire. The firm announced today (24 September) it had appointed energy partner Derek Anchondo from Greenberg Traurig.

Anchondo will join HFW’s Houston office, which now consists of eight partners and 19 lawyers following a fully-integrated transatlantic merger with Legge, Farrow, Kimmitt, McGrath & Brown in January 2017.

He has experience advising public and private energy companies on M&A transactions, joint ventures, financing, upstream exploration and production activities. Anchondo said: ‘My clients will benefit from HFW’s considerable industry expertise and its extensive international network. I am also excited about the opportunity to help build the firm’s corporate and transactional practices in the United States.’

tom.baker@legalease.co.uk

Legal Business

HFW’s continued international growth lifts revenue 8% in tough market conditions

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Financial results 2017/18 HFW

UK top 50 firm HFW has produced a competitive set of financial results headlined by a 12% rise in profit and strong international performances.

Revenue for the 2017/18 financial year increased 8% to £179.1m, while profit per equity partner (PEP) was up 2% to £542,000. In the past two fiscal years, HFW’s revenues have grown by more than 25%.

PEP’s relatively slow growth compared to profit, which was £47.5m, was due to an increased partner headcount. The firm has already added 18 partners this year, including nine lateral hires and nine internal promotions.

A key factor in HFW’s improved financials was the collective performance of its international offices. Out of the firm’s 19 international hubs, six of them saw revenue boosts of more than 20%: specifically Geneva, Houston, Lebanon, Perth, Riyadh and Sydney.

HFW senior partner Richard Crump told Legal Business that the firm’s international offices now accounted for 60% of total turnover, in comparison to 55% last year. That was alongside a ‘still growing’ London office, he said.

Crump said the firm’s growth came amid challenging conditions: ‘All the markets and sectors are tough. Price remains an issue for all our clients. The days in the past of being able to raise your rates are gone.’

The firm’s energy and construction sectors saw double digit growth over the last financial year, while shipping was less robust. Crump commented: ‘It was less than other areas but that’s to be expected, it’s a mature market.’

HFW’s commodities group was another standout performer, recording revenue growth of more than 21%. Aerospace and insurance were also up by double-digit percentages.

Among the nine lateral hires made this year, HFW announced earlier this week (30 July) that it had hired construction partner Kijong Nam from Ince & Co.

The firm last week (24 July) also acted for the Greek state on the €535m privatisation of its gas network alongside Clifford Chance (CC).

tom.baker@legalease.co.uk

Legal Business

Asia focus: Gordon Dadds breaks international duck in Hong Kong while HFW adds Korea expertise

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Asia Gordon DaddsHFW

Ambitious listed law firm Gordon Dadds has launched its first overseas office in Hong Kong, as HFW bolsters its Korean capability with a London hire.

Gordon Dadds has been in acquisitive form since listing on the Alternative Investment Market (AIM) last August, and has now turned its mind to international expansion after gaining approval to practise English law in Hong Kong.

The new Asian outpost will be led by Alan Ma, a real estate lawyer who joins from his own practice, Maxwell Alves Solicitors. Gordon Dadds’ London-based managing partner Adrian Biles will also spend time in the new six-lawyer office, which will initially specialise in property and corporate law.

Biles told Legal Business the Hong Kong market suited the firm’s strengths in capital markets, and commented on Ma: ‘He’s an extremely well-qualified lawyer and he has a lot of local contacts. He’s very well-liked in Hong Kong and an all-round nice guy.’

Biles said the firm was also eyeing Bermuda for its next international hub, citing the strength of the region’s insurance market.  The Hong Kong opening is a continuation of an expansion strategy that has seen the firm acquire five businesses in the 2017/18 financial year. Among those were tax advisory business, CW Energy, for £4m, and south London law firm, Alen-Buckley.

Gordon Dadds’ top line grew 25% to £31.2m in the year to 31 March, its first financial results since listing. Profits before tax were up 23% to £3m, while operating profits, which include partner profit shares, were up 19% to £8.8m.

Elsewhere, HFW added to Ince & Co’s recent fee-earner exodus by hiring its construction partner Kijong Nam.

Nam, who had been a partner at Ince since 2011, becomes the eighth construction partner to move to HFW in the last 18 months, following hires in Dubai, Hong Kong, London, Melbourne Perth and Sydney.

While Nam will be based in London, he is a native Korean speaker who will work with HFW’s Korean clients, including contractors, energy companies and project sponsors. His practice is focused on the offshore construction and shipping industries.

Nam commented: ‘My clients will be pleased to know that they can now benefit from HFW’s extensive international network and first-class multi-disciplinary team.’

tom.baker@legalease.co.uk

Legal Business

Deal watch: HFW acts for Greek government on major state sell-off while US firms score heavyweight mandates

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Dealwatch HFW

In a deal of major national significance, Holman Fenwick Willan (HFW) and Clifford Chance (CC) have advised the Greek state on the €535m privatisation of its gas network. Meanwhile US leaders  Kirkland & Ellis, Weil Gotshal & Manges and Jones Day have also acted on substantial buyouts recently.

The sale of the natural gas transmission system operator, DESFA, is part of Greece’s wider strategy of disposing assets to reduce the country’s debt following the financial crisis. The deal implies a total equity value for DESFA of €810m.

Alex Kyriakoulis, HFW’s lead corporate partner, told Legal Business that Greece has earmarked some €50bn in assets to be sold off, having already sold a 67% stake in Piraeus Port to Chinese shipping giant COSCO in 2016.

Kyriakoulis, who has advised the Greek government for the last seven years, commented: ‘It’s their second or third attempt to privatise the Greek gas industry. They had previously tried to sell for a slightly lower consideration, about €400m. They’ve done well to sell the same stock for €535m.’

CC also advised the Greek state on EU law matters, while local outfit Koutalidis Law Firm provided Greek law counsel. The buying consortium, consisting of Snam, Enagás and Fluxys, was advised by Athens-based Kyriakides Georgopoulos Law Firm.

Elsewhere, Weil is acting for French IT company Atos in its $3.67bn acquisition of US-based IT services provider Syntel.

The all-cash transaction will see Atos buy all of Syntel’s outstanding shares at $41 per share as well as the US company’s debt. Atos expects the Syntel deal to bring in around $1bn in additional revenue.

New York-based M&A partner Jackie Cohen led Weil’s team that comprised partners Claude Serra, Chayim Neubort, Paul Wessel, Jeffrey Osterman, Annemargaret Connolly, Morgan Bale, Olivier Jauffret, Ariel Kronman, Randi Singer and Ted Posner.

Jones Day, which acted for Syntel, was led by M&A partners James Dougherty and Tim FitzSimons.

Finally, Kirkland landed a key role on the $430m sale of Coriant, a provider of hyperscale network solutions, to California-based Infinera.

Infinera, which was represented by Palo Alto firm Wilson Sonsini Goodrich & Rosati, will pay $150m in cash at closing, with additional instalments of $25m and $55m over the coming years. Infinera also plans to issue around 21 million shares which, combined with the cash consideration, brings the overall deal value to roughly $430m.

The Kirkland team was led by corporate partner Hamed Meshki, and included capital markets partner Dennis Myers, real estate partner Roberto Miceli, tax partners Russell Light and Josh McLane and debt finance partner David Nemecek.

tom.baker@legalease.co.uk

Legal Business

Life during law: Richard Crump

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Life During Law HFW

Never wanted to be a lawyer. I was persuaded to read law at Oxford by my school. I wanted to do history. Hated law at university. Wasted my time. I was lectured by the great and good but didn’t find it interesting. The one interesting course was on international trade, which was given by a guy called Francis Reynolds. Also a guy that tutored me at college, Peter Gross, who later became a Lord Justice of Appeal, they kindled that interest for me.

When I joined Holman Fenwick & Willan, as it was then known, my intention was to get my two years’ articles and do something else.