Legal Business

‘Culture of valuing and recognising everyone’s contribution’: Slaughters unveils bumper associate bonus package

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Associates Slaughter and May
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Slaughter and May has increased the size of its annual bonuses, with associates qualified for more than four and a half years set to receive an additional 15% on top of their salary.

Associates at the firm, which last year introduced a discretionary bonus to all staff after abandoning its rigid associate lockstep, will reap a larger bonus this year, linked to both PQE and performance.

Associates up to six months qualified and achieving a good or exceptional level of performance will receive a 7.5% bonus this year, up on the 6% paid out in 2013, and worth almost £5,000. Associates qualified for between one and two years are set to take home a 10% bonus, a rise on the 8% handed out this time last year.

The biggest rise, amid increased competition for talented senior associates as US law firms look to build out in the City, have gone to those qualified for more than two and a half years. Those qualified for between two and a half and four years will earn an extra 2.5% this year, with bonuses rising to 12.5%, while those qualified for more than four years will see bonuses hiked up by 3% to 15%.

Associates who do not attain a good to exceptional level of performance – with points awarded to individuals based on legal knowledge and skills, business and communications skills, practice management and people skills and personal development – will receive a lower bonus. In 2012, all associates at the firm were paid a flat bonus of 5%.

Bonuses for trainees and support staff have been frozen at 3%. That means a first year trainee at the firm will expect to take home a £1,185 bonus, while second year trainees will take home around £1,350.

Executive partner Richard Clark said: ‘Our bonus levels reflect a busy year for the firm and our staff. We do not impose billing or time recording targets on our associates and our approach to bonus differentiation is to recognise performance and career progression while ensuring that we reflect our team culture of valuing and recognising everyone’s contribution.’

tom.moore@legalease.co.uk

Legal Business

‘We are a true partnership’: Slaughter and May names Wittmann new practice head as CC re-elects senior partner

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Leadership Clifford ChanceSlaughter and May
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Slaughter and May has appointed David Wittmann as the firm’s practice partner with the role’s current holder, partner Paul Olney, stepping down at the end of the year.

Wittmann will be responsible for the firm’s overall practice strategy and development both within the firm and its ‘best friends’ relationships with leading law firms outside the UK.

Slaughter and May has offices in London, Brussels, Beijing and Hong Kong, and Wittman rejects the view that Slaughter and May is a UK focused firm. ‘We operate from four offices,’ he said. ‘The competition like to paint us into a UK domestic firm but a large amount of the firm’s work is international across all out practice areas.’

Wittman told Legal Business that while ‘it will be business as usual’, he will focus on maintaining the firm’s culture. ‘We are not a heavily managed firm, we are a true partnership and this is very central to the way we operate. We don’t direct partners on how to manage their practices but try and build a consensus,’ he said. ‘M&A has been somewhat patchy this year, but we have been busy in disputes, regulatory work, competition and investigations.’

The role, when it goes into effect on 1 January 2015, will see him work closely with senior partner Chris Saul and executive partner Richard Clark. He succeeds Paul Olney who announced previously that he would retire from the firm at the end of 2014, after six years in the role and having been a partner at the firm since 1990.

Wittmann became a partner in 1997, having joined Slaughter and May as a trainee solicitor in 1988. His time at the Magic Circle firm has seen him advise on corporate, corporate finance and private equity work.

Meanwhile, Clifford Chance has re-elected Malcolm Sweeting as senior partner to serve a second four-year term and chair the firm’s Partnership Council. Sweeting said, ‘The legal landscape is not immune to change, and it is clear that our clients are increasingly challenging us to innovate and adapt. It is also clear from discussions with our clients, across sectors and from around the globe, that there are fantastic opportunities for Clifford Chance to support them as they look to achieve their ambitions and navigate this rapidly changing environment.’

jaishree.kalia@legalease.co.uk

Legal Business

The Friday Edit: Lloyds unveils panel, LB unveils The Disputes Yearbook and Slaughters’ magic still mesmerises the profession

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Comment Lloyds Banking GroupSlaughter and May
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It’s that time of the week again, dear readers, where we help you look back at the interesting legal happenings since Monday and pick out some of the highlights of this month’s edition of Legal Business. You can click here for further information on gaining full access to Legal Business.

Analysis of the week: Martial law

Can the disputes boom continue? And if it can are City law firms ready to bring their once-marginalised litigators back fully into their inner circles? These and many other issues were tackled in the piece, Martial law, the combatively titled signature piece for our 2014 Disputes Yearbook. The article assesses if the post-Lehman expansion of contentious work can continue and finds litigators unlikely to again accept taking a secondary role to deal lawyers. By a similar token the momentum running in favour of litigation boutiques shows no sign of having run its course.

Story of the week: Lloyds panel review

Though we reported it first late last Friday evening, it was this week that most readers would have seen the news of Lloyds’ long-awaited panel review, with 10 law firms making it on to the bank’s core own-account roster. Previous Lloyds counsel not on the list include Osborne Clarke, Stephenson Harwood and Berwin Leighton Paisner. By all accounts, the process was considerably less aggressive than Barclays’ overhaul earlier this year – which was reputed to have sliced £20m off the bank’s annual legal spend – but few expect the trend for tough bank reviews to change any time soon. Click here for our report and here for a recent interview with Lloyds’ Andrew Whittaker and Kate Cheetham for more background.

Comments of the week: Keeping Slaughters relevant and Norton Rose Fulbright’s ‘seamless’ service

In a further reminder that something mysterious about Slaughter and May still quickens the profession’s pulse, our piece on the firm ‘Never mind the magic, feel the substance‘ rapidly became the most widely read comment piece to have appeared on Legal Business’s website this year. While taking a sceptical view of the firm’s chances of sustaining its position indefinitely, we conclude its quality and consistency still provide formidable and enduring assets in the age of global law. We raise the point that Slaughters’ traditionalist view of client services could be more aggressively deployed to its advantage. Subscribers wanting to read the accompanying assessment of the firm’s celebrated corporate practice, The new boy, should click here.

Another popular piece came from regular LB contributor Bruce MacEwen of Adam Smith, Esq, who takes a jaded view of Norton Rose Fulbright’s attempt to have its cake and eat it in a dispute about conflicts and the status of its multi-profit centre combination. Bruce concludes: ‘Lawyers get enough of a bad rap in the public imagination for this very kind of behaviour: Saying one thing for widespread public dissemination and standing on contradictory legalistic distinctions invisible to anyone who’s not a lawyer, and implausible to many who are, when that tactic suits their self-interest.’

Quotes of the week:

‘There is a storm on the horizon and I don’t think many UK in-house counsel recognise it. Where is the line? Where do we have a moral, social or legal obligation to offer testimony and evidence, and discuss things externally? Or do we just have to shut up, be quiet and only speak to our client? That is a moving target right now.’

Bill Mordan, group GC at RB, reflects on the ethical challenges facing the modern in-house counsel, Where next, consigliere?

‘Professionals spend their career trying to convince their clients that they are essential and then at a certain point they realise that they will have to leave the firm and slip out of the door and no-one will really notice. That’s really hard.’

Slaughters veteran William Underhill reflects on the changing of the seasons, The new boy.

‘The kind of people you want to hire at a law firm are those who have a major zest for life and want to do things outside the office. That lawyer will otherwise lack in originality and the ability to work fast and efficiently. I see a lot of friends and family, play a lot of sport, and watch a lot of films. I saw Guardians of the Galaxy the other night – I highly recommend it.’ Clifford Chance litigation partner Simon Davis on keeping his edge, The Disputes Yearbook

Top posts:

Revealed: Lloyds unveils 10-firm roster as panel overhaul draws to a close

Comment: Never mind the magic, feel the substance – Slaughters has only one shot at staying relevant

Guest post: ‘Seamless’? The unintended consequences of Norton Rose Fulbright’s ‘combination’ argument

Quinn Emanuel targets City competition practice with Hausfeld partner hire

What’s in a name: One year on King & Wood Mallesons drops SJ Berwin

alex.novarese@legalease.co.uk

Legal Business

Comment: Never mind the magic, feel the substance – Slaughters has only one shot at staying relevant

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Comment Slaughter and May
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During its 125th anniversary year, Slaughter and May still divides the industry like no other institution. For its admirers, it is the standard bearer, bucking the received wisdom of the modern legal market – for detractors, an outfit on borrowed time, hoping to bet against the market (with an unhedged bet at that).

But 17 years since it first articulated what became irritatingly known as its best friends strategy, there remains no clear answer as to which camp is right.

Still, as we find in our look at the firm’s celebrated corporate practice this month (see ‘The new boy‘), Slaughters has had a pretty good crisis. Buoyed initially by bank bailout work, it has coped admirably in an environment in which its domestic corporate market has been in hibernation, while the economic shift eastwards further threatened its relevance.

On paper, Slaughters should be in trouble. In reality, the simplicity of its structure, relatively low cost-base, flexibility of its generalist approach and consistency of its partnership have compensated in the medium term, though not without a little slimming down.

The firm retains by far the strongest corporate bench in the City, while also having picked up market share as City rivals shift focus abroad. It’s striking and slightly unsettling the extent to which the firm still relies on Brand Boardman – there are more succession issues than Slaughters lets on – but even without Mr M&A, it’s a fantastic line-up.

None of which is enough to put Slaughters’ future beyond reasonable doubt. The international question looms as threateningly as it did in the late 1990s. Slaughters’ main counter to global challengers – that they are plagued with quality control issues across their networks – is eroded year on year. Top global firms have their strategic issues, but they are generally making ground in this area and will make more in the future.

In response, new head of corporate Andy Ryde (pictured) is putting renewed emphasis on its international profile. What else can the firm do? It has been fortunate that Asia and the US have proved so problematic for key rivals post-Lehman but the law game gets more international by the minute. Slaughters’ sales pitch here would also be more convincing if it wasn’t forced every five years or so to give the same spiel about how its referral arrangements used to be a little rough around the edges but their ‘best friends’ really get it now. How much more scope there is to improve the firm’s international showing without a shift in strategy is debatable. Slaughters cannot match its global rivals for resource.

What will be interesting is if Slaughters were to more robustly articulate another aspect of its approach that makes it as distinct: its classicist view of client service undiluted by CRM programmes or matter profit analysis. There’s certainly scope to play that message up: its international strategy is damage limitation in mitigating the negative inherent in its chosen model. In contrast, its bat-for-your-client ethos could have a major upside in the era of more demanding GCs.

This also brings us to the main reason Slaughters has endured as an institution against the odds: it provides a world-class service to clients and has the most consistent partnership in the City. Forget the grating attempts to shroud itself in mystique, which may still impress the tourists but no one else, Slaughters’ selling point isn’t style, it’s substance. And it will be those qualities that will give it a shot of confounding expectations for years to come.

For more analysis of Slaughter and May’s strategy see: The new boy – can Ryde & co keep Slaughters’ deal team on top

alex.novarese@legalease.co.uk

Legal Business

The new boy – can Ryde & co keep Slaughters’ deal team on top?

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Corporate Slaughter and May
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The City’s top deal shop has a new corporate head. Legal Business meets Andy Ryde and asks if Slaughters can keep the M&A magic going.

For a state school lad from Nottinghamshire who self-mockingly confesses to still having the tiniest chip on his shoulder, it has been quite a journey. Slaughter and May partner Andy Ryde in March was named as the firm’s new head of corporate, leading what most neutral observers would see as, by some margin, the City’s top deal practice.

Legal Business

Never mind the magic, feel the substance

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Comment Slaughter and May
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During its 125th anniversary year, Slaughter and May still divides the industry like no other institution. For its admirers, it is the standard bearer, bucking the received wisdom of the modern legal market – for detractors, an outfit on borrowed time, hoping to bet against the market (with an unhedged bet at that).

But 17 years since it first articulated what became irritatingly known as its best friends strategy, there remains no clear answer as to which camp is right.

Legal Business

‘We would expect to bring in a few more lateral hires’ -Slaughter and May loses London tax partner to Greenberg Traurig Maher

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Strategic recruitment Greenberg TraurigSlaughter and May
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Having broken with tradition in making its first-ever lateral hire this year, Slaughter and May has seen a rare departure at partner level, with long-serving tax partner Graham Iversen leaving the firm to become head of Greenberg Traurig Maher‘s (GTM) London tax practice.

Iverson, who joined the Magic Circle firm in 1990 and made partner in 2000, becomes GTM’s second tax partner in London and seventeenth partner in total. He replaces Justin Hamer, who was recruited by GTM from Paul Hastings in 2009, who is retiring from the firm.

According GTM chair Paul Maher, Iversen’s name came up after the London practice canvassed colleagues for a suitable replacement for Hamer, in light of the fact that tax is a critical component of Greenberg Traurig’s practice internationally.

‘We would expect to bring in a few more lateral hires over the next three to six months,’ said Maher. ‘Graham’s a direct replacement for Justin but also part of strategy to grow our core components. Graham has a very broad skill set and there are very few things he hasn’t done. He will have a key role in building our European tax practice.’

Iversen’s exit, planned for November, takes Slaughter and May’s tax practice down to eight partners, with the firm promoting Dominic Robertson to partner last year. Senior partner Chris Saul confirmed Iversen’s departure and told Legal Business: ‘Graham has been an excellent member of the team here at the firm and we wish him every success.’

tom.moore@legalease.co.uk

Legal Business

Shearman & Sterling and Slaughters lead on Bridgepoint’s £212m purchase of Moneycorp

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Corporate Shearman & SterlingSlaughter and May
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Shearman & Sterling has advised European private equity group Bridgepoint on its £212m acquisition of Moneycorp, a foreign exchange provider, owned by SOF Investments which was advised by Slaughter and May.

UK-based Moneycorp sells foreign currency to small businesses and consumers, with 10 stores and 61 airport locations. It benefitted from a withdrawal of services provided by high street banks and took advantage of Thomas Cook’s debt burden in 2013 to acquire the travel group’s foreign exchange business.

The company recorded £97.2m in revenue in 2013, up on the £65.2m it registered the previous year. It expects the UK international payments market to grow by 11% year-on-year as customers switch away from banks.

London-based private equity partners Simon Burrows and Mark Soundy of Shearman & Sterling advised Bridgepoint on the deal. Slaughter and May’s corporate partner David Johnson, who recently advised Punch Taverns on its last ditch success in restructuring £2.3bn worth of debt, advised SOF Investments. Johnson was supported on the deal by Slaughters’ associates James Kaye and Sam Whittaker.

Charles Russell advised Moneycorp’s management on the deal, with corporate partner Mark Howard and employment partner David Green taking the lead.

Mark Horgan, chief exec at Moneycorp, said: ‘We are setting out to make Moneycorp the first choice in international payments and foreign exchange in the UK and now also have the opportunity to realise our broader ambitions and to grow internationally with Bridgepoint.’

Tom.moore@legalease.co.uk

Legal Business

Slaughters and HSF lead as BHP Billiton undergoes major demerger

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Corporate Herbert Smith FreehillsSlaughter and May
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Slaughter and May corporate partners Richard de Carle and Susannah Macknay are spearheading a demerger at mining giant BHP Billiton, which is spinning off its less profitable aluminium, silver, South African coal, manganese and nickel businesses into a new company estimated to be worth around $14bn.

The new independent company will be created by way of a demerger through an in-specie distribution and listed on the Australian Securities Exchange and Johannesburg Stock Exchange. Slaughter and May is working alongside Herbert Smith Freehills, who are advising on Australian law matters, and 600-lawyer ENSafrica on South African law matters. The new company will be based in Perth.

Slaughters’ team includes tax partner Jeanette Zaman, financing partner Philip Snell and competition partner Michael Rowe. Associates Louise Campbell, Elizabeth Szanto and Emma Game are assisting. HSF’s Australian legal team was made up of corporate partners Al Donald, Quentin Digby, Adam Strauss and Baden Furphy.

BHP Billiton, which is listed on the London Stock Exchange, is a longtime client of the Magic Circle firm. Corporate partner Nigel Boardman, who has been a partner at Slaughter and May since 1982, is the relationship manager and was lead partner on the company’s 18-month pursuit of Rio Tinto for $68 billion in 2008.

The company hopes to create better returns for BHP Billiton shareholders by streamlining the company and focusing on a simpler portfolio comprising iron ore, copper, coal and petroleum. BHP chief executive, Andrew Mackenzie, said in a statement: ‘The assets that would form the new company are not of the same size as those in our major basins but many are among the largest and highest quality in their sectors. We believe they will be more valuable in a purpose-built, independent company than they would be in BHP Billiton.’

Tom.moore@legalease.co.uk

Legal Business

Slaughters posts high trainee retention rate while BLP keeps on 83%

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Trainee retention Berwin Leighton PaisnerJones DaySlaughter and May
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Slaughter and May, which is well known for its high retention rates, has kept on 33 out of its 34 qualifying trainees, giving it a retention rate of 97%. In March, the firm retained 36 people from a cohort of 38, a rate of 95%.

Corporate partner Robert Byk, who helps lead the firm’s graduate recruitment, told Legal Business: ‘Most firms significantly reduced training contracts three years ago, so it’s logical that their retention rates have improved, we didn’t do that. For us the lowest we’ve ever been is 88%. For us it is important to retain people and recruit for the long-term.’

Byk added that the firm’s recruitment policy, which does not screen out applicants based on A Level results, supports diversity at the firm, which has also added to the complexity of its written tests carried out on the day of interview, a policy introduced two years ago and then shared with partners that had not interviewed the candidate.

Berwin Leighton Paisner has retained 15 of 18 newly qualified lawyers, posting an 83% retention rate in a year when some of its City rivals have increased the number of lawyers they are keeping on.

The firm, which posted bumper financial results this year including a 35% rise in profit per equity partner to £542,000, retained 15 out of 18 final-seat trainees. In the Spring the firm kept hold of 16 out of 18 newly qualified lawyers, a retention rate of 89%.

Anthony Lennox, BLP’s trainee principal, said: ‘We are very pleased to once again be able to retain such a high percentage of our trainees. They are the future of the firm and we are committed to their development and career progression. The calibre of trainees at BLP is extremely high and this reiterates our ambition to recruit only the very best into our trainee programme.’

Elsewhere, US firm Jones Day will keep on eight newly qualified lawyers from an intake of ten. This follows on from when the firm kept on one out of a group of three in March this year, giving the firm a retention rate of 82% for 2014 in London.

Three of the newly qualified will take up positions in the firm’s global disputes practice, while two will join real estate, and the remaining three will be split between corporate, banking and intellectual property.

Of the two trainees that are not staying on, one is leaving to launch his own business, while the other chose to specialise early.

Tom.moore@legalease.co.uk