Legal Business

Dealwatch: Freshfields joins Slaughters in fight for UK plastics plc as Apax returns to Links Paris team

Dealwatch: Freshfields joins Slaughters in fight for UK plastics plc as Apax returns to Links Paris team

It has been a busy few days for the Magic Circle, as US company Berry Global trumped an offer by Apollo to secure UK plastics group RPC for £3.34bn while Apax sold its business schools to Cinven for €800m.

Corporate head Andy Ryde and partner Paul Mudie have been leading the Slaughter and May team advising the London-listed company as its board approved last Friday (8 March) the offer from the American packaging group.

Freshfields Bruckhaus Deringer’s Piers Prichard Jones and Alison Smith acted for Berry. The New York-listed manufacturer trounced a previous £3.3bn bid by Apollo, leaving the private equity house definitively out of the game.

‘The first offer from Apollo was expressed as a final offer and there were no caveats,’ Ryde told Legal Business. ‘And if you make a final offer with no reservation on a UK public takeover you are not allowed to bid again.’

A Sullivan & Cromwell team led by Ben Perry acted as lead adviser to Apollo on the UK takeover elements of the deal when its bid was initially recommended by RPC’s board on 23 January, with Paull Weiss London-based M&A partner David Lakhdhir providing additional advice to that firm’s core client in the US.

‘It’s very interesting that Berry made their competing offer on Friday, the week before the meaningful vote in Parliament on Brexit,’ added Ryde. ‘It suggests that Berry are fairly relaxed about Brexit. It is a positive sign for the UK that they were prepared to do that.’

The possibility of further bids is not ruled out but considered very unlikely. Berry’s offer will need the backing of 75% of shareholders in a meeting to be called shortly. Closing is expected in the third quarter of the year.

Freshfields saw its French team busy too, as Paris corporate partner Alan Mason led the team advising Cinven in its €800m acquisition of private higher education group Inseec, announced on Monday (11 March).

Linklaters advised seller Apax, led by Paris corporate partner Fabrice de La Morandière.

The Silk Street firm previously advised the UK private equity house when it acquired Inseec from Career Education in December 2013 for €200m.

The group has since grown to a collection of schools in Europe, the USA and China enrolling more than 25,000 students.

marco.cillario@legalease.co.uk

Legal Business

Linklaters to hit 20% female partnership as women make up a third of 33-strong promotion round

Linklaters to hit 20% female partnership as women make up a third of 33-strong promotion round

For the sixth year in a row Linklaters has increased the size of its promotion round, adding 33 lawyers to its partnership.

Eleven of the new partners announced today (11 March) and effective from May are women, surpassing the firm’s 30% annual target and meaning its overall partnership will be 20% female for the first time.

Managing partner Gideon Moore told Legal Business that the result was a validation of the changes the firm was driving through the partnership in terms of diversity and inclusion: ‘We are heading in the direction we wish to, bearing in mind where we started from and the way the partnership evolved. I won’t be satisfied until it’s 50-50.’

As in last year’s 27-strong round, the firm’s corporate practice had the largest intake of partners globally, with nine promoted. Capital markets was second at six, twice as many as last year. Banking saw five lawyers promoted while disputes had three.

‘All of the promotions are client-led,’ said Moore. ‘We don’t start off by saying we will only have a certain number. We look at the quality of the individual and the practice.’

London promotions also increased on last year, with 11 minted compared to ten in 2018.

City-based Charles Turner, Derek Tong and Tom Thorne got the nod in the corporate practice; Matthew Harding and Thomas Waller in banking; Chris Stevenson in disputes and Thomas Quoroll in capital markets. Sinead Casey, John Sheppard, Rahul Manvatkar and Ross Schloeffel were also added to the partnership in employment, pensions, investment funds and projects respectively.

Continental Europe replaced Asia in second place this year, as ten lawyers were promoted on the continent and eight in the firm’s Asian offices.

marco.cillario@legalease.co.uk

Linklaters partner promotions in full:

Christoph Barth, Competition/Antitrust, Dusseldorf

Sinead Casey, Employment, London

Gabriel Silva, Mainstream Corporate, São Paulo

Karen Phang, Mainstream Corporate, Jakarta

Robert Elliot, Mainstream Corporate, Singapore

Claudia Schneider, Mainstream Corporate, Frankfurt

Thomas Broichhausen, Mainstream Corporate, Munich

Charles Turner, Mainstream Corporate, London

Derek Tong, Mainstream Corporate, London

Tom Thorne, Mainstream Corporate, London

Carmen Burgos, Mainstream Corporate, Madrid

John Sheppard, Pensions, London

Alejandro Meca, Tax, Madrid

Adrian Fisher, TMT IP, Singapore

Omar El Sayed, Banking/Corporate, Middle East

Sabine Vorwerk, Banking, Frankfurt

Matthew Harding, Banking, London

Thomas Waller, Banking, London

Jonathan Ching, Banking, New York

Karen Lam, Capital Markets, Hong Kong

Sherry (Jiwei) Cui, Capital Markets, Hong Kong

Kenneth Lam, Capital Markets, Tokyo

Thomas Quoroll, Capital Markets, London

Simon Few, Capital Markets, EMEA

Ugo Orsini, Capital Markets, Milan

Peiying Chua, Financial Regulation, Singapore

Rahul Manvatkar, Investment Funds, London

Crystal Chen, Projects, Hong Kong

Ross Schloeffel, Projects, London

Adolfo Guerrero, Real Estate, Madrid

Brenda DiLuigi, Dispute Resolution, New York

Kerstin Wilhelm, Dispute Resolution, Munich

Chris Stevenson, Dispute Resolution, London

Legal Business

Magic Circle leads tech foray as Slaughters unveils tech incubator and Linklaters and A&O back Nivaura in $20m funding round

Magic Circle leads tech foray as Slaughters unveils tech incubator and Linklaters and A&O back Nivaura in $20m funding round

Slaughter and May has announced today (27 February) its much-anticipated legal tech incubator, Slaughter and May Collaborate, with the firm primed to select about six legal tech companies for its first cohort.

Magic Circle counterparts Allen & Overy (A&O) and Linklaters, meanwhile, have both featured in fintech company Nivaura’s $20m funding round as the City elite bustle to achieve a technological advantage.

Collaborate is the first tech incubator at Slaughters with an exclusively legal focus, following the firm’s fintech effort, Fast Forward. The incubator will use a cohort model that will expose participants to clients and lawyers within the firm.

Collaborate will also feature an advisory panel of the firm’s top blue-chip clients, with GlaxoSmithKline, John Lewis Partnership, Santander, Standard Chartered and Vodafone all providing feedback on their technological needs. The programme will not include permanent office space or look to take equity in applicants.

Slaughters’ head of innovation Jane Stewart (pictured) told Legal Business: ‘We spoke to a lot of tech companies who had participated in existing incubators to get an idea of what they wanted out of it, we really wanted to find out what was practically useful. One surprising thing that came out of that was companies don’t consider office space something of high importance.’

Part of the offering from Slaughters will include two mentors assigned to each Collaborate member, one coming from the innovation team and another a practicing lawyer relevant to the company’s business. Applications are open until 27 March, with the firm hoping to get the programme underway in April.

Collaborate is mostly aimed at early and mid-stage ventures rather than established businesses, but applications are open to all stages of maturity.

Steward added: ‘Already we have had a very established company express interest.’

Elsewhere, Linklaters and A&O both featured in a funding round for leading fintech prospect Nivaura, a longstanding participant in A&O’s Fuse tech incubator. The funding round raised $20m for the start-up, and was led by the London Stock Exchange Group.

For Linklaters, the investment marks a first for the firm, having never before taken equity in a technology start-up. A&O, meanwhile, has a longer relationship with Nivaura, with the firm investing approximately £100,000 in the company prior to Nivaura entering A&O’s tech incubator Fuse. The latest funding round has seen the firm increase its equity in the company, but the stake remains a small percentage of Nivaura’s overall shareholding.

‘They have a unique proposition,’ A&O debt capital markets partner Philip Smith told Legal Business. ‘They have granulised the various steps involved in a capital markets transaction, from the inception to the finalisation. There are other companies we are working with and we have considerable interest in investing with the model we have developed alongside Nivaura.’

Founded three years ago, Nivaura focuses on the deployment of digital investment banking platforms for banks. Compared to the fledging legal tech scene, fintech remains a more mature and sophisticated market, with Nivaura now set to rapidly expand its leadership, business development and technical teams to focus on large-scale projects throughout 2019.

‘The investment gives us an opportunity to help Nivaura,’ Linklaters capital markets partner Richard Levy told Legal Business. ‘It also gives us the opportunity to be at the centre of innovation. We look at start-ups in different ways and would consider future investments as part of a wider collaboration with a company.’

The funding round also saw US law firm Orrick, Santander InnoVentures and Transamerica Ventures invest, and is the latest influx of capital into the space after Slaughters stepped up earlier this month to help AI company Luminance secure a further $10m of funding, giving the company a valuation of $100m.

thomas.alan@legalease.co.uk

Legal Business

Linklaters ends culture row as wannabe whistleblower agrees to destroy confidential documents

Linklaters ends culture row as wannabe whistleblower agrees to destroy confidential documents

Former Linklaters executive committee member Frank Mellish has agreed that he will not disclose information raising concerns over the firm’s culture after his former employer obtained an injunction against him.

Mr Justice Warby said in a judgment in the High Court today (18 February) that the firm’s former director of business development and marketing had signed an agreement with the firm to destroy copies of various ‘confidential documents’ he originally intended to share with the media, settling the dispute.

Linklaters obtained a temporary injunction against Mellish on 5 February, after he announced he was going to share information highlighting what he described as ‘the ongoing struggle Linklaters has with women in the workplace’.

The Magic Circle firm had applied for an injunction on the basis that the disclosures would be a breach of confidence and Mellish’s contract included an obligation of confidentiality over the information obtained during his work. The firm’s former director intended to disclose details around three specific events, called the ‘Munich incident, the NY Settlement and the London Settlement’.

In a second hearing on Monday 11 February, Mellish instructed his lawyers to write on his behalf that he didn’t oppose the injunction, and three days later he signed a draft consent order to destroy the documents and bring the litigation to an end.

‘We can confirm that the court has approved an order reached by agreement which, in effect, makes the previous order final and brings these proceedings to an end,’ said a spokesperson for Linklaters. ‘We did not take the decision to apply for an injunction lightly. We have a strong, supportive workplace culture and everyone working with us should be able to rely on information shared confidentially with the firm remaining confidential.’

Linklaters hired Mellish from Deloitte Australia in March 2017, but he was given six months’ notice in June 2018.

Last month he emailed Linklaters senior partner Charlie Jacobs and managing partner Gideon Moore saying he intended to ‘share my impressions of the current culture at Linklaters’ in interviews during the first two weeks of February. Linklaters then applied to prevent the disclosure of this information, including the identity of a former partner who was the subject of complaints by another staff member.

While Linklaters did not seek to restrain Mellish from sharing in general terms his impressions of the firm’s current culture, it also applied to prevent Mellish from disclosing any detail on its internal discussions over any public response to questions raised from the three named incidents.

Mellish did not appear in court for either of the hearings, while Linklaters instructed Andrew Caldecott QC and Aidan Eardley of One Brick Court.

marco.cillario@legalbusiness.co.uk

Legal Business

‘Ongoing struggle’: Linklaters shuts down former director going public with concerns over firm culture

‘Ongoing struggle’: Linklaters shuts down former director going public with concerns over firm culture

Linklaters has been granted an interim injunction against a former director of business development and marketing seeking to raise his concerns over the firm’s ‘current culture’ in ‘interviews for publication’.

In a High Court ruling yesterday (5 February), Mr Justice Warby restrained the firm’s former executive committee member Frank Mellish from sharing information highlighting what the former employee described as ‘the ongoing struggle Linklaters has with women in the workplace’ until a further hearing on Monday (11 February).

The Magic Circle firm sought an injunction on the basis that the disclosures would be a breach of confidence and Mellish’s contract included an obligation of confidentiality over the information obtained during his work. According to the judgment, Mellish intended to disclose details around three specific events, called the ‘Munich incident, the NY Settlement and the London Settlement’.

Linklaters hired Mellish from Deloitte Australia in March 2017, but he was given six months’ notice in June 2018. The contract termination included a ‘substantial additional sum…ex gratia’, according to Warby J’s ruling.

After receiving his final payment last month, he emailed Linklaters senior partner Charlie Jacobs and managing partner Gideon Moore to express his concern that given his age, the termination of his employment was effectively the end of his career, despite acknowledging that the terms on which his employment had been ended were lawful.

The email then said he intended to ‘share my impressions of the current culture at Linklaters’ and the firm’s struggle with women in the workplace in interviews during the first two weeks of February. Linklaters then applied to prevent the disclosure of this information, including the identity of a former partner who was the subject of complaints by another staff member. The decision also refers to an unspecified number of other people against whom complaints were made, and prevents the disclosure of the identity of the female complainant in the Munich incident and a complainant in the NY settlement.

While Linklaters did not seek to restrain Mellish from sharing in general terms his impressions of the firm’s current culture, it also applied to prevent Mellish from disclosing any detail on its internal discussions over any public response to questions raised from the three named incidents.

Mellish was not represented nor did he appear in court, while Linklaters instructed Andrew Caldecott QC and Aidan Eardley of One Brick Court. A spokesperson for Linklaters said: ‘We can confirm that the firm sought and has been granted an interim injunction in the terms set out in the judgment handed down by the court. We cannot comment further.’

Linklaters has already been subject to the increased scrutiny over sexual misconduct that emerged in the wake of the #MeToo movement. A year ago a Munich court sentenced a former partner to three years and three months in prison for sexually assaulting a student at an Oktoberfest party in September 2014.

Firms to see partners leave following complaints of inappropriate behaviour include Baker McKenzie, Reed Smith, Quinn Emanuel Urquhart & Sullivan, Latham & Watkins, Herbert Smith Freehills and Dentons.

Marco.cillario@legalbusiness.co.uk

Legal Business

Deal watch: Busy year-end as Japanese group buys Swiss power grid and Malaysian funds invest in Battersea

Deal watch: Busy year-end as Japanese group buys Swiss power grid and Malaysian funds invest in Battersea

City deal teams are having a busy run-up to Christmas, with Baker McKenzie, Freshfields Bruckhaus Deringer, Addleshaw Goddard and Linklaters leading on two multibillion-dollar deals.

Bakers’ London private equity head David Allen and corporate partner Jannan Crozier led a team advising Hitachi as the Japanese conglomerate acquired 80.1% of Swiss giant ABB’s power grid division for around $6.4bn.

Hitachi’s largest ever acquisition, with an enterprise value of $11bn including net debt, saw Freshfields’ M&A partners Piers Prichard Jones and Stephen Hewes advise ABB, which will retain control of 19.9% of a business spread across more than 100 countries and employing over 130,000 people.

‘The impact of this deal will be felt for generations to come,’ Crozier told Legal Business, pointing to the ability of the Japanese group to combine its technology with the infrastructure acquired from ABB and bring energy to areas of the world where it is more difficult to get to. ‘They will be able to revolutionise the way power is brought to consumers.’

Swiss firm Homburger’s M&A partners Claude Lambert and David Oser also acted for ABB, which is looking to simplify its business structure and focus on automation technology.

The Swiss group is able to require Hitachi to buy the remaining 19.9% of the power grid business in three years’ time. Under a so called ‘put and call’ provision, Hitachi will also be able to require ABB to sell its remaining stake in the business.

‘In the short term we will provide the maximum stability to the company through this joint venture, but in three years’ time we will have the flexibility to do that,’ Crozier said. The Bakers team was supported by Tokyo partners Akifusa Takada and Yutaka Kimura.

The acquisition caps off a busy 2018 for Bakers, which was active on numerous large deals over the last few months. Earlier in December the firm acted for Unilever on its £3.1bn acquisition of malted drink brand Horlicks from GlaxoSmithKline.

Elsewhere, the redevelopment of Battersea Power Station in London provided rich pickings for a trio of City firms as Malaysia’s asset manager Permodalan Nasional Berhad and state pension fund The Employees Provident Fund took a £1.6bn stake in the £9bn project.

Addleshaws’ real estate partner Simon Tager led the team acting for Battersea Power Station Development Company on the sale of the commercial assets of phase two of the project, including a six-acre site hosting the former coal power station on the south bank of the river Thames. Addleshaws’ Leona Ahmed, Luke Harvey, Hugh Lauritsen and Lee Sheldon also worked on the deal, while the buyers instructed Linklaters’ real estate partner Patrick Plant.

Phase two, which will include Apple’s new UK headquarters, is due to complete by the end of 2020.

marco.cillario@legalease.co.uk

Legal Business

LLP accounts: Linklaters posts fall in profits as top earner doubles income at Macfarlanes

LLP accounts: Linklaters posts fall in profits as top earner doubles income at Macfarlanes

Operating profits at Linklaters dipped 1% to £472.3m, while Macfarlanes’ highest-earning partner brought home almost £4m in 2017/18, the two firms’ LLP accounts showed this week.

In a mixed bag of financial results, the fall in profits at Linklaters came despite a 6% rise in turnover to £1.51bn. The operating profit figure reported is more than £200m lower than the £676.2m pre-tax profit the firm posted in July .

Linklaters said the discrepancy was because the published accounts consider as salaried employees the firm’s 150 partners that are not LLP members. The number of equity partners was down by two on last year to 310, according to the filing. Last year’s accounts had shown a 9% rise in operating profits to £476.2m in 2016/17.

The firm saw a 5% increase in its staff cots to £739m this year, up from £705m last year, as the number of lawyers rose by 30 to 2,487 and business support staff by 41 to 2,190. The share of profit available to the firm’s 13 executive committee members rose slightly however to £21.6m from £20.8m.

Linklaters has the lowest profit per equity partner (PEP) of the Magic Circle at £1.54m. Discussing the financial results in July, managing partner Gideon Moore said he was happy with the firm’s financial performance: ‘The increase in revenue was good and it’s an indication that the clients are supporting what we are trying to do’.

On the weakened profitability, he pointed to significant investments made by the firm in a number of areas, including the joint operations agreement with Shanghai firm Zhao Sheng.

Meanwhile, Macfarlanes’ highest earner took home £3.86m in 2017/18, a 90% increase on £2m the previous year. According to the accounts, the figure includes payments on retirement to a partner who is not a member of the senior management team.

Operating profits rose 24% to £106.27m amid a 20% turnover growth to £201.5m in a standout year for one of the most profitable operators in the City. The strong increase in profits came despite staff cost rising 12% to £59.3m with the firm growing its headcount by 25 to 585. The remuneration available for key management group members was £4.55m, up 10% from £4.11m in 2016/17.

In July Macfarlanes posted a PEP of £1.74m , up 26% and higher than most of the Magic Circle.

Marco.cillario@legalbusiness.co.uk

Legal Business

Banking and finance focus: Back to the future

Banking and finance focus: Back to the future

‘The truth is no-one’s got the faintest idea what finance practices will look like in the future,’ shrugs Tony Bugg, Linklaters’ head of banking, when asked to describe a top City finance practice in 2030. Of the dozens of London finance chiefs and partners to whom Legal Business posed the question, Bugg’s take is at least one of the more candid.

If the last decade is any guide, the finance world will be girding itself for more wrenching change. The post-banking crisis environment has seen a dramatic increase in regulation and oversight of banks and helped encourage the growth of institutions filling the void as senior lenders retrench.

Legal Business

‘No blueprint’: Looking back at Lehman’s wind-up

‘No blueprint’: Looking back at Lehman’s wind-up

Lehman Brothers International (Europe) (LBIE)’s 5,500 employees left the London office at 25 Bank Street on Friday 12 September 2008 expecting to return on Monday morning to their weekly routine. As did their colleagues in the rest of the world.

Not that life had been easy up to that point. Global financial turmoil had been going for around a year and Lehman had just posted a $3.9bn third-quarter loss amid the subprime mortgage crisis. Yet, the sense was that the bank founded in 1850 would be bought out by either Barclays or Bank of America, despite the US government’s resistance to bailing it out.

Legal Business

Linklaters finishes tech jigsaw with hire of Ashurst’s global IT head

Linklaters finishes tech jigsaw with hire of Ashurst’s global IT head

Linklaters has bolstered its technology clout with the hire of Ashurst’s well-regarded head of global IT, Bruna Pellicci.

Pellicci becomes the Magic Circle firm’s chief technology officer (CTO) after more than 11 years at Ashurst, five of which were as the firm’s global IT director.

She will report to Linklaters’ global chief operating officer and director of technology, Matt Peers, and have responsibility for the firm’s technology initiatives and information security. Linklaters has a 250-strong IT team.

Peers, who took on his role in May, told Legal Business: ‘Bruna is established in the legal field, but more than that she has tried to push the legal field. She has been involved in a lot of transformative activity and having someone who is good at driving change initiatives always adds horsepower to the firm.’

Peers believed Pellicci could be the last significant technology hire the firm needs: ‘On the innovation side we had enough thought innovation, what we were missing is making these ideas a reality. Bruna completes our team, she is the last piece of the jigsaw.’

Linklaters also has an ongoing relationship with tech start-up Eigen Technologies, which earlier this year raised £13m. Headed by one of the firm’s former advisers, Lewis Liu, Linklaters and Eigen developed and launched data extraction tool Nakhoda in 2017.

Pellicci’s move has been a long time coming after Ashurst hired CTO Noel Jordan in April as her replacement. It also comes as firms increasingly look to technology specialists to respond to client pressures to re-evaluate delivery processes and costs.

It is also the latest in a string of technology related hires this year, with Freshfields Bruckhaus Deringer hiring Charlotte Baldwin in January and Ashurst making a significant play by re-hiring Christopher Georgiou after he left to head up Fieldfisher’s alternative legal services arm, Condor.

For more on tech and innovation at the UK’s 12 largest firms, see ‘Law firm tech: Turning the lights on’.

thomas.alan@legalease.co.uk