Legal Business

King & Wood’s American dream over as merger talks with Morgan Lewis called off

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Following a long courtship, merger discussions between King & Wood Mallesons (KWM) and Morgan, Lewis & Bockius have been called off, Legal Business can reveal.

A combination between the global giant and Philadelphia-based Morgan Lewis would have created the world’s second biggest firm by turnover, combining KWM’s revenue of $1.02bn with Morgan Lewis’ $1.84bn. Morgan Lewis posted profits per equity partner (PEP) at $1.53m for 2015 while KWM’s stand at $900,000.

It understood talks between the firms had been strained in recent weeks following uncertainty over the future of KWM’s European business. Discussions had been led by Morgan Lewis’ chair Jami McKeon opposite global managing partner Stuart Fuller, who has since quit his leadership post.

The European and Middle Eastern partnership is currently considering a rescue deal from its Australian and Chinese counterparts after it was forced to halt its recapitalisation plan after the loss of four key partners, including Halford, former managing partner Rob Day and corporate finance partners Andrew Wingfield and Jonathan Pittal. The legacy SJ Berwin practice is carrying more than £30m in debt.

While the Asia Pacific arm has agreed to underwrite the debt and has promised minimum earnings for equity partners, the deal includes a year lock-in and salaried partners must also contribute to the recapitalisation. As with the original recapitalisation, equity partners must stump up £14m, with the shortfall to be made up by the Chinese and Australian partnerships.

The deal is subject to a vote, of which at least 70 partners (around 60% of the Europe and Middle East partnership) must agree to. The partners have until the week beginning 21 November to agree the deal. In July, 98% of the partnership had voted in favour of the original recapitalisation plan.

However, KWM was not the only firm vying for a union with Morgan Lewis, as CMS Cameron McKenna has approached the firm in recent months. A Morgan Lewis partner told this publication that Camerons had indicated that Morgan Lewis was its preferred choice of US suitor.

KWM declined to comment while Morgan Lewis did not respond to requests for comment.

sarah.downey@legalease.co.uk

Read more on KWM in ‘Comment: The moment of truth arrives in the SJ Berwin saga’

For an in-depth assessment of KWM, subscribers can see our July cover feature ‘Branded’

Legal Business

Exclusive: Morgan Lewis holds talks with KWM as Camerons circles

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Morgan, Lewis & Bockius has emerged as a potential partner to King & Wood Mallesons (KWM), despite the US giant also being targeted by CMS Cameron McKenna as its long-coveted US suitor.

A Morgan Lewis partner has told Legal Business that talks to combine with KWM had been on and off for months but KWM had been eager to press ahead with conversations in recent weeks. With 520 equity partners, the top 20 US law firm has a profit per equity partner (PEP) of $1.54m and revenues in 2015 of $1.84bn. In contrast KWM has over 550 partners around the world and PEP of $900,000.

It is understood that the talks were led by Morgan Lewis chair Jami Wintz McKeon and involved the possibility of a multi-profit centre union using a Swiss verein structure initially to ‘test the waters’.

However, the Morgan Lewis partner said talks had become strained since the resignation of KWM City funds partner Michael Halford, who had been central to the discussions, but they had not been officially called off. The departure of Halford last week and three fellow partners in London saw KWM halt a planned recapitalisation after a 2016 dominated by departures in Europe to reassess its options.

The talks come as KWM Europe, UK and Middle East (EUME) managing partner Tim Bednall and senior partner Michael Cziesla have flown to China to talk about the future of the firm amid a turbulent period for its European practice, which joined KWM through the 2013 merger between KWM and SJ Berwin. It is understood that talks are ongoing for the Asia-Pacific business to offer support to the EUME partnership to help stabilise the firm in the region. Moves by the larger Asia Pacific business, which is still growing at more than 20% a year in China, may involve lock-ins with the EUME partnership, which is a separate profit centre, in return for financial commitments or guarantees to the business.

The Morgan Lewis partner added that while many US law firms were interested in KWM’s Chinese arm, its large Australia business would put off some US rivals.

The partner added that while Morgan Lewis was likely to not be the only firm seriously approached, ‘I think they liked us best.’

However, KWM is not the only firm vying for a union with Morgan Lewis, as Camerons has approached the firm ‘quite aggressively’ in recent months. The partner said that Camerons had indicated that Morgan Lewis was its preferred choice of US suitor.

The Morgan Lewis partner added: ‘However, there are partners in the US who feel CMS partners are in a different standard from Morgan Lewis, plus there is an issue with the German arm.’

A former Camerons partner said: ‘I would have thought the PEP levels at Morgan Lewis were too strong. I don’t think Camerons would have fitted too well with a New York firm, but an East Coast firm would be good for them. I have a high level of confidence the firm would be interested in Morgan Lewis. It’s a tightly run, profitable outfit.’

Camerons is currently moving to implement its combination with Nabarro and Olswang, with partners at the three firms having voted to merge last month. When the three-way merger goes through the combined firm will have revenues of more than £400m in the UK.

Morgan Lewis is no stranger to rescue deals, having in 2014 completed a ‘transaction’ which saw 226 partners and more than 525 other lawyers, legal professionals and staff move over from Boston-bred Bingham McCutchen.

Morgan Lewis, KWM and Camerons declined to comment.

sarah.downey@legalease.co.uk, matthew.field@legalease.co.uk

Read more in the opinion piece: ‘Comment: The moment of truth arrives in the SJ Berwin saga’

Read more analysis in the feature: ‘Branded – Inside the troubled takeover of SJ Berwin’

Legal Business

‘Focus on integrating’: Competition head takes over from Sharp as Morgan Lewis London leader

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Morgan Lewis & Bockius has confirmed Frances Murphy is the firm’s new London managing partner, replacing Peter Sharp.

Murphy joined Morgan Lewis in 2014 from defunct firm Bingham McCutchen where she led the firm’s antitrust and trade regulation practice. She counts BASF, Total, General Motors and Sanofi among her current and former clients.

The competition lawyer’s rise to leadership comes after being appointed to the firm’s advisory board and international committee last year.

Her experience also includes mergers and acquisitions, restructurings, joint ventures, licensing of intellectual property rights, and other strategic alliances. She does not have a fixed term as leader of the US firm’s City outpost and keeps her post as competition head.

Murphy told Legal Business: ‘Since the merger [with Bingham McCutchen] in 2014, the London office grew 200%, and the focus is really on integrating it across the firm. I look forward to contributing taking the firm from a very good firm to an elite practice.’

Sharp had been in charge of the London office since 2012 when he joined from Dewey & LeBouef where he was partner for 17 years since 1995. He joined with several partners including David Waldron, Nick Greenwood, Bruce Johnston, Amanda Jennings, and Amy Comer. He has returned to fee-earning in the litigation practice.

Last month, Morgan Lewis hired a team of five partners from Dentons, including Dentons’ Asia managing partner Mitch Dudek and partners Tood Liao, Alex Wang, Eddie Hsu and Cindy Pan. The five partners arrived as part of a 23 lawyer team appointment.

According to the latest Global London, Morgan Lewis’ City headcount dropped 2% to 62 in 2015. The firm had 33 partners.

georgiana.tudor@legalease.co.uk

 

Legal Business

US spree: Morgan Lewis hires five-partner team for Shanghai launch as Latham taps A&O for German hire

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US-bred law firms have kicked off the key post-summer season with a rash of hires, with Morgan Lewis & Bockius hiring a team from Dentons to launch in a key Chinese market as Latham & Watkins recruits yet another Magic Circle partner in Europe.

Dentons’ former Asia managing partner Mitch Dudek, along with partners Todd Liao, Alex Wang, Eddie Hsu and Cindy Pan, are leading team to Morgan Lewis to launch in Shanghai. The partners join with a team of 23 lawyers with experience in corporate, real estate and finance work.

Dudek was the founding partner of Dentons’ mainland China practice and its Shanghai office, launching the office in 2011. He also helped secure Dentons’ combination with Chinese law firm Dacheng in 2015.

The Shanghai launch furthers the top 20 US law firm’s Asian expansion, having opened in Singapore in 2015 and taking a team of lawyers from Bingham McCutchen in 2014 to open in Tokyo. The 1,900-lawyer Morgan Lewis now has 29 offices worldwide, including an outpost in Beijing.

Latham, meanwhile, continues its recent run of aggressive European expansion with the hire of Allen & Overy (A&O) capital markets partner Oliver Seiler in Frankfurt, its second partner from the Magic Circle firm in three months. Seiler currently heads A&O’s German international capital markets group and co-heads the City firm’s EMEA equity capital markets practice.

Latham has been on a hiring spree in the UK and Germany, with Seiler’s arrival following fellow A&O finance veteran Stephen Kensell into Latham’s City arm in July. Kensell was formerly head of A&O’s cornerstone banking practice, and ran for the senior partner post at the Magic Circle firm earlier this year. Latham – currently the world’s highest billing law firm – has substantially hiked revenues in recent years in its London arm, up 12% in 2015 to $263m, against firm-wide revenues of $2.65bn.

Seiler’s arrival also follows a string of senior Latham recruits into Germany from Magic Circle firms, with Clifford Chance’s co-head of private equity Oliver Felsenstein joining 18 months ago alongside buyout partner Burc Hesse, CC’s German banking chief Alexandra Hagelüken following in October and Linklaters’ German head of private equity Rainer Traugott arriving in March.

Rüdiger Malaun, a partner in Latham’s Munich office and global co-chair of the capital markets practice, said: ‘There are strong synergies between our equity capital markets, private equity and high yield practices and Oliver’s arrival is an important step in our plans to build the market-leading transactional practice in Germany and Europe.’

matthew.field@legalease.co.uk, tom.moore@legalease.co.uk

Legal Business

Partner moves: Morgan Lewis and Ashurst make hires in London and New York

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US firm Morgan, Lewis & Bockius continues its firm wide hiring spree with Covington & Burling corporate partner Simon Currie being the latest to join the firm’s City ranks. Meanwhile Ashurst is continuing efforts to bulk up its New York collateralised loan obligations (CLO) practice with the hire of partner Lawrence Berkovich from Mayer Brown.

Currie will join Morgan Lewis’ London investment management team and will strengthen the firm’s services to clients across the continent, as well as in the US, the Middle East, and Asia. Currie has experience of representing financial sector clients on investment funds and financial services regulatory matters.

Morgan Lewis investment management head Louis Singer said: ‘Simon is a leader in advising clients on the management and operation of private equity funds and he has counselled numerous private equity funds on the development of the Alternative Investment Fund Managers Directive throughout the EU legislative process. That experience and his background in successfully representing clients before the EU legislative bodies and the UK Treasury on issues of concern to them make him an ideal addition to our London team.’

Separately, Ashurst’s finance practice, which suffered a mass-partner exit earlier this year, is rebuilding, with Berkovich joining from Mayer Brown where he helped build the firm’s CLO practice.

Berkovich specialises in complex structured finance transactions, with a particular focus on broadly syndicated and middle-market CLOs, first mortgage and mezzanine commercial real estate loan securitisations and rated and unrated leveraged loan and commercial real estate loan warehouse facilities.

Ashurst US head William Gray said: ‘Larry’s appointment is an important further expansion of the firm’s CLO team, and will go a long way to further strengthening our banking/arranger CLO client base. In addition, his experience in the private equity, M&A and real estate sectors will help us to deliver significant assistance to network clients that need US expertise in these areas.’

The hire comes after Ashurst recently expanded its structured finance team in New York and Washington DC after Scott Pierpont joined from Jones Day and Lee Ann Anderson moved from Sullivan & Cromwell in October.

This followed Ashurst’s recruitment of former UBS Securities managing director Eric Bothwell to boost the CLO practice in July.

The firm said it was ‘determined to rebuild’ after US managing partner and finance partner Eugene Ferrer and global co-head of the securities and derivatives group, Scott Faga, alongside three counsel and four associates, left the firm for Paul Hastings.

jaishree.kalia@legalease.co.uk

Legal Business

Freshfields head of Islamic finance to leave for Morgan Lewis

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Freshfields Bruckhaus Deringer global head of Islamic finance Tarek El-Assra has quit the firm to join Morgan, Lewis & Bockius as a partner, as the Morgan Lewis targets the United Arab Emirates and Saudi Arabia

The departure is Freshfields’ second exit in recent weeks after Shearman & Sterling hired its co-head of telecoms, media and technology, Frank Miller, as the latter firm bids to pull in a greater array of M&A in the City.

El-Assra joins Morgan Lewis’ Dubai office in a bid to build its cross-border Islamic finance and investment offering specifically targeting the UAE and Saudi Arabia.

The hire comes as Morgan Lewis moves to bulk its international finance team with a focus on the Middle East. Ayman Khaleq, managing partner of the firm’s Dubai office and a partner in the finance and investment management practices, said: ‘Tarek will further strengthen our Gulf Cooperation Council and international transactional practices while greatly enhancing our already leading cross-border Islamic finance and investment capabilities.’

El-Assra has worked at Freshfields for the last four years, having joined from rival firm Allen & Overy (A&O) as counsel in 2011. At Freshfields, El-Assra headed the firm’s Islamic finance group and specialised in leveraged and acquisition finance, asset finance, real estate finance, trade finance, infrastructure and project finance, and restructurings.

He handled matters for clients in the United Arab Emirates and Saudi Arabia and worked closely with the firm’s global finance, debt capital markets, and restructuring teams in Dubai, New York, London, Frankfurt, and Singapore.

He joined A&O in 2000 and later became a senior associate, after spending a year at Goldman Sachs’ acquisition finance group.

The move forms part of Morgan Lewis’ wider investment strategy and comes shortly after the firm recruited structured finance partner Theresa Kradjian and corporate tax partner Paul Beausang – a further two further partners from K&L Gates, adding to the three already to have made the move in July – as its expands its City securitisation offering. 

jaishree.kalia@legalease.co.uk

Legal Business

Completing the set: Morgan Lewis takes another two partners from K&L Gates in City structured finance push

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Morgan, Lewis & Bockius has recruited two further partners from K&L Gates, adding to the three already to have made the move in July, as the US firm builds its City securitisation offering.

Structured finance partner Theresa Kradjian and corporate tax partner Paul Beausang will join the firm’s London office structured finance team as law firms position themselves ahead of an expected revival of the securitisation markets.

The duo join recently recruited finance partner trio – Matthew Duncan, Julian Goodman and Paul Matthews – also from K&L Gates, taking a five-partner team to make the move so far this summer. The expanded structured finance team will allow the firm to add to its offering in the US, Asia and Europe.

Previously, Kradjian, Duncan and Matthews joined K&L Gates in 2007 in a three-partner hire from Sidley Austin, as K&L boosted its City finance practice. The loss of the five-partner team now leaves a significant hole in the firm’s offering.

Morgan Lewis structured transactions practice leader Reed Auerbach said: ‘It has been our experience that recruiting teams who have practiced together for many years is the most successful way to assist our clients with their increasingly sophisticated global needs. Theresa Kradjian and Paul Beausang bring unique expertise and added depth to our structured transactions team in London and across the firm.’

Kradjian has experience of mortgage-backed and asset-backed securitization and structured finance deals. She also focuses on commercial paper, CLOs, and covered bond transactions.

Beausang has advised clients on corporate tax issues with a particular emphasis on structured finance transactions, big ticket indirect real estate projects, and public/private development partnerships.

In addition, last month [July] Morgan Lewis added DLA Piper’s London head of funds Gawain Hughes. 

‘London is a key area of focus for our clients and our firm,’ said Morgan Lewis Chair Jami McKeon. ‘Our new partners bring to our clients a depth of knowledge and comprehensive experience that complements our market-leading practice in the US.’

jaishree.kalia@legalease.co.uk

Legal Business

Morgan Lewis continues City ramp-up with DLA Piper’s head of funds

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US firm Morgan, Lewis & Bockius has bolstered its funds practice as it continues to build its City presence with DLA Piper’s London head of funds Gawain Hughes – adding to the structured finance trio hired from K&L Gates last week.

Hughes joins Morgan Lewis in London as a partner after having headed up DLA Piper’s investment funds practice for five years and previously leading CMS Cameron McKenna’s funds practice from 2004 to 2010. Before this, he had the same management role at Osborne Clarke for eight years.

His experience has focused on the UK and Europe, acting for institutional fund managers, administrators and investors on all aspects of fund formation, investment and regulation. Recent work includes advising Jones Lang LaSalle Investment Management on the transfer of management mandates and equity/debt interests in eleven real estate funds to a spin-out, Marick Capital; and acting for Harbert Management Corporation on its first European growth debt fund.

Hughes’ arrival builds on the recently recruited finance partner trio – Matthew Duncan, Julian Goodman and Paul Matthews – from K&L Gates in London, as the firm expanded its global structured transactions capability to add to its offering in the US, Asia and Europe.

Morgan Lewis chair Jami McKeon said: ‘His addition further enhances the comprehensive spectrum of services we offer to clients from New York, London, Singapore, and other global financial centres.’

Earlier this year, DLA Piper lost its structured trade and receivables finance head Alex Dell as Mayer Brown boosted its City banking and finance team.

jaishree.kalia@legalease.co.uk

Legal Business

Revolving doors: Magic Circle duo lose international players while Morgan Lewis continues City advance

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The past week has seen Allen & Overy (A&O) and Clifford Chance (CC) lose senior lawyers internationally as Morgan Lewis & Bockius bulked up in London with a three-partner hire from K&L Gates.

In New York, A&O IP partner Paul Keller has left the firm after nearly five years to join Norton Rose Fulbright. Before A&O, Keller was a partner at Wilmer Cutler Pickering Hale and Dorr between 2005 and 2010.

Keller focuses on patent litigation, trade secret litigation, IP due diligence and transactional matters. He has represented clients in all stages of lawsuits from pre-suit investigation to final disposition of jury and bench trials and ITC investigations.

A&O has also seen the departure of banking and finance partner Chris Robertson over in Sydney, who has joined King & Wood Mallesons as a consultant. Robertson has over 20 years’ experience in domestic and international finance, including syndicated and corporate debt transactions, leveraged and acquisition finance and secondary debt trades. Before A&O, he was a partner at Herbert Smith Freehills.

Berkeley Cox, KWM’s managing partner of banking and finance and dispute resolution said: ‘Chris’ appointment is an important and strategic investment in the growth of our deep and genuinely full-service banking and finance practice. Combined with the recent appointment, also in Sydney of Andrew Maynes as a partner, it strengthens our position.’

Over in Germany, Reed Smith launched its European IP practice with the hire of IP partner Anette Gärtner from Clifford Chance. Gärtner will join the recently launched Frankfurt office – which recently opened its doors in June – in August and leaves Clifford Chance’s Munich office where she is currently of counsel.

In her new role, Gärtner will work closely with the firm’s IP team in Munich, led by partner Alexander Klett. Her main focus is patent litigation, in particular cross-border infringement and nullification proceedings. She also provides non-litigious and strategic advice on licensing programmes, as well as employee inventions.

‘Our commitment to growing our full-service German offering continues,’ said Stefan Kugler, Frankfurt and Munich managing partner. ‘We have a well-established IP team in Munich and we’ve made a strong start to our launch in Frankfurt. Both will now work hand-in-hand to support clients across Germany.’

Klett added: ‘The creation of the European Unified Patent System and the Unified Patent Court will impact the practice of patent law and particularly patent litigation in Europe. Therefore, Anette’s arrival not only builds our coverage across Germany, but will also ensure we’re in an even stronger position to support clients across our European platform.’

Meanwhile Morgan Lewis has recruited finance partner trio Matthew Duncan, Julian Goodman and Paul Matthews from K&L Gates in London. The team joins Morgan Lewis as it expands its global structured transactions capability to add to its offering in the US, Asia and Europe.

Duncan advises on banking, capital markets and derivatives matters and has been involved in securitisation since it arrived in the UK in the late 1980s, while Matthews tends to represent funds, investment managers, financial institutions, banks and dealers on derivatives.

Goodman was promoted to partner last year in a 52-strong promotions round. He focuses on real estate and advises clients on property finance loan origination, commercial mortgage-backed security and residential mortgage-backed security transactions.

‘A strong bench of structured transactions lawyers based in our London office is essential to our ability to service clients in the UK, across Europe, the US and Asia,’ said practice leader Reed Auerbach. ‘The addition of Matthew, Julian, and Paul – and ultimately their larger team – keeps us ahead of the game in our ability to serve our clients, particularly hedge funds, as they grow increasingly global.’

Jaishree.kalia@legalease.co.uk

Legal Business

Singapore scramble: Morgan Lewis teams up with Stamford Law to enter market

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Singapore continues to be an attractive legal market for many Western law firms targeting the fast growing Asia-Pacific region with Morgan Lewis & Bockius being the latest to combine with a local outfit – teaming up with Stamford Law Corporation.

The combination comes as the US firm looks to build a disputes ‘powerhouse’ across Asia-Pacific, with an additional focus on transactions for clients investing in Singapore and the wider Asian marketplace.

The new firm will operate under the name Morgan Lewis Stamford and claims it will be ‘the only fully integrated law firm in Singapore that can practice across all legal service areas’. The move adds 80 Stamford lawyers to the US firm, making it the second bulk team hire for the firm in recent months, after the mass-recruit of 750 lawyers and staff from Bingham McCutchen.

The new combination will go into effect 1 April with current senior director of Stamford Law, Suet-Fern Lee, heading the new office as its managing partner.

Stamford Law is ranked second tier for its work in capital markets, corporate and M&A, restructuring and insolvency, and employment in The Legal 500, and is recognised for corporate, commercial, finance and litigation work in Singapore, Hong Kong, China, Japan and India.

‘Singapore is a vibrant and critical business hub that serves as a regional gateway to the broader Asian market,’ said Morgan Lewis chair Jami McKeon. ‘Combining with Stamford Law gives us immediate strength in the region to support the business needs of our multinational clients. It also brings us closer to our increasing number of clients based there.’

Lee added: ‘This combination is unprecedented in extent and structure. It allows us to undertake much larger, more complex and in-depth cross-border legal transactions for many of the largest and most dynamic global corporations.’

Other firms to enter the region recently include Kennedys which bulked up its presence in the city-state through a joint venture with local firm Legal Solutions; Withers which established a formal law alliance with Singapore law firm KhattarWong; and King & Wood Mallesons which also confirmed plans to open an office.

jaishree.kalia@legalease.co.uk