Legal Business

‘Dubious financial arrangements’: Disgraced ex-Locke Lorde partner struck off and handed £70,000 bill

‘Dubious financial arrangements’: Disgraced ex-Locke Lorde partner struck off and handed £70,000 bill

A former Locke Lord partner who played a key role in the US firm receiving the largest ever fine from the Solicitors Disciplinary Tribunal (SDT) has been struck off and ordered to pay £70,000 in costs.

Jonathan Denton, a banking and finance partner at Locke Lord, was sacked in July 2015 after using the firm’s client account for transactions ‘that bore the hallmarks of dubious financial arrangements or investment schemes’, according to a judgement from the SDT last November.

As a result, Locke Lord was fined a record £500,000 that same month for failing to prevent Denton’s actions.

In a new SDT judgment, filed on 17 May, Denton’s conduct received scathing criticism, with the tribunal deeming his behaviour ‘was motivated by financial gain’ and a ‘flagrant breach of the trust placed in him by his clients’. The tribunal found Denton liable for 70% of the overall costs, which stood at £76,613, however, this was lowered to the ‘appropriate and reasonable’ amount of £70,000.

The Solicitors Regulation Authority (SRA), which was prosecuting, was represented by Capsticks partner Daniel Purcell, who instructed Paul Ozin QC of 23 Essex Street. Denton did not attend the hearing and was thus unrepresented. The judgment noted: ‘In choosing not to respond, the respondent had failed to comply with his legal and regulatory obligations and had failed to deal with his regulator in an open, timely and co-operative manner’.

Denton’s misconduct dates back to August 2012, when Locke Lord began acting for clients Ikaya and Sionne, which claimed to operate high-yield investment schemes. Subsequently, an estimated £21m of investment funds went into the firm’s client account between September 2012 and April 2015, from both individual and corporate investors.

Over the period of the retainer, Locke Lord billed a total of 1,424.9 hours and delivered invoices from the firm to Ikaya totalling £532,044.79, £657,194.37 and €286,902.52.

Denton had appointed himself as the sole director and shareholder of Ikaya, with his wife acting as company secretary. Locke Lorde was even contacted by US intelligence service the Federal Bureau of Investigation (FBI) in 2013, raising concerns that someone was trying to divert £2m from the client account for their own personal use.

Locke Lord’s £500,000 sanction was twice the previous record set by White & Case, which was fined £250,000 in July 2017 for failing to identify a conflict of interest and protect confidentiality regarding a $2bn Ukrainian commercial dispute.

For more on Denton’s conduct and the SRA’s prosecution drive, read Off the leash.

tom.baker@legalease.co.uk

Legal Business

Off the leash – as regulators target City leaders, is more to come?

Off the leash – as regulators target City leaders, is more to come?

It was a prized scalp. In December, Clifford Chance (CC) became the first Magic Circle player to fall foul of the Solicitors Regulation Authority (SRA), when the firm and its disputes partner Alex Panayides were each fined £50,000 for their role in the well-documented Excalibur professional negligence saga.

It was a highly-symbolic move. But the £50,000 penalty is small beer relative to CC’s global revenues, and to the fines received by White & Case and Locke Lord in 2017. US firm Locke Lord, with a small City operation, was ordered to pay a record £500,000.

Legal Business

Locke Lord fined, Clydes ex-partner suspended, while Appleby hit by data breach

Locke Lord fined, Clydes ex-partner suspended, while Appleby hit by data breach

In a tough period for international firms at the hands of legal regulators, US firm Locke Lord received the largest-ever fine handed down by the Solicitors Disciplinary Tribunal (SDT) in November.

The £500,000 penalty handed to Locke Lord came after one of its former UK lawyers engaged in ‘dubious financial arrangements’ with a client’s bank account. The lawyer in question, Jonathan Denton, left the firm in October 2015.

Legal Business

Targeting London: Locke Lord duo depart to launch boutique Foran Glennon in the City

Targeting London: Locke Lord duo depart to launch boutique Foran Glennon in the City

Just three years after helping to launch Locke Lord in the UK, insurance litigators Damian Cleary and Gavin Coull have departed to launch US firm Foran Glennon Palandech Ponzi & Rudloff in the City.

A 50-lawyer boutique in the US, Foran Glennon hired Cleary through his consultancy firm DCThree Services to execute a launch in the City and ended up poaching him to run the venture.

Foran Glennon, centred on litigation, insurance and bankruptcy, only launched in 2001 but now has offices in Chicago, New York, San Francisco and Orange County, California. Its opening in London represents its first overseas launch.

Cleary and Coull have each contributed 10% of the equity to launch the firm in the UK, with Foran Glennon contributing the remaining 80%. Legal Business understands the partners are hoping to secure an alternative business structure (ABS) licence in the UK, due to the firm’s US structure. It is still also awaiting clearance from the Solicitors Regulatory Authority (SRA).

Nonetheless, the pair have already taken office space in the City. Fittingly, for an insurance boutique, the firm has taken an office in 11 Leadenhall Street.

Having joined as a partner in May 2012, Cleary recently stepped down as a partner at Locke Lord and became a consultant at the firm. He made his name as a partner at collapsed US firm Dewey & Leboeuf, leaving in 2010 to become a partner at Steptoe & Johnson. Coull worked closely with Cleary during his four-year stint at Steptoe & Johnson, before the pair left in May 2012 to launch Locke Lord in the UK. He was previously a partner at Reynolds Porter Chamberlain (RPC).

Locke Lord management have parachuted in Texan litigator Michael Collins to oversee its struggling London office.

tom.moore@legalease.co.uk

Legal Business

Planning to ‘make a big impact’: Cooley raids Edwards Wildman and MoFo’s City offices to launch in London

Planning to ‘make a big impact’: Cooley raids Edwards Wildman and MoFo’s City offices to launch in London

US firm Cooley has made its long-awaited entrance to the London legal market, taking partners from Morrison & Foerster and Edwards Wildman Palmer to create a 55-lawyer UK practice.

The office, the firm’s first in Europe, will be headed by Justin Stock, the former head of Morrison & Foerster’s London corporate practice, who is joined by corporate, technology and IP partners David Bresnick, Chris Coulter and Ed Lukins and Nicholas Bolter. 

They are joined by former Edwards Wildman litigators Laurence Harris and Kevin Perry and a five-partner reinsurance group led by David Kendall, Edwards Wildman’s former head of international insurance and reinsurance.

Cooley has taken on all of Edwards Wildman’s old office space at 69 Old Broad Street and carried out a complete refit. The building will house 20 partners across corporate, technology, IP, litigation, competition, insolvency, employment and privacy practices.

‘Cooley plans to make a big impact in London,’ said Joe Conroy, Cooley’s CEO. ‘We have brought together partners who are the very best in their fields, and who share our values and approach to achieving success for our global client base. From our San Francisco and Silicon Valley roots, we have grown to 850 lawyers, solving complex business and litigation issues for the world’s most dynamic companies.’

Stock added: ‘We have substantive strengths in areas essential to Cooley’s global client base. We are ready to build a thriving and successful UK-based practice together. We intend to take the momentum of this launch and continue to attract top legal talent with the same drive and spirit.’

The vice-chair of Cooley’s business department and partner in charge of its Washington DC office, Ryan Naftulin, will relocate to London. As a US liaison partner, his focus will be on office integration and building opportunistic growth for the firm.

Morrison & Foerster, which lost five partners to Cooley, is now understood to have eight partners left in the City plus managing partner for Europe Paul Friedman who is also based in San Francisco. Edwards Wildman, which completed its merger with fellow US firm Locke Lord over the weekend, would have been left with just two partners in London after a string of departures depleted the office prior to Cooley’s launch.

The full list of Cooley’s London partners comprises:

London Head

Justin Stock, head of corporate at Morrison & Foerster.

Partners – Corporate

David Bresnick, corporate partner at Morrison & Foerster with a focus on Eastern Europe and Turkey. Joined MoFo in October 2012 from CMS Cameron McKenna, where he headed the firm’s private equity group.

Ed Lukins, a corporate partner at Morrison & Foerster. Formerly a partner at Norton Rose and Simmons & Simmons.

Chris Coulter, a technology transactions partner at Morrison & Foerster specialising in software and digital content licensing rights.

Ann Bevitt, an employment and privacy partner at Morrison & Foerster for the past 12 years.

Jon Yorke, an insolvency partner at Edwards Wildman for the last three years.

Sarah Pearce, an IP partner at Edwards Wildman who joins Cooley’s technology transactions group.

Ryan Naftulin, US Liason partner at Cooley who relocates from Washington DC, where he was partner in charge. Naftulin, a Cooley lifer, is the vice chair of the firm’s business department. He joined the firm in 1998.

Litigation

Nicholas Bolter, an IP partner at Edwards Wildman and former partner-in-charge of the London office.

David Kendall, former head of international insurance and reinsurance at Edwards Wildman, and who had been at the firm since 1988.

James Crabtree, an insurance and reinsurance partner at Edwards Wildman.

Mark Everiss, an insurance and reinsurance partner at Edwards Wildman.

Chris Finney, an insurance and reinsurance partner at Edwards Wildman.

Mark Deem, a litigation partner at Edwards Wildman.

Laurence Harris, a litigation partner at Edwards Wildman and former deputy managing partner.

Richard Hopley, an insurance and reinsurance partner at Edwards Wildman.

Akash Sachdeva, a qualified barrister and an IP partner at Edwards Wildman.

Kevin Perry, a litigation partner at Edwards Wildman and former co-chair of its litigation department.

Becket McGrath, a competition partner Edwards Wildman and former co-chair of its antitrust practice group.

James Maton, a litigation partner at Edwards Wildman.

tom.moore@legalease.co.uk

Legal Business

Worst-kept secret: Locke Lord and Edwards Wildman approve combination

Worst-kept secret: Locke Lord and Edwards Wildman approve combination

Dallas-bred Locke Lord and Boston’s Edwards Wildman Palmer have rubber-stamped their high-profile union, today (1 December) announcing that their respective partnerships have approved a combination from 10 January 2015, a move which will generate gross revenues of $675m and a headcount of 1,000 lawyers.

Set to be named Locke Lord Edwards, Locke Lord’s Jerry Clements will serve as chair of the combined firm, while Edwards Wildman’s current managing partner Alan Levin will serve as vice chair, alongside Locke Lord’s Dan Schlessinger and Bill Swanstrom.

Other members of its executive committee will include Nick DiGiovanni, Michael Gaertner, Janis Loegering, Graham Spitz, David Taylor and Tom Yoxall from Locke Lord. Jeffrey Hsi, Walter Onge, Heather Stone, George Ticknor and Jonathan Young from Edwards Wildman will also make up the executive team.

The merger will give the firms additional presence in Asia with offices in Hong Kong, Istanbul and Tokyo. In a statement, the firms said London will continue to be an important focus of the combined firm and ‘one with anticipated growth as a gateway to international business’.

Clements added: ‘This combination will enhance our position in the top tier of US law firms and significantly strengthen our position and product offerings in the middle market. It will allow us to brand that identity in the global marketplace with a major presence in the Northeast and a stronger footprint in the Midwest, West Coast and Southeast regions of the United States, as well as in Asia.’

Both firms confirmed in October they had signed a letter of intent to merge early next year. It is understood that the official vote was a ‘done deal’ and the voting process was a ‘mere formality’ according to one partner.

It comes as Edwards Wildman faced a series of partner defections in recent months. It is still unclear whether any of the Edwards Wildman London-based partnership will become part of the deal, as a host of staff led by commercial litigation partner Laurence Harris remain in long-drawn out negotiations with fellow US firm Cooley for its potential London launch.

sarah.downey@legalease.co.uk

Legal Business

Partner exits mount: Edwards Wildman loses commercial litigation partner to GlaxoSmithKline

Partner exits mount: Edwards Wildman loses commercial litigation partner to GlaxoSmithKline

Pharmaceutical giant GlaxoSmithKline (GSK) is the latest to dip into the dwindling partnership at Edwards Wildman Palmer’s London office as it has emerged that commercial litigation partner, Antonio Suarez-Martinez, is leaving the firm for the corporate’s legal team.

Currently co-chair of the firm’s pro bono committee, Suarez-Martinez trained at the firm, qualified into its commercial litigation team in 2002 and became a partner in 2011. Having previously advised anti-corruption NGOs including Transparency International, the disputes lawyer acts on large scale commercial disputes and civil fraud and has advised governments on issues including asset recovery (of the proceeds of corruption), international arbitration and public international law issues.

A host of partners led by commercial litigation partner Laurence Harris remain in long-drawn out negotiations with fellow US firm Cooley for its potential London launch. Meanwhile, Edwards Wildman announced plans to combine with Dallas-bred Locke Lord in early October and confirmed they had signed a letter of intent in mid-September to merge early next year, forming Locke Lord Edwards.

With Edwards Wildman partners said to be invited to Locke Lord’s upcoming retreat in April 2015, it is understood that the official vote has yet to take place but according to one partner it is a ‘done deal’ and the voting process is a ‘mere formality’.

Suarez-Martinez joins a growing list of defections since the summer with multiple partners leaving the Boston-headquartered firm, including Ben Goodger to Osborne Clarke, Niall McAlister to Olswang, Stuart Blythe to CMS Cameron McKenna, Shawn Atkinson to Orrick, Herrington & Sutcliffe, and David Ramm to Morgan Lewis & Bockius.

More recently, Legal Business revealed that Simmons & Simmons had hired insurance partner Martin Lister, who established Edwards Wildman’s Hong Kong office in 2006. His departure follows IP partner Kenneth Choy who left for local firm Choy, Cheung & Co in August, and corporate partner John Lo who moved to CWL Partners, which operates in association with US firm Nixon Peabody and the mainland Chinese Hylands Law Firm, in June.

sarah.downey@legalease.co.uk

Legal Business

Edwards Wildman and Locke Lord set to combine

Fellow US firm Cooley plans London office takeover

Dallas-bred Locke Lord and Boston’s Edwards Wildman Palmer became the latest US duo to announce plans to merge last month, as consolidation continues in the US national market. The news emerges as California firm Cooley prepares to launch in London, potentially taking on a major proportion of Edwards Wildman’s City team in the process.

Legal Business

Consolidation in US mid-tier continues as Locke Lord and Edwards Wildman set to merge

Consolidation in US mid-tier continues as Locke Lord and Edwards Wildman set to merge

The run of consolidation in the US national market continues with Dallas-bred Locke Lord and Boston’s Edwards Wildman this week announcing plans to merge, forming a $675m practice that would sit just outside the top 50 of the Global 100.

The two firms announced they had signed a letter of intent yesterday (10 September) to merge early next year, forming Locke Lord Edwards, a 1,000-lawyer firm with 23 offices. The new practice would be chaired by Jerry Clements, the current chair of Locke Lord, with Edwards Wildman head Alan Levin becoming vice chair of the combination.

The Texan firm is the larger of the two entities, currently ranked 87th in the Global 100 with 2013 revenues of $415m, which represented a 3% fall on the previous year’s turnover. Edwards Wildman, meanwhile, saw revenues fall 9% to $311.7m. This means that the announced combined revenues of the merged entity is some way short of the 2013 revenues of the firms’ combined $726.7m.

In terms of profitability, Locke Lord’s profits per equity partner (PEP) of $935,000 are also significantly higher than Edwards Wildman, which posted PEP of $680,000 for 2013.

The agreement has been reached rapidly, after initial discussions began in July following an approach from Edwards Wildman, who had engaged US consultant Mestel & Company to compile a list of potential suitors.

The two firms have substantial London presences, both featuring in the top 50 US firms in London by size. Edwards Wildman, however, has suffered a difficult time lately, with a 10% drop in revenues to £27.8m in its latest UK LLP posting and the departure of a number of partners.

At the end of last year Locke Lord had 34 lawyers in the UK, against 81 at Edwards Wildman, though the latter firm has seen headcount fall this year. Edwards Wildman’s 20-partner London office could likely see further departures ahead of the Locke Lord merger amid expectations that a large group of partners is in talks to transfer to US corporate technology leader Cooley to launch its City arm.

It is understood that the Cooley talks are being led by Edwards Wildman commercial litigation head Laurence Harris, with a target for a mid-October launch.

Harris was part of the team that negotiated the 2008 merger between Edwards Angell Palmer & Dodge and London outfit Kendall Freeman.

Over the summer, Edwards Wildman saw five corporate partners including Shawn Atkinson, Stuart Blythe, David Ramm, Eero Rautalahti and Niall McAlister exit the firm. Such departures were said to be due to a feeling of a lack of support from the US together with issues of ‘disconnection’.

Commenting on the union, Locke Lord’s Clements said: ‘We will spend the next few months working on details and introductions, and hopefully be able to move forward together in a way that offers increasing breadth and depth to our clients. Both firms have been through a number of successful combinations, but we think this one opens the door for something truly transformational.’

Consolidation among mid-tier US firms in the Global 100 has been particularly evident in 2014, with Squire Sanders and Patton Boggs forming Squire Patton Boggs in July.

Also on the merger trail is Bingham McCutchen, which earlier this year approached a group of US rivals regarding a deal after a tough 2013 financial year. Morgan, Lewis & Bockius is viewed as the most likely potential tie-up, though mergers at this scale are notoriously difficult to pull off, particularly when one firm is in a weaker position.

As Legal Business reported last week, Bingham is currently braced for a major team departure from its highly rated City restructuring team to US rival Akin Gump Strauss Hauer & Feld.

mark.mcateer@legalease.co.uk

Legal Business

Accounts show fee and profits slide at Edwards Wildman in London as partner departures pile up

Having endured a difficult time in recent months with an exodus of partners from its London office, US law firm Edwards Wildman Palmer published its UK limited liability partnership (LLP) accounts in August, which recorded a 10% drop in UK turnover, alongside a 21% drop in profit.

The LLP accounts, dated to 31 December 2013, show revenue fell to £25.1m from £27.8m, operating profit decreased to £8m from £10.1m and net debt rose to £323,827 from £54,952.