Legal Business

Expansion for Global 100 giants as Bakers plans new offshoring centre and Reed Smith launches in Kazakhstan


Baker & McKenzie and Reed Smith will further extend their global footprints, with Bakers looking at another low-cost offshore base after its success in Manila while Reed Smith has today (21 January) announced a new launch in Kazakhstan with the hire of one partner each from Morgan Lewis and White & Case.

Bakers, which launched its captive offshore support centre in Manila in at the turn of the millennium, is ‘exploring options for replicating the model in other jurisdictions’ but at this time has no set timetable.

‘Baker & McKenzie was one of the first firms to establish a sophisticated support centre in an advantageous location, opening an office in Manila more than 10 years ago. Our 600-plus professionals in Manila provide 24/7 service to lawyers around the world, and we believe this approach has provided efficiencies and reduced costs that benefit clients,’ said a spokesperson for the firm.

The Manila team supports lawyers, paralegals, accountants, developers, researchers, designers manage projects and processes and deliver front- and back-end support to the firm’s 70 offices. In 2007, the firm brokered a deal with multinational Unilever, which saw the Manila office handle the entire company’s trade mark portfolio work.

Meanwhile Reed Smith has hired Vladimir Shuster from Morgan Lewis and Arman Tastanbekov from White & Case to staff its new launch in Kazakhstan’s capital, Astana. Both advise on corporate and commercial transactions with a focus on cross-border M&A, energy and natural resources, banking, private equity and capital markets and had worked together at Dewey & LeBoeuf before the US firm went into administration in May 2012. The pair are dual qualified in US and Kazakhstan law.

Reed Smith has been involved in disputes in the country for 14 years but the new hires give the firm added capacity to advise on corporate matters. The corporate team has already advised the government of the Republic of Kazakhstan on its participation in a consortium for the £3bn takeover of scandal-hit Eurasian Natural Resources Corporation (ENRC) last year.

‘We’ve established a strong disputes practice in the region. However, our clients increasingly require on-the-ground transactional capability, and Vladimir’s and Arman’s arrival has helped us achieve just that. Having experienced partners on the ground will enable us to better serve our clients’ needs, while ensuring we’re able to provide a competitive quality service,’ said Belinda Paisley, an international arbitration partner who will run the Kazakhstan office from London.

‘The ENRC deal was one of the largest and most complex takeover deals in the City this year, highlighting both our capability and the quality of work emanating from Kazakhstan. Vladimir’s and Arman’s arrival puts us in an even better position to act on corporate transactions of this nature,’ said James Wilkinson, partner and head of the firm’s Europe and Middle East corporate practice.

Reed Smith joins the growing number of firms expanding Kazakhstan, with White & Case (where Tastanbekov was a partner) and Dentons both opening their second Kazakhstan offices in Astana in 2013.

Legal Business

Reed Smith set for record year in London thanks to lateral push and sector focus


David Stevenson reports on Reed Smith’s evolution into credible global contender

For a 1,500-lawyer, top-30 Global 100 firm, Reed Smith has a habit of quietly getting on with its business. This is despite having conducted three mergers since 2001; grown by around one jurisdiction a year; and made a series of high-profile City hires as it builds out from its core shipping and litigation foundations in the UK – in so doing significantly boosting its 2013 London revenues.

The resignation in October of global managing partner Greg Jordan was a rare senior departure for the nearly 700-partner law firm, which in London this year hired Clifford Chance (CC) structured finance and derivatives partner Claude Brown (after hiring his former colleague Peter Zaman in 2012); McDermott Will & Emery City energy partner Rashpaul Bahia; and DLA Piper media partner Askandar Samad.

Legal Business

Flamboyant or offensive? Race pundit McCririck’s age claim sees Reed Smith and Cavendish Legal in court


Reed Smith and Cavendish Legal Group have been facing each other in the Central London Employment Tribunal this past week as eccentric race pundit John McCririck (pictured) sues his former employers Channel 4 and IMG Media for age discrimination.

Seventy-three year-old McCririck was axed from Channel 4’s coverage last year, when Clare Balding and a new-look team took over.The case has hit the national headlines as cigar-wielding McCririck, known even outside of racing circles for his loud behaviour and deer stalker hat, has variously been described by witnesses for and against as the ‘face of racing’ to ‘unappealing and irritating’, with Channel 4 claiming he was dismissed because his style was not in keeping with the more serious journalism planned for 2013.

McCririck has instructed long-time advisor Stephen Beverley at Cavendish Legal Group, alongside Jennifer Eady QC at Old Square Chambers.

‘John was one of my first clients when I first began practising as a solicitor,’ said Beverley. ‘It’s a very difficult and challenging but important case. It will go on until Monday [7th October] at least.’

Reed Smith is representing Channel 4 and IMG Media Limited, with employment partner Graham Green leading the case alongside Thomas Linden QC at Matrix Chambers.

Reed Smith has advised Channel 4 on multiple matters including a 2009 joint venture with BBC Worldwide, and in 2011 the broadcast corporation’s head of legal for governance, regulatory and trading, Nick Swimer, moved across to the top 30 Global 100 firm’s media and technology group.

Reed Smith said in a statement: ‘Reed Smith confirms that employment partner Graham Green is acting for Channel 4 and IMG Media Limited in relation to John McCririck’s allegations of age discrimination. Reed Smith will be assisting Channel 4 and IMG Media in their vigorous defence of any claims brought by Mr McCririck.’

Legal Business

Going buy-side: Reed Smith’s global managing partner takes over from Hoyt at PNC


It is still reasonably uncommon to see private practice partners step straight into a general counsel (GC) role but Reed Smith’s global managing partner (MP) Greg Jordan is to join one of the firm’s clients, Pittsburgh’s largest bank, the PNC Financial Services Group, taking over from Bob Hoyt as he prepares to join Barclays. Alexander Thomas, Reed Smith’s global chair of litigation, will take over the global MP role from Jordan.

Jordan, who was only re-elected for another three year term last year, is set to become executive vice president GC and head of regulatory and government affairs. He will report directly to PNC’s CEO William Demchak.

Hoyt, meanwhile, who was also the former GC to the US treasury department, is set to join Barclays this month as the replacement to retiring head of legal Mark Harding.

Reed Smith reported revenues of $1.01bn for 2012-13, a 2% increase on the previous year, coming in at 26 in The Global 100. Since Jordan took the helm 13 years ago, then the youngest managing partner in the firm’s history, Reed Smith has quadrupled in size and now has 1800 lawyers in 25 offices. The firm expanded globally through a mixture of mergers, such as the 2007 merger with the UK’s Richard Butler, creating the firm’s biggest office, as well as greenfield operations such as the Singapore office, which opened last year.

Jordan said: ‘It will be difficult to leave, but I am excited about this new opportunity to help lead a great company and client like PNC. I am proud of the firm we have built, and I know the firm’s strong core values and great talent will continue to make it successful. There is an outstanding and experienced management team in place to lead Reed Smith into the future.’

Jordan’s replacement, Thomas, joined Reed Smith in 1999 through the firm’s combination with Virginia outfit Hazel & Thomas, after serving in the Justice Department.

Legal Business

Deal Watch: Dentons & King & Spalding act on HR Owen hostile takeover bid as Freshfields and Skadden secure Asian M&A roles


While the traditional August lull in corporate work may have seen Asia relax, the giant is far from asleep and has gifted a number of transatlantic and Magic Circle firms with eye-catching international M&A deals.

Dentons led by corporate partner Jeremy Cohen is advising luxury car dealer HR Owen on the £32.5m hostile takeover bid by Malaysian billionaire Vincent Tan’s Berjaya Philippines, which HR Owen last week rejected as ‘derisory’.According to Cohen, Dentons, which has previously advised HR Owen out of its Milton Keynes office, advised on the defence and takeover roles.

Top 40 US firm King & Spalding led by London corporate partner William Charnley is advising Berjaya Philippines on the attempted takeover, which valued the company at 130 pence a share and will be voted on by shareholders later this month. Charnley, who has held roles as head of corporate finance at Simmons & Simmons and London managing partner of McDermott Will & Emery, joined King & Spalding’s London office in July last year.

The bidder has until 19 August to obtain the requisite level of acceptances by shareholders.

Elsewhere, Freshfields Bruckhaus Deringer and Reed Smith Richards Butler Hong Kong are advising leading UK retailer Tesco and China Resources Enterprise (CRE) respectively on talks to combine their Chinese retail operations to form a leading retailer in the People’s Republic. Tesco, which has been operating in China since 2004 and has 131 stores, is looking to combine with CRE’s 3000 outlets trading as Vanguard.

The Freshfields team is being led by client relationship partner Claire Wills, head of Freshfields’ retail sector group, while at Reed Smith corporate partner Ivy Lai is leading a team out of Hong Kong.

The proposed joint venture would create a business with sales of £10bn, in which CRE would control 80%, with the remaining 20% controlled by Tesco. However, according to Tesco, there is no certainty that the transaction will go through.

Elsewhere, Skadden, Arps, Slate, Meagher & Flom is advising Cheil Industries and Samsung Electronics on an acquisition of a majority stake in lighting specialist Novaled. Cheil Industries is set to acquire 50% while Samsung will take 40% of the company in a deal that values Novaled at €260m. The remaining 10% is currently held by Samsung Venture Investments, which will maintain its shareholding.

The Skadden team is being led by M&A partners Matthias Horbach in Frankfurt and Young Shin in New York alongside tax partner Johannes Frey in Frankfurt. Sullivan & Cromwell led by Frankfurt corporate partner York Schnorbus advised Novaled. This will be Samsung’s first large strategic investment in Germany.

Legal Business

Good girl gets mad: Rihanna wins t-shirt tiff against Topshop


In a case where the profile of the parties far outshone the legal substance and had many media outlets overexcited, global popstar Rihanna yesterday ( 31 July) won a High Court battle against high street retailer Topshop over the unauthorised use of her ‘brand’. The £5m case has resulted in untold lovely column inches and hopefully hefty fees for the two firms involved, Reed Smith and Mishcon de Reya.

Suing parent company Arcadia Group, the Barbadian songstress, whose real name is Robin Fenty, filed the claim after Topshop sold t-shirts with her face printed on without permission.

She was represented by 8 New Square’s Martin Howe QC and Hogarth Chambers Andrew Norris, who were instructed by Michael Skrein at Reed Smith, while One Essex Court’s Geoffrey Hobbs QC and 11 South Square’s Hugo Cuddigan acted on behalf of the retail giant under the instruction of Jeremy Hertzog at Mishcon de Reya.

The issue at trial, which took place over a four day period between the 17 and 23 July, was whether Topshop had committed the tort of passing off by using Rihanna’s photograph on its t-shirts. There has been little precedent for the rights of celebrities to protect their image in the UK, with the most established case involving former Ferrari F1 driver Eddie Irvine who successfully sued TalkSport in 2002 for using his image to endorse the radio station.

Mr Justice Birss, who opened his 16-page judgment with the thumpingly literal line: ‘Topshop is a well-known fashion retailer. Rihanna is a famous pop star’, ruled that a substantial number of purchasers would likely be deceived into buying the t-shirt because of a ‘false belief’ that Rihanna had authorised it, which would ultimately be ‘damaging to the claimants’ goodwill’.

‘For one thing it amounts to sales lost to her merchandising business. It also represents a loss of control over her reputation in the fashion sphere. The fact the garment is a high quality product does not negate that aspect of damage. It is a matter for the claimants and not Topshop to choose what garments the public think are endorsed by her.’ So far, so obvious.

He added: ‘The mere sale by a trader of a t-shirt bearing an image of a famous person is not, without more, an act of passing off. However the sale of this person on this garment by this shop in these circumstances is a different matter. I find that Topshop’s sale of this Rihanna t-shirt without her approval was an act of passing off. I find for the claimants.’

Certainly the case has done much to enhance the profile of the two solicitors, Mishcons’ Hertzog and Skrein at Reed Smith. Hertzog was quoted in City AM this morning saying: ‘There is “no such thing as a free standing general right by a famous person (or anyone else) to control the reproduction of their image”. Put simply, there is nothing unlawful in selling garments bearing the images of well-known celebrities without the approval of the celebrity in question.’ Meanwhile, Skrein and Reed Smith have stayed quiet, with a single line: ‘The judgment speaks for itself,’ the only comment attributed to Skrein so far.

Jason Rawkins, head of the fashion group at Taylor Wessing, says the odds were always ‘stacked up against Topshop’.

‘There haven’t been many image rights cases in England because most just settle,’ he says. ‘It’s quite interesting when you compare what was going on in the 70s to now, and how the world has moved on. The judgment is partly a reflection of how the real world has changed and ultimately how the public have changed in their thinking. It is now the norm for celebrities or musicians to make money outside of the day job.

‘It’s quite specific. They had done collaborations with Kate Moss, Kate Bosworth and even Rihanna herself. And Rihanna had also done collaborations with H&M and Armani. So there’s a connection in people’s minds between Rihanna and fashion, and between Topshop and celebrities. The photograph they used was also similar to how she appeared on one of her albums. That’s another reason people would think it was authorised.’

‘The interesting question is whether it will now be easier for celebrities to get home on passing off. I suspect it’s now going to be significantly easier for celebrities in the modern world to win on these sorts of cases because of the way they operate these days.’

‘I think the decision broadens the circumstances in which passing off can be claimed and is likely to lead to more claims against the use of celebrity images on products,’ adds Peter Brownlow, IP partner at Bird & Bird. ‘In the previous UK leading image rights case, Irvine v Talksport, the Judge drew a distinction between “celebrity endorsement” – where the use of the image was to endorse a product and “character merchandising” where there was mere use of the image on a product such as clothing or a mug. The former amounted to passing off but the latter didn’t. This case appears to blur that distinction.’

Perhaps pop stars such as Rihanna should brush up on their knowledge of offshore legal jurisdictions, as Guernsey has been pioneering legislation and a register for image rights that can be enforced effectively.

Topshop will be seeking leave to appeal, according to Mishcons’ website. But for now, it seems that as far as the English legal system is concerned, the singer has found love in a hopeless place (sorry).

For a link to the judgment click here. Visit the IP blog IPKat for its good value and irreverent take the case.

Legal Business

Reed Smith set to earn nearly £1m from Savile mandate as BBC criticised for £5m bill


Reed Smith has received nearly a million pounds in legal fees as a result of assisting in the BBC’s investigation into the Jimmy Savile sex abuse scandal as the corporation comes under criticism for spending a total of £5m of licence fee payers’ money on three reviews.

The BBC’s annual report today (17 July) revealed that the cost of the Pollard Review – one of three reviews set up in the wake of the Savile scandal – was £2.8m, of which £893,500 went to Reed Smith.

However, the firm is also assisting in a further review into the culture and practices of the BBC led by Dame Janet Smith, the costs of which have not yet been revealed.

The review led by former head of Sky News Nick Pollard sought to establish whether there were any failings in the BBC’s management of the Newsnight investigation relating to allegations of sexual abuse of children by Jimmy Savile, including the broadcast of tribute programmes on the BBC.

Reed Smith led by commercial disputes head Richard Spafford alongside partners Carolyn Pepper and Ben Summerfield was instructed in October, in a move welcomed by culture secretary Maria Miller (in a letter to BBC Trust Chair Lord Patten) as being ‘independent’ and ‘free from conflicts of interest.’ However, the appointment was later criticised by Conservative MP for Reading Bob Wilson, as Reed Smith is a longstanding legal adviser to the BBC.

The annual report also reveals that a further £492,000 was spent on external legal costs in connection with the Pollard review. According to the document, these costs were for the review of the hard copy disclosure from witnesses, the electronic email review of over 30,000 documents, the review of the appendices and transcripts, and preparation of material for disclosure and publication.

The BBC set up three reviews in the wake of the Jimmy Savile scandal: the Pollard Review; the Respect at Work Review assisted by Dinah Rose QC which was published on 2 May 2013; and Dame Janet Smith’s review into the culture and practices of the BBC during the years that Jimmy Savile worked at the BBC. This includes a detailed investigation by Dame Linda Dobbs DBE into the conduct of Stuart Hall at the BBC, and will publish later this year.

A spokesperson for Reed Smith said: ‘Reed Smith has been providing legal and secretariat advice to the Pollard and Dame Janet Smith Reviews since November 2012. Our role has included providing legal advice to the review chairs, advising in relation to the collection of evidence and the preparation or reports. The terms of each engagement are confidential and Reed Smith is unable to comment further.’

BBC Trust and BBC Executive Costs (excluding VAT and tax) for The Pollard Review:

Nick Pollard – £81,600.00

Reed Smith (inc. fees and disbursements) – £893,501.35

Witnesses’ legal costs – £391,120.92

BBC’s external legal support (inc. fees and disbursements) – £492,436.62

BBC’s technical support (email archive extraction and document management) – £227,292.31

Total cost to the BBC Executive – £2,085,951.20

Total cost to the BBC Trust (external legal support) -£360,910

Total £2,446,861.20

Legal Business

Revolving Doors: DAC Beachcroft, RPC, K&L Gates and Reed Smith boost London offering with lateral hires


London has been the focus of a series of hires for top national, City and US firms including DAC Beachcroft, RPC, K&L Gates and Reed Smith, as Dechert has also boosted its Moscow offering with a hire of a partner from Hogan Lovells.

Adrian Williams joins DAC Beachcroft’s corporate insurance team from reinsurance giant Swiss Re, where he was general counsel for Europe, Middle East and Africa, and was based in Zurich. The firm has also bolstered its real estate team in London with the hire of Nathan East from Hempsons. East specialises in advising medical professionals, care providers and the NHS.

‘We are delighted to welcome Nathan to the firm. His appointment adds an important extra dimension to our existing health practice with his considerable experience of advising GPs,’ said Eve Gregory, head of the firm’s health real estate team.

Elsewhere, 1,548-lawyer firm Reed Smith continues to grow its London office with the appointment of Eoin O’Shea as a partner in the firm’s global regulatory disputes practice based in London. Joining from Lawrence Graham (LG), O’Shea is known for his disputes work which includes economic crime, corporate crime, fraud and corruption disputes and investigations. He spent six years at the commercial bar and another six years with Simmons & Simmons before joining LG. O’Shea has led on litigation for major pharmaceutical companies relating to blackmail and other crimes.

‘Eoin’s reputation and his broad experience, across our key industry sectors and geographies, will ensure that Reed Smith is even better placed to assist clients facing the rapidly evolving regulatory landscape,’ said Richard Spafford (pictured), head of Reed Smith’s commercial disputes group for Europe and the Middle East.

‘O’Shea told Legal Business: ‘The reason I joined Reed Smith is because they are very strong in litigation worldwide. For my specialism in bribery and corruption it helps to have a strong group in the US.’

Reed Smith hired banking and finance partner Claude Brown from Clifford Chance in April this year.

Meanwhile, K&L Gates, which dropped three places in this year’s Global 100 to 25 with a turnover of $1,06bn, has added Anthony Fine as a partner in its energy, infrastructure and resources (EIR) practice in London. Fine joins from White & Case where he was head of the PPP/PFI practice in the firm’s energy, infrastructure, project and asset finance group.

‘With his track record in projects and infrastructure and his significant market connections, I am delighted that Anthony has joined our growing practice,’ said Tony Griffiths, London managing partner of K&L Gates.

Also growing in London with a number of recent heavyweight hires is RPC, which has brought in partner Sukh Ahark from Davenport Lyons, where he was head of banking and finance.

Ahark spent eight years at legacy Herbert Smith and has also worked for Pinsent Masons and Hammonds. Recent mandates he has advised on include luxury building company Harrison Varma Limited on the financing of a development of 20 new residential apartments, where the financing was provided by Barclays and Coutts.

‘We’re very pleased to have Sukh on board. His practice neatly complements our existing broad-based corporate offering, and his outgoing, unfussy and approachable style of doing business fits very well with how we operate at RPC,’ said Jonathan Watmough, managing partner of RPC.

Sukh’s appointment follows RPC’s hire of a three partner corporate team from Wragge & Co at the start of the year, consisting of former managing partner Richard Haywood, the head of corporate Maurice Dwyer, and David Marshall, a private equity specialist.

In Russia meanwhile, global top 50 US firm Dechert has recruited Taras Oksyuk from Hogan Lovells where he was head of real estate to lead the firm’s real estate and construction practice in Moscow. Deals that Oksyuk has advised on include leading Russian property fund, O1 Properties, on its $500m sale of a business centre in Moscow to Kaspersky lab.

Laura Brank, Moscow managing partner and head of Dechert’s Russia & CIS practice said: ‘We are very pleased that Taras is joining us. He is a highly regarded Russian real estate and construction expert who will bring a wealth of experience to our corporate and real estate practices in Moscow.’


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Legal Business

Lone star state of mind


Reed Smith’s assault on Houston is a brave move following its failed merger with Thompson & Knight three years ago.

The firm launched a greenfield office in downtown Houston last month, where it will fill two floors of the city’s tallest building, the BG Tower, with up to 30 lateral hires over the next quarter. Firmwide managing partner Greg Jordan says Reed Smith has already recruited several partners and associates from leading local firms.

Although he won’t name individuals, he says that local hires are crucial. ‘Our goal is to build the office with people who are real leaders in their fields. And we’re not planning to build the office through relocations, but real Houston talent.’

Texan firms tend to agree. Jerry Clements, chair of Locke Lord says: ‘There is a great deal of loyalty in Texas. And its a very difficult market to break into, if you’re not from there, because of the client loyalty, history and knowledge.’

Houston-based energy partner Doug Glass from Akin Gump Strauss Hauer & Feld says: ‘A lot of US and international clients want to expand in the energy field. Our firm, like others, has from time to time in the past encountered interest from other law firms who want to enter the market, but we feel good about our competitive position. Apparently our clients share that view.’

Brimming with confidence is well and good, but there are stumbling blocks unique to Texas that Jordan must consider. Firstly, the Texan legal market is a battlefield so making 30 lateral hires will be a bit of a problem. Texan partners often stick like glue to their firms and pledge loyalty throughout their careers. And as clients in Texas tend to choose firms over individuals, it is harder for a lawyer to defect. Baker Botts London-based energy partner Steve Wardlaw tells LB that the question of whether Reed Smith can be successful depends on whether they can hire laterals. ‘The energy market for lawyers is quite deep and ingrained and what you hear from Texans, is that people don’t flit between firms,’ he says. ‘In the London market they’ll change every few years, but that is not what happens there.’

Michael Pollack, global head of strategy for Reed Smith admits that his firm had approached up to 20 local firms for a merger yet failed to find a partner and says this was due to, ‘client conflict and not the right fit at the time. It’s a very competitive market’.

Despite this, Reed Smith has kept its eye on Texas. Jordan says: ‘Over half of our 250 clients have operations in Houston. The strategy is really about being where the clients are and expanding our services and relationships with them.’

The move is good in theory. Houston has long established its position as a premiere energy hub, with over 3,000 energy related companies based there – the highest concentration in the US. Reed Smith is also attracted to the abundance of shale gas in the US. The gas fields in surrounding states are an oasis of untapped reserves which clients wish to explore. Pollack believes the US will be an energy exporter in the next 10 years and the impact on over 70 of its energy clients in Houston will be ‘huge’.

Jordan is aware of all the challenges a newcomer faces and insists that his firm can tackle them. ‘We’ve never been in Texas,’ he says. ‘Having a lot of clients here already helps, but we’ll be competing with firms that have been here for up to 100 years.

We know that it takes time to build a brand position, so we are going to work really hard to build that.’

Jostling for position in a saturated market is a Herculean task, and Reed Smith certainly has its work cut out.