Legal Business

Dealwatch: Kirkland and CMS drink in $3bn pub group takeover as Slaughters and Latham analyse Moody’s disposal

Dealwatch: Kirkland and CMS drink in $3bn pub group takeover as Slaughters and Latham analyse Moody’s disposal

In the customary rush to get deals over the line before the summer lull, the City and US elite have this week lined up on big-ticket transactions including the sale of Moody’s Analytics to Equistone and Slug & Lettuce owner Stonegate’s $3bn acquisition of pub company Ei Group (EIG).

Kirkland & Ellis fielded a team led by corporate partners David Holdsworth and Stuart Boyd to advise buyer Stonegate as it acquired EIG, the largest owner of pubs in the UK. Stonegate, which was formed when funds managed by private equity group TDR acquired 333 managed pubs from Mitchells & Butler, also owns high street brands including Walkabout and Yates.

CMS advised EIG with a team led by partners Gary Green and Gordon Anton. An Ashurst team led by M&A partner Tom Mercer advised Nomura International, Goldman Sachs International and Barclays, the buyer’s financial advisers, on the recommended cash offer.

Meanwhile, Slaughter and May advised longstanding client Moody’s on the sale of its Moody’s Analytics Knowledge Services (MAKS) business to Equistone Partners Europe Limited, a deal which is expected to close later this year.

Latham & Watkins acted for Equistone on the deal, with a team led by London corporate partner David Walker and including London finance partner Charles Armstrong.

Co-head of Slaughters’ infrastructure group, Michael Corbett, told Legal Business: ‘It’s a significant reflection of Moody’s evolving strategic priorities. They’re in the business of producing high value analytical services to their customers, and the so-called knowledge services that’s been disposed of was non-call for Moody’s activities. It was consistent with a strategic repositioning. It was significant because it’s a global business with a multitude of jurisdictions involved and that always creates some complexity in a context of a carve-out business disposal.’

He added that M&A has shown decent levels of activity in spite of the effect the current political uncertainty has had on sterling.

‘A lot of the work we do has a cross-border element and frankly a majority of the work we do is not necessarily domestic UK, but overseas assets and global businesses,’ said Corbett.

MAKS provides outsourced research and analytical support to banks, asset managers and consulting firms through delivery centres in India, Costa Rica, Sri Lanka and China. The sale proceeds and repatriated offshore cash will be used to repurchase around $300m of Moody’s outstanding stock.

Freshfields Bruckhaus Deringer and Addleshaw Goddard also this week landed lead mandates as the European arm of Australia’s Macquarie Group acquired British telecoms company KCOM in a £627 million cash-only deal.

Freshfields advised (MEIF) Macquarie European Infrastructure Fund 6 with a team led by corporate and M&A partners Stephen Hewes and Andrew Hutchings.

Addleshaw’s corporate partner Richard Lee and employment partner Jonathan Fletcher Rogers led the team advising KCOM group which operate in Hull, Yorkshire.

Finally, Linklaters’ partner Richard Coar led a team advising SSE Renewables, Copenhagen Infrastructure Partners and Red Rock Power on the refinancing of the 588MW Beatrice offshore wind farm off the coast of Scotland. The firm said the deal shows a strong need for offshore wind assets established by an experienced sponsor group. Norton Rose Fulbright advised a consortium of 29 commercial and institutional lenders and 24 hedging banks in the deal, led by the firm’s head of energy, infrastructure and natural resources in London, Rob Marsh.

muna.abdi@legalease.co.uk

Legal Business

Pay for today: Slaughters boosts associate remuneration package to £100k as talent war intensifies

Pay for today: Slaughters boosts associate remuneration package to £100k as talent war intensifies

Slaughter and May is bolstering associate pay to a £100,000 including bonuses, becoming the latest of the City elite to play its hand on lawyer salaries.

The move comes after Freshfields Bruckhaus Deringer and Clifford Chance (CC) both hiked their newly-qualified (NQ) pay to £100,000 in a bid to head off the ever-increasing threat from US rivals.

In a statement Slaughters said: ‘In accordance with our policy of keeping our associate remuneration competitive in the market, we have decided to increase our newly qualified associates’ remuneration (salary and bonus) to a minimum of £100,000.’

Slaughters did not disclose how the salaries would rise for associates beyond NQ but the firm is expected to make ‘reasonable adjustments’ for more senior associates. The pay jump is considerably more drastic than the increases the firm announced in December of last year, when NQs saw their pay rise to £83,000 from £80,000, an increase of 4%.

Associates with six months of post-qualification experience (PQE) were handed a rise of £2,000 to earn £86,000 while one-year and 18 months PQE associates saw rises to £89,000 and £93,750 respectively.

Attention will now turn to Linklaters and Allen & Overy, who both set their NQ rates at £83,000 in their most-recent reviews last year. However, questions will be raised around how firms will manage the costs of the latest pay war, while many US firms still comfortably exceed the new standard set in the Magic Circle. Kirkland & Ellis’ starting rate is £143,000 while Latham & Watkins offers its City associates a lucrative $190,000.

Slaughters added: ‘We continue to value and recognise everyone’s contribution by rewarding our associates in a way that reflects the partnership’s flat lockstep structure and by not imposing billing or time recording targets.’

thomas.alan@legalease.co.uk

Legal Business

Ashurst, Slaughters and White & Case re-elect leaders as rivals ring in the change

Ashurst, Slaughters and White & Case re-elect leaders as rivals ring in the change

The recent spate of leadership elections has seen Ashurst, Slaughter and May and White & Case all sticking with tradition while Stephenson Harwood and Quinn Emanuel Urquhart & Sullivan bet on new leaders.

May saw Hugh Verrier’s term as White & Case chair extended to 16 years after he was re-elected for another four years at the helm of the New York-bred giant. First elected to the role in 2007, Verrier’s tenure has seen sustained growth for the firm, most strikingly in London, where the 2020 strategy led by partner Oliver Brettle, and its core ambition of taking on the Magic Circle in its own backyard, have paid dividends.

Legal Business

Cash in hand: Slaughter and May to pocket £6m in fees for advice on failed hostile bid

Cash in hand: Slaughter and May to pocket £6m in fees for advice on failed hostile bid

Slaughter and May is set to receive over £6m in fees after advising sub-prime lender Non-Standard Finance (NSF) on its failed £1.3bn takeover of doorstep lender Provident Financial, which collapsed on Tuesday night (4 June) due to insufficient regulatory capital and a lack of shareholder support.

The mandate for Slaughters was led by corporate head Andy Ryde alongside fellow partner Paul Mudie, with the hostile bid being launched in February of this year. However the Prudential Regulation Authority decided the combined entity would not carry sufficient capital at the point of completion, and therefore blocked the deal. Slaughters did not advise the client on capital or shareholder-related issues.

While Slaughters is receiving the lion’s share of the fees, NSF’s bankers are set for a smaller sum, with Deutsche Bank and Ondra set to be paid just over half a million pounds. KPMG advised on financial regulatory issues. The failed takeover aw NSF’s share price yesterday (5 June) drop to 42p.

Shareholders who collectively own more than 50% of Provident, including Woodford Investment Management, Invesco and Marathon Asset Management, were initially in favour of the February bid following a series of profit warnings from chief executive Malcolm Le May. However, this support seemingly waned after the bid became public.

The takeover breakdown adds to a complex history between Slaughters, Provident and NSF. Provident had historically been a client of the Magic Circle firm, with Slaughters having advised the company while it was chaired by current NSF chief executive John van Kuffeler. The relationship between Kuffeler and Slaughters continued after Kuffeler set up NSF in 2015.

thomas.alan@legalbusiness.co.uk

Legal Business

Prestige meets hustle – Slaughters sends jolt through start-up community with launch of tech incubator

Prestige meets hustle – Slaughters sends jolt through start-up community with launch of tech incubator

For years Slaughters epitomised City conservativism but, reports Thomas Alan, marquee clients and a clear structure mean its new law tech incubator is being closely watched

The value of legal tech incubators is much debated in the industry. The jaded in the tech community often decry such initiatives as marketing opportunities and even many start-ups themselves are sceptical, comparing some law firm incubators to ‘fish bowls’.

Legal Business

Disputes perspectives: Sir David Green QC

Disputes perspectives: Sir David Green QC

Looking back, I spent 25% of my time at the Serious Fraud Office reacting to a campaign against the SFO orchestrated [by] the [UK government]. In order to do that I was building alliances with politicians in the Lords and the Commons, with journalists, with academic and City lawyers, with independent NGOs and with international organisations. They were all hugely supportive, and ultimately the SFO survived.

I’m not saying that there aren’t two sides to this argument, but I fought as I did because I believed very strongly in the need for an independent SFO. The reason being that if you are investigating the kind of companies at the very top of the blue-chip list, people who can literally pick up the phone and speak to the Prime Minister, it is incredibly important in terms of public confidence that the prosecutor has visible and real independence.

Legal Business

‘Keep doing it better’: Slaughters senior partner Cooke gets another three years

‘Keep doing it better’: Slaughters senior partner Cooke gets another three years

Highly-respected M&A practitioner Steve Cooke (pictured) has had his term as senior partner at Slaughter and May extended until 2024.

Cooke was first elected to senior partner at the City institution in 2016 for a five-year term after a long stint spearheading the firm’s M&A practice. His current term runs until 2021, with the extension meaning Cooke will have been in the role for eight years.

‘There’s not been any big strategy changes over the first term,’ Cooke told Legal Business. ‘The partnership is very aligned around the current strategy – what would we wish to change? You just try to keep doing it better.’

He succeeded Chris Saul who also served for eight years. Cooke has been at Slaughters for 36 years and has establishing himself as one of the City’s leading transactional lawyers – a practice he will maintain throughout his tenure. He believes the past year has been a good one for the firm.

‘The year was pretty good considering the headwinds of uncertainty. The hire of David Green and our ongoing work with Luminance are standouts,’ said Cooke.

Earlier this year in March Slaughters engaged a rare lateral hire in Hong Kong, with Jing Chen joining the firm’s partnership from the Listing Division of Hong Kong Exchanges and Clearing Limited. Alongside the hire the firm made up one partner in the City, with finance lawyer Harry Bacon promoted to the firm’s partnership ranks.

thomas.alan@legalease.co.uk

Legal Business

Collaboration all the rage as Slaughters reveals first incubator cohort and Deloitte and Burges Salmon forge tech partnerships

Collaboration all the rage as Slaughters reveals first incubator cohort and Deloitte and Burges Salmon forge tech partnerships

Slaughter and May has today (29 April) announced its debut cohort of fledgling technology start-ups to enter its legal tech incubator, Collaborate.

Meanwhile, Big Four accountancy firm Deloitte has allied with software provider UiPath in Bucharest and Burges Salmon has announced a new technology-focused partnership with the University of Bristol.

For Slaughters, the cohort announcement has seen the Collaborate programme move apace since it was officially announced in February. Tabled, StructureFlow, Clarilis, JUST:Access, Logiak and LitiGate have all joined the programme following an application process which got underway in late March.

Tabled is a workflow management tool, while Litigate is an AI-driven disputes platform and Clarilis a document automation tool. StructureFlow, meanwhile, helps lawyers visualise transactions while Just:Access automatically transcribes court hearings. Logiak, finally, helps lawyers code to create systems that can spot individual points of law. Compared to other City incubators – such as Allen & Overy’s Fuse – the Collaborate cohort is comprised of less mature start-ups, with nascent companies set to benefit most from the programme.

‘We spread the net wide,’ Slaughters’ director of innovation Jane Stewart (pictured) told Legal Business. ‘We got some interest from some very established names, which we were surprised by. We didn’t deliberately exclude them – one we were very close to going for but we went for Tabled in the end.’

The start-ups now enter a 12-week programme which includes exposure to Slaughters’ blue chip client panel for product testing and feedback, while the firm will also facilitate a series of company-specific focus groups with mentors and clients alike.

Others have also made technology plays for fear of missing out, with Deloitte again looking to make good on its technology-orientated pitch, this time partnering with software company UiPath in Bucharest. The New York headquartered UiPath focuses on providing robotic process automation, and the new collaboration with Deloitte is expected to result in new products designed by the pair and focused on the legal sector.

‘Making better use of advanced technologies will be crucial as increased demands are placed on the legal function,’ commented Deloitte global leader of legal services Piet Hein Meeter. ‘Through this first-of-its-kind collaboration, Deloitte Legal and UiPath will provide automation solutions to enable organizations to maximize efficiency, reduce cost and free lawyers’ time to work more closely with the organization as a trusted business partner.’

Closer to home, Bristol-based law firm Burges Salmon has announced a partnership of its own, pairing up with the University of Bristol to undertake joint research and innovation initiatives. The aim of the partnership is to explore potential uses of AI and data science within the professional services.

thomas.alan@legalbusiness.co.uk

Legal Business

Slaughters becomes latest to reveal underwhelming gender and ethnicity pay gap

Slaughters becomes latest to reveal underwhelming gender and ethnicity pay gap

Slaughter and May has published its first partner-level pay gap report, revealing that male partners earn on average 8.9% more than their female counterparts.

Including all employees, the figures remained flat from 2017, with the mean pay gap between men and women standing at 14.4% and the median gap steady at 38.7%.

The firm’s ethnicity pay gap shows a larger divide, standing at 9.7%. However the ethnicity gap rises to a striking 51% average when including partners, or 19.4% on a median basis.

‘The way we remunerate our employees and the size and shape of our workforce have not changed during this reporting period and therefore our gender pay gap remains broadly the same,’ Slaughter and May’s executive partner Paul Stacey (pictured) said in a statement. ‘We have also published information on our ethnicity pay gap for the first time. We see this as an important step in opening up conversations about race in the workplace and working towards businesses reflecting society at large.’

There remain questions over how firms report their pay statistics, with such disparities expected when women overwhelmingly make up the lowest quartile of firmwide employees. Last November, the Law Society called for uniformity in pay gap reporting, publishing a set of recommendations to ensure reports were truly reflective of the disparities.

At Slaughters women make up 71% of the lowest quartile of employees, with the figure dropping significantly to 36.9% in the highest quartile. Starker still is the percentage of BAME employees in each quartile, with the highest quartile at the firm 83.4% white, where the mean pay gap stands at 14.6%. It remains compulsory for law firms to reveal their annual employee gender pay gaps, however firms can choose to exclude their partner-level and ethnicity pay gaps.

Elsewhere, Freshfields Bruckhaus Deringer’s second pay gap report saw some improvement. The overall median pay gap between men and women fell from 13.3% to 6.2%, while falling from 13.9% to 5.7% on a mean basis. However, just 13.5% of the firm’s partnership identifies as BAME, signalling more to do at the Magic Circle outfit.

Linklaters reported a mean pay gap of 20.8% for 2018, and a median gap of 33.9%, both decreases on last year. The firm is 84% white within its top quartile, while across the firm the mean ethnicity gap stands at 30.3%. Magic Circle counterpart Clifford Chance had a slightly better story to tell on gender, with an almost 50/50 split at its top pay quartile between men and women. However the mean partnership gender pay gap stands at 25.9%, and rises to 30.5% on a median basis.

With the pay gap reporting so far not making for inspiring reading at the top level of law, firms will be under yet more pressure to ensure the figures improve for 2019.

thomas.alan@legalease.co.uk

Legal Business

Slaughter and May chooses Hong Kong once more for rare partner hire

Slaughter and May chooses Hong Kong once more for rare partner hire

Traditionally phobic to partner hires, Slaughter and May has recruited in Hong Kong again almost a year after its previous move in the jurisdiction, this time recruiting Jing Chen as partner from the Listing Division of Hong Kong Exchanges and Clearing Limited (HKEX).

Chen re-joins the firm having been a trainee solicitor at Slaughters in 2006, before spending eight years as an associate advising on M&A and capital markets following qualification.

Chen had initially been seconded to the HKEX but the move became permanent in 2017. While there, he acted on a range of initiatives, including the introduction of the new listing regimes for pre-revenue biotech companies and companies with weighted voting rights.

Peter Brien, senior partner of the Hong Kong office, commented: ‘We are really pleased to welcome Jing Chen back to the firm as a partner. He is a first-class practitioner and his time at the Listing Division will serve him well as he draws on his regulatory and market knowledge for the direct benefit of our clients in Asia’

In April of last year, the firm hired investigations and litigation lawyer Wynne Mok to its Hong Kong office from the Hong Kong Securities and Futures Commission. Mok became the third lateral in the firm’s history, having previously broke the duck four years prior with another Hong Kong appointment in John Moore. The second hire came from Herbert Smith Freehills in the City, with pensions partner Daniel Schaffer joining the firm. Chen meanwhile will take up his position in April.

Slaughters also announced one partner promotion in the City today (20 March), with finance associate Harry Bacon being made up from May, having been at the firm as a trainee since 2009.

thomas.alan@legalbusiness.co.uk