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.

thomas.alan@legalease.co.uk

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 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.

tom.baker@legalease.co.uk

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.

tom.baker@legalease.co.uk

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.’

Georgiana.tudor@legalease.co.uk

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.

Georgiana.tudor@legalease.co.uk

Legal Business

CAT orders Law Society to pay up to £230,000 costs in abuse of dominance case while first opt-out consumer damages class action fails

CAT orders Law Society to pay up to £230,000 costs in abuse of dominance case while first opt-out consumer damages class action fails

The Competition Appeal Tribunal (CAT) has hit the Law Society with a costs order of up to £230,000 to pay an online training provider after finding it breached competition law in a ruling published this week, while the first CAT opt-out consumer class action was withdrawn. 

In a judgment in May, the CAT ruled that, by requiring law firms to buy anti-money laundering (AML) and mortgage fraud training from it rather than others as a condition of maintaining their Conveyancing Quality Scheme Accreditation (CQS), the Law Society had abused its dominant position in the legal training market.

The claimant, Socrates Training, which provides online AML training packages, alleged that the Law Society’s actions were anticompetitive and sought an injunction as well as damages and costs. Its approved costs budget was £230,000.

The CAT ruled that the Law Society must now pay Socrates’ costs and damages. Socrates sought £112,500 damages in its claim form. The quantum of damages, however, will be determined at a later hearing.

Socrates has until 1 September 2017 to come to agree quantum, while a further case management conference will also take place in the interim to consider directions on the quantum proceedings. The date has yet to be fixed.

The Law Society was represented by Norton Rose Fulbright. Socrates Training was represented by Bernard George.  

In a separate set of CAT antitrust proceedings, the first opt-out consumer class action in the UK has failed after Dorothy Gibson, the National Pensioners Convention’s (NPC) general secretary, who was the class representative, officially withdrew the claim against defendant Pride Mobility Products.

Gibson has agreed to pay 60% of Pride’s costs, a figure amounting to roughly £309,000. Gibson had secured after-the event insurance through Burford Capital, underwritten by Great Lakes Reinsurance, for Pride’s costs up to £1.08m and her own disbursements in the case of failure.

The claim followed a 2014 decision from the Office of Fair Trading which found Pride had breached competition law by banning retailers from advertising prices online below Pride’s recommended retail price. Leigh Day represented Gibson in the case. Band Hutton Button represented Pride.

The second collective class action to be brought in the UK under the new collective damages regime is still awaiting approval at the CAT. That is a separate £14bn consumer damages opt-out competition class action case against MasterCard, in which Quinn Emanuel Urquhart & Sullivan partner Boris Bronfentrinker is acting for the class representative.

The claimants, debit and credit card users in the UK, alleged that MasterCard charged retailers anticompetitive fees to process card payments and retailers passed that cost onto consumers.

A ruling on whether the claim will be allowed to proceed is expected this month.

tom.baker@legalease.co.uk

 

Legal Business

Quinn’s City outpost loses second partner this year as Friedman exits

Quinn’s City outpost loses second partner this year as Friedman exits

London-based litigator Paul Friedman is to leave Quinn Emanuel Urquhart & Sullivan after just over a year at the firm. Friedman is the second partner to leave the US firm this year after a nine year period with no partner exits.

Friedman, who specialises in both litigation and arbitration, had previously spent nearly 13 years as head of banking disputes and commercial fraud at Clyde & Co.

It is understood Friedman will join national firm Gunnercooke within the next month. Quinn co-managing partner of the London office Richard East commented: ‘Paul has decided to move on to a new challenge and we wish him the very best.’

While at Quinn, Friedman acted on various high-profile mandates, including acting for a US based global investment bank in relation to a structured investment vehicle with $5bn under management. Friedman also represented a Japanese investment bank and a Japanese securities finance company in relation to the Lehman collapse.

Friedman also spent a large amount of time working in the Middle East whilst at Quinn, representing high net worth individuals and private equity houses based in Israel.

The departure of Friedman signals the second partner exit from Quinn this year, after Martin Davies left in January. Davies, who quit to join Latham & Watkins, had been with the firm since 2010 and had acted on the Royal Bank of Scotland’s £4bn rights issue litigation.

However Quinn has made some hires in Europe, with Stephen Mavroghenis and Miguel Rato joining 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.

Quinn has also announced it is increasing its office space by half, via a move into a floor of Olswang’s 90 High Holborn premises. The move has increased the amount of space Quinn occupies from 18,000 sq ft to 27,000 sq ft.

tom.baker@legalease.co.uk

Legal Business

‘World-class competition office’: Quinn returns to Shearman in Brussels for double hire

‘World-class competition office’: Quinn returns to Shearman in Brussels for double hire

Quinn Emanuel Urquhart & Sullivan announced today (19 May) that it has hired Shearman & Sterling’s global antitrust head and managing partner of its Brussels office, Stephen Mavroghenis, as well as competition partner Miguel Rato  – after first approaching the team last autumn.

Mavroghenis and Rato will join Trevor Soames, formerly part of the same team, who joined Quinn last December. As reported in September 2016, Quinn approached Shearman’s Brussels team and when Soames joined, Mavroghenis and Rato were believed to be staying put.

The latest hires, which Legal Business understands also includes six associates, leaves Shearman with one partner based permanently in Brussels, Geert Goeteyn. Matthew Readings, who will take over as global head of antitrust and Brussels managing partner, will split his time between Brussels and London, as will partner James Webber.

The Brussels office has previously been a headache for Shearman. In 2009 it was left without a partner locally after antitrust lawyers Annette Schild and Silvio Cappellari departed for Arnold & Porter.

The hires double the partner count to four in Quinn’s Brussels office, which was launched in 2014. Mavroghenis’ practice includes merger control, monopolisation, government investigations and EU litigation. Rato advises clients on contentious and non-contentious EU competition law issues, with a particular focus on complex unilateral conduct matters, transactions and IP licensing in hi-tech industries.

Quinn managing partner John Quinn said: ‘One of the major goals of our European plan has been to build a world-class competition office in Brussels. With the arrival of Stephen and Miguel closely on the heels of their colleague Trevor Soames we have achieved that goal.’

A spokesperson for Shearman said: ‘The firm has a strong antitrust capability in Europe and is recognised for its deep EU competition law expertise. Combined with our wider global antitrust practice, we remain well positioned to continue to serve our clients. We also continue to be committed to our Brussels office and will be announcing additional resources for that office soon.’

georgiana.tudor@legalease.co.uk