Legal Business

‘No-one has managed to build out of the key locations’: Eversheds’ Ranson discusses Asia strategy following KWM tie-up

Following the announcement last week that Eversheds Sutherland has entered into a formal cooperation agreement with Chinese firm King & Wood Mallesons (KWM), Legal Business spoke to Eversheds’ chief executive officer Lee Ranson about the arrangement and the implications for both firms.

Under the terms of the deal, KWM will exclusively refer all its clients requiring legal advice in the UK, Europe, Middle East, Africa and South America to Eversheds, while Eversheds will refer all its international clients in need of PRC legal counsel solely to KWM.

Ranson clarified the types of clients that the arrangement gives Eversheds access to: ‘It opens up all of KWM’s outbound work from China into Europe, the Middle East, South America and Africa. KWM is a very sophisticated firm in China and there is a close affinity between its practice group structure and our own.

‘There is an overlap between Eversheds and KWM with some joint clients, as well as a lot of clients that we haven’t been instructed by yet in all the main sectors we operate in, such as TMT, financial institutions and  energy, as well as large corporates who are involved in cross border M&A. These are prime examples where there will be overlaps and opportunity for us both.’

On the rationale behind the agreement, Ranson said: ‘We are a global law firm, so not only does this agreement strengthen our global offering, but it also strengthens our Asian offering. If we have clients inbound to China, we will now work with KWM to deal with the local PRC aspects. KWM’s mainland Chinese offering is substantially better than any other international firm operating in that market, which is becoming increasingly complex and sophisticated with new regulations that impact how deals are structured, so this deal has strengthened our ability to act for clients in the Chinese market.’

Ranson gave an indication of when talks regarding the agreement began: ‘Several months ago. We have been working with KWM to see the extent of the opportunity, as well as the cooperation agreement in the background. There haven’t been intensive negotiations for all that time.’

He elaborated on how international firms build a foothold in China: ‘No-one has managed to build out of the key locations and gain a foothold that way. Dentons has a local tie-up, but beyond that it is a small presence there for international firms.’

Asked why KWM wanted to enter into a cooperation agreement with Eversheds, Ranson responded: ‘Because of the depth of our relationships and offices across Europe, the Middle East, Africa and South America. KWM had relatively small offices prior to this deal, now it has a deal with one of the largest firms internationally. It is attracted to the sophistication of the offering and what we bring in terms of servicing its clients across the various sectors and practice areas.’

He continued: ‘We are a full-service law firm and have very developed capabilities in many jurisdictions that the Chinese are interested in, such as the Middle East, which Chinese investment is increasingly focusing on. To put it into perspective, we have seven offices in the Middle East, but before this deal KWM had one in Dubai. KWM wants to be able to carry out deals outside of China so that it can strengthen its own relationship with its clients and sell a deeper offering across Europe.’

As part of the new agreement, KWM will terminate all its operations in the UK, Europe and the Middle East by 31 October 2024. It is anticipated that KWM’s partners and staff will be able to integrate with Eversheds’ relevant offices ‘subject to practice needs and other considerations’.

Probed on the long-term logistics of the agreement, Ranson confirmed: ‘The intention is that KWM will effectively come out of its six locations in Europe, including London. We said a longstop date at the end of October 2024, a number of offices may be sooner than that.’

On whether KWM and Eversheds, which does not currently have and a presence in Australia, have any plans on expanding the deal to other parts of Asia and Australia through KWM’s Hong Kong and Australian Vereins, Ranson said: ‘Not at the moment. We are focused on the deal we have agreed, which is the largest agreement of its type, and we are going to put a lot of resources and infrastructure into it so that is creates as many opportunities for us and KWM as possible.’

Ranson summarised: ‘It goes back to the question of how do global law firms ensure they have true global coverage? The Asian market is evolving, and firms must come up with ways to create a client offering that reflects the opportunities and complexities in the various markets.’

Legal Business

Mishcon turns off the lights in New York as partners defect to KWM

Mishcon de Reya has called it quits in Manhattan after ten years as the firm’s three remaining partners jumped ship for the New York office of King & Wood Mallesons.

Dispute resolution partners Mark Raskin, Robert Whiteman and Vincent Filardo have joined the global disputes practice at KWM along with six senior counsel and one paralegal.

Raskin is an IP litigator experienced in patent, trademark, trade secret and copyright litigation with a focus on life sciences, biotechnology and pharmaceuticals. Whiteman is a trial lawyer who is experienced in patent cases in federal courts and focuses on electrical patent disputes. Filardo is a commercial litigator and trial lawyer dealing in commercial disputes, trade secrets and unfair competition, business tort, defamation, employment disputes and white-collar crime.

Raskin commented: ‘With KWM’s unique international platform and client base, together with our local capability and experience, we are very excited about the growth opportunities this move presents. We look forward to joining the global KWM network and leveraging our shared strengths to enhance the offering we provide to our clients in the US and around the world.’

Senior counsel Eric Berger, Michael DeVincenzo, Elizabeth Long, Andrea Pacelli, John Petrsoric and Charles Wizenfeld have also joined KWM from Mishcon.

Managing partner of Mishcon Kevin Gold said: ‘After much deliberation, we have agreed with the partners of Mishcon de Reya New York to withdraw from that business.

‘Mishcon de Reya New York was always a separate business to Mishcon de Reya in London, with different partners and a different structure. Over the last number of years, the New York office had focused its practice on contingency patent cases. This type of practice was no longer consistent with our business in London.

‘This will not affect the many relationships we have with other law firms based in the USA,’ added Gold.

Mishcon opened its New York office in 2010 and at one point had eight partners and 25 attorneys with capabilities in complex civil litigation, IP and patent litigation, family, international arbitration, internal investigations, white-collar criminal and regulatory defense, fraud and asset recovery, hedge and mutual funds and employment litigation.

In July last year Mishcon confirmed that it was considering all options for raising funds as part of its ‘ambitious plans’ for growth, including either an IPO or partnering with a private equity investor.

Legal Business

Apathy and a multimillion-pound shortfall define beleaguered KWM Europe insolvency

Thomas Alan finds reality setting in for creditors and former partners more than two years on

‘My immediate thought was: “Can’t we just move on?” I can’t be bothered with it,’ says one former King & Wood Mallesons (KWM) Europe and Middle East partner when asked for their thoughts on the firm’s latest administration report. Indeed, it is hard not to share some of the sentiment. Two years after the collapse of KWM EUME, the saga continues to limp forward in a fashion considered onerous even by law firm insolvency standards.

Legal Business

KWM administration report shows £18.3m hole for creditors as former staff set for payouts

Two years after the collapse of King & Wood Mallesons (KWM) the saga rumbles on, with administrators primed to pay former staff as an £18.3m funding deficit leaves unsecured creditors out of pocket.

A progress report filed last week details how some former employees of the firm have been ranked as preferential creditors following KWM’s 2017 insolvency. These employees will now be eligible for successful claims on failing to consult on the redundancy process, as well as payouts on wages and holiday pay.

Though among former partners there is a lingering sense of apathy regarding the latest report, with one former KWM partner telling Legal Business: ‘I’ve not actually read the latest report or been sent it. In truth I’ve not been following any updates on it for a while.’

The firm’s unsecured creditors will likely be more concerned, however. Quantuma, who received a 12-month extension to its role as administrators of KWM in January last year, has set aside £600,000 for unsecured creditors, the maximum possible based on the collapsed firm’s assets.

However, the 159 claims received from unsecured creditors totals £18.9m, leaving a multimillion-pound shortfall. The firm’s sole secured creditor is banking giant Barclays, who to date has received £6.5m, with £500,000 paid between 17 June 2018 and 16 January this year.

Having first begun in January 2017, the administration was extended by 12 months in January 2018, while in January of this year it was extended once more as KWM’s dispute with Standard Chartered over unpaid fees held up the process.

Meanwhile, former partners of the firm are still wrestling with tax issues following the collapse of its European arm, meaning further delays to rebate payments. Despite this, none of the former partners Legal Business approached had seen the most recent report.

In September 2017, 288 former KWM employees were awarded over £1m by an employment tribunal which settled claims after the collapse, as it was deemed KWM failed to properly engage in a formal redundancy consultation. The latest report states the administrators are currently calculating and distributing the money owed to other former employees, with the KWM story set to continue for some time.

Legal Business

‘A clear cut case’ – Ex-KWM employees win £1m pay-out from employment tribunal

After being on the verge of accepting a six-figure sum last month, a group of 288 former King & Wood Mallesons (KWM) employees have been awarded over £1m by an employment tribunal to settle claims from the collapse of the firm’s European arm.

The ex-staffers received the compensation award this week (20 September) following the failure of KWM to properly engage in a formal redundancy consultation during its much-publicised European insolvency.

The pay-out represents a significant uplift in compensation for the claimant group, which had considered accepting a near-£800,000 settlement offer from the firm’s administrators made in August. Quantuma, KWM’s administrators, made the offer after conceding that a ‘technical breach’ had taken place during the required UK redundancy consultation period. The earlier proposed settlement constituted eight weeks’ pay, capped at £479 per week per person.

The claimants, however, rejected the settlement, taking the case to employment tribunal, which handed down its judgment this week.

The claimants were represented by Wokingham law firm Herrington Carmichael, with a team led by partner and head of employment Alistair McArthur. In a statement, McArthur thanked Quantuma ‘for being amenable and helpful throughout the process’ and described the case as ‘a very unfortunate situation for all involved’. McArthur went on to label the claim as ‘a clear cut legal case’ and stated the firm was ‘confident that the former employees had a strong case for compensation through the employment tribunal’.

The pay-out is the latest episode in the lengthy saga of KWM’s European collapse. The firm filed for administration in December 2016 with debts of over £30m after senior figures had left the firm in droves. It was the largest failure to ever hit the European legal market. The practice was largely made up of the legacy SJ Berwin practice, which merged with Asia-Pacific giant KWM in 2013. Despite the union, the firm remained structured as individual partnerships leaving the rest of KWM unaffected by the insolvency.

A report filed earlier this month by Quantuma at Companies House revealed the costs associated with the firm’s European administration, including CMS Cameron McKenna receiving a total of £826,740 for ‘assistance in attending to the complex legal issues which have arisen both in the pre and post-administration periods.’

Click here for the definitive account of the collapse of KWM (£)

Legal Business

KWM insolvency report reveals cost of everything from artwork to legal fees as ex-staff agree payout

Eight months on and the King & Wood Mallesons (KWM) saga continues, with a progress report filed this week revealing the cost of the firm’s European administration amid confirmation that ex-staff are set to receive a payout.

According to a report filed by administrator Quantuma at Companies House on 5 September, CMS Cameron McKenna received a total of £826,740 for ‘assistance in attending to the complex legal issues which have arisen both in the pre and post administration periods’. This figure also includes costs of £235,544 incurred by the firm in dealing with KWM’s German offices while additional legal fees of £186,318 go to Pinsent Masons for advising the administrators as well as £70,000 to iLaw Legal Services.

The report also shows the amount paid to Barclays, KWM’s main secured creditor. The report states: ‘The joint administrators instructed their legal advisers to conduct a review of the bank’s security… valued at £16,557,222.’ A total of £4,473,767 has been paid to Barclays so far in three separate instalments.

Included by Quantuma are the costs owed by numerous law firms including KWM 2.0, DLA Piper and Baker McKenzie. KWM 2.0 paid £75,000 for numerous assets in January – however, the firm still owes £881,250. DLA Piper still owes £521,000 after making a payment of £419,000 in May this year while Baker McKenzie made a full payment of £103,603 in January.

Additionally the report lists numerous miscellaneous costs including everything from artwork to mobile phones. It is revealed that the firm’s mobile phones have been sold for a total of £5,780; £4,000 has been paid to Hector Patterson & Co in regards to the valuation of KWM’s artwork displayed throughout their premises and a total of £26,515 was paid to Clear it Solutions for clearance of KWM’s offices.

Tim Bednall, KWM’s former managing partner, was paid £25,380 to be ‘instructed as the joint administrators’ agent in order to advise and assist’ due to his knowledge of the firm’s clients. This was agreed on a fixed-fee basis.

News of the administration’s progress comes as KWM’s staff have accepted a financial settlement offered by Quantuma after conceding a ‘technical breach’ occurred in the required UK redundancy consolation period.

The proposed settlement constitutes eight weeks’ pay, capped at £479 per week per person. An email sent to around 200 staff from the group’s solicitors Herrington Carmichael said that following discussions with the Redundancy Payment Office, the firm would apply to the Employment Tribunal for the judgement by consent agreed between the parties. The email added: ‘We were delighted to receive full acceptance of the proposal from all claimants and, therefore, have now made the required application.’

This week’s news is the latest update in the acrimonious collapse of the European practice of KWM, which is formed by the legacy SJ Berwin. The SJ Berwin business, which remained a separate partnership after combining with KWM in 2013, collapsed in December 2016 with debts of over £30m after a string of senior departures. It was the largest failure to ever hit Europe’s legal market.

Legal Business

KWM Germany plans to double Chinese-German deals capability by mid-2018 in focus shift

Asia-headquartered firm King & Wood Mallesons (KWM) has made a strategic commitment to its German practice with the hire of two new partners in Frankfurt to strengthen its Sino-German deals capability, following the collapse of its European arm in January.

With four corporate partners in Germany, all based in its Frankfurt office, the firm told Legal Business that it plans to grow around 50% in the region by mid-2018.

‘We want to implement our global strategy, and due to the activity in Germany we have decided to enlarge our corporate finance element here,’ said corporate partner Christian Cornett.

According to Cornett, KWM’s German practice is currently engaged in 40% local German work and 60% international transactions work, stemming from the Asia-Pacific region.

‘Germany currently has the strongest economy in Europe, so our international network naturally has a strong focus on Germany now,’ he added.

Corporate partners Hui Zhao and Daniel Ehret will join the firm on 1 October bringing additional corporate finance expertise including clients involved in Sino-German investments.

Cornett said that the firm had approached ‘a few select people’ to join the German practice, with Zhao and Ehret as the first to join, with two or three more due to come on board by the end of the year.

Based in Frankfurt, Zhao joins from Noerr and is a corporate lawyer specialising in Chinese M&A in Germany and worked to develop Noerr’s China practice over the last decade. Ehret is a finance and restructuring specialist who joined from Latham & Watkins. He has represented investors, lenders and distressed companies on restructurings.

‘The strategy is to build two strong pillars in this practice – one international platform servicing work from our Asia Pacific network, and the other to have a strong local German practice. With additional private equity (PE) capability we can now build these,’ Frankfurt Corporate partner Sandra Link said.

‘Outbound investment of Chinese investors has increased in general based on various factors including scarcity of attractive domestic assets in China and a supportive financing and political environment,’ she added.

‘Chinese investors are in particular interested in technology and industrial know-how and “Made in Germany” has a high reputation,’ Link said.

Link cited an rise in Chinese M&A transactions in Germany over the past five years, counting 39 in 2015 and 68 in 2016.

In 2016, in KWM Germany’s mandates included advising Techcent Entrepreneur Family Deng on its joint venture with ALBA Group, and Chinese fertilizer company Kingenta Ecological Engineering Group on its acquisition of Compo Consumer Business from PE investor Triton.

After the firm’s European practice broke down over the last year, EUME senior partner Michael Cziesla, based in Frankfurt, joined McDermott Will & Emery earlier this year. Cziesla had only been elected senior partner of the firm in October last year.

In January, DLA Piper also recruited KWM Germany real estate head Lars Reubekeul and real estate partner Florian Biesalski, along with their teams, to DLA’s Frankfurt and Munich offices.

When Reed Smith confirmed the hire of 50 KWM lawyers across Europe, adding 10% to its European headcount, it also hired two partners in Germany. These were competition and antitrust partner Tilman Siebert in Munich and litigation partner Francis Bellen in Frankfurt.

Legal Business

Ex-KWM real estate duo exits Ashurst for Fried Frank after one year

Real estate duo Darren Rogers and Patrick Williams has resigned from Ashurst to join Fried, Frank, Harris, Shriver & Jacobson’s London office just over a year after joining the City firm from King & Wood Mallesons (KWM).

Rogers was made up to partner at legacy SJ Berwin in 2010, where he started as an associate 16 years ago. Ashurst announced he was set to join the real estate team as a partner in April last year together with Williams, who was promoted to partner in 2015 when KWM made up only two London lawyers as part of a 36-strong round.

The pair counts British Land as a longstanding client, alongside Invesco Real Estate, CBRE Global Investors and Battersea Power Station Development Company among others.

The hire is the first Fried Frank’s London office has made for over a year, with the US firm bringing in Mayer Brown co-head of restructuring Ashley Katz in February 2016.

Fried Frank’s corporate real estate co-head Fiona Kelly said Rogers and Williams ‘have a strong reputation, both within the UK and internationally, for providing preeminent counsel in this sector.’

She added that the duo’s broad experience in commercial real estate law and corporate law would add strength to the firm’s clients ‘in all facets of high value commercial real estate investment’.

An Ashurst spokesperson said the real estate group, which has 21 London based partners, will continue to focus on high end work: ‘We do not anticipate these departures as having any significant impact on the real estate practice and they are likely to increase our profitability.’

Earlier this June, Ashurst lost a four-partner team from its Paris arm to Gibson, Dunn & Crutcher, which came just four months after it emerged a group of five Ashurst corporate partners in Paris to Freshfields, collectively responsible for a book of business worth £8m.

The firm’s London head of pensions Marcus Fink also departed to PwC earlier this year.

Conversely, in March Ashurst launched a European high-yield offering, bringing in Allen & Overy senior associate Tamer Bahgat, who was made up to partner at Ashurst, and Linklaters counsel Natalia Sokolova.

The firm has also hired Linklaters leveraged finance senior associate Pierre Roux and PwC tax director Emmanuelle Pontnau-Faure in Paris, who will both be made up to partner in the move.

In March, Fried Frank confirmed London managing partner and City veteran Graham White would leave private practice at the end of May. Asset management partner Mark Mifsud stepped into the role following his departure. and


Legal Business

‘Cementing KWM’: Australian chief exec Kench elected as new global managing partner

After going months without a global managing partner, King & Wood Mallesons (KWM) has appointed Australia chief executive partner Sue Kench to the role, effective 1 June 2017.

Kench succeeds Stuart Fuller, who stepped down from the role at the end of 2016 during the collapse of the firm’s European arm, and has since returned to full time practice.

Kench has been chief executive partner in Australia since 2013. She is also currently a member of the firm’s global executive committee and the international management committee. In her new role, she will work with recently-appointed global chairman Wang Jungfeng.

Kench joined legacy Mallesons in 1996 and held leadership positions such as managing partner of the real estate and construction practice, sector lead in real estate and construction and board member.

KWM said in a release that Kench will lead the firm’s global strategy and operations ‘with a focus on cementing KWM as leading international firm in Asia’.

Speaking to Legal Business, Kench said: ‘The key for us really is to bring the firm closer together, integrate the businesses better and harness the opportunities that are out there for us. When coming into Asia, we should be the first firm that people recognise. And if Asia clients want work done outside the region, our other capabilities should be capturing that work as well.’

‘We will have a stronger focus on all of the component parts that make up integration, and what work should we be attracting beyond Australia and China. There’s no other firm like us in the world. That’s the differentiator, and we have to use that to the maximum.’

The firm has also announced the appointment of Rupert Li as global chief operating officer (COO) and Berkeley Cox as Kench’s replacement, as chief executive partner in Australia. Li was international partner within China and Hong Kong, and is also a current member of the international management committee and the China management committee. Cox was deputy managing partner for Australia.

Last month Legal Business revealed KWM Europe partners who took out personal loans from Barclays for their capital contributions had received payment ultimatums. Former KWM staff have also come together earlier this year to take legal action over the way redundancies were handled, as the administrators’ investigation into the collapse of the legacy SJ Berwin business.

Read more: ‘Shattered – The final days of ‘SJ Berwin’

Legal Business

News in brief – May 2017


Pinsent Masons has launched in Madrid, the firm’s third international office in less than a year. The new office comprises six partners, four from local Madrid firm Ramón y Cajal Abogados. The firm has also hired from contractor OHL and promoted a Pinsents associate to partner.