Legal Business

Stephenson Harwood enters Formal Law Alliance with Singapore’s Virtus Law

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Stephenson Harwood has received formal approval to work with Singapore firm Virtus Law from the local Attorney General’s Chambers.

Under the Formal Law Alliance (FLA), the firms will work more closely together to undertake work requiring both English and Singapore law expertise.

The top 40 firm ramped up its Asia presence in May last year, when it announced its exclusive association with Virtus Law, with a particular focus on corporate, litigation and asset finance. The firm also launched in Beijing around the same time, marking its fourth office in Greater China. This year has seen a further focus on building its presence in Asia, with the announcement in February of plans to open in the burgeoning Seoul market, with the hire of DLA Piper’s local office head and litigation partner Michael Kim.

In addition to Beijing, Stephenson Harwood also has offices in Hong Kong, Guangzhou and Singapore, and associations with Christian Teo Purwono & Partners in Indonesia and U Tin Yu & Associates in Myanmar.

Stephenson Harwood Singapore managing partner Martin Green said: ‘Virtus Law’s areas of capability correspond to key areas of Stephenson Harwood’s expertise in Singapore. The alliance with Virtus Law LLP will enable us to offer clients a more tightly integrated service in multi-jurisdictional matters involving English law and permitted areas of Singapore law.’

Arthur Loke, senior partner in Virtus Law, added: ‘This alliance will allow us to pool our resources in terms of client advice, extend our legal provision and client offering to Stephenson Harwood’s international clients. We look forward to working with the Stephenson Harwood partners to do so.’

jaishree.kalia@legalease.co.uk

Legal Business

‘A good time to take over’: Stephenson Harwood appoints new head of corporate as H1 revenues up by 17%

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With Stephenson Harwood’s chief executive Sharon White this month reappointed for a further three-year term, the high profile transactional lawyer has relinquished her dual role as head of corporate to Andrew Edge, who concedes that ‘it is a good time to take over’, with the department’s revenues up by 17% in the first half of the 2013/14 financial year.

Edge (pictured) formally takes over on April 1 2014, with the firm’s City corporate practice’s revenue on an upward trajectory, having risen to £14.3m in the 2012-13 financial year, up nearly 7% from £13.4m in 2011-12.

Having joined Stephenson Harwood from Ashurst in March 2010 Edge, who specialises in public and private M&A, will manage a team of 67 lawyers including 23 partners covering commercial and outsourcing, projects, funds, tax and competition, and 14 corporate finance partners.

He plans on striking a healthy balance between management and doing deals. ‘I am not going to take my foot off the pedal,’ he says. ‘I became a corporate lawyer to do deals and that is what I will continue to do.’

He adds: ‘Over the last few years the firm has built on the foundations of the strong team we already had. For example, we brought in Tom Nicholls [from Lawrence Graham] and before him, Jonathan Cripps [from Eversheds], and we are feeling the benefits of these investments. It was a slow 2011 but the markets have picked up.’

Nicholls joined the firm in February 2013, having been head of energy and natural resources at Lawrence Graham, and focuses on M&A and equity fundraisings, both on the main market and the alternative investment market. Cripps, meanwhile, now heads the firm’s projects team and is considered one of its top billers. He brought over waste disposal authority client North London Waste Authority in 2012. Other new corporate clients include Schroders Real Estate Investment Trust.

Edge, meanwhile, has led on high value deals including advising Piramal Healthcare, a Mumbai-listed pharmaceutical company, on the sale of its Indian prescription generic pharmaceuticals division to US pharmaceuticals giant Abbott for $3.7bn; representing Baker Tilly on the acquisition of the assets of RSM Tenon Group by way of a pre-pack administration; and advising GDF SUEZ on the £190m acquisition of Balfour Beatty’s UK facilities management division – operating as Balfour Beatty WorkPlace.

White said: ‘Andrew is a highly respected figure in the market and since his arrival, his skill base has enhanced our ability to offer corporate services to a wide range of clients. I am delighted that he will now take up the position as practice group leader of the corporate group, to oversee the growth and development strategy which we are committed to fulfilling.’

The appointment comes as Stephenson Harwood last week appointed Richard Parsons as its new global head of aviation, following the departure of Paul Ng to Milbank, Tweed, Hadley & McCloy.

jaishree.kalia@legalease.co.uk

Legal Business

Asia round-up: DLA Piper, Hogan Lovells and Stephenson Harwood move to bolster regional networks

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Despite the bearish mood that last year gripped many international law firms regarding Asia, and sustained tremors this year running through emerging market securities, a host of major advisers have kicked off 2014 with significant investments in the region, including DLA Piper, Hogan Lovells and Stephenson Harwood.

DLA Piper has hired O’Melveny & Myers partner Mark Fairbairn to head its restructuring group in Asia. Fairbairn was based in O’Melveny’s Hong Kong arm, having joined in 2008 following a five-year tenure at White & Case.His focus is on distressed and alternative investments, financial restructurings and insolvency. Counsel Ashley Bell also joins the Anglo-American giant’s restructuring group from O’Melveny. This is the third recent hire that DLA Piper has made from O’Melveny, as corporate partner Timothy Tan joined the firm’s Bangkok office last month.

Hogan Lovells, meanwhile, has scored a high-profile recruit with the appointment of Herbert Smith Freehills’ head of litigation in south-east Asia, Maurice Burke. Burke, who is set to join Hogan Lovells in May, has extensive experience on a range of commercial litigation, contentious regulatory and investigation matters throughout Asia. He will work alongside Singapore-based international arbitration partners Jonathan Leach and Paul Teo, a team that is rated in the top-tier of the recently released edition of The Legal 500 Asia Pacific 2014.

Commenting on Burke’s arrival, Stephen Immelt and Michael Davison, global co-heads of Hogan Lovells’ litigation, arbitration and employment practice, said: ‘Singapore has established itself as a hub for resolving disputes in south-east Asia. As one of the leading practitioners in the region, Maurice will further enhance our top-tier offering to clients across south-east Asia.’

Elsewhere, Jones Day has announced that David Carden, the US’s first ambassador to the Association of Southeast Asian Nations will re-join the firm as partner-in-charge of Asia. He was a partner based in New York and co-head of Jones Day’s securities litigation and SEC enforcement practice before his ambassadorship in March 2011.

Finally, top-50 UK practice Stephenson Harwood has hired DLA Piper’s Seoul office head Michael Kim as a partner in the marine and international trade practice to aid the firm’s launch in the much-touted economy. Kim will be based in the firm’s London office initially but with a planned opening in South Korea soon, Kim will be the managing partner of the new office.

He is experienced in ship finance and litigation, as well as arbitration matters. Both Kim and the firm share some clients including Export-Import Bank of Korea, STX Corporation, Daewoo Shipbuilding & Marine Engineering and Hyundai Merchant Marine.

‘As the world’s twelfth-largest economy and one of the largest in Asia, Korea is a key market for Stephenson Harwood. Michael’s appointment further strengthens our Korea practice and provides us with the opportunity to apply for a licence for an office in Korea, and in doing so, extends our Asia network,’ said Sharon White, chief executive of Stephenson Harwood.

Whatever the doubts about Asia’s medium-term prospects, it is clear that the queue of ambitious law firms looking to forge potent practices in Asia shows no sign of shortening during 2014.

david.stevenson@legalease.co.uk

Legal Business

Seoul searching: Stephenson Harwood hires DLA Piper’s South Korea head Michael Kim

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With five of its nine overseas offices in South and East Asia, it is perhaps unsurprising that Stephenson Harwood has become the latest UK firm to make plans to open in the burgeoning Seoul market, with the hire of DLA Piper’s local office head and litigation partner Michael Kim.

Kim brings with him a developed reputation in South Korea and experience in shipping, ship finance, shipbuilding and offshore and general commercial litigation and arbitration matters.

However, the top 35 UK firm today (7 February) announced that it has yet to apply for a license to set up in Seoul and Kim will be based in London initially, in the anticipation of relocating to its latest Asian outpost when permission is granted.

Key mutual clients of both the firm and Kim include the Export-Import Bank of Korea, STX Corporation, Daewoo Shipbuilding & Marine Engineering and Hyundai Merchant Marine.

Stephenson Harwood’s head of the marine and international trade practice Mike Phillips said: ‘There are significant synergies between Michael’s work and that of the marine and international trade and finance practices of Stephenson Harwood both in London and in Asia. We both work for most of the biggest names in Korean shipping, ship building, finance and trade sectors and Michael’s arrival here will take the firm’s leading reputation to the next level.’

Stephenson Harwood already has offices in Beijing, Hong Kong, Guangzhou and Singapore, as well as a number of associations in the region.

Seoul’s GDP is $1.13trn and since the liberalisation of the legal market in 2012 it has drawn the likes of Baker & McKenzie and Cleary, Gotlieb, Steen & Hamilton, which in 2013 acted for local private equity house MBK Partners on its €1.24bn acquisition of ING Life Korea.

Stephenson Harwood chief executive officer Sharon White added: ‘As the world’s twelfth largest economy and one of the largest in Asia, Korea is a key market for Stephenson Harwood. Michael’s appointment further strengthens our Korea practice and provides us with the opportunity to apply for a licence for an office in Korea, and in doing so, extends our Asia network.’

Jaishree.kalia@legalease.co.uk

Legal Business

LLP latest: Trowers accounts confirm profits slide as Holman and Stephenson Harwood power on

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What finer way to kick off the New Year than a stream of law firm limited liability partnership (LLP) accounts? The latest in a run of recent filings confirm the extent of the fall in profitability at Trowers & Hamlins, while Holman Fenwick Willan and Stephenson Harwood confirm revenue increases.

Trowers’ LLP accounts for 2012/13 show that the firm’s net income fell from £26.2m to £16.1m while operating profit was down from £28.4m to £18.8m. The firm said the sharp fall in profits was largely due to the cost of moving its new London headquarters. Its turnover also decreased by 3.6% to £78.2m in 2013 from £81.2m the previous year.

The firm’s overall staff count grew from 514 to 527 while fee earner headcount remained static with the highest paid equity partner taking home £411,002, down from £496,838 in 2012.

Moreover, the firm took out new loans and finance leases during 2013 totalling £5.8m compared to £785,000 in 2012. The firm’s cash position has weakened against the previous year, moving from a surplus of £8.17m to net debt of £5.19m.

The firm, which has in recent years had to weather a slowdown in its public sector practice and problems in its Middle East network, also today (3 January) confirmed that it was to close its Cairo branch, citing uncertainty in Egypt. Trowers’ Cairo managing partner Sara Hinton along with other fee-earners will join local firm Ibrachy & Partners and operate on a ‘best friends’ basis.

In contrast, at Holman Fenwick revenue grew to £141.4m in the financial year 2012/13, up from £124.2m the previous year, while profits also rose to £47m from £39.7m. The firm has been one of the most financially successful practices in the UK top 50 over the last five years, with revenues rising 82% since 2008.

The firm employed 445 fee-earners on average compared to 436 the previous year, while the overall staff headcount was slightly lower at 771 compared to 780 in 2012. Staff costs increased to £53.4m from £49.3m. The firm’s average number of members grew from 128 to 141.

The LLP’s bank borrowings totalled £16.1m compared to £17.8m the previous financial year.

Meanwhile, Stephenson Harwood’s revenue increased by 3.7% to £113.3m to £109.3m, after announcing a 2% growth in revenue from £110.2m to £112.3m in July. The firm told Legal Business the unaccounted £800,000 was due to subletting income.

The firm’s profit remained static against preliminary estimates at £36.8m. The figures come after the firm transferred to a LLP structure in March 2012.

Member headcount grew from 105 to 112, with the highest paid LLP member receiving £895,000, down from £910,000 in the previous year. Average fee-earner and support staff headcount also increased from 506 to 522 and 173 to 180 respectively with the overall staff increasing from 679 to 702. This led to staff costs rising to £41.4m from £39.6m.

The firm’s pension liabilities also grew firm £39.9m in 2012 to £47.6m while its pension deficit also increased from £4.8m to £6.6m. In addition, the firm has bank loans of £6.2m, which it will pay in 32 quarterly instalments of £200,000 until February 2021.

jaishree.kalia@legalease.co.uk

Legal Business

Financial results 2013: DAC Beachcroft, Stephenson Harwood, Brodies and Morgan Cole reveal their numbers

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Top 30 UK firms DAC Beachcroft and Stephenson Harwood today (15 July) unveiled growth in revenue for 2012/13, while Brodies last week revealed a third consecutive increase in turnover and profit and Morgan Cole has seen its profits drop significantly.

DAC Beachcroft’s revenues have increased by 14.2% to £188.2m, up from £164.8m in 2011/12. Net profit at the 1079-lawyer firm also increased by 42% to £31.8m at the end of the last financial year, up from £22.4m the previous year. However, profit per equity partner (PEP) is down by 11.5% from £321,000 in 2011/12 to £284,000.

The firm merged with Davies Arnold Cooper in October 2011 and in January this year became the first European firm to launch in Chile by acquiring two local firms. Managing partner Paul Murray said: ‘Year-on-year comparisons continue to be distorted by the merger mid-year in 2011/12 but these numbers will provide a baseline for next year. Overall the results are acceptable in what continues to be a challenging and changing economic environment.’

Also unveiling its revenue figure today is UK top 30 firm Stephenson Harwood, which announced a more modest growth of 2% to £112.3m at the end of the 2012/13 financial year, up on last year’s figure of £110.2m.

The firm has attributed the growth to ‘some major investments including the recruitment of 12 new partners and the opening of offices in Dubai and Beijing’, chief executive Sharon White (pictured) said.

The firm now has nine offices across Europe, Asia and the Middle East and has acted on a number of high profile international deals over the course of the year, including for Indonesia-based Lion Air for the world’s largest commercial aircraft order, comprising 234 Airbus – A320 and A321 aircraft, with a price list value of $24bn. The firm also advised Hitachi on its bid to provide the rolling stock for London’s Crossrail, with a total contract value of around £1.8bn.

Meanwhile, Scottish firm Brodies has seen its revenue grow for the third year in a row, posting a 7.5% increase to £46m, up on £42.8m last financial year. The firm has credited the successful implementation of the second year of its three-year strategic plan, following on from a revenue increase of 16% in 2011/12, up from £36.9m.

Over the course of the year, the firm, which has four offices across Scotland and in Brussels, has continued to expand its Aberdeen office, which has grown from 34 to 46 staff, including 28 lawyers, as a result of three partner hires and six new lawyers.

Legal Business Management Partner of the Year, Bill Drummond, said: ‘The targeted investment that is being made across the business – in people and infrastructure – positions us well to benefit from stabilising market conditions and our strong balance sheet means that Brodies’ management team can continue to seek suitable investment opportunities to further enhance the service we deliver to our clients.’

Elsewhere, national top 75 firm Morgan Cole has posted a drop in revenue and profit, posting a turnover of £35.4m, down 3.3% from last year’s £36.6m, while PEP also dropped 34.7% to £162,000 from £248,000 in 2011/12.

Managing partner Elizabeth Carr said the firm has spent the past year considering its future business strategy ‘to ensure the right structure to meet the needs of the evolving market’ and subsequent changes to that structure and investment in the firm’s property portfolio means the reduction in revenue and profit are ‘entirely as expected.’

Highlights of the year include growth of £1.7m in the public sector and appointments on the Government Procurement and NHSLA panels.

Carr added: ‘Consolidation, competition and pricing pressures will continue through 2013-14 but we are confident that exemplary service to clients, focused sector marketing and an open approach to merger and acquisition opportunities will result in new clients and increased revenue in 2013-14 and beyond.’

francesca.fanshawe@legalease.co.uk

Legal Business

Asia round-up: DLA hits Jakarta while Stephenson Harwood expands in Singapore and Beijing

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Despite concerns over a cooling eastern economy, UK advisers continue to invest in Asia with DLA Piper and Stephenson Harwood this week making major plays in the region.

DLA Piper has entered into a strategic alliance with Indonesian law firm Almaida Baely & Firmansyah (IAB&F), ramping up its already huge global footprint. Like most international advisers, DLA had previously largely serviced Indonesian work from its Singapore arm.

DLA co-chief executive Nigel Knowles explained the rationale for entering the increasingly feted market: ‘At DLA Piper we make it our business to do business where our clients do business. Indonesia is one of the fastest growing emerging economies in the world, with a young population, burgeoning middle class consumers and growing international trade – it makes sense for us to formalise our close ties with our partners there.’

International advisers have been attracted to soaring rates of direct foreign investment in Indonesia – estimated by the International Monetary Fund to have expanded 400% over the last four years – annual growth rates of over 6% and the potential of a country with a population of a quarter of a billion.

In March 2011, Norton Rose tied up with Jakarta’s Susandarini & Partners, while Stephenson Harwood entered into an association with Christian Teo Purwono & Partners in November the same year. Herbert Smith Freehills (HSF) has a longstanding alliance with Hiswara Bunjamin & Tandjung that began over ten years ago.

Magic Circle firms Linklaters and Allen & Overy also have alliances in the country while White & Case is the most recent international firm to enter the market via an association with MD & Partners, which was agreed earlier this year.

IAB&F joins DLA as part of a growing group of ‘relationship firms’, including DLA Phillips Fox in New Zealand, Croatia’s Glinska & Miskovic, Egypt’s Matouk Bassiouny, Sweden’s DLA Nordic and six firms across Africa.

Elsewhere, Stephenson Harwood has ramped up in another much touted market after agreeing a formal association with Singapore’s Virtus Law. This bypasses the need for a qualifying foreign law practice (QFLP) licence to offer Singaporean law. Despite 23 international firms – including Stephenson Harwood – last year applying for the incoming QFLP, only four were granted in the first round.

Stephenson Harwood also this week opened a representative office in Beijing, after receiving approval from the Ministry of Justice late last year. James Zhang, a legal director at the firm, is heading up the branch, which will focus on corporate and maritime law.

The relative difficulty of securing local licences has been seen as a driver for alliances between foreign and local firms. However, Singapore is widely expected to eventually move towards further liberalisation.

Elsewhere, Legal Week today (2 May) reports that Linklaters and Baker & McKenzie are the latest firms to secure approval to launch local offices in South Korea. A large group of foreign law firms last year applied for local licences in response to Bar liberalisation. Eighteen firms have so far received approvals from the Ministry of Justice, including Clifford Chance, DLA Piper, K&L Gates and Herbert Smith Freehills.

david.stevenson@legalease.co.uk

Legal Business

FSA slaps Pru with £30m fine before its split

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The Financial Services Authority (FSA) handed out its last penalty before being split up after fining companies in the Prudential Group (Prudential) a total of £30m.

According to the watchdog, the fine relates to Pru’s failure to inform the regulator that it was seeking to acquire AIA, the Asian subsidiary of AIG, in early 2010.

Stephenson Harwood and Freshfields Bruckhaus Deringer landed roles advising on the fine.

The Pru turned to Freshfields’ head of financial institutions David Scott for advice on the fine.

Tony Woodcock, commercial litigation partner at Stephenson Harwood landed a role acting for Tidjane Thiam, the insurer’s chief executive.

‘Prudential, led by Thiam as CEO, failed to give due consideration to its obligation to inform the FSA of this transaction, which would have had a huge impact on the ground had it gone through. That was a serious error of judgement for which the Prudential is paying the price,’ said Tracey McDermott, FSA director of enforcement, in a statement.

According to the FSA, the Pru failed to inform it at the earliest opportunity to allow them to approve or reject the deal on regulatory grounds.

The FSA issued record fines in 2012, totalling £313m after issuing 57 penalties. Compared to 2011, the FSA handed out £65.5m in fines although the Libor scandal was a major factor in the exponential rise in penalties last year. Already this year, the FSA has handed out over £135m in penalties, with the Royal Bank of Scotland getting hit with an £87.5m fine over the Libor issue in February this year.

This was the last fine to be handed out by the FSA, as it was split into two parts becoming the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) on 1 April.

Slaughter and May corporate heavyweight Charles Randell, is the only City lawyer to be appointed to either of the new regulation bodies. Randell will sit on the PRA’s board.

But if the change in name of the organisation may have caused some to think that the level of fines might drop, one partner at a Magic Circle firm is not convinced.

‘My expectation is that fines will continue to increase. The FSA was moving towards a tariff system, which increased fines in line with a company’s revenue. Although until Prudential no one was criticising the FSA for level of fines,’ they said.

Despite Martin Wheatley, chief executive of the FCA, publicly stating that level of fines will not change companies’ behaviour, many think it will be business as usual for the regulator. One City partner said: ‘The FSA is always trying to hold senior management to account, as seen with the targeting of Prudential’s Thiam.’

A new name perhaps but it looks like financial regulatory partners will be kept busy for the future.

david.stevenson@legalease.co.uk

Legal Business

Cleary hires former Stephenson Harwood chief executive

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Cleary Gottlieb Steen & Hamilton has hired former Stephenson Harwood chief executive and litigation heavyweight Sunil Gadhia in its London office, marking a growing trend of US firms bulking up City disputes practices.

Gadhia is set to join Cleary’s London outpost this year after 15 years as a partner at Stephenson Harwood, of which he spent six as chief executive.