Legal Business

City revenues shoot up 16% after another bumper year for Quinn Emanuel

City revenues shoot up 16% after another bumper year for Quinn Emanuel

Disputes heavyweight Quinn Emanuel Urquhart & Sullivan has continued its impressive run of form in London as City revenues for 2018 shot up 16% to £83.6m.

The US-bred firm also saw profits rise 13% to £59.3m. As a result, Quinn’s London profit margin is consistent with the business globally at 70%. Quinn London co-managing partner Richard East told Legal Business: ‘We had a strong year last year after we added lateral partners and launched some key new practice areas, such as contentious tax and construction arbitration. To be up 16% with the same number of people was very pleasing.’ 

The firm unveiled an outstanding set of financial results last January, including a striking 61% growth in City revenues .

A number of key cases settled in Quinn’s favour in 2018, with the $3bn Court of Appeal Eurobonds dispute between Ukraine and Russia being a major highlight. Quinn successfully represented Ukraine in the case, instructing Fountain Court Chambers’ Bankim Thanki QC and Blackstone Chambers’ Ben Jaffey QC.

The firm also struck a big victory against Banco Popular in October 2018, representing a number of clients suing the bank for a loss of shares following its £1 sale to Santander in 2017.

The robust financial results come from a UK disputes market that appears to have softened somewhat in the last 12 to 18 months. As an example, after similarly above-trend revenues and profits in 2016/17, Stewarts saw turnover dip by over 20% to £62.4m after a swing in contingency fees.

However, 2018 was not an unmitigated success for Quinn in the UK. The firm took a substantial PR hit last May when London partner Mark Hastings was sacked following an investigation into ‘inappropriate behaviour’. Hastings was dismissed following an independent probe by Alison Levitt QC, instigated by allegations by two members of staff.

Legal Business

Global 100 ten-year view: Bad timing

Global 100 ten-year view: Bad timing

In the last boom year in 2008 before the global financial crisis took its toll, the picture was rosy for UK-bred law firms. Riding high on an exchange rate that was more than two dollars to the pound, Clifford Chance (CC) topped the table with revenues of nearly $2.7bn, heading a list of seven $2bn+ firms, of which four were Magic Circle and another, DLA Piper, the result of a headline-grabbing UK/US tie-up.

Buoyed by their own success, the messages from the City elite were naturally upbeat. Not least because those firms felt that with the globalisation of legal services in full swing and the focus of clients shifting away from New York and towards markets like China and India, their attractiveness to US suitors had never been greater. ‘We want to be the number one global law firm and, without a strong US component, we won’t achieve that,’ said Linklaters’ then firm-wide managing partner Simon Davies. Freshfields Bruckhaus Deringer’s chief executive at the time, Ted Burke, echoed the point: ‘We’ve never seen so much interest in us from New York firms.’

Legal Business

Associate pay: Freshfields joins salary race as global firms jostle for talent in US

Associate pay: Freshfields joins salary race as global firms jostle for talent in US

More details are emerging on associate pay at Magic Circle firms as Freshfields Bruckhaus Deringer has joined the list of firms to announce increased salaries for US associates, as competition to recruit top lawyers intensifies.

The move by Freshfields will see the firm match the rates set by Milbank Tweed Hadley & McCloy, which set the standard for raising the starting salary for new lawyers two weeks ago, with Freshfield’s US associates now starting on $190,000 and rising to $330,000 in their eighth year.

Despite matching Milbank’s rates, pay is below that the rates announced by Magic Circle counterpart Clifford Chance (CC), which will pay also junior associates $190,000 but this will eventually rise to $350,000 for senior associates. CC also announced summer bonuses starting at $5,000 for junior lawyers rising to $25,000 associates from the 2009 class and more senior.

The issue of associate pay has seen firms begin to jostle with each other, as CC’s rates closely-matched those of Quinn Emanuel Urquhart & Sullivan, which announced a new scale of $190,000 for first year associates to rising to $340,000 for senior associates, as both firms surpass the levels announced by Milbank for mid-level and senior associates.

In addition, Quinn announced a pay hike for junior London lawyers, which sees associates start on £125,000, potentially rising to £245,000 for senior associates. Despite being below New York rates, Quinn’s London salary announcement means a sharp hike for associates in many bands, particularly in the class of 2013, who will see a pay increase of £30,000 from £155,000 to £185,000.

The latest pay rises come as City firms wrestle with fee pressure from core blue-chip clients, while expansionist US firms continue to attract Magic Circle talent and inflate the market rate for the best deal lawyers. With good growth predicted for Magic Circle firms this year, the associate pay increases could go some way towards steering young talent in the direction of the established City players as US firms continue to stretch London salaries.

Legal Business

Boutiques: Highly evolved

Boutiques: Highly evolved

With the disputes market evolving and clients becoming more discerning, it has been a phenomenal ten years for boutique law firms focused on litigation. The pressure on generalist, mid-market dispute teams has played towards this dynamic, leaving true contentious specialists increasingly going head-to-head with the traditional London elite.

A glance at the financial results of some of the main litigation specialists – Stewarts, Signature Litigation and Quinn Emanuel Urquhart & Sullivan – shows dramatic increases in revenue amid a string of major cases.

Legal Business

The International Arbitration Summit: Trusting the cowboys

The International Arbitration Summit: Trusting the cowboys

I am going to take a narrow view of a narrow subject: less of a keynote speech, more of a keyhole speech. Indeed, it is through a keyhole that I will ask you to join me in a voyeuristic peer into the room of what I call broken arbitrations, the room into which I have stuffed myriad examples of how the process of arbitration can too easily become corrupted.

And ‘keyhole’ is apt, in that privacy and confidentiality – and I hope we understand that they are very different things – prevent the door to arbitration from ever fully opening. It is merely through a keyhole that we form our impressions and understandings of what happens in actual cases.

Legal Business

Quinn Emanuel sacks City partner after inappropriate conduct investigation

Quinn Emanuel sacks City partner after inappropriate conduct investigation

In the latest of a string of allegations of bad behaviour facing the legal industry, disputes leader Quinn Emanuel Urquhart & Sullivan has sacked City partner Mark Hastings after an investigation into ‘inappropriate behaviour’.

The US-based law firm today (10 May) issued a statement regarding allegations of ‘inappropriate behaviour’ made by two staff members against Hastings (pictured) in February. Quinn Emanuel suspended Hastings in response and commissioned an independent investigation, carried out by Alison Levitt QC of Mishcon de Reya.

Levitt’s findings were presented on 26 April, and Quinn subsequently expelled Hastings without compensation on 8 May.

Quinn’s statement notes that the firm has ‘not sought, nor will we seek, any form of non-disclosure agreement from the complainants in relation to the allegations that they have made’.

The statement adds: ‘Quinn Emanuel takes allegations of the nature made against Mr Hastings extremely seriously. We will not tolerate abusive behaviour from anyone within the firm.’

It is an ignominious departure for the fraud specialist, who had joined the firm in December 2016 from Addleshaw Goddard. Trained at Herbert Smith, Hastings boasted high-profile mandates such as serving as the lead partner for Boris Berezovsky in several cases, including a $6bn commercial court claim against Chelsea FC owner Roman Abramovich. He was known to be one of Addleshaws’ top billers.

Though the precise nature of the allegations is unknown, the expulsion comes after six months of uncomfortable headlines for the legal industry regarding claims of lax handling of abusive behaviour. The profession has also been criticised for its role in drafting non-disclosure agreements that have helped to keep a lid on historic allegations across many industries.

Legal Business

Quinn Emanuel lays down outstanding marker with 61% surge in City revenue and profit

Quinn Emanuel lays down outstanding marker with 61% surge in City revenue and profit

Disputes powerhouse Quinn Emanuel Urquhart & Sullivan has seen London revenues rise by a startling 61%, with net profit increasing by the same margin.

The US-based player’s revenue stands at £71.9m, up from last year’s figure of £44.8m. Net profit also rose from £32.6m to £52.6m. As a result, the firm’s profit margin is now a staggering 73%.

The results are even more impressive considering that the office’s headcount has expanded modestly since January 2017, with the number of partners remaining static at 18. However the number of other lawyers in the office has grown from 33 to 47.

Richard East, co-managing partner of Quinn’s London office (pictured), commented: ‘The results are very pleasing and represent serious and significant contributions from all our London partners, including the new joiners. We have also achieved these results despite recent (albeit unusual) partner losses and the fact that we have had overlapping lease obligations on two offices. But we are now focused on 2018 and the challenge for us now is to beat this and grow again.’

As alluded to by East, Quinn saw three partners leave during 2017, despite going the previous nine years with no partner exits. In January last year, Martin Davies joined rival US pace-setter Latham & Watkins. Davies had previously acted on the Royal Bank of Scotland’s £4bn rights issue litigation .

In May last year, Quinn saw litigation and arbitration specialist Paul Friedman join national firm Gunnercooke. Friedman, who spent the majority of his time at Quinn working in the Middle East, had previously spent nearly 13 years of head of banking disputes and commercial fraud at Clyde & Co.

The third departure of the year came in July, when Latham returned to Quinn for David Berman. Berman was appointed as head of Latham’s financial services and regulatory division.

Despite the exiting trio, 2017 did see Quinn hire Clifford Chance’s touted tax investigations head Liesl Fichardt.

The results represent an eye-catching return for the high-performing City practice of this bullish disputes firm, which posted 41% revenue growth in 2015 and 33% in 2014, although this growth slowed slightly in 2016 by its own very high standards, at 21%, while profits remained steady.

Legal Business

Quinn Emanuel breaks tradition as merger talks with DC disputes leader Williams & Connolly begin

Quinn Emanuel breaks tradition as merger talks with DC disputes leader Williams & Connolly begin

US litigation powerhouse Quinn Emanuel Urquhart & Sullivan has entered into merger discussions with Washington DC disputes shop Williams & ConnollyLegal Business can reveal.

Negotiations between the two began in the past month. The tie-up would mark Quinn’s first full-scale merger with the aim of complementing its existing white-collar and product liability practices, as well as its general contentious coverage in the DC area.

Quinn Emanuel managing partner John Quinn said: ‘It is true that we had a meeting on this subject but it was very preliminary and we don’t know what, if anything, will come of this.’

Williams & Connolly now comprises over 300 lawyers and ranks 94th in the latest Global 100 with a turnover of $420m and profit per equity partner standing at $1.6m. In contrast, Quinn – the second-most profitable law firm in the world, which has made a virtue of being one of the premier independent disputes specialists – has a PEP of more than $5m against global revenues of $1.2bn.

A tie-up would give Williams & Connolly lawyers access to Quinn’s expanding international footprint as well as US offices in Chicago, Houston, Los Angeles, New York, San Francisco, Seattle and Silicon Valley. A union also would be a rare marriage of leading US law firms and further cement the dramatic rise to global prominence over the last decade of the iconoclastic Quinn Emanuel.

Williams & Connolly is ranked as tier 1 by The Legal 500 in commercial disputes and product liability, and is listed as tier 2 in corporate investigations and white-collar criminal defence.

It was founded in 1967 by illustrious litigator Edward Bennett Williams and his former student Paul Connolly. Since its formation, it has gained reputation for representing high-profile political clients such as Hillary Clinton, Barack Obama and Tony Blair.

In May, media reports claimed that Williams & Connolly lawyer Brendan Sullivan Jr had made it onto a four-strong shortlist to represent Donald Trump against investigations into alleged Russian involvement in the 2016 US presidential election. The firm can also boast a cross-sector client base including Pfizer, Sony, Samsung, HSBC, Bank of America and Google.

Williams & Connolly declined to comment.

Legal Business

Latham swoops on Quinn Emanuel for high-profile financial regulatory hire Berman

Latham swoops on Quinn Emanuel for high-profile financial regulatory hire Berman

Latham & Watkins has appointed head of financial services and regulatory David Berman from Quinn Emanuel Urquhart & Sullivan’s London office, returning to the firm for the recruit six months after hiringlitigation partner Martin Davies.

Berman only joined Quinn in January this year and was previously Macfarlanes head of financial services regulation and a partner for nearly eight years. In his early career, he was a managing director at an global investment bank where he held senior legal, compliance and regulatory roles.

Berman starts at Latham on 1 August.

His practice focuses on representing financial institutions on regulatory, compliance and governance-related matters and advisingbuy-side and sell-side clients on transactions and remedial work. Berman’s recent work includes advising on the Financial Conduct Authority’s Senior Managers and Certification Regime and the Market Abuse Regulation.

Latham’s London managing partner Jay Sadanandan said Berman was a perfect fit for the firm’s strategic growth in London and the continued expansion of Latham’s global financial services regulatory practice.

Global co-chair of Latham’s financial regulation practice Rob Moulton said: ‘We set our sights on establishing the preeminent global practice with the ability to tackle the most complex regulatory matters of our financial institution clients. David has a tremendous market standing and will be a great addition to our existing strong team.’

Since hiring Ashurst’s global co-head of financial regulation in January this year, Latham has been expanding its global financial regulation practice, most recently hiring Linklaters’ financial regulatory partner Daniel Csefalvay, after a decade working for the Magic Circle firm.

Latham now more than 2,400 lawyers in its offices located in Asia, Europe, the Middle East and the United States.

This year, after a period of nine years with no partner exits, Quinn lost London-based litigator Paul Friedman to national firm Gunnercooke, alongside Latham hiring Davies in the firm’s litigation practice.

Quinn has also hired in Europe. Stephen Mavroghenis and Miguel Rato joined the firm’s Brussels office from Shearman & Sterling. Mavroghenis was previously the practice group leader of Shearman’s worldwide antitrust practice while Rato was a litigation partner focused on competition law issues.

In recent years, Latham made a string of high-profile City appointments including Slaughter and May finance partner Sanjev Warna-kula-suriyaAllen & Overy banking head Stephen Kensell and most recently Olswang’s commercial litigation partner Ian Felstead.

London office co-head of Quinn Emanuel Richard East told Legal Business: ‘David has unfortunately decided that his practice is best suited to a full service law firm. We are very disappointed to see him go, but wish him very well.’

‘He was the first partner we’d hired in London from a non-contentious background as we viewed his financial services advisory practice as being a good fit with our existing buy side litigation expertise. We thank him for having the courage and the entrepreneurial flair to give it a go.’

Legal Business

Court rejects landmark application for £14bn class action against MasterCard in Freshfields win

Court rejects landmark application for £14bn class action against MasterCard in Freshfields win

The Competition Appeal Tribunal (CAT) has today (21 July) ruled against certifying one of the first US-style £14bn opt-out consumer damages antitrust class actions, against payment giant MasterCard, in what would have been the UK’s largest claim.

CAT president Mr Justice Roth ruled against allowing the collective proceedings application on grounds that potentially disparate groups of claimants could not form a single class action for the purposes of this claim, regardless of the means of payments used or the retailer from whom the purchase was made.

The judgment is a win for Freshfields Bruckhaus Deringer, which represented MasterCard.

The applicant, former UK chief financial services ombudsman Walter Merricks, sought damages for 46m consumers in the UK relating to MasterCard’s multilateral interchange fees (MIFs) charged to retailers. Quinn Emanuel Urquhart & Sullivan represented Merricks’ claim, funded by Burford Capital for up to £43m, with £10m to cover MasterCard’s costs if the claim failed.

In what would have been the first collective damages action of its kind, Roth ruled that even if loss had been suffered and could be estimated across the whole class, there was no way of ensuring that a class member would receive distribution of an amount compensating any actual loss suffered.

The CAT concluded, however, that if it had allowed the collective proceedings to proceed, it would have authorised Merricks to act as class representative.

The application was one of the first to be filed under the Consumer Rights Act 2015, designed to allow US style ‘opt-out’ group damages claims to be brought in the UK CAT.

The damages claim bid related to consumers who bought purchases over an 18-year class period from 1992 to 2008 and to whom retailers allegedly passed on MasterCard’s MIF overcharges.

The claim, if certified, would have been the first major case under the new framework for class action law suits on behalf of a large number of claimants.

In a statement, Merricks said he was now considering with his advisors and funders if he could appeal. He said he was ‘surprised and disappointed’ that the CAT rejected his application to bring collective proceedings against MasterCard.

‘The new collective action regime was introduced by the Consumer Rights Act to overcome the difficulty for consumers seeking to recover losses from competition law infringements. I am concerned that this new regime, designed to benefit consumers, may never get off the ground’, he said.

‘It is disappointing that the Tribunal determined that even if I could identify accurately the loss suffered by all 46 million consumers, the fact that I could not precisely calculate the individualised loss for each of those 46 million consumers, means consumers should get nothing at all,’ said Merricks.

The case followed an European Commission (EC) probe into MasterCard. Its 2007 decision found MasterCard overcharged MIFs and lacked ‘procompetitive benefits or proven efficiencies’.

Marc Israel, an antitrust partner at White & Case, said: ‘This is a real setback for the collective proceedings regime. This is the second case that has failed, following Dorothy Gibson in the mobility scooters cartel case earlier this year.’

Israel added that the ruling ‘may well deter other potential class representatives from seeking to act on behalf of potential claimants and incurring the time and expense in seeking to become a representative in such cases.’

Covington & Burling partner Elaine Whiteford told Legal Business that ‘from a perspective of funding of claims, the judgment is encouraging as it clarifies a funders’ uplift can be paid from undistributed damages’, one of MasterCard’s arguments, which would have made funding much more difficult had it succeeded.

‘However, given this is a new regime, I am slightly surprised the judge didn’t invite the applicants to provide further detail in the first instance, as it did in the previous application under the new regime.’

Freshfields’ Jon Lawrence told Legal Business that the tribunal accepted ‘that the regime is designed to compensate individuals. In this case there was no way to estimate the loss suffered by any one individual.’

A Freshfields spokesperson described the judgment as ‘an important development for the UK’s collective actions regime,’ adding that ‘additional clarity has been given as the criteria to be satisfied and the evidence required to grant certification of collective actions in the UK. The judgment also addresses the terms of funding arrangements that can be used by those bringing collective actions’.

Quinn partners Boris Bronfentrinker and Kate Vernon, instructed Paul Harris QC of Monckton Chambers and Marie Demetriou QC of Brick Court Chambers.

Freshfields’  Jon Lawrence, Mark Sansom Jonathan Isted, Mark Sansom and Nick Frey, instructed Brick Court’s Mark Hoskins QC, Ben Williams QC, and Tony Singla.

Recent cases rooted in the 2007 EC decision against MasterCard include Sainsbury’s claim against MasterCard in 2016, an antitrust damages action which resulted in a £69m award and substantial interest after the CAT ruled its UK and Irish interchange fees were unlawful.

This year, Humphries Kerstetter also launched a series of new £300m competition damages claims relating to alleged losses against MasterCard and Visa, on behalf of a group of 27 UK high street companies, related to their MIFs, which form part of ‘merchant service charges’ retailers pay banks on card transactions made in store or online.

Earlier this year, however, in a separate claim by a group of UK high street retailers against the company, the High Court ruled that MasterCard’s cross-border interchange fees were lawful, necessary to its business operation and ‘below any objectionable level’, dismissing the £450m damages case. Asda, Morrisons, Arcadia, and Homebase/Argos are currently seeking permission to appeal the judgment.