Legal Business

Slaughters starts salary race with £70k for NQs

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Associates Slaughter and May
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The yearly contest to attract new talent has started with Magic Circle duo Slaughter and May and Linklaters both making salary hikes of over 5% for junior lawyers, while Hogan Lovells kept pace by bumping its junior pay up to match Slaughters’ £70,000 newly-qualifieds’ (NQs) salary.

Although Linklaters reported its NQs received a £3,500 pay increase to £68,500, this was still behind Slaughters, which has traditionally been a bellwether of trainee and associate salaries among the Magic Circle and gifted an 8% wage bump to NQs, taking them to £70,000. However, Linklaters’ salary bands were increased more aggressively higher up the associate ladder as both two and three-year post-qualification experience (PQE) lawyers were given sizeable salary increases that topped Slaughters.

Legal Business

Dealwatch: Bakers wins role alongside Slaughters on Equinix’s £2.35bn takeover of Freshfields client Telecity

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Corporate Baker McKenzieFreshfields Bruckhaus DeringerSlaughter and May
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Slaughter and May teamed up with a Baker & McKenzie team led out of London to help US data giant Equinix in its £2.35bn takeover bid for UK rival and Freshfields Bruckhaus Deringer client Telecity.

Telecity, which was in talks to merge with Dutch peer Interxion before Equinix stepped in, instructed Freshfields’ Julian Makin and Ben Spiers to handle its sale. London-based Makin, a corporate partner who co-heads Freshfields’ mining and metals team, was heavily involved in the company’s listing on the main market of the London Stock Exchange and the firm was also advising on the company’s proposed Dutch takeover with Latham & Watkins acting for Interxion.

Meanwhile, Slaughters advised the Californian data company on the acquisition which involves paying 572.5p and issuing 0.0327 of new Equinix shares for each Telecity share – a 27% premium to Telecity’s closing price on 6 May. Its team was led by corporate partners Richard Smith and John Papanichola and included finance partner Matthew Tobin and competition specialist Philippe Chappatte. Cravath, Swaine & Moore acted for Equinix in the US, while De Brauw Blackstone Westbroek advised in the Netherlands and Hengeler Mueller in Germany.

For international due diligence and the corporate reorganisation work required, Equinix turned to Baker & McKenzie’s London-based global head of reorganisations, Kirsty Wilson, and finance partner Lynn Rosell Rowley.

Telecity has 39 data centres in 11 European countries and has customers including Spotify and Facebook. Equinix, whose in-house team consisted of general counsel Brandi Galvin Morandi and EMEA general counsel Peter Waters, said the deal, which comes amid growing demand for cloud storage in Europe and consolidation in the sector, would give it ‘increased network and cloud density to better serve customers’ and a footprint ‘to attract customers and pursue the emerging enterprise opportunity’.

tom.moore@legalease.co.uk

Legal Business

Linklaters reveals NQ salaries of £68,500 – under Slaughters but tops it with 3 year PQE band

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Salaries LinklatersSlaughter and May
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Linklaters has revealed its salary bands for junior lawyers in London with newly-qualifieds (NQs) receiving a £3,500 pay bump to £68,500 while those with three year post-qualified experience (PQE) had a 5% increase to £98,500.

Seat 1 trainees also had a 5% jump to £42,000, up from the £40,000 received last year while the band to receive the greatest percentage increase was two year PQE which gained 7.3% on last year rates and will be paid £88,000. Rounding out the increases, those with one year PQE had a 5% boost to £74,000.

On Wednesday (20 May), Hogan Lovells revealed it was matching Slaughter and May’s pay for NQs of £70,000. But while Linklaters’ NQs lose out in their first year in comparison with Slaughters and Hogan Lovells lawyers, those with three year PQE are better off by £2,000 with Slaughters paying £96,500. The difference is also apparent in trainee rates with Slaughters and Hogan Lovells both offering £41,000.

Simon Branigan graduate recruitment partner at Linklaters, said: ‘Coupled with strong performance-related bonuses – which we pay across all levels – and which for a significant majority have, in percentage terms, been in double figures on a scale that can realistically reach 35% of salary, we believe that our compensation is extremely competitive and an important factor in attracting and retaining some of the brightest and best talent in the market.’

tom.moore@legalease.co.uk, michael.west@legalease.co.uk

Legal Business

£70,000 NQ salary: Hogan Lovells matches Slaughter and May as legal salary race reaches new heights

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Salaries Hogan LovellsSlaughter and May
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Hogan Lovells has bumped up the salaries of its newly qualified lawyers by £5,000 to £70,000 in a move that will see it again match the salary on offer at Magic Circle firm Slaughter and May.

In a hike that is more than double the pay rise given to newly qualified lawyers at Hogan Lovells last year, when salaries rose by £2,000 to £65,000, Hogan Lovells becomes one of the top-paying law firms in the City.

The £70,000 salary for newly qualified lawyers is 15% higher than what was on offer just four years ago, when a newly qualified lawyer at the firm would earn £61,000 a year.

Meanwhile, the rates for trainees will also increase to £41,000 for first year trainees, £1,500 up on last year, while second year trainees will earn £2,000 more to reach £46,000.

With sharp growth at US firms offering £100,000 salaries in the City, the steep rise in salary at Hogan Lovells generates more heat in the battle for talent. Freshfields Bruckhaus Deringer, which has yet to announce its salary bands for the new financial year, was the highest paying Magic Circle firm for newly qualified lawyers in 2014, pegging their salaries at £67,500.

Slaughter and May started the salary review season at the end of last month when it announced NQs would recieve £70,000 while those with three years experience would get £96,500.

tom.moore@legalease.co.uk

Legal Business

A&O, Freshfields and Slaughters land key roles on biggest-ever all-UK deal

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Corporate Allen & OveryFreshfields Bruckhaus DeringerSlaughter and May
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Shell offers £47bn for BG Group

The proposed £47bn acquisition of BG Group by fellow energy major Shell saw a trio of Magic Circle firms land leading roles, as Freshfields Bruckhaus Deringer, Slaughter and May and Allen & Overy (A&O) advising on what constitutes the largest UK-to-UK deal ever.

Slaughters is acting for Shell, supported by Cravath, Swaine & Moore on US corporate law and allied firm De Brauw Blackstone Westbroek on Dutch aspects of the deal. Corporate partners Roland Turnill, Hywel Davies and Rebecca Cousin are leading Slaughters’ team, which Turnill told Legal Business started ‘working in earnest’ on the transaction as far back as Christmas. Finance partner Matthew Tobin is also working on the deal alongside tax specialist Steve Edge, competition partners Bertrand Louveaux and Jordan Ellison and pensions and employment partners Jonathan Fenn and Roland Doughty.

Legal Business

Slaughter and May raises associate pay with NQs getting £5,000 boost

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Associates Slaughter and May
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Traditionally a bellwether of trainee and associate salaries among the Magic Circle, Slaughter and May has made significant hikes to the salaries it pays junior lawyers.

Again the first Magic Circle law firm to publish its salaries for the next financial year, taking effect on 1 May, newly qualified lawyers at Slaughters will receive £5,000 more than last year, rising 8% from £65,000 to £70,000 as competition for talent hots up in the City.

Freshfields Bruckhaus Deringer was the highest paying Magic Circle firm for newly qualified lawyers in 2014, pegging their salaries at £67,500. Demand for talent has increased in recent years following the expansion of US firms in the City, with newly qualified lawyers at Davis Polk & Wardwell paying £100,000 a year.

Large increases have been built into all of the pay scales, with the biggest percentage rise coming for those that are two years’ qualified, with salaries going up from £79,000 to £87,000, a rise of over 10% while those with three years under their belt will receive £8,500 more than in 2014, with salaries rising by over 8% to £96,500.

Trainee salaries only marginally moved up, with a rise of just over 2% build into first year trainees to take their annual income up £1,000 to £41,000 and £46,000.

Richard Clark, executive partner of Slaughters, told Legal Business: ‘Our intention is always to make sure our lawyers are properly remunerated in accordance with the market so there is an element of market referencing as you would expect.’

The rise follows a bumper payday at the end of last year when the firm increased Christmas bonuses across the board. Associates between 4.5-6.5 PQE took home bonuses of 15% at the end of 2014, compared to 12% at the end of 2013.

The new salary bands are as follows:

Trainee year 1: Up 2.5% from £40,000 to £41,000

Trainee year 2: Up 2.5% from £45,000 to £46,000

Newly qualified: Up 7.7% from £65,000 to £70,000

One year’s PQE: Up 7.9% from £70,000 to £75,500

Two years’ PQE: Up 10.1% from £79,000 to £87,000

Three years’ PQE: Up £8.4% from £89,000 to £96,500

tom.moore@legalease.co.uk

Legal Business

A €350bn asset manager: Slaughters and Links lead on Santander and UniCredit’s asset management merger

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Corporate LinklatersSlaughter and May
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Slaughter and May and best friend firm Uría Menéndez plus Davis Polk & Wardwell in the US were instructed by Santander to combine its asset management arm with Linklaters-client Unicredit’s Pioneer Investments to create one of Europe’s biggest asset managers.

In a move that will see the banks improve their balance sheets to meet more stringent rules doled out by the European Central Bank. The deal sees Santander and UniCredit each take a 33.3% stake in the new company, with private equity houses Warburg Pincus and General Atlantic taking the remaining 33.3% stake in what will be called Pioneer Investments. The transaction values Santander Asset Management at €2.6bn and Pioneer Investments at €2.75bn.

Pioneer Investments’ operations in the US will be hived off into a separate company owned by UniCredit, which will take a 50% stake, and Warburg Pincus and General Atlantic .

The Slaughter and May team advising Santander on the deal is led by corporate and commercial partners Mark Zerdin, Michael Corbett and Roland Turnill, who became a star in the City in 2013 when he ran Vodafone’s $130bn disposal of its stake in Verizon. Uria’s team was led by partner Antonio Herrera while Luigi De Ghenghi led for Davis Polk.

Meanwhile UniCredit turned to a Linklaters team led by Carlton Evans and Italian boutique Gianni, Origoni, Grippo, Cappelli & Partners which was led by Roberto Capelli.

While Santander is known to use a host of firms in the City, including Magic Circle rival Linklaters, Slaughters has for some time been the bank’s go-to firm for major M&A work. Turnill arranged for Santander to acquire 318 of the Royal Bank of Scotland’s UK branches in 2010, but the deal fell through two years later and the British bank instead spun-off TSB Bank to meet demands placed on it by regulators. He was recently instructed by Shell to lead a team that helped it to complete the largest oil and gas M&A since 1999, acquiring BG Group for $70bn in April.

tom.moore@legalease.co.uk

Legal Business

Significant mandates: Slaughters, Paul Weiss and Hengeler act as Deutsche Bank fined $2.5bn

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Litigation Hengeler MuellerPaul, Weiss, Rifkind, Wharton & GarrisonSlaughter and May
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Famed for its work on blockbuster M&A, Slaughter and May had five partners working around the clock as Deutsche Bank received a $2.5bn fine from regulatory authorities in the US and UK over investigations into its role in the manipulation of interest rates Libor and Euribor between 2005 and 2010.

Slaughters’ head of dispute resolution and global investigations groups Deborah Finkler marshalled the German bank’s dealing with the City watchdog, the Financial Conduct Authority (FCA), with disputes partner Ewan Brown also playing a major role in orchestrating the settlement. A senior team in Manhattan at Paul, Weiss, Rifkind, Wharton & Garrison including partners Roberto Finzi and Andrew Finch handled the US end of the investigation, while Hengeler Mueller’s Sven Schneider handled the defence in Germany.

The bulk of the penalty will be split between US authorities, with $800m going to the Commodities Futures Trading Commission, $775m to the US Department of Justice and $600m going to the New York State Department of Financial Services.

The UK’s FCA took $340m, or £227m, of the penalty for manipulating interest rates. The FCA found that the misconduct, which ranged from colluding with other panel banks that set Libor and Euribor to putting cash into the market to trick submissions at other banks, involved at least 29 Deutsche Bank staff across London, Frankfurt, Tokyo and New York. It has been a contributor bank for Libor fixes in ten currencies, including the US Dollar, Swiss Franc and Pound Sterling from at least 1998 to the present, that sets the lending rates for lending around the world, from mortgages to business lending.

The fine was levied because of what the FCA labelled a ‘deeply ingrained’ culture of ‘generating profits without proper regard to the integrity of the market’ and its attempt to mislead the regulators by giving the FCA misleading information about its ability to provide a report commissioned by the German regulator, BaFin, and providing false information about its systems and controls around Libor.

Georgina Philippou, the FCA’s acting director of enforcement and market oversight, said: ‘This case stands out for the seriousness and duration of the breaches by Deutsche Bank – something reflected in the size of today’s fine. Deutsche Bank’s failings were compounded by them repeatedly misleading us. The bank took far too long to produce vital documents and it moved far too slowly to fix relevant systems and controls.’

Jürgen Fitschen and Anshu Jain, Deutsche Bank co-chief executives, said: ‘We deeply regret this matter but are pleased to have resolved it. The Bank accepts the findings of the regulators. We have disciplined or dismissed individuals involved in the trader misconduct; have substantially strengthened our control teams, procedures and record-keeping; and are conducting a thorough review of the Bank’s actions in addressing this matter.’

tom.moore@legalease.co.uk

Legal Business

Dealwatch: A&O, Linklaters and Slaughters take lead on Virgin Active sale to South Africa-listed Brait

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Corporate Allen & OveryCliffe Dekker HofmeyrGibson, Dunn & CrutcherLinklatersSlaughter and May
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Magic Circle trio Allen & Overy (A&O), Linklaters and Slaughter and May have taken instructions advising on Virgin Group’s £682m sale of an 80% stake in international health club operator Virgin Active to South African-listed private equity group Brait.

The Linklaters team advised Brait on the deal, which values Virgin Active at £1.3bn, led by private equity partners Alex Woodward and Stuart Boyd, alongside corporate partner Stuart Bedford and tax partner Tim Lowe. Cliffe Dekker Hofmeyr took the lead advising Brait on South African law.

A&O advised Virgin Active working with general counsel Ashley Aylmer as well as the fitness chain’s management on Brait’s proposed acquisition. The transaction was led by the firm’s co-head of corporate Andrew Ballheimer, who is the relationship partner for Virgin Active and Virgin Group, and corporate partner Simon Toms. Gibson, Dunn & Crutcher advised management shareholders with a team led by Mark Sperotto and Nicholas Aleksander.

Slaughter and May advised current owners Virgin Group and CVC on the sale with corporate partner Mark Zerdin leading a team including tax partner Dominic Robertson, and competition specialist Anna Lyle-Smythe.

The deal is expected to complete over the summer after which Brait will own 80% of Virgin Active with Virgin Group retaining 20% (excluding management). The existing management team will be retained, and will be reinvesting alongside Brait.

sarah.downey@legalease.co.uk

Legal Business

A £47bn deal: Slaughters and Freshfields win key roles on Shell’s acquisition of BG Group

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Corporate Freshfields Bruckhaus DeringerShellSlaughter and May
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Slaughter and May and Freshfields Bruckhaus Deringer have both won key roles advising on Royal Dutch Shell’s £47bn acquisition of BG Group – likely to be one of the biggest M&A deals this year.

Slaughters provided legal counsel to Shell, supported by Cravath, Swaine & Moore on US law and best friend firm De Brauw Blackstone Westbroek on Dutch aspects of the deal. Freshfields won the mandate for BG, with Goldman Sachs and banking boutique Robey Warshaw advising on the financial aspects of the deal.

Shell is fielding a large team of in-house lawyers for the deal, which values BG at £47bn, led by legal director Donny Ching and including company secretary Michiel Brandjes.

The Slaughters’ team advising on the oil major’s merger is being led by corporate partners Roland Turnhill, Hywel Davies and Rebecca Cousin, and includes tax partner Steve Edge, financing partner Matthew Tobin and competition partners Bertrand Louveaux and Jordan Ellison. Pensions and employment partners Jonathan Fenn and Roland Doughty are also acting.

The De Brauw team is led by partner Paul Sleurink and the Cravath, Swaine & Moore team is led by partners William Rogers and Richard Hall.

In a big win for the firm, corporate partner Graham Watson and M&A partner Mark Rawlinson are leading for Freshfields on the BG side, supported by senior corporate associate Richard Jones. BG conducted a panel review at the end of 2013 which saw Freshfields retain its spot alongside CMS Cameron McKenna, while Clifford Chance beat Herbert Smith Freehills and Allen & Overy to the last position.

The deal will require approvals from regulators in the EU, China, Brazil and Australia as well as both companies’ shareholders before it can be completed, currently targeted for early 2016. If finalised it would see BG shareholders recieve 383 pence in cash and 0.4454 Shell shares for each share of BG they hold.

Commenting on the deal, which could produce a company worth more than £200bn, Ben van Beurden, chief executive of Shell said: ‘At the start of 2014, Shell embarked on an improvement programme, including divestments and the restructuring of underperforming businesses, whilst at the same time delivering profitable new projects for shareholders. This programme is delivering, at the bottom line.’

He added: ‘BG will accelerate Shell’s financial growth strategy, particularly in deep water and liquefied natural gas: two of Shell’s growth priorities and areas where the company is already one of the industry leaders. Furthermore, the addition of BG’s competitive natural gas positions makes strategic sense, ahead of the long-term growth in demand we see for this cleaner-burning fuel.’

kathryn.mcann@legalease.co.uk

For more coverage of Shell’s and BG’s legal teams see the energy section of the GC Powerlist.