Legal Business

Deal watch: Kirkland and Linklaters take care of Nestlé business as UK advisers get busy in Europe

Deal watch: Kirkland and Linklaters take care of Nestlé business as UK advisers get busy in Europe

International investors have been keeping UK and US counsel busy this week, with Linklaters and Kirkland & Ellis winning roles on Nestlé’s proposed $10bn sale of its skincare business.

Eversheds Sutherland, Pinsent Masons and Ashurst, meanwhile, were all in action as Japan’s largest housebuilder, Sekisui House, entered the UK market, and Herbert Smith Freehills (HSF) advised Spanish company Cellnex in a multibillion-euro series of acquisitions on the continent.

Kirkland’s private equity partner Roger Johnson is advising longstanding client EQT as the private equity house confirmed it is partnering with Abu Dhabi Investment Authority and Canada’s Public Sector Pension Investment Board to acquire Nestlé Skin Health for $10.1bn.

Linklaters’ corporate partners David Martin and Michael Honan are acting for Nestlé as the Swiss group enters exclusive negotiations for what could be one of the largest transactions in Europe this year.

Latham & Watkins is advising EQT on the financing, led by London partners Dominic Newcomb and Jennifer Engelhardt.

Founded in 1981 as Galderma and operating as a subsidiary of Nestlé since 2014, the Lausanne-headquartered skincare company employs more than 5,000 people across 40 countries. According to EQT’s plans, the company will take back its original name and keep its headquarters in Switzerland while focusing on international expansion, particularly in the US.

Elsewhere, Eversheds corporate partner Alistair Cree led a team advising regeneration company Urban Splash as it signed a £90m joint venture with Homes England and Sekisui House. The deal marks the entrance of the Japanese housebuilding giant into the UK with a view to deliver thousands of homes across the country. Pinsents partner Scot Morrison led the team advising the government body, while Ashurst’s Hiroyuki Iwamura acted for Sekisui.

‘Sekisui is the world’s largest housebuilder, it has the balance sheet of all the UK housebuilders combined,’ Cree told Legal Business. ‘The plan of the joint venture is to invest and develop the modular housing model, where houses are built off-site, and roll it out across England – in this way houses can be built much more quickly.’

He added: ‘It’s a real vindication of the Urban Splash business, because you’ve got someone with a real reputation investing into a business that is based in the North West of England.’

Outside the UK there were rich pickings for HSF, as a team led by Paris corporate partner Edouard Thomas advised Spanish telecom infrastructure company Cellnex on its €2.7bn acquisitions in France, Italy and Switzerland.

Cellnex agreed to acquire a series of mobile towers in France and Italy from telecom company Iliad, for €1.4bn and €600m respectively, while in Switzerland it acquired communication sites from Salt.

Alongside HSF, the deals involved Paul Hastings, which advised Salt in Switzerland led by London corporate partner Garrett Hayes, and a number of independent firms across the continent.

French champion Bredin Prat advised Iliad in France and Italy, Italian firm BonelliErede acted for Cellnex on Italian law aspects, and Bär & Karrer advised Cellnex in Switzerland.

marco.cillario@legalease.co.uk

Legal Business

Flexi lawyering on the up as Linklaters launches Peerpoint-style platform and LOD makes Australasian acquisition

Flexi lawyering on the up as Linklaters launches Peerpoint-style platform and LOD makes Australasian acquisition

Linklaters has become the latest firm to venture into the ever busier flexible lawyering market after hiring the former director of Ashurst’s innovation arm to lead its new contract lawyer platform.

New Law pioneer Lawyers on Demand (LOD), meanwhile, has expanded its Australasian footprint with the acquisition of legal ops and tech platform lexvoco.

Linklaters announced today (30 April) the launch of Re:link, allowing the firm to employ lawyers on an interim basis to work on specific projects. Mark Higgs, who led Ashurst Advance for three years until 2018, has joined Linklaters’ London base as chief operating officer of the new contract lawyer platform.

Re:link will initially focus on the UK market but the firm envisages exploring other geographies in the near future.

‘We are looking to draw extensively on our alumni to build up our lawyer community and connect them with opportunities to work with both our clients and lawyers,’ Higgs told Legal Business.

He would not specify the number of lawyers the service will make available, but said it will be open to all practice areas: ‘There are clearly clients that have been strong users of contract lawyers in recent years – financial institutions is the obvious example – but we see this as cross-practice.’

Linklaters is the second Magic Circle firm to launch a flexi lawyering arm. Allen & Overy launched in 2013 Peerpoint, which now fields around 300 lawyers available on an interim basis and operates in the UK and Asia.

In distinction from Peerpoint and other flexible lawyering services, Re:link will operate as part of Linklaters rather than as a separate business. Higgs said there was a focus on making sure that ‘everyone that joins Re:link is fully part of the firm and takes advantage of the infrastructure the firm can offer.’

He added: ‘I have been speaking with Gideon [Moore, managing partner] and members of the board throughout 2018 as they shaped their idea. To join a firm like Linklaters to launch and lead a new area was a one-off opportunity.’

Also today, contract lawyer business LOD announced the addition of 100 lawyers in Australia and New Zealand and 30 members of staff after it acquired lexvoco, a platform which focuses on providing legal operations and legal-tech solutions to in-house teams. The additions bring LOD’s Australasian lawyer headcount to 300.

The deal means the lexvoco team will join LOD in their combined offices of Sydney, Melbourne, Brisbane and Perth, while adding Adelaide and Geelong, as well as Auckland, Wellington and Christchurch in New Zealand to the New Law outfit’s global network.

The legal ops and tech functions of lexvoco will form LOD Innovate, a new Asia Pacific-based business unit led by lexvoco founder Anthony Wright.

The Australasian expansion comes a year after LOD secured new private equity backers in place of parent firm Bryan Cave Leighton Paisner (BCLP). Buyout house Bowmark Capital acquired in May last year BCLP’s entire stake of 62% in LOD.

LOD chief executive Tom Hartley said: ‘Following our capital investment from Bowmark, this deal gives us greater scale in our core business and increased capability in the legal operations and tech space that our clients are demanding in all of our locations.’

Launched in 2007 as part of legacy Berwin Leighton Paisner, LOD first entered Australia in 2016 through a merger with AdventBalance.

The deal is a further sign of consolidation among New Law players. Elevate acquired in January UK-based flexible lawyer firm Halebury, creating a combined business of over 1,000 members of staff and $70m in annual revenue.

marco.cillario@legalease.co.uk

Legal Business

‘Immensely rewarding’: Moore gets second term as Linklaters managing partner

‘Immensely rewarding’: Moore gets second term as Linklaters managing partner

Linklaters managing partner Gideon Moore will stay in his role until April 2022 after the partnership re-elected him for a second term.

Partners confirmed the former banking head in the role during a two-day annual partnership meeting in Cannes after he stood unopposed. However, his second term will be shorter to bring the managing partner and senior partner terms in sync. Senior partner Charlie Jacobs’ first term finishes at the end of 2021.

Moore replaced Simon Davies as managing partner in January 2016  after seeing off competition from dispute resolution head Michael Bennett and Asia managing partner Marc Harvey. That election was triggered early due to Davies’ surprise decision to join Lloyds Banking Group in early 2016. During his first term he implemented a ‘refreshed strategy’, which saw the firm drop individual partner metrics and annual assessments to focus on team and firmwide performance.

Moore also pushed through lockstep reforms providing more flexibility in moving partners on the equity ladder, introducing a gate at the eighth year of progression and regular reviews for partners who have reached the top of equity.

The firm’s most recent set of financial results were muted, as revenue grew 6% to pass the £1.5bn mark but profits remained flat.

Commenting on his re-appointment, Moore said in a statement: ‘I am honoured to have the opportunity and privilege to continue leading Linklaters. The last few years have been immensely rewarding and my job now will be to continue creating the best conditions for the firm to excel: delivering best-in-class client experience; investing appropriately to manage our business ever more efficiently and innovatively; and ensuring Linklaters is a place where our people can perform to their best and thrive in their careers.’

marco.cillario@legalbusiness.co.uk

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