Legal Business

LLP latest: profits fall at Norton Rose Fulbright as Dentons’ top earner sees pay cut

LLP latest: profits fall at Norton Rose Fulbright as Dentons’ top earner sees pay cut

Operating profits at Norton Rose Fulbright’s (NRF) Eurasian business fell 7.5% to £115.8m in the year to 30 April 2017, the firm’s latest LLP accounts have revealed.

The fall in profits for this segment of the business, which includes the legacy Norton Rose operations, came despite a 3% rise in turnover from £444.3m to £457.9m.

It resulted in the firm’s top-earner bringing home £1.4m, 12% less than the year before despite the average number of members remaining essentially flat at 241 compared to 242 at the end of April 2016.

The firm also cut remuneration for management by 13% from £5.94m to £5.16m but spent more on its staff. The number of fee earners was reduced from 1,094 to 1,085 and business services staff from 1,129 to 1,118. But salaries, social security payments and pensions cost the firm 8% more at £213.2m compared to £197.2m in 2015/16.

Fee income grew 3% to £252.4m in the UK and 5% to £118.2m in the rest of Europe, but fell from £78.2m to £77.8m in the rest of the world.

NRF is in the middle of its 2020 strategy, including the implementation of a practice management system from SAP and moves to re-engineer its business for global clients.

Speaking to Legal Business in the summer, global chief executive Peter Martyr – who started his sixth term last month – said the firm was in a ‘transitional phase, a time of transformation and structural changes’.

He added: ‘A lot of what we are doing has been designed to drive efficiency and flexibility. It will take about five years for the strategy to be fully implemented. We are now in year two.’

Meanwhile, Dentons’ UKMEA business also published its LLP accounts, showing the firm’s top earner brought home 15% less than last year even though the firm’s turnover and profits increased slightly.

The highest-earning member’s remuneration was down from £1.3m to £1.1m as the firm grew both the number of its members – from 124 to 129 – and fee-earners – from 435 to 484.

The firm had a total of 929 staff at the end of the financial year, costing it £84.9m, 8% more than last year.

Dentons also slashed the remuneration for its top management team 9% from £4.3m to £3.9m.

These numbers do not include the combination with Scotland’s Maclay Murray & Spens, which went live at the end of October last year and brought the firm’s UK headcount to 200 partners and 600 other lawyers.

Turnover at the firm in 2016/17 was broadly flat at £170.3m compared to £169.2 the year before, while operating profit grew from £47.2m to £48.2m.

Financial results published in the summer showed a 9% fall in the LLP’s profit per equity partner to £481,000. UK and Middle East chief executive Jeremy Cohen admitted at the time the firm would have ‘preferred to have a better profitability’ and pointed to a ‘fairly flat year’ in the UK market.

Both NRF and Dentons had less than half the cash at the end of April 2017 compared to the year before. The former had £25m in the bank and in hand compared to £56.3m the year before, the latter £7m compared to £15m.

marco.cillario@legalbusiness.co.uk

Legal Business

Deal Watch: Simpson, CC and NRF line up as business data firms generates big ticket double

Deal Watch: Simpson, CC and NRF line up as business data firms generates big ticket double

As January draws to a close the deal market continues its robust run, with Simpson Thacher & Bartlett leading the advisers on Blackstone’s headline-grabbing Thomson Reuters carve-out while City leaders deploy for Informa’s £3.9bn takeover of UBM.

Simpson, Dechert and Norton Rose Fulbright (NFR) won the lead mandates on a Blackstone-led bid to acquire the data analytics business of Thomson Reuters in a deal valued at $20bn. The bid, confirmed on Tuesday (30 January), is one of the largest ever private equity-backed acquisitions and Blackstone’s largest outside the real estate sector.

Simpson is advising the consortium headed by long-standing client Blackstone, which also includes Singaporean sovereign wealth fund GIC and Canadian pension fund CPPIB. A New York-based Simpson team includes partners Wilson Neely, Elizabeth Cooper and Mike Wolfson (M&A) and Lori Lesser (IP).

Thomson Reuters, advised by Torys and Wachtell, Lipton, Rosen & Katz, is selling a 55% majority stake in its financial and risk (F&R) business in return for gross proceeds of $17bn. The company will keep a 45% stake in the business, as well as full ownership of its legal, tax & accounting and Reuters news operations. As part of the deal, Reuters will supply news to the F&R business for $325m-a-year under a 30-year contract.

NRF, meanwhile, advised Thomson Reuters Founder Share Company, fielding a team that included New York corporate partner David Barrett and London-based IP head Mike Knapper. The London team included corporate partner Jon Perry as well as senior lawyers Clementine Hogarth and Jon Perry. Dechert is advising GIC out of New York with a team led by corporate partners Mark Thierfelder and Jonathan Kim.

The business publishing sector in January generated another multi-billion pound deal with Informa finalising its recommended cash and share offer on its £3.9bn acquisition of listed events business UBM. CC acted for Informa, fielding a team under partners Katherine Moir and Steven Fox, opposite Linklaters duo Michel Honan and Iain Fenn for UBM. CC has acted for Informa on numerous occasions previously, including on its proposed $1.5bn acquisition of Penton Business Media in 2016.

The takeover is designed to create an events business with revenues of £2.6bn a year. Ashurst is advising Centerview Partners, the financial adviser to Informa, with a team led by corporate partner Tom Mercer and banking partner Tim Rennie. UBM is currently the largest dedicated B2B events business in the world, owning and operating more than 300 exhibitions and events.

Despite unease about Brexit, 2018 has gotten off to a strong start for deal counsel, with a string of marquee bids already announced as a depressed sterling and robust economies in the US and the Eurozone underpin M&A activity.

nathalie.tidman@legalease.co.uk

Legal Business

Bumpy start to 2018 for Norton Rose Fulbright as Japan corporate head departs and two offices close

Bumpy start to 2018 for Norton Rose Fulbright as Japan corporate head departs and two offices close

While 2017 saw Norton Rose Fulbright (NRF) further expand its global footprint through two mergers in the US and Australia, the new year has begun with the firm losing out internationally with Paul Hastings recruiting its Japan head of corporate and NRF closing its Abu Dhabi and Kazakhstan offices.

Paul Hastings confirmed Eiji Kobayashi has joined its Tokyo office today (12 January), with his four-person team, including two associates, expected to join him in the coming weeks.

Kobayashi joined NRF at the beginning of 2015 from Japan’s largest firm, 500-lawyer Nishimura & Asahi, where he co-lead the cross-border transactions group. He went on to head up NRF’s corporate, M&A and securities operations in the country. A US-qualified lawyer, he previously worked in the Houston and Tokyo offices of Skadden, Arps, Slate, Meagher & Flom. He typically advises Japanese corporates on outbound investment and M&A deals.

He said Paul Hastings’ ‘strong cross-border track record and local expertise in Asia’ attracted him to the firm: ‘I am keen to help the firm’s clients effectively navigate compliance and investigations challenges and to seize opportunities from cross-border mergers and acquisitions.’

Including the new hires, Paul Hastings will have 13 lawyers including four partners in the Japanese capital, all in corporate save for one partner and one associate in litigation.

NRF also closed its Kazakshtan base at the beginning of the year after Almaty-based partner Yerzhan Kumarov established a domestic shop, KM & Partners.

‘We mutually agreed that a full-service offering was no longer required by Norton Rose Fulbright in Kazakhstan,’ said Martin Scott, managing partner of Europe, Middle East and Asia. A spokesperson for the firm added the firm will maintain an unspecified ‘working relationship’ with Kumarov.

NRF also announced this week that it had shut its Abu Dhabi office in December last year, moving partner Paul Mansouri and the other two lawyers based there to Dubai. One of the business services staff was also moved to Dubai, while two other support staff were made redundant.

‘In the past few years, the majority of our activity has increasingly regionalised,’ according to head of Middle East Deirdre Walker. ‘As a result it makes better business sense to consolidate our resources in Dubai. Our clients want simplified access to our firm across the Middle East. This development addresses their needs allowing us to support them with their opportunities across the region.’

NRF’s move to pare back its Middle East operations has been a relatively common trend among global law firms that have grown like weeds internationally, creating a barrage of offices that very often do not live up to their initial promise. Major law firms have reacted to losses in the Middle East after overinvesting during the oil boom in the 2000s, with Abu Dhabi in particular a primary target. In 2015 and 2016, Simmons & Simmons, Latham & Watkins, Vinson & Elkins and Herbert Smith Freehills closed their doors to focus on Dubai, just 100km away.

These developments follow an expansive year for NRF, in which completed two mergers – with Manhattan-headquartered Chadbourne & Parke  and Australia’s Henry Davis York . These were not without fallout though, with four infrastructure and energy partners leaving in the summer to establish Pinsent Masons’ Perth office .

marco.cillario@legalbusiness.co.uk

Legal Business

NRF appoints first female chair as City veteran Parish steps down

NRF appoints first female chair as City veteran Parish steps down

While Norton Rose Fulbright’s (NRF) chief executive Peter Martyr is closing in on two decades leading the firm, its C-suite will see a new face with Tricia Hobson becoming its first female chair and Stephen Parish stepping down as EMEA chair next spring.

NRF announced that Australia head Hobson will take over as global chair at the end of the year from the London-based Parish.

Parish will continue as chair of NRF’s operations in Europe, Middle East and Asia, a role where he was elected for a third term in 2015 . There will be a fresh election for the EMEA role in early 2018, though Parish has confirmed that he will not stand again.

Described by the firm as an ‘ambassadorial leadership role’, the global chair focuses on improving collaboration and client relationship among NRF’s various verein members, as well as promoting diversity and inclusion initiatives.

‘The main task is to be the external face of NRF from an international perspective,’ Parish told Legal Business. ‘There is quite a bit of travelling around the world to meet clients and preaching the good news about what NRF is doing. It is also about being the internal face, going around the various regions, telling our people what we are doing and how they can help with our development.’

The global chair role was first established in 2009 and held by Parish until 2011, when it was turned into a one-year role taken up on a rotational basis by the firm’s regional heads – along with Europe and Australia, the firm has a chair for its American and Canadian businesses.

The Sydney-based litigator Hobson was named in the role a few days after NRF’s merger with mid-tier Australian practice Henry Davis York went live on 1 December .

A veteran litigator, Hobson recently defended three former directors of QrxPharma in a lawsuit brought by a group of shareholders on alleged regulatory non-disclosure.

‘It is fantastic that we are able to have a woman as global chair,’ continued Parish. ‘One of the things I have been keen to promote during my time as chair is diversity, and gender diversity is one of the most important aspects of it.’

Martyr, who was in October confirmed for a sixth term leading NRF , said that Hobson’s appointment demonstrated ‘the importance of the Asia Pacific region to the development of our global business’. ‘Tricia’s knowledge and extensive experience of working within the global insurance industry will be invaluable as we look to grow our practice.’

The changes in leadership comes amid a busy time for NRF. Aside from the Henry Davis deal, the top 20 Global law firm in June went live on its merger with New York’s Chadbourne & Parke .

Marco.cillario@legalbusiness.co.uk

Legal Business

Martyr closes in on 20 years at helm as Norton Rose Fulbright chief gets a sixth term

Martyr closes in on 20 years at helm as Norton Rose Fulbright chief gets a sixth term

Having already been one of the longest-serving leaders at a major City law firm, Peter Martyr looks to be taking a crack at the industry’s record books after having been re-appointed for a sixth term as chief executive of Norton Rose Fulbright (NRF).

A spokesperson confirmed that Martyr will begin his new three-year term in January 2018, taking him until the end of 2020, by which point he will have had approaching 20 years at the head of the firm.

Partners were told of the appointment at a meeting in June but NRF has been unusually coy about the mechanics of the process, refusing to say if there was a vote for the new term. Martyr was formally elected to his fifth term in 2014.

Martyr was first appointed at the head of legacy Norton Rose in 2002 , becoming the architect behind the transformation of the City firm from ailing Magic Circle challenger into global giant via a series of mergers in the US, Australia, Canada and South Africa. The 4,000-lawyer firm last year turned over $1.685bn.

While Martyr is given huge credit for re-inventing the 220-year old institution, his long leadership has garnered some criticism from partners regarding lack of consultation and transparency… claims that will be fuelled by caginess over his re-appointment.

NRF has nevertheless been active again globally this year, securing mergers in the US with a takeover of Chadbourne & Parke and Australia’s Henry Davis York, giving the combined firm 160 partners in the country.

The firm deploys a verein structure which means that operates as a series of globally separate profit centres rather than a fully integrated partnership.

Martyr’s re-appointment means he will fully oversee the implementation of its 2020 strategy, which includes a focus on the implementation of a cutting edge practice management system from SAP and moves to re-engineer its business for global clients.

Speaking to Legal Business in July, Martyr said the firm was in a ‘transitional phase, a time of transformation and structural changes. A lot of what we are doing has been designed to drive efficiency and flexibility. It will take about five years for the strategy to be fully implemented. We are now in year two.’

marco.cillario@legalbusiness.co.uk

For more analysis of Martyr’s leadership, see ‘On the bus – Inside the Norton Rose Fulbright masterplan’ (£)

Legal Business

Expansive Pinsents ships in four Norton Rose Fulbright partners for third Oz office launch

Expansive Pinsents ships in four Norton Rose Fulbright partners for third Oz office launch

Pinsent Masons is continuing its sustained international expansion drive with a new Australian arm in Perth and the hire of four infrastructure and energy partners from Norton Rose Fulbright (NRF).

The UK law firm’s new Perth branch, to open in the autumn, will be its third Australian office after Sydney and Melbourne and its fifth international launch in the last 18 months.

Legal Business

Cog on the Tyne – Norton Rose expands Newcastle legal services hub following successful trial

Cog on the Tyne – Norton Rose expands Newcastle legal services hub following successful trial

After a year-long trial, Norton Rose Fulbright (NRF) is following up on its recent transatlantic merger with further investment in its Newcastle legal services hub.

Supporting the firm’s operations globally, the Newcastle operation will move to larger premises on 1 November amid plans to increase headcount in the North East from 28 to 100 over the next two to three years.

The Newcastle centre launched as a one-year trial in 2016 that saw 25 paralegal staff and three associates provide legal support work across all practice groups. The team has also trialled the use of new legal technology, as well as collecting and analysing data for research.

Martin Scott, managing partner of Norton Rose Fulbright, Europe, Middle East & Asia, said expanding the team outside of London would allow the firm ‘to trial emerging technology and working practices, including agile working, in a structured way’.

Kiran Radhakrishnan, head of the Newcastle hub, told Legal Businessthe firm does not plan to move any employees from London and would prefer to recruit locally. He added that the pace of the team expansion will depend on demand, which at the moment ‘is looking very good’.

‘With its universities, the local talent pool and its growing reputation for technology and innovation, Newcastle seemed the right place to establish the hub. We ran a pilot to see whether the concept worked for us and that’s proved successful: demand is rapidly increasing, so the team needs to expand.’

NRF has signed a ten-year lease with Northumberland Estates for the new 6,950 sq ft premises in Quayside and was supported in the search by Invest Newcastle, a scheme devised by Newcastle City Council to support investment and job creation in the area.

The firm has focused heavily on efficiency in recent years and it is seen as a key plank of its strategy. The drive was illustrated by plans to relocate 170 operational roles, 5% of the global workforce, to a service centre in Manila, in a move announced in May last year. It is only the latest firm to focus on removing legal costs by enhancing efficiency through legal service centres, including Allen & Overy, Herbert Smith Freehills, Freshfields Bruckhaus Deringer and Hogan Lovells, among other Global 100 rivals.

Speaking to Legal Business this summer, global chief executive Peter Martyr said: ‘Efficiency is a big trend: that is why we are investing to get a platform that will make us more efficient. Everyone is focusing on that more than ever, because clients are becoming more demanding. The overall size of the legal market has not increased, so to be competitive you have to be more efficient.’

marco.cillario@legalbusiness.co.uk

For more on culture and strategy at Norton Rose Fulbright, read ‘On the bus – Inside the Norton Rose Fulbright masterplan’

Legal Business

‘A stellar team’: Pinsents to open in Perth with Norton Rose Fulbright partners

‘A stellar team’: Pinsents to open in Perth with Norton Rose Fulbright partners

Pinsent Masons is continuing its extensive international expansion of late with a new Australian office and the hire of four infrastructure and energy partners from Norton Rose Fulbright.

The firm’s new Perth base, to open in the autumn, will be its third Australian office after Sydney and Melbourne and its fifth international launch in the last 18 months.

Norton Rose Fulbright’s Australian arm will see the departure of four partners, comprising construction and engineering specialists Rob Buchanan and Matthew Croagh, projects partner Adrienne Parker and arbitration expert Bill Ryan.

The firm’s Australian head David Rennick said: ‘In less than two years, Pinsent Masons has established itself among the preeminent infrastructure firms in Australia and enhanced its reputation across the Asia-Pacific region. Our strong growth and high calibre of work is being recognised and we are delighted to be able to attract a stellar team of fellow specialists to join us in expanding our business into Perth. The appointments also present an opportunity to expand further into the energy sector.’

Norton Rose Fulbright Australia’s managing partner Wayne Spanner connected the partners’move to Pinsents with NRF’s imminent combination with Australian law firm Henry Davis York, announced in June and expected for the second half of the year.

‘Some people will want to adopt a different course and we wish them well,’ he said. ‘This sort of thing is a common occurrence in mergers.’

He added: ‘We’ve had a strong, positive response from clients during our many conversations with them about what the combination would offer their organisations.’

Pinsents launched in Australia in 2015 and has since acted on infrastructure and energy mandates, including the AUD$15bn Melbourne Metro Project. The firm also advised First Solar on its project finance acquisition and development of a 48MW solar power plant and Samsung C&T on the AUD$2bn Roy Hill mining dispute.

The firm’s legal resourcing hub Vario will also begin operating in Australia, its first base outside the UK.

Pinsent Masons has invested heavily in its international operations in 2017. In June, the firm announced plans to launch in Dublin and the acquisition of diversity and inclusion specialist Brook Graham. In May, it entered Spain and South Africa with new offices in Madrid and Johannensburg.

In the last 18 months Pinsents has also expanded in Germany, opening an office in Dusseldorf and acquiring boutique Munich firm Mayrhofer & Partner.

The 1,600-lawyer firm has also strengthened its global teams through a spate of laterals this year: it hired three partners from Gowling WLG to bolster its Munich office in February and a new head for its corporate offering within the financial sector, Hammad Akhtar, from Ashurst in January.

When the Perth office opens, the firm will have 24 offices worldwide.

marco.cillario@legalbusiness.co.uk

Legal Business

US growth: Norton Rose Fulbright joins up with Chadbourne & Parke

US growth: Norton Rose Fulbright joins up with Chadbourne & Parke

Norton Rose Fulbright has completed its combination with Manhattan-headquartered Chadbourne & Parke, strengthening its North and Latin American presence with a focus on the financial sector, its chief executive said.

The combination, which completed on Friday (30 June) following a delay arising from several material conflicts, will make Norton Rose Fulbright one of the 25 largest law firm offices in New York City.

The global firm now counts 1,000 lawyers in the US, of which more than 300 are based in New York.

The firm now has around 4,000 lawyers in 59 offices across 33 countries. The combination will in particularly improve its capabilities in litigation, white collar disputes, tax, Latin American finance and infrastructure work.

The combination will also strengthen Norton Rose Fulbright’s operations in project finance, creating what global chief executive Peter Martyr described to Legal Business as ‘probably the strongest project practice in the world’.

Martyr added that the reason for the combination was simple: ‘We wanted to grow our strength in the US, they wanted a much bigger international position. We both are strong in energy, infrastructure and finance and our strategies are similar: this made the proposition particularly attractive.’

He said the firm’s reach would extend to Mexico City and Sao Paulo.

Andrew Giaccia, former managing partner of Chadbourne & Parke, is now vice chair of Norton Rose Fulbright’s US management committee.

marco.cillario@legalbusiness.co.uk

Legal Business

Norton Rose Fulbright delays Chadbourne merger due to a ‘few material conflicts’

Norton Rose Fulbright delays Chadbourne merger due to a ‘few material conflicts’

Norton Rose Fulbright (NRF) has delayed its US merger with New York firm Chadbourne & Parke due to a ‘few material conflicts’.

Peter Martyr, global chief executive of NRF, said today in a statement that the combination process included an in-depth review of potential conflicts and as a result some material conflicts had been identified which the firm was working to resolve.

‘We expect our proposed combination with Chadbourne & Parke to enhance our capabilities and add tremendous value to our collective clients.  As we are in the process of working through the technicalities of bringing both firms together, it is premature to discuss any further at this stage. An update will be provided in due course,’ he said.

The merger with the $250m US firm will be NRF’s second North American merger in two years after NRF first entered the US through its combination with Texas practice Fulbright & Jaworski.

The deal will add to NRF’s $1.7bn top line and take the firm up to almost $2bn in total revenue worldwide.

Chadbourne is centred in New York, with a presence in Washington DC, Los Angeles, Mexico City, Sao Paulo, Moscow, Istanbul, Dubai and Johannesburg. It has a small insurance-focused offering in London.

Chadbourne has been on the merger hunt before, entering into talks with Pillsbury Winthrop Shaw Pittman in 2015, before talks ultimately fell through later that year.

Meanwhile yesterday (13 June), partners at NRF and Australian law firm Henry Davis York formally agreed to merge, less than a week after it was confirmed they were in late-stage discussions.

The merger will give the combined firm 160 partners in Australia with offices in Brisbane, Canberra, Melbourne, Perth and Sydney. It is expected the merger will go live later this year.

kathryn.mccann@legalease.co.uk