Legal Business

Sponsored briefing: Interview with Doug Bryden (partner and head of risk and operational regulatory) and Heather Gagen (partner, dispute resolution)

Sponsored briefing: Interview with Doug Bryden (partner and head of risk and operational regulatory) and Heather Gagen (partner, dispute resolution)

What are your backgrounds in terms of advising and acting for clients on ESG-related risks?

Doug Bryden (DB): I have advised clients in relation to a broad spectrum of risks for many years, from environmental to business ethics (including modern slavery and human rights) and on related governance and boardroom responses. The prevailing trend now is to view these operational, reputational and legal issues through the lens of ‘ESG’. The consolidation of these risks under a single banner is proving extremely useful in both explaining those risks to boards as well as streamlining a stronger, better considered management response. On one hand my job as an ‘ESG lawyer’ is to help clients promote ESG awareness within a business and to ensure compliance with an ever-increasing range of ESG regulatory obligations. However, this needs to be carefully balanced against the threat of novel legal risks that ESG programmes and associated public disclosures create. Much of my practice and Heather’s is focused on achieving outcomes which sensibly protect an organisation from such legal risks, without undermining the real opportunities and progress that better ESG management creates.

Legal Business

Financial results 2020/21: Travers overcomes Covid blip as revenue spikes 15% and PEP surges 22%

Financial results 2020/21: Travers overcomes Covid blip as revenue spikes 15% and PEP surges 22%

The financial performance of Travers Smith has seen a dramatic double-digit bounce-back as turnover increased 15% to £185.7m and profit per equity partner soared 22% to £1.22m. The eye-catching PEP result came even as the number of full equity partners remained broadly flat at 57 compared with 56 last year.

The provisional results for the year ended 30 June 2021 announced today (9 August) will be a welcome return to form after last year’s disappointing showing when the firm suffered a 1% revenue drop to £160.9m, stymying a decade-long run of uninterrupted turnover growth. PEP also fell 20% to £1m, with the results being adversely affected by a reporting period that ran to the end of June, rather than April, giving the firm greater exposure to the pandemic downturn.

Travers’ managing partner Edmund Reed attributed the figures to continued investment in the business, including building across core areas of asset management, M&A and dispute resolution and investigations. ‘This has enabled us to attract a number of significant instructions from clients, which have kept our teams busy. None of us were expecting that we would be living and working under lockdown restrictions for such a long period of time. The way our people performed during the crisis continues to be amazing: by supporting each other both professionally and personally, every team across the firm has contributed to produce these excellent results. I am very proud of what we have achieved through this extraordinarily difficult period.’

‘The next 12 months will no doubt present new challenges, but we go into our new financial year in very good shape, confident in our model, and with a healthy pipeline of work. I am grateful for the support and trust placed in us by both our people and our clients,’ added Reed.

The firm promoted seven lawyers to the partnership during the year, across the focus areas of dispute resolution, private equity and financial sponsors funds, finance and financial services and markets.

In July, the firm also said it had recruited infrastructure finance specialist Ben Thompson from Weil, Gotshal & Manges to work closely with the corporate team led by Spencer Summerfield, Mohammed Senouci and Jonathan Walters.

Travers offered up a long list of desirable mandates for the year across its asset management, M&A and disputes and investigations practice areas.  Teams acted for longstanding client Medicxi, the European life sciences investment firm, on a €200m structured secondary transaction, Investec Bank on one of the first ESG-linked subscription facilities in Europe and Nortel Networks UK Pensions Trust on a further buyout, bringing the total value of transactions between the Nortel Networks UK Pension Plan and Legal & General to over £2.5bn.

M&A highlights include advising Inflexion on its partnership investment in Digital Wholesale Solutions, a leading independent unified communications and cloud platform provider, currently a division of Daisy Group, and Macquarie Capital Principal Finance on its acquisition of a majority stake in Wavenet Group Holdings Limited. Disputes teams have handled matters including Hewlett Packard Enterprise on fraud claims amounting to $5bn, with parallel criminal proceedings in the US, arising out of the $11bn acquisition of Autonomy in late 2011.

The firm also points to a number of technology projects developed by its in-house team, which have created significant efficiencies and cost savings for clients.  These include Etatonna, the first legal industry data labelling AI platform, which labels concepts in contracts for the purpose of automated document review, and its first product, a free force majeure app for clients.

Commenting on the results, senior partner Kathleen Russ (pictured) was bullish: ‘Our continued success reflects our firm’s stellar reputation in our core areas and is a testament to the hard work, resilience and commitment of everyone in the firm. Our teams have been there for our clients every step of the way throughout the pandemic. At the same time, many of our people continued to do inspirational things – helping those in need and contributing to the wider community, while at the same time doing all they could to support each other. I am incredibly proud of our firm and grateful to our teams for all their efforts.’

Legal Business

Life During Law: David Patient

Life During Law: David Patient

My father was a consultant obstetrician, his brother was an accountant, but I was rubbish at science and didn’t like maths. I was pushed down this corridor – ‘why don’t you do law?’ I knew absolutely nothing about it and no-one in our family had been a lawyer.

Some of my best friends still are people I met at university. A lot of them have gone off to do other things but one of them who has remained a close friend from the very first evening we met is a senior corporate partner at Allen & Overy, Richard Hough. Really lovely guy.

Legal Business

End of an era for Travers as Reed to succeed Patient as managing partner

End of an era for Travers as Reed to succeed Patient as managing partner

David Patient is to hand the Travers Smith managing partner baton to private equity partner Edmund Reed, the firm announced this morning (16 November).

Reed, a partner in Travers’ private equity and financial sponsors group and member of the firm’s partnership board since 2013, will assume the role on 1 July 2021.

The popularity of Patient (pictured), who was originally elected to the helm in January 2015 to succeed Andrew Lilley  was marked in 2018 when he stood unopposed to be elected for a second three-year term .

His successor Reed joined Travers in 1994 becoming a partner in 2005 and, between 2000 and 2004, he was an investment manager at Phoenix Equity Partners. He is credited with playing an active part in the management of the firm and the development of Travers Smith’s business strategy, alongside his M&A experience with a focus on private equity and real estate deals.

His clients include private equity firms Phoenix Equity Partners, Inflexion and Patron Capital, and large corporates including Ascential Group and Foster + Partners.

But for the fallout of the coronavirus pandemic, Patient has steered the firm through six years of revenue growth and has been instrumental in refocusing the professionalism of the firm without sacrificing its much-prized culture.

Patient and former senior partner Chris Hale were also the forces behind the firm’s highly successful Paris office as a route to more English law work on the continent for UK private equity clients and to build a referral network.

Travers had enjoyed nine consecutive years of revenue growth, with the tenth marred by the impact of having a reporting period running to the end of June rather than April, meaning greater exposure than most peers to the pandemic downturn. This resulted in a 1% revenue dip to £160.9m, 11% slump in net profit and 19% fall in profit per equity partner (PEP) to £1m.

Senior partner Kathleen Russ said: ‘Edmund is an outstanding strategist, who combines a deep understanding of the benefits of the firm’s independence, culture and ethos with innovative thinking and a highly commercial perspective. This is a period of transformation for the legal industry and with those challenges come opportunities. I very much look forward to working alongside Edmund as we move into a period of innovation and evolution and as we embrace these developments to build on the firm’s current success and reputation in the market.’

Russ also commended Patient for his ‘thoughtful leadership’ of the firm through the coronavirus pandemic.

Patient said: I would like to congratulate Edmund on his appointment as our next managing partner. With his in-depth knowledge of Travers Smith, business acumen and diversity of experience he has all the qualities to make an outstanding managing partner. I am extremely pleased to see him take up this key leadership role in the firm.’

Reed added: ‘Travers Smith is a vibrant and dynamic firm, with fantastic clients and a terrific team of highly skilled lawyers and business services professionals. Over the last few years, under David’s leadership, we have built an outstanding business focused on our market-leading capability in asset management, M&A and disputes.

‘I am also proud of the way that the firm looks after its people, not just through the current pandemic, but in the wider sense including the significant progress we are making on diversity and inclusion.’

For more on Travers Smith’s success under David Patient, read ‘Defying gravity – Inside the improbable rise of Travers and Macfarlanes’ (£)

Legal Business

‘Not out of the woods yet’: Coronavirus puts the kibosh on Travers’ decade of revenue growth amid profit dive

‘Not out of the woods yet’: Coronavirus puts the kibosh on Travers’ decade of revenue growth amid profit dive

Travers Smith has suffered one of its biggest financial setbacks due to the coronavirus pandemic, recording an 11% slump in net profit and a 20% fall in profit per equity partner (PEP), its provisional results revealed. 

The provisional figures, announced on Thursday (30 July) show a 1% revenue drop to £160.9m from £162.5m last year, stymying a decade-long run of uninterrupted turnover growth. PEP fell to £1m, with the results being adversely affected by a reporting period that ran to the end of June, rather than April, giving the firm greater exposure to the pandemic downturn. 

The numbers are a far cry from last year, when Travers celebrated its tenth consecutive year of revenue growth with an 11% increase in turnover as PEP grew by 4% to £1.25m. In 2018/19, revenue had seen a 70% increase over five years.

Speaking to Legal Business this morning (Friday 31 July), managing partner David Patient (pictured) noted the drawback of the entire last quarter of the financial year taking place during the crisis, but was characteristically upbeat in the face of adversity 

You’ve got to put things in context. Wind back to the dark days of lockdown, it was surreal watching the pandemic sweep across the world, and it hit us very quickly. Back then, I had three questions: Will we be able to work? Will the clients need us? Will we get paid? And the answers, thankfully, were: Yes we can, yes they did, and yes we did, said Patient, adding that he was proud of how the firm’s people were able to make a success of lockdown. 

One should not simply assume that law firms will have uninterrupted growth. Every so often, something serious comes along, like the global financial crisis 0f 2008/9. We had been bracing for turbulence in this current year as we left Europe and expected growth to be flat or decline. We mustn’t forget Brexit, but this crisis has overshadowed everything.’ 

Upsides for the year included investment in technology that enabled staff to adapt to enforced working from home, as well as advising on a raft of matters. This included advising Hewlett Packard on fraud claims amounting to $5bn and criminal proceedings in the US arising from the $11bn acquisition of Autonomy in late 2011. 

Deal highlights included advising Rothesay Life on its £3.8bn buy-in of the Asda Group Pension Scheme, Willis Pension Scheme on a longevity swap transaction with Munich Re to manage risk on around £1bn of pension liabilities and EQT on the sale of its Credit business segment to Bridgepoint. 

Travers introduced what Patient called ‘prudent financial measures… to protect our business’. In April, the firm reduced monthly drawings for all partners and deferred partner profit distributions until the longer-term trading position becomes clear.  

The firm has not accessed the government’s Job Retention Scheme all and members of staff have been kept on full pay throughout the lockdown. Travers has deferred its annual salary review until later in the year, but it has awarded firm-wide bonuses, albeit at a reduced rate. 

It made up five new partners on 1 July across the corporate and equity capital markets, derivatives & structured products, dispute resolution, employment, and finance teams, and also posting a 90% retention rate for its autumn 2020 newly qualified lawyers.    

Patient refused to be downcast: ‘We are not out of the woods yet and I wonder how far we are even into them. The situation is challenging and will continue to be challenging, but I’m a glasshalffull man. There are significant clouds on the horizon, but the outlook is good.’ 


Legal Business

Dealwatch: Slaughters and Ashurst make headlines on i newspaper sale as DLA and A&O dine out on Bookatable acquisition

Dealwatch: Slaughters and Ashurst make headlines on i newspaper sale as DLA and A&O dine out on Bookatable acquisition

In a busy week for UK buyouts, Slaughter and May advised Daily Mail and General Trust on the £49.6m acquisition from JPIMedia of i newspaper and its website by its consumer media business, DMG Media.

The Slaughters team was led by corporate partner Rebecca Cousin while an Ashurst  team led by corporate partner Braeden Donnelly advised JPIMedia Group.

Donnelly told Legal Business: ‘The sale of the i newspaper to Daily Mail was a significant first step for JPIMedia in realising value for bondholders. It is also part of a wider trend we are seeing in the UK print media market where consolidation is picking up pace as media owners respond to slowing print sales and increased competition from online alternatives.’

The deal was completed on 29 November. Ashurst previously advised Johnston Press on its acquisition of the i newspaper business from Independent Print Limited in 2016.

Meanwhile, DLA Piper advised Michelin on the sale of London-headquartered restaurant reservation business Bookatable to TripAdvisor company TheFork.

The acquisition allows competitor TheFork to consolidate in the United Kingdom, Germany, Austria, Finland and Norway meaning that 14,000 restaurants on Bookatable will join the 67,000 restaurants available on TheFork.

The DLA team was led by London partner Tim Wright and Paris partner Simon Charbit while an Allen & Overy team led by Richard Browne advised TripAdvisor.

The acquisition follows Michelin’s content and licensing partnership with TripAdvisor and its subsidiary TheFork. The partnership means that Michelin guide inspectors will be grading restaurants according to the ‘stars, bib gourmand and Michelin plate’ on the TripAdvisor and TheFork websites. 4,000 restaurants in Europe will also be available on TheFork and the Michelin Guide’s digital platform.

French firm Gide advised Michelin on the partnership with a team led by partner Guillaume Rougier-Brierre.

Elsewhere, Travers Smith has advised New York Stock Exchange-listed company Noble Corporation on the acquisition of its 50%interest in the Bully I and Bully II drillship joint ventures by a subsidiary of Royal Dutch Shell for a value of $166m.

Shell will pay a final cash settlement of roughly $59m of to Noble for its two drillships. Nobel, which owns and operates fleets in the offshore drilling industry, issued a note payable to Shell which satisfied a portion of the buyout price.

The Travers team was led by corporate partner Richard Spedding and Shell was advised in-house.

Finally. Addleshaw Goddard advised the promotional products company Pebble Group on its flotation on the AIM market with a fundraising value of £135m. It is the eighth IPO on AIM this year and the largest in terms of funds raised. The firm also advised on the £28m essensys listing in May and the £57m Brickability Group IPO in September.

The Addleshaw team was led by corporate partner Richard Lee. Lee told Legal Business: ‘What it means for the group is that they are no longer a private equity owned business and they no longer have the debt structure that goes with the private equity ownership. It gives them an improved balance sheet because the funds they raised in the IPO have been used to pay off the debt which they were previously carrying.

‘There were preferred share structures in there, plus loan notes, plus bank debts and the purpose of the fundraising for the company was to clear out that debt,’ added Lee.

The equity fundraise was managed by Berenberg with Grant Thornton acting as adviser. A London Bird & Bird equity capital markets team led by Adam Carling advised Berenberg as broker and Grant Thornton as nominated adviser.

Legal Business

Former Travers managing partner Lilley joins Deloitte Legal as employment head

Former Travers managing partner Lilley joins Deloitte Legal as employment head

Big Four accountancy firm Deloitte has bulked up its UK legal bench by hiring Andrew Lilley, the former managing partner of Travers Smith, to spearhead its employment practice.

Lilley will now focus on building the firm’s employment presence in the UK, as Deloitte joins its Big Four counterparts in further expanding its domestic legal capability. Lilley joins alongside Squire Patton Boggs employment partner Liz Pierson.

Commenting on the hire, Deloitte Legal’s UK managing partner Michael Castle said: ‘Andrew and Liz both have fantastic track records in their respective fields. As we continue to build Deloitte Legal’s presence in the UK, we are determined to hire the very best talent in order to provide our clients with best-in-class service.’

Lilley joined Travers in 1995 and served as the firm’s head of employment before being appointed managing partner for a four-year term in 2010. Lilley resigned in 2015 to explore a career in teaching. Pierson, meanwhile, had been a partner at Squire Patton Boggs since 2017, having previously been a senior counsel at Clifford Chance for four years.

The hires come off the back of another significant play from Deloitte in May, when it announced a non-exclusive alliance with US law firm Epstein Becker Green to provide employment law to clients.

Deloitte will hope to make up ground with the double hire, having been the last of the Big Four to make a push into UK legal. In January 2018 Deloitte secured its alternative business licence, while a year later the firm announced the hire of Allen & Overy banking veteran Castle to head its UK legal business after a four-month hunt. Currently Deloitte Legal counts over 60 practicing lawyers in the UK with more than 125 other fee-earners engaged in legal activities.

‘Andrew and Liz’s knowledge of employment law and reward will add to a wealth of expertise across Deloitte, providing clients with technology-enabled, practical solutions to tackle the complexities they face,’ Castle added.

Legal Business

Some challenges: Travers ups NQ pay range following 11% revenue growth and subdued PEP

Some challenges: Travers ups NQ pay range following 11% revenue growth and subdued PEP

Travers Smith has marked a tenth consecutive year of revenue growth with an 11% increase in turnover, although profit per equity partner (PEP) grew at a more subdued 4%.

Revenue at the firm grew to £162.5m for the 2018/19 financial year – good for growth of more than 70% over the last five years – while PEP hit £1.25m. The firm subsequently joined the raft of firms increasing pay for newly-qualified solicitors (NQs), lifting their base rate salary to £85,000. NQs have the potential to receive between £93,500 and £110,500 with bonuses and other discretionary payments.

Managing partner David Patient (pictured) told Legal Business: ‘Every year we’ve managed to beat our budgets and surpass our expectations. This financial year will present some challenges. There is a lot of political and economic uncertainty which could come into play in terms of what our clients will want to do over the next 12 months.’

He said activity levels were high across the firm with standout areas being dispute resolutions, investment funds, infrastructure M&A, and the pension sector. Highlight mandates include representing Hewlett Packard in its $5bn fraud claim involving Autonomy, Premier Rugby in its major investment from private equity firm CVC Capital Partners, and Nortel Networks UK Pensions Trust on a £2.4bn buy-out for the Nortel Networks UK Pension Plan with Legal & General.

In addition, the firm worked with The Carlyle Group and shareholders on the sale of Graze to Unilever and with Horizon Capital and shareholders on the sale of EAT group to Pret A Manger.

Travers made up four new partners this year and has promoted 16 new partners over the past three years. Earlier this month, the firm appointed Paul Dolman co-head of the corporate department in addition to his role as head of private equity and financial sponsors.

Meanwhile, the firm has increased the base salary for NQs by 8% to £85,000. It follows Macfarlanes and the Magic Circle announcing similar lucrative pay increases.

Patient commented: ‘It’s a very competitive market, we want to be able to attract and retain the best possible people. We want to ensure therefore that, in terms of being able to offer a fair compensation to our lawyers, it is comparable with what other people in the market are paying.’

For more on Travers’ improbable rise, read: Defying gravity (£)

Legal Business

Travers’ private equity star Dolman joins Summerfield at the corporate helm

Travers’ private equity star Dolman joins Summerfield at the corporate helm

Travers Smith has appointed Paul Dolman as co-head of corporate in addition to his existing role of head of private equity and financial sponsors.

The well-respected Dolman joins the influential Spencer Summerfield, who has been sole head of corporate since 2013, on a joint ticket to lead Travers’ M&A, private equity and equity capital markets practices.

Dolman told Legal Business: ‘I am honoured to be given the chance to run the corporate team. That isn’t to say that my focus is going to move away from leading the private equity and financial sponsors group and being heavily involved in fee earning. I certainly think there is an opportunity for me to use the skill set that I have developed doing that, for the benefit of the wider corporate group as a whole.’

‘The M&A market has been slightly subdued for the last 24 months. But I think people are now getting to the stage where the break is coming off, and activity levels are ramping up.’

Former tax head Kathleen Russ also on Monday (1 July) took over from Chris Hale as senior partner, a move first announced last November. Hale had held the role since 2013 having been re-elected in March 2017.

Russ commented: ‘Clients are at the heart of our business. As the firm’s new senior partner, I am keen to build on our strong client relationships and ensure we continue to deliver a first-rate service to clients across all areas of expertise.’

The firm’s managing partner David Patient said: ‘Kath and I share a strong commitment to our firm’s values and culture, and I very much look forward to working alongside her more closely going forward, in what promises to be an exciting new chapter for the firm.’

Meanwhile, Ian Jeffery will be stepping down in September as chief executive officer of Lewis Silkin after 15 years. Jeffery will continue as partner and will focus on the development of new legal service ventures.

Jeffery said: ‘With Lewis Silkin in great shape and full of potential for the future, I believe that after fifteen years of firm-wide leadership responsibility, a planned transition this year is in the interests of both the firm and myself, allowing a refreshed leadership team to refine and deliver the business plan for the next three years and giving me the opportunity to focus on venture opportunities in an exciting period for the legal industry and our markets.’

Lewis Silkin will be under a new leadership structure, with the joint management of partners Giles Crown and Richard Miskella. They are currently divisional managing partners for the firm’s Creators, Makers and Innovators (CMI) division and Employment, Immigration and Reward (EIR) division respectively.

For more on Travers’ improbable rise, read Defying Gravity

Legal Business

Deal watch: Seats at the table for Travers, Skadden and Gateley as Pret acquires EAT and Oliver’s chain collapses

Deal watch: Seats at the table for Travers, Skadden and Gateley as Pret acquires EAT and Oliver’s chain collapses

Two opposite developments in the UK high street have seen City and US firms advise as food chain Pret A Manger acquired rival Eat and high-profile British chef Jamie Oliver’s restaurant business went into administration.

Also keeping City insolvency practitioners busy was the news today (22 May) that British Steel has been put into compulsory liquidation.

Skadden, Arps, Slate, Meagher & Flom advised Pret as it agreed to acquire all of Eat’s 94 shops for an undisclosed sum, with plans to turn most into ‘Veggie Prets’.

The US firm’s team was led by London corporate partners Richard Youle, Katja Butler and Linda Davies. Freshfields Bruckhaus Deringer partner Alex Potter is advising Pret on antitrust.

On the other side of the table, Travers Smith’s head of private equity and financial sponsors Paul Dolman led the team advising Ardian, Horizon Capital and the other selling shareholders of Eat.

‘I acted for Horizon when they acquired Eat [in 2011] and we have acted for them ever since, so we were the logical people to advise on the sale,’ Dolman told Legal Business. ‘Travers has in-depth expertise in this sector.’

The deal sees Travers’ and Pret’s paths cross again after the City firm advised previous owner Bridgepoint on the £1.5bn sale of the food chain to JAB Holding Company one year ago, with a team including Dolman and private equity partner Ian Shawyer.

Under Bridgepoint’s ownership the company, founded in London in 1986, expanded its presence in the UK and US, and launched in France, China, Dubai and Singapore, quadrupling its revenues to £879m. It now counts over 500 shops in nine countries.

Eat was founded in 1996 and bought by Horizon in 2011 with plans to build hundreds of shops. But it has struggled in recent years and reported pre-tax losses of £17.2m in the year to end of June 2018.

Meanwhile, Daniel French, an insolvency partner at listed firm Gateley, is leading the team acting alongside administrator KPMG after Oliver’s business became the latest victim amid difficult times for the UK high street.

Jamie Oliver Restaurant Group will see 22 of the 25 eateries it operates close, resulting in 1,000 job losses.

This is the second prominent high-street insolvency Gateley has acted on this year. The firm also advised KPMG on the administration of Patisserie Valerie in January.

Elsewhere, Clifford Chance (CC)’s insolvency team is advising as British Steele entered compulsory liquidation, putting its 5,000 employees at risk of redundancy.

The government’s official receiver has taken control of the company and together with Big Four accountancy firm EY is looking for a buyer, while it continues to trade normally.

CC’s restructuring head Philip Hertz and partner Iain White are leading the team advising on the process.

The Magic Circle firm was previously among the advisers in one of the largest UK insolvencies to hit the construction industry in recent years, when construction giant Carillion collapsed in January last year.