Legal Business

Slower growth at Signature Litigation but staff see increased profit share

Disputes-only outfit Signature Litigation has marked its tenth year since inception with a marginal rise in revenues, inching upwards 1.5% from £27.4m to £27.8m.

Staff had cause for cheer, however, as they were paid an increased annual profit share of 18.7% in line with Signature’s co-operative model. Last year, when revenues grew by 22%, the profit share payout amounted to 17.6%.

Founding partner Graham Huntley (pictured) told Legal Business: ‘When we opened the firm ten years ago, it was very “in” at the time to aim for specific amounts in terms of revenue and PEP. But the impact this had on all the people who made that happen was hardly thought about. Things have changed, meaning that when firms are doing well some tend to make voluntarily payments, but for us sharing profits is automatic. We’re happy about that because it’s stable and doesn’t depend on discretion.’

Despite the muted growth this year, on a ten-year basis, revenues are up 477% from the £4.82m Signature recorded after its first year of trading in 2013.

Chief executive Kevin Munslow said: ‘A decade after launch, Signature has achieved our goal of steady growth and becoming established as a serious player in the high-value disputes arena. We now have a team of more than 70 professionals worldwide and over 30 other members. Our offices in London, Paris and Gibraltar all report robust financial results, maintaining our long-term goal of managed year-on-year growth.

‘We remain ever-more committed to building an environment that delivers on the aspirations of every member of the firm and a culture where the fruits of success are shared with all our members without discretion or variation.’

Work highlights from the past year include the ongoing defence of Cellcom against a claim that it is vicariously liable for the alleged actions of a former director of its subsidiary. Partner Paul Brehony, counsel Kate Gee and associate Olivier Swain make up the team on that matter.

This week Signature also welcomed a new partner in the form of Tsegaye Laurendeau, who was previously at arbitration boutique Gaillard Banifatemi Shelbaya Disputes. With more than a decade of arbitration experience under a variety of rules, Laurendeau typically advises corporates, states and state-owned entities in both commercial and investment treaty arbitration. He has a particular focus on the oil and gas, energy, mining, construction and telecoms industries.

Laurendeau said: ‘Signature’s track record in complex corporate disputes speaks for itself. I very much look forward to building on that with my new colleagues across our three offices, including with our arbitration team in Paris, to bolster our international arbitration offering to clients.’

Legal Business

Guest comment: The new differentiator for law firms?

A quiet revolution is happening, and I am here to champion it. For many years, the role of a professional support lawyer (PSL) or knowledge lawyer has been viewed as an optional extra, a ‘nice to have’, something that only a magic circle law firm could possibly justify. If this is what you think, then it’s time to update your precedent. PSLs have become a key differentiator as firms look to benefit not only from their legal experience but also their business acumen.

The PSL role was created back in the 1990s to support a firm’s practice by drafting and maintaining standard form precedents. At the time there was little in the way of legal databases or online research tools and PSLs became the focal point for this activity as well. However, while this remains a central part of the role, the functions of a PSL have evolved.

The importance of the 2008 financial crisis should not be overlooked in terms of furthering the PSL role. Cost pressures and budget cuts meant PSLs were some of the first to feel the pinch as firms axed support functions. However, as in the natural world, adversity creates opportunity. Symbiotically with the rise of technology, PSLs took on new business operations. The result: more than most, PSLs understand the business of law.

The aim of a PSL is a simple one: ensure their firm or practice group delivers effective and cost-efficient legal services. Yes, at the heart of it all is knowledge management. But let go of the perception that this is just about using knowhow systems and sharing an interesting article occasionally. Knowledge management is the harnessing of collective wisdom to significantly improve client outcomes. It is knowing that experience and expertise can be shared and repurposed for a wider benefit. It is connecting with clients not in silo but as a collective.

Those handling client matters must remain laser focused on their client’s needs. It’s incredibly demanding and virtually impossible for such an individual to provide the level of attention that is required of them while also staying on top of legal developments, advances in technology, social media marketing, data analytics and everything else in between. In contrast, no longer on the front line, PSLs have the relative freedom to enhance their legal knowledge (which is often unparalleled) with skills focused on the interests of the firm’s clients as well as the firm as a business itself.

When I decided to step away from the traditional career path for a lawyer, I had accepted that I wouldn’t necessarily be included in legal rankings or be featured alongside traditional industry leaders. I therefore note the significance that this year I was recognised by The Legal 500 for my contribution to my firm. However, I am one of very few (if any) PSLs to be recognised in this way.

For too long, the expertise of PSLs has flown under the radar. In my view, they are at the heart of a legal team and these individuals are pushing the boundaries when it comes to legal analysis, thought leadership and client services. But PSLs are also the ultimate team player, demonstrating individual commitment to a group effort whether that be their practice group, their firm, their industry sector, or the jurisdiction in which they operate.

There is a saying which sums it up best: ‘a player who makes a team great is more valuable than a great player’. However, while the value of PSLs has been recognised by a great number of law firms, glass ceilings remain and wider recognition by the industry is lacking.

Clients see the value of the output from PSLs and knowledge management teams. Firms that champion the individuals behind this offering, beyond what’s gone before, will undoubtedly strengthen the connection with their clients and attract new ones as a result. A new differentiator? I think so.

Johnny Shearman is head of knowledge and legal services at Signature Litigation and is a recommended lawyer in The Legal 500 2022 for banking litigation: investment and retail.

Legal Business

Signature boosts revenue 16% as dispute boutiques sustain their ascendency

City litigation specialist Signature Litigation has capped off a run of high-profile mandates to record a 16% uptick in revenue for the 2016/17 financial year.

The rise sees turnover climb to £11.95m. Under Signature’s profit-sharing scheme, 21% of profits were paid out to staff. Cumulative profits paid out by Signature over the last five years amount to 131% of salary. Signature’s structure sees ownership held more widely than the traditional equity partnership towards a co-operative model.

However, this year’s profit pay-out is significantly lower than last year, when members of the firm received a 34% share. The firm said that increased investment in partners and the launch of a local operation in Gibraltar explained the lower figure. The firm’s growth has also slowed on 2015/16 when Signature hiked income by 36% to just over £10.2m.

Signature chief executive Kevin Munslow commented: ‘The firm continues to grow consistently year-on-year, and we take pride in having a system which returns the value of our success to every employee in the firm without the intervention of any discretionary element.’

Signature has seen its headcount expand over the last year, with the number of fee-earners now standing at 50. Senior additions over the period include Ioannis Alexopoulos from Bryan Cave, Simon Bushell from Latham & Watkins and Josh Wong from DLA Piper.

Signature also worked on a number of headline-grabbing cases over the last 12 months. Among the mandates was the Royal Bank of Scotland (RBS) group action, in which Signature partner Graham Huntley represented thousands of investors in a £4bn rights issue dispute. Huntley also acted for Eurasian Natural Resources Corporation on a dispute with the Serious Fraud Office focused on legal professional privilege.

Huntley commented: ‘The arrival of four new heavyweight partners has further strengthened our core practices and international capabilities, and also fortified the foundation of partners who share the commitment to the firm’s values and non-discretionary economic ownership.’

The performance underlines the dramatic ascent of disputes boutiques in recent years in the City legal scene with peers such as Enyo, Stewarts Law and Three Crowns securing a string of big ticket cases. Stewarts one of the top performing players in this year’s LB100, with revenues up 25%.

Legal Business

Signature Litigation client ENRC to appeal as High Court rules in favour of SFO in legal privilege claim

The High Court has ruled that documents prepared by mining giant Eurasian Natural Resources Corporation (ENRC) in relation to a Serious Fraud Office (SFO) investigation were not protected by legal professional privilege (LPP).

Signature Litigation client ENRC has announced its intention to appeal the decision, signalling an extension to the long-running dispute with the SFO, which began in 2013.

The ruling relates to a criminal investigation by the SFO which alleged fraud, bribery and corruption on the part of ENRC. As part of the investigation, the SFO requested that ENRC produce relevant documents. ENRC claimed these documents were protected by LPP and were therefore justified in resisting the request.

But in the judgment, Justice Andrews ruled that the SFO was warranted in its request: ‘There is a recognised public interest in the SFO being able to go about its business of investigating and prosecuting crime; and the sort of evidence which one would expect to be found in the Disputed Documents is likely to be of considerable value to its current investigation.’

An ENRC spokesman stated: ‘We are very surprised by this ruling and we will appeal today’s decision because the effect of this judgment is that a party who wishes to consult a lawyer in relation to an SFO dawn raid or criminal investigation is not entitled to the protections afforded by litigation privilege.’

ENRC was represented by Signature Litigation partner Graham Huntley, who instructed Fountain Court Chambers’ Richard Lissack QC and Tamara Oppenheimer in addition to Outer Temple Chambers’ Saaman Pourghadiri. Eversheds Sutherland acted on behalf of the SFO, and instructed Bright Line Law’s Jonathan Fisher QC and Blackstone Chambers’ James Segan and Eesvan Krishnan.

Huntley commented: ‘This judgment for the first time signals that litigation privilege will be unlikely to protect that legal work, meaning that genuine attempts by clients to investigate allegations will have to be embarked upon knowing that privilege will not cover whatever is produced.’

The ruling follows a decision by the senior courts costs office to allow ENRC to have multimillion-pound bills from Dechert assessed after the mining company claimed it had been overcharged. ENRC initially hired Dechert in 2011 in relation to the company’s self-reporting process ahead of the SFO’s investigation.

Legal Business

Revolving doors: Linklaters adds depth to Asian offices as Signature opens in Gibraltar with key hire

In a busy week for lateral hires, firms have been actively adding to their offices at home and abroad. Linklaters has made a couple of key appointments in Asia while a host of other firms have hired laterals in the UK, the US and Gibraltar.

Eversheds Sutherland has bolstered its UK tech and real estate practices with the hire of Mark Chester from Gowling WLG. Chester is a real estate lawyer with a specialism in real-estate backed operating businesses, primarily in the technology sector.

Alternative business structure Keystone Law has also been busy, hiring Lewis Silkin’s defamation partner Jonathan Coad. Coad is chiefly experienced in advising media corporations on defamation and privacy disputes, reviewing and editing material prior to broadcast. In addition to Coad’s appointment, Keystone has strengthened its ship finance team with the dual hires of Benjamin Maltby from Ince & Co and TLT’s head of maritime Anastasia Papadopoulou. Maltby is a barrister with an expertise in luxury asset law while associate Papadopolou is experienced in advising high-net-worth individuals.

Elsewhere Signature Litigation has established a Gibraltar presence with the hire of commercial litigator Elliott Phillips as a partner. Phillips joins from local firm ISOLAS and will head Signature’s new Gibraltar office. Phillips is both a barrister and Member of Parliament in Gibraltar and specialises in global commercial litigation and high value trusts disputes work.

In New York, Dechert has hired Linklaters former US banking head Jeff Norton in New York, alongside Paul, Weiss, Rifkind, Wharton & Garrison corporate partner Gareth Clark, who joined the firm on 1 May.

Linklaters has made appointments in both its China and Singapore offices. In Singapore, Niranjan Arasaratnam has joined Linklaters as a partner from Australian firm Allens, where he headed its corporate practice. Arasaratnam specialises in the corporate aspects of TMT law, and will co-head Linklaters’ global TMT sector. In China, Linklaters has hired Simon Meng and Andrew Ruff as partners, to add depth to the firm’s corporate and project teams. Meng is a corporate lawyer with over 25 years’ experience in M&A transactions while Ruff has over 16 years’ experience in energy infrastructure investments and project finance deals.

Legal Business

RBS rights issue litigation narrowed as 40% of Signature’s claimants take settlement

A significant portion of the Royal Bank of Scotland (RBS) investors represented by Signature Litigation in the ongoing £4bn rights issue battle have settled their claims, while a remaining 60% of the firm’s claimants, including 27,000 retail investors, are pushing forward for trial on 3 May.

A statement issued by the claimants said that some of their party were ‘willing to swallow large losses in return for some compensation.’

The statement added: ‘We are pleased that some members of our group have been able to come to an agreement with the bank. However, we remain resolute in our fight for justice for retail shareholders and the numerous institutions that remain in this litigation. We are funded for the trial ahead.’

Led by Signature Litigation partner Graham Huntley, the claimant group represents individual and institutional investors who lost money during a June 2008 rights issue in which £12bn was raised for the bank. Later that year, RBS collapsed and was bailed out by taxpayers at a cost of over £45bn.

The action is levelled against RBS’ former chief executive Fred Goodwin in addition to three other executives: former chairman Tom McKillop, former financial director Guy Whitaker and former head of corporate markets Johnny Cameron.

Claimants represented by Quinn Emanuel Urquhart & Sullivan, Mishcon de Reya and Stewarts Law settled their cases in December 2016. RBS is represented by Herbert Smith Freehills partners Adam Johnson, Simon Clarke, Kirsten Massey and James Norris-Jones. The firm came under scrutiny after it emerged in June last year it would likely exceed its previous cost estimate of £92m.

Legal Business

Q&A: Signature Litigation’s Graham Huntley on potential mergers and the need for litigators to behave

In the middle of a monumental class action against RBS representing around 25,000 claimants, Signature Litigation founding partner Graham Huntley talks to Tom Baker about the firm’s co-operative structure, the market and the pressures facing commercial litigators in 2017.

Do you see the commercial litigation market growing? If so, why?

What we’re seeing is a market that is becoming more tailored to the needs of the client. There is a bedding down in the large international law firms of work that is appropriate for those players. At the same time, you’re seeing the bedding down of the niche firms who are operating in a symbiotic relationship with the large firms. Both of them growing. As they grow, they are propelling a general growth in litigation too. The commercial litigation product seems to be more appropriate for many than it was 10 or 20 years ago.

What is making litigation funding more prevalent?

We’re in the early days of litigation funding. Clients are enthusiastic about what it can do for them in terms of access to litigation opportunities. But there is a lagging appreciation of the responsibilities that go with being funded by third parties which perhaps not all corporates fully appreciate.

Why is litigation against banks in particular on the increase?

To some degree banks were seen to be “open season” post-financial crisis. In other senses they were exposed by regulatory reports that identified practices that were open to claims in civil courts. Then there is the legislation which allows more group actions to be brought against banks, in addition to litigation funding which provides a platform for those claims. The Magic Circle firms are growing to look after banks in a very sophisticated and institutionalised way, so you are seeing the niche firms becoming very adept and managing the interplay between client, funder and stakeholder. Niche firms are coming to be viewed as predominantly claimant operations, which I question especially for a firm like Signature.

How can you continue Signature’s impressive growth over the next few years?

All firms should have a priority of increasing the quality of the litigation product for clients. You should be growing the offering, with volume following on from that in that order. We’re going for steady growth, but growth of our offering first. We’re not going for massive growth by itself, if I could use an expression, it would be “steady and stable growth.”

In light of recent market news, would Signature ever consider a merger?

Who can say never? But it’s certainly not on our agenda. We are a co-operative, so it’s not easy to merge or be taken over. We run the firm for the members, meaning everyone who is employed in it. Co-operatives keep looking after their own people. Every member of the firm, whether they are a partner or the most junior support staff, has a fixed non-discretionary, proportionate, entitlement to the firm’s profits which is an immutable right that can’t be taken away.

What is the priority for commercial litigators over the next five to ten years?

The need for commercial litigators to maintain appropriate standards of behaviour and conduct in the face of overbearing business pressures on them. This includes the modern insecurities many partners have: the financial pressures of big business models, the mentality of winning at almost any cost, the huge opportunities generated from success and the fear of negative publicity. It troubles me that what used to be respectful jousting 30 years ago, has sometimes become more negative behaviour today. I hope that can be curtailed as we go forward.

Litigators also need to think about how they can try to help the patently under-resourced judiciary to do its best.

Read more: ‘Focal points – Law boutiques and the art of focus’

Legal Business

‘A great tactician’: Latham City disputes chair exits for boutique

Boutique disputes outfit Signature Litigation has landed top commercial litigation and arbitration lawyer Simon Bushell from Latham & Watkins.

Bushell (pictured) joined the US giant in 2013 and has acted as chair of the firm’s London litigation department since 2014.

Prior to his move in 2013, Bushell spent more than 16 years as a partner at Herbert Smith Freehills, the firm he joined in 1987. Bushell is rated in the Legal 500 for his work on civil fraud, banking litigation, commercial litigation and international arbitration.

Signature founding partner Graham Huntley said: ‘Simon’s strong reputation, especially in civil fraud, speaks for itself. We have grown substantially and Signature is a strong platform for another senior litigator such as him. He is highly commercial, imaginative and a great tactician.’

Bushell’s hire brings Signature’s team to ten partners and 30 fee earners. The boutique recently saw its revenues increase by 36% for the 2015/16 financial year to £10.2m. The addition of Bushell continues the firm’s investment in lateral hiring after it recruited of Bryan Cave litigation partner Ioannis Alexopoulos in September last year.

Signature currently has a number of key cases on its books, including the ongoing £4bn shareholder group action against the Royal Bank of Scotland (RBS), a major dispute against Credit Suisse on behalf of the investment fund of Georgian billionaire Bidzina Ivanishvili and his family for losses over mismanagement of his portfolio in Switzerland, which have led to criminal proceedings against the bank’s fund managers, and representing energy major ENRC in its high profile costs and privacy dispute with its former legal adviser Dechert.

Legal Business

Signature Litigation: Contractual interpretation – eyes on the Financial List


Abdulali Jiwaji

Partner, Signature Litigation

Sarah Kelly

Associate, Signature Litigation

Disputes over contractual interpretation find their way to the courts relatively frequently, leaving judges to unpick the wording of complex commercial agreements which will often have been negotiated in detail over many months. The courts will have to weigh up the natural meaning of the words in the contract after hearing arguments driven by the commercial implications of different interpretations for the parties involved, and what one might conclude after applying business common sense. The establishment of the Financial List is itself testament to the complexities encountered by the court in resolving financial markets disputes, and in these types of cases the exercise of contractual interpretation can involve more complexities than most.

Legal Business

Signature sees revenues soar 36% to £10.2m as boutique hires Bryan Cave litigation star


Disputes boutique Signature Litigation has seen revenue soar by 36% to £10.2m for the 2015/16 financial year, and continues invest in lateral hiring with Bryan Cave litigation partner, Ioannis Alexopoulos.

The firm’s gross profit margin stands at roughly 50% and under its profit sharing scheme, it gives away around 10% to all staff members at the firm. Under Signature’s profit sharing structure economic ownership is transferred away from the traditional equity partner model towards a direct and fixed participation of all members of the firm. Every pound of profit is split according to fixed and non-discretionary formula. The firm’s 2015/16 profit share of 34.3% to all members of the firm, is a significant increase on the previous year’s payment of 20.4%.

Chief executive officer Kevin Munslow told Legal Business: ‘The last four and a half years – our primary aim has been to broaden out the practice and even out the peaks and troughs. It’s a combination of the year before where we saw revenues dip a little – this is partly recovery from that. It’s regular day to day cases – there are a couple of cases where the rates have been particularly good – but it’s a reflection of the fact that the firm has been working on a handful of significant cases throughout the year concurrently. That’s kept everyone busy.’

Key cases on the books includes the ongoing £4bn shareholder group action against the Royal Bank of Scotland (RBS), a major dispute against Credit Suisse on behalf of the investment fund of Georgian billionaire Bidzina Ivanishvili and his family for losses over mismanagement of his portfolio in Switzerland, which have led to criminal proceedings against the bank’s fund managers, and representing energy major ENRC in its high profile costs and privacy dispute with its former legal adviser Dechert.

In relation to profit sharing, Munslow adds: ‘In over the four years we’ve been operating we’ve given away profits worth 109% of base salaries worth to people who have been here from the start. That’s in addition to regular fee earner bonuses. People often think there is a catch to this – that we’ll claw it back somehow. Lots of firms have some element of profit sharing but often the reality is they fudge the issue and never actually pay out – and if they did, it was small. The reality is with this scheme that I can’t muck around with the parameters.’

Signature has also boosted its ranks with Bryan Cave litigator Alexopoulos, who joined the firm earlier this month. Alexopoulos trained at Holman Fenwick Willan and spent eight years working at the firm before joining DLA Piper as an associate in 1998. He eventually ascended to partner in 1998 and was at one time served as DLA’s London head of litigation.

He specialises banking disputes, particularly those involving financial products, investment banking and derivatives, as well as joint venture and shareholder disputes, shareholder protection, business break-ups and fraud. Other high-profile hires in recent months includes Clyde & Co litigator Julian Connerty.

Signature now houses eight partners and a further 22 fee earners strong, with the last year having seen the firm move into newly refurbished floors at their Fetter Lane offices, which will provide additional room for the ongoing growth of the firm. Munslow says the firm’s maximum headcount would range between 12 to 15 partners and overall 50 to 60 fee earners.