Legal Business

H1 2014/15: ‘The way we’d planned it’ – RPC half year revenue rises by 16%

H1 2014/15: ‘The way we’d planned it’ – RPC half year revenue rises by 16%

City law firm RPC has recorded a 16% rise in its first half-year revenue from £38.7m in the same period last year to £46m. The firm said the rise, covering the period May to October, was a ‘direct result’ of its investment strategy and was spread across most of its practice areas and offices.

Managing partner Jonathan Watmough said: ‘This is where I’d hoped we’d be and puts us in a good position to push on into the second half of the year, which is traditionally stronger for us. These results demonstrate that our investment strategy is delivering the way we’d planned it.’

In July, the firm posted mixed financial results for 2013/14, with revenue up 3% to £84.1m – representing growth of 40% since 2011 – but partner profits down by 6% to £26m. Profit per equity partner (PEP) came in at £338,000 for the period, a 9% drop on last year’s figure of £372,000. The firm did not report a profit figure for the half-year.

The firm this year notably strengthened its insurance and marine capability in the UK and Asia with the hire of senior litigation partner Leigh Williams from Clyde & Co and shipping and international trade partner Steven Wise from Holman Fenwick Willan (HFW) in Hong Kong.

sarah.downey@legalease.co.uk 

Legal Business

Summer retention 2013/14: RPC posts 100% trainee retention rate as CMS sees rate drop to 67% post Dundas tie-up

Summer retention 2013/14: RPC posts 100% trainee retention rate as CMS sees rate drop to 67% post Dundas tie-up

City firm RPC is the latest to reveal its trainee retention rates this summer, and has announced it will keep all 15 trainee solicitors who applied to qualify this year, constituting the second time the firm has achieved a 100% rate since 2010. Meanwhile, CMS Cameron McKenna posted more modest results and confirmed a retention rate of 67.2%, with the firm’s London office keeping the lion’s share of trainees.

For RPC, the results signal a consistently positive retention rate for the firm, which kept 100% in 2011; 80% in 2012; and 81% last year.

RPC managing partner Jonathan Watmough said: ‘We invest a lot of time and money in our trainee recruitment programme, and set the bar for qualification very high. It’s always particularly pleasing, therefore, when we get such an outstanding group who make the grade, and doubly gratifying when we are able to offer them all positions at the firm.’

‘We have a very good record of retaining a high percentage of our trainees which is testament to the rigour of our recruitment process and the quality of our development programme throughout the training contract.’

‘We look to attract a very specific kind of person – someone who’s as interested in understanding business as learning the law, and who has the breadth of experience and range of interests to bring a different perspective to the advice they give their clients.

‘Given the quality I see coming through year on year the future success of RPC is in good hands.’

For Cameron McKenna, a breakdown of the results will see 21 join the City office; four join the Bristol office; 10 take a position in Edinburgh; three join in Glasgow; and three in Aberdeen.

The results are a marked shift downwards on last year’s results which saw the firm hold onto 28 out of 34 newly qualified lawyers that September, equating to a retention rate of 82%.

Graduate recruitment partner Simon Pilcher attributed the lower results to the firm’s recent combination with beleaguered Scots firm Dundas & Wilson that went live in May. He explained: ‘We have a significant increase in the number of trainees qualifying in August compared to last year (61 trainees this year compared to 34 last year). As a consequence, due to the volume of trainees the overall retention rate is regrettably lower than in previous years.’

‘However we are in a strong position as a firm post-merger and were therefore able to offer more NQ positions than last year with 41 trainees accepting roles with us. This represents an increase of 46% compared to the number of roles offered in the August qualification round last year and a 64% increase in comparison to Aug 2012.’

Other results to emerge in recent weeks include Magic Circle firm Linklaters which kept 93% of qualifying trainees in its latest cohort and Mayer Brown which said in late July it kept ten (or 67%) of trainees for September 2014. More evidence of the firm’s intention to scale back includes plans to cut its September 2016 trainee intake by half, and take in just ten applicants compared to its usual 20-strong group.

Sarah.downey@legalease.co.uk

Legal Business

Financial results 2013/14: RPC posts mixed results with revenue up 3% against 9% drop in PEP

Financial results 2013/14: RPC posts mixed results with revenue up 3% against 9% drop in PEP

RPC has this morning (21 July) posted mixed financial results for 2013/14, with revenue up 3% to £84.1m – representing growth of 40% since 2011 – but partner profits down by 6% to £26m. Profit per equity partner (PEP) came in at £338,000 for the period, a 9% drop on last year’s figure of £372,000.

In 2012/13 the City firm rose five places to 44 in the LB 100 with a revenue uptick of 21% to £82.1m, while PEP increased 5% to £372,000. Profit per lawyer, however, dipped 8% to £86,000.

Managing partner Jonathan Watmough (pictured) said: ‘We’re very pleased with last year’s revenue growth, particularly off the back of the stellar 20% increase we posted the year before. Especially given that our growth – broadly in line with what the likes of the Magic Circle have achieved – is entirely organic, and not the result of merger activity.

‘But it could have been better – last year saw a significant uptick in activity towards the financial year-end but too late to be accounted for in the 2013/14 financial year. But it has meant this year has got off to a flying start – revenue to date is already 14% up on the same period last year, with average recovered rates also continuing to climb.’

He added: ‘We’re not motivated or governed by some arbitrary PEP metric and so we don’t run the business that way. Compare this with other firms who have announced 3-5% increases in revenue and, in some cases, larger increases in profit and PEP; surely, in a case like that, when costs are increasing by up to 7% year on year you can only increase profit in a climate like this by slashing cost and not investing, and you can only increase PEP by cutting partners and not replacing them. That’s not our style, and nor will it ever be.’

In December 2013, RPC took steps to adopt an entirely merit-driven pay model and announced its intentions to abolish the traditional flat-rate salary for newly-qualified solicitors (NQs) in the UK and move to a system linked to merit and market rates from September 2014.

Highlights in the last year saw the firm secure a place on the 25-strong advisory panel for AIG, as well as winning the mandate to be sole advisor on a project involving pharma giant AstraZeneca on the acquisition, construction and planning related issues for a new global research and development (R&D) centre and corporate headquarters at the Cambridge Biomedical Campus, which AstraZeneca intends to inject £330m into.

However, the year also saw the firm lose its head of financial services and regulatory Steven Francis to Baker & McKenzie in March, while insurance partner Simon Kilgour joined the City office of fellow international firm CMS. Last week also saw DLA Piper hire a four-strong real estate team from RPC, including heavyweight Stephen Malley.

Sarah.downey@legalease.co.uk

Legal Business

RPC bolsters insurance and marine teams with double hire from Clydes and Holman Fenwick

RPC bolsters insurance and marine teams with double hire from Clydes and Holman Fenwick

RPC has strengthened its insurance and marine capability in the UK and Asia with the hire of senior insurance litigation partner Leigh Williams from Clyde & Co and shipping and international trade partner Steven Wise from Holman Fenwick Willan (HFW) in Hong Kong.

Williams will be based in London and specialises in complex high value international insurance and reinsurance litigation work, with a particular focus on the marine and energy sectors. Originally qualified as a barrister, Williams was previously a partner at Barlow Lyde & Gilbert between 2005 and its merger with Clydes in 2011.

Notable cases he has advised on include acting for Polish conglomerate Elektrim on its €2.5bn dispute with French and German telecoms companies Vivendi and T-Mobile, and for German truck manufacturer MAN in its successful US$1bn claim against Daimler Chrysler subsidiary Freightliner, the highest damages award ever made by the English Commercial Court at the time.

RPC managing partner Jonathan Watmough (pictured) said: ‘Leigh is well known to many of us here at RPC, and we’re very much looking forward to him joining. We are actively investing in our high value complex insurance litigation practice, and he fits squarely into that space. He also has a broad-based background handling more general commercial litigation and international arbitration, which dovetails neatly with our existing arbitration practice.’

Wise, meanwhile, will be based in Hong Kong and focus on dry shipping and trade disputes, alongside complex charterparty and multi-jurisdictional litigation and arbitration. Wise has worked in Asia for over ten years and primarily acts for members of P&I clubs in Hong Kong, Korea, Singapore and mainland China, as well as representing ship owners, operators and trading companies.

The hire in Hong Kong follows RPC’s earlier recruitment of Ince & Co’s Singapore head of insurance and reinsurance Iain Anderson in October 2013, to boost its insurance capability in the jurisdiction.

Watmough added: ‘Steven’s expertise complements our existing marine practice, headed by Andrew Horton. Coming shortly after the appointment of marine insurance partner Iain Anderson in Singapore towards the end of last year, Steven’s arrival means that, since we opened in August 2012, we’ve already established one of the strongest Asia Pacific marine practices.’

Jaishree.kalia@legalease.co.uk

Legal Business

RPC in talks with breakaway Edwards Wildman partners alongside Cooley and Foley & Lardner

RPC is in talks with a potential breakaway group of Edwards Wildman Palmer City partners – made up of corporate partners Niall McAlister, Eero Rautalahti, Stuart Blythe, and insurance and reinsurance partner David Kendall – alongside California-headquartered Cooley and top-60 Global 100 US firm Foley & Lardner.

The formerly five-strong splinter group is down to four after Shawn Atkinson, who served as co-chair of Edwards Wildman’s venture capital group, resigned in June to go to Orrick, Herrington & Sutcliffe.

Legal Business

RPC in talks with breakaway Edwards Wildman partners alongside Cooley and Foley & Lardner

RPC in talks with breakaway Edwards Wildman partners alongside Cooley and Foley & Lardner

RPC is in talks with a potential breakaway group of Edwards Wildman City partners – made up of corporate partners Niall McAlister, Eero Rautalahti, Stuart Blythe, and insurance and reinsurance partner David Kendall – alongside California-headquartered Cooley and top 55 Global 100 US firm Foley & Lardner.

The formerly five-strong splinter group is down to four after Shawn Atkinson, who served as co-chair of Edwards Wildman’s venture capital group, resigned last week to go to Orrick.

Located at Old Broad Street, the partners are understood to be unhappy over a lack of support from the US together with issues of ‘disconnection’ and pay.

A partner at the firm said: ‘Everybody has a different take on this. Everyone likes more money and more love from colleagues. That’s like any US firm in London and it’s very normal for a lower end AmLaw firm.’

The firm has denied claims that it is looking to sell off its London office and the partner added: ‘The firm will always have a London office but just different in size.’

The discussions follow a string of partner exits, most recently insurance & reinsurance partner Damian Connolly, who this month took up the position of chief legal officer for American managed healthcare company Aetna International. In early June, insurance heavyweight Francis Mackie started a new role at national firm Weightmans.

An ex-partner told Legal Business: ‘It’s the usual mixture of problems of a London office when it goes to the stage of being neglected. There are partners looking at their exit strategy if the talks don’t meet their expectations and satisfaction.’

Edwards Wildman and RPC declined to comment. Foley did not return requests for comment.

Sarah.downey@legalease.co.uk

Legal Business

Partner promotions: Watson Farley; RPC; TLT and McCann FitzGerald unveil numbers

Partner promotions: Watson Farley; RPC; TLT and McCann FitzGerald unveil numbers

Top 50 UK firms Watson, Farley & Williams (WFW) and RPC have unveiled their latest partner promotions, making up 13 and three lawyers respectively, as top 60 firm TLT and leading Irish firm McCann FitzGerald both announced today (7 May) that they have promoted four lawyers.

WFW’s 13 promotions – which is a significant increase on last year’s figure, when just four lawyers were made up – brings the total number of partners to 133.

The new partners have been promoted in eight of the firm’s 13 offices, with three apiece in London and Hamburg, two in New York, and one each in Athens, Bangkok, Paris, Rome and Milan.

Promotions were made across six practice areas including the 389-lawyer firm’s energy and projects group, real estate, corporate, maritime, finance and disputes.

Managing partner Lothar Wegener said: ‘I congratulate these 13 outstanding lawyers on their promotions to the WFW partnership. In addition to highlighting our confidence in these individuals as practitioners, collectively this group of new partners underscores the ongoing strength of the firm as a whole, and the confidence we have in our respective practices.’

Meanwhile, RPC promoted three new partners across its insurance and reinsurance disputes, insurance disputes (professional indemnity) and competition practices. Last year, the 311-lawyer firm made up just one lawyer.

‘When we appoint new partners at RPC we’re welcoming them as genuine owners of the business, with a real stake in our future success. That’s the reality of an all equity partnership. So, naturally, the bar is set that much higher,’ said RPC’s managing partner Jonathan Watmough.

Maintaining a steady hand is TLT, which promoted four of its associates to partnership – the same number as last year – across the 250-lawyer firm’s corporate, disputes and banking teams, within its Bristol and London offices.

The promotions take the firm’s total partner headcount to 96. In addition, TLT promoted 20 solicitors to associate, up from 2013 when that figure was just nine.

TLT’s senior partner Robert Bourns said: ‘These promotions, both at partner and associate level, recognise the drive by individuals to identify client need and deliver in a way that clients find supportive and valuable – getting the job done. Their commitment to understanding and matching the clients’ business needs and the whole firm’s legal expertise, together with their flexibility and responsiveness make the difference.’

All partner promotions went into effect on 1 May 2014.

Outside of the UK, leading Irish law firm McCann FitzGerald today announced the appointment of four new partners, with one in banking and financial services; two in dispute resolution and litigation; and one in real estate, bringing the total number of partners at the all-equity firm to 70.

jaishree.kalia@legalease.co.uk

Legal Business

Heading to The Ivy: Legal Business and RPC team up for GC Power List Summer Reception

Heading to The Ivy: Legal Business and RPC team up for GC Power List Summer Reception

We’ve made it no secret that a major aim for Legal Business and its Legalease stable-mates is to better engage with the general counsel community. As such we’re taking another step in that direction with the launch of an exclusive debate and networking event in June building on the success of our acclaimed Power List Report.

The GC Power List Summer Reception will be held on the evening of 11 June, with RPC as lead sponsor. The event will comprise a relaxed debate chaired by veteran City columnist Anthony Hilton followed by an evening of food and drink at the renowned private members’ club at The Ivy. The debate will include senior lawyers sharing their experiences from companies including Land Securities, ITV, Royal Bank of Scotland, Shire and Vodafone.

The discussion will aim to explore themes from the 2014 report, which focused on up-and-coming lawyers working at major companies’ legal teams in the UK and Europe.

Invitations are being extended to our Rising Stars for 2014, who were identified following weeks of research and drawing on hundreds of nominations. We are also inviting the GCs highlighted in our 2013 report and other selected in-house counsel.

The event will be attended by more than 50 in-house counsel from major companies. The idea is to produce a top-class networking debate, a little food for thought and plenty of actual food and drink in a relaxed atmosphere. And I promise to keep the speechifying to a minimum. If you want to know more, drop me a line.

alex.novarese@legalease.co.uk

Legal Business

High-value commercial litigation rises 16% as recession-related disputes filter through to courts

High-value commercial litigation rises 16% as recession-related disputes filter through to courts

2013 saw a sharp rise in high-value commercial litigation as major disputes arising from the recession filter down to the courts in greater numbers, according to research released today (7 April) by RPC.

Statistics compiled by the firm shows that 1,353 cases were launched in the Commercial Court in 2013, up 16% on the 1,167 cases started in 2012.

RPC said the increase is likely due to the length of time it can take for a claimant to pull together a major case or because of situations where parties have failed to reach a deal, leaving the claimant deciding litigation is the only option to resolve the dispute.

RPC’s head of commercial litigation, Geraldine Elliott, said: ‘This kind of “big-ticket” litigation tends to be quite complex as well as very contentious – it’s not something that can be rushed to court. So there’s bound to be a time-lag between disputes arising during the downturn and when they start to come through the system.

‘Sometimes high-value or large-scale claims can take several years to actually get as far as filing a claim, let alone a court hearing, which is why we are seeing such an upswing in cases coming to court now, even as we start to leave the recession behind us.’

The research also indicated that banking litigation will continue to be a key area for high-value claims, as PPI mis-selling, Libor and interest rate swap scandals faced by financial institutions have resulted in a steady pipeline of cases in recent years.

Banks preparing themselves for further potential claims include the Royal Bank of Scotland, which earlier this year announced it would set aside an additional £3bn for legal claims, including £1.9bn for mortgage-backed securities claims.

The amount of money set aside for FX manipulation claims is also likely to be higher according to the research, as banks not only have to face fines and penalties but have to undertake costly investigations.

RPC financial disputes partner Andy McGregor, said: ‘Claims based on alleged FX manipulation are likely to be particularly complex, and the scale of resources required to deal with the regulatory probes could dwarf even what we saw with Libor. Increasingly, the Financial Conduct Authority is looking to the banks themselves to organise and fund the bulk of data mining and other investigative work, which is going to take huge amounts of specialist manpower.’

Examples of high-profile commercial cases involving banks last year included a dispute between UK trading and investments firm CF Partners and Barclays. The former filed a claim against Barclays last year alleging that the bank breached a confidentiality agreement. CF Partners, whose claim is being bankrolled by Harbour Litigation Funding, alleged that Barclays used confidential information it supplied to the bank when requesting funding for its own bid for Swedish carbon trader Tricorona.

This research coincides with a study published today by Eversheds, which has released similar findings on the rise of large commercial disputes, despite the fact that corporates do not want to resort to litigation. In a study entitled Companies in Conflict: How Commercial Disputes are Won, whether a company wins or loses in court is determined by the calibre of the professionals involved in the case, while corporates that generate revenue of more than £1bn were typically engaged in two to five large disputes over the last three years, but 16% of companies were involved in more than ten. One fifth of businesses involved in the study considered managing reputation to be the most important factor in pursuing a dispute.

sarah.downey@legalease.co.uk

Legal Business

LLP latest: DLA Piper’s net debt down 32% as RPC posts 21% increase in fee income

LLP latest: DLA Piper’s net debt down 32% as RPC posts 21% increase in fee income

DLA Piper International’s net debt decreased by 32% while cash in the bank dropped almost 15% according to its most recent limited liability partnership (LLP) filed at Companies House.

Net debt was down from £47.5m at the end of 2011/12 to £32.4m at the end of last financial year, with the 4036-lawyer firm’s cash position also down from £35m to £29.9m.

Turnover at DLA Piper International – which includes all the firm’s activities outside the US including its share of joint ventures – increased from £788m in 2011/12 to £800.4m in the last financial period, while profit available for discretionary allocation among members dropped almost 3% from £269m to £261.5m during that period.

The UK, meanwhile, saw revenue decrease by 3.4% from £287.3m to £277.5m, while operating profit also fell 7.5% from £102.9m to £95.2m at the end of 2012/13.

However, both Continental Europe and the Asia Pacific saw turnover increase by around 4% to £290.1m and £210.2m respectively. Operating profit in Continental Europe grew 2.7% from £107m to £110m but in Asia Pacific it fell by 9.4% from £65.7m to £59.5m.

The biggest boost came from activities in the Middle East, where turnover increased 15.5% from £18.8m in 2011/12 to £21.7m in 2012/13, while operating profit was up from £158,000 to £2.8m in the same period.

DLA’s move to an all-equity partnership on 1 May 2012 resulted in a boost in member’s capital of £27.6m during the year, although 29 members internationally elected to remain as non-equity partners, eight of which were in the UK.

The highest paid partner received £1.8m in 2012/13, 3.3% more than the previous year.

Elsewhere, RPC posted an above average 21% increase in fee income from £67.4m to £81.7m. Costs including non-member partner profit shares rose 27%, which, the top 50 firm said, reflect significant one-off costs associated with setting up two new offices.

Profits available to members increased during the year by 8% to £26m while staff costs increased by 21% to £36.2m from £28.5m in the 2011/12 financial year.

At 30 April, the firm’s net debt stood at just over £5m – a 123% increase compared to £2.3m the previous year, while bank loans of £4.8m (£3m in 2012) are repayable by equal monthly instalments until 2017 and a further bank loan of £833,333 (£412,905 in 2012) was due for repayment in October 2013.

The estimated profit attributable to the highest paid member stood at £928,018 compared to £789,282 the previous year. The average monthly number of fee earners rose from 196 to 252 at the firm, which has invested solidly in lateral hires over the last year, including Davenport Lyons former head of banking and finance Sukh Ahark, former SJ Berwin corporate partner Anthony Shatz, and Wragge & Co former managing partner and corporate head respectively, Richard Haywood and Maurice Dwyer.

francesca.fanshawe@legalease.co.uk

sarah.downey@legalease.co.uk