Legal Business

City hire: Reed Smith takes on Travers Smith leverage finance partner Ben Davis

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With Reed Smith’s London office results touted to break the $200m mark next week, the top 30 global law firm has hired Travers Smith leverage finance partner Ben Davis to join its City office in March.

Davis advises on corporate facilities, refinancings, debt restructurings and general banking matters. Last year he advised Pace on its US law $470m financing for the acquisition of Aurora Networks, and thetrainline.com, backed by Exponent Private Equity, on its £190m unitranche and super senior refinancing facilities.

The firm’s London finance team now has 25 fee earners after a series of hires including Clifford Chance structured finance and derivatives partner Claude Brown last year.

Tamara Box joined from Berwin Leighton Paisner to head up Reed Smith’s structured finance practice in 2012, and in the same year private equity partner Perry Yam joined from legacy SJ Berwin to head the firm’s Europe and Middle East (EME) private equity practice.

Reed Smith’s finance team recently represented Siemens and Siemens Financial Services in the completion of the £1.6bn Thameslink transaction. The group also advised CBPE Capital on its £100m acquisition of award-winning restaurant group Côte Restaurants.

‘Ben’s arrival will ensure we continue to be closely aligned with the needs of our clients. He is very well regarded in the market and will complement our growing EMEA and US finance practice, as well as support the continued development of our UK and pan-European private equity practice,’ said Nola Beirne, vice chair of Reed Smith’s financial industry group for EME.

London is Reed Smith’s biggest office and last year London managing partner Roger Parker predicted the firm’s London office would break the $200m revenue mark. The firm’s financial results are expected next week.

David.stevenson@legalease.co.uk

Legal Business

Trainee Retention: Hogan Lovells, Travers and RPC reveal numbers

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The trainee retention rates rollercoaster continues to bring with it good news and bad as today firms including Hogan Lovells, Reynolds Porter Chamberlain (RPC) and Travers Smith are on something of a high.

Top 50 UK firm Travers Smith has posted a 95% retention rate while at transatlantic firm Hogan Lovells – where out of a total of 33 trainees, 28 offers were made and 25 were accepted – the firm achieved a retention rate of 76%.

City firm RPC also today unveiled an 80% retention rate after offering 13 out of its 16 trainees a newly-qualified (NQ) position. RPC’s managing partner Jonathan Watmough (pictured) said the results are a ‘testament to the rigour of both our recruitment process and the quality of our trainee programme that we’re consistently able to retain a high percentage of our intake each year.’

Watmough added: ‘Given the massive over-supply of aspiring lawyers in the market simply getting a training contract these days is far harder than it was a decade ago, and the bar for qualification is rising year-on-year. We invest a lot of time and energy into our trainees – having spent time with them, I can say with confidence that this represents a key investment in the future success of our firm.’

These developments follow a more variable picture last week, when Osborne Clarke attained a 100% retention rate but Shoosmiths only 41%.

Osborne Clarke took on all eight of its trainees who qualify next month. This group of trainees is the first to qualify under the Q3D programme, which maintains regular assessment of junior lawyers once they have qualified by testing them in specialist areas. The programme is run in conjunction with BPP Law School.

‘Qualification is a massive milestone in a lawyer’s career, and I would like to congratulate each of these impressive NQs on achieving positions within the firm. At Osborne Clarke we see education and training of our people as a key and ongoing priority – both during their training contracts and also beyond, as seen in our education and development programme Q3D,’ said Nick Johnson, training principle at the firm.

The NQs will be spread across the firm’s offices, with three in London, four in Bristol and one in Reading.

Last week also saw Stephenson Harwood announce it is to retain 80% of its trainees, offering positions to eight out of ten. Three are going into the commercial litigation group, one apiece in finance, corporate, real estate, marine and international strategy, while the eighth trainee is to work in the firm’s Singapore office.

These retention rates are in stark contrast to Shoosmiths, where only nine of its 22 trainees achieved a NQ position, giving it a retention rate of just 41%.

sarah.downey@legalease.co.uk

david.stevenson@legalease.co.uk

Legal Business

Comparing apples with, err, pears: Dentons’ financials show slight increase in revenue as Withers and Travers reveal numbers

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If the financial results of 2013 are useful for one thing, it will be to remind us of the sheer volume of transcontinental mergers, nearly-ran mergers, and the growth in popularity of the Swiss verein model.

The tail end of the financial reporting season has seen Dentons post its first, broadly flat set of results since the three-way merger of SNR Denton, Salans and Fraser Milner Casgrain, while Withers and Travers Smith (which stands out all the more for its fierce independence) have both seen a small increase in turnover.

Dentons posted a combined total turnover of £829.7m, placing it broadly in the top 20 of global law firms in terms of turnover. Its PEP figure is £452,000, while net earnings stand at £225.2m.

The turnover sum is reached by combining the revenues of each limb of the verein, which on the face of it seems straightforward but for the fact that they do not all have the same financial year. This will undoubtedly skew any really meaningful comparison with Dentons’ peers.

Compared with last year, Dentons’ revenue figure represents a 1% increase and PEP is down by 1%. A spokesperson for the firm confirmed that by practice area, corporate work made up for around 61% of total global revenues, or £507.5m, disputes brought in £164.4m (20%), finance work contributed £75.4m (9%), and property £82.3m (10%) of the total revenues.

Elsewhere, Withers, which in May called off merger talks with Speechly Bircham, saw its revenues rise by 4% to £117.8m from £113.3m the previous year. It’s PEP, however dropped by 4% from £386,000 to £370,000. The top of equity has also dropped from 548,000 to 519,000 but the bottom of equity rose by 4% to £272,000.

Given the firm’s private client focus, it’s no surprise that wealth planning made up for almost half of its turnover, 48%, with disputes and corporate bringing in 17% and 15% respectively.

Meanwhile, the ever independent Travers Smith posted total revenues of £86.2m, up 3% from £83.8m last year. However, PEP dropped by 2% to £790,000 from £804,000 in 2011/12.

The results comes in a week that saw Herbert Smith Freehills announce its financial performance for just seven months – the period since the union between Herbert Smith and Australian leader Freehills went live on 1 October – but refuse to disclose the proceeding five months of the legacy City firm’s financial year.

The issued seven-month figures appear to support claims that the firm has seen an effective 10% fall in its profitability, at least judged by the rough ‘n’ ready formula of a pro-rata reading of the results over a 12-month period.

The seven-month results show revenues of £471.2m, with net profits of £137.2m, to be shared across 316 equity partners. On a 12-month extrapolation – admittedly a very rough guide – this equates to a profit per equity partner (PEP) of £753,000, against a legacy figure for Herbert Smith of £840,000 for the 2011/12 year. The legacy Herbert Smith PEP figure is on the basis of 131 equity partners.

David Willis, managing partner of HSF, told Legal Business that a straight financial comparison is not realistic. ‘You’re not really comparing like-for-like with the old firm. We’ve bought together two firms,’ he said.

david.stevenson@legalease.co.uk

Legal Business

Travers senior lawyers to be paid for interruptions to family life as firm adopts more merit-based model

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Travers Smith has become the latest City firm to overhaul its lockstep for senior associates in a bid to incentivise and reward lawyers for their hard work and interruptions to family life as they approach partnership.

Led by managing partner Andrew Lilley and pensions partner Paul Stannard, a 10-month review has concluded that Travers should continue to operate a strict lockstep for junior and mid-level associates, under which they receive an annual bonus at the end of the year. However, a new, more merit-based system will now be introduced for senior lawyers, including an additional one-off payment for those that have experienced disruption in their personal lives and increased flexibility from the lockstep structure for associates with six years’ post qualification experience (PQE).

A firm spokesperson told Legal Business that the plan is to identify and reward those who have made sacrifices during tougher periods, where individuals might have a more demanding client than their peers and miss out on family or social life.

Associate pay has over the past few years moved from the entirely dominant lockstep to a more flexible, merit-driven version. Though the jargon differs between firms, the basic idea is the same: seniority-driven pay to three year PQE, soon after which kicks in some form of discretionary promotion or assessment that defines salaries and career tracks. While the mid-tier pioneered it, Freshfields’ recent introduction of a four-stage ‘milestone’ framework was hugely significant. Even the famously conservative Slaughters is currently bringing in some grading beyond the four year PQE point.

Meanwhile, Travers confirmed it would be announcing its associate salary review at its financial year end on 1 July. Last year’s starting salary currently stands at £38,000 while a three-year PQE associate is paid £86,000.

sarah.downey@legalease.co.uk

Legal Business

After Travers defeat, Linklaters faces discrimination claim by former paralegal

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Linklaters is being sued by a former paralegal for unfair dismissal and discrimination just weeks after top 50 law firm Travers Smith was found to have discriminated against a former trainee because she had fallen pregnant.

The case against Linklaters started today (10 June) in the London Central Employment Tribunal and the hearing is scheduled to run for six days.The claim is for unfair dismissal, discrimination, racial discrimination, religious discrimination and breach of contract, according to the tribunal listing. The tribunal lists the name of the claimant as Mr A Hussain and is being heard by Employment Judge Pearl.

Hussain has instructed Laura McHugh at JMW Solicitors with Kashif Ali of St Johns Buildings acting as counsel. Linklaters is being advised by Lewis Silkin associate Shalina Crossley with Amy Sander of Essex Court Chambers instructed as counsel.

The case comes after the same tribunal in May found Travers Smith had discriminated against former trainee Katie Tantum, represented at the tribunal by Leigh Day & Co, by refusing her a place at the firm after she fell pregnant.

In that case, the tribunal found that partners Julian Bass and Andrew King artificially reduced the number of places available in real estate from two to one as a result of the pregnancy.

In 2011 the Legal Services Board (LSB) announced plans to force law firms and barristers’ chambers to publish their diversity figures, including the gender, sexual orientation, ethnicity and educational background of their lawyers.

Linklaters was one of the first major UK law firm to publish its diversity data on the LSB website. Reporting became compulsory in December 2012.

Employment claims against major law firms remain relatively rare, despite mounting focus in recent years on the general lack of diversity in the legal profession.

Linklaters declined to comment.

caroline.hill@legalease.co.uk

Legal Business

Travers Smith suffers defeat for pregnancy dismissal

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Top 50 City firm Travers Smith has suffered the rare public reverse of losing a high-profile discrimination case after a tribunal found the firm denied a former trainee a place in the firm because she became pregnant.

The Central London Employment Tribunal found that Travers ‘contrived to prevent Katie Tantum from being offered a post as a newly-qualified solicitor because of her pregnancy’, according to a statement by Tantum’s solicitors, Leigh Day.

Legal Business

Travers Smith in surprise discrimination defeat

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Top 50 City firm Travers Smith has suffered the rare public humiliation of losing a high profile discrimination case after a tribunal found the firm denied a former trainee a place in the firm because she had fallen pregnant.

The Central London Employment Tribunal found that Travers ‘contrived to prevent Katie Tantum from being offered a post as a newly qualified solicitor because of her pregnancy’, according to a statement by Tantum’s solicitors, Leigh Day & Co.

The tribunal found that partners Julian Bass and Andrew King artificially reduced the number of places available in real estate from two to one as a direct result of the pregnancy.

Tantum was represented by Leigh Day barrister Elizabeth George, who instructed Cloisters’ employment and discrimination law barrister, David Massarella. Travers Smith was represented by Essex Court Chambers’ Edward Brown.

The tribunal dismissed Tantum’s further claims that she was denied a permanent place in the tax, corporate and litigation departments.

In a prepared statement Travers said: ‘We really did not expect this decision at all. We are very surprised and disappointed by it. Throughout the proceedings, we thought our evidence was strong. We still believe that, although the employment tribunal has found otherwise on one aspect of this claim.’

Both Bass and King are longstanding members of the firm. Bass is currently head of real estate, while King joined as a trainee in 1986, becoming a partner in 1996.

Travers added: ‘Before we took the decision to defend this case, we reviewed the allegations against us extremely thoroughly with everyone involved, as well as with counsel. If we had not been satisfied with the strength of our defence, we would not have fought the claim.

‘We sincerely regret that one of our former trainees was left unhappy from her experience at the firm, and we will take on board the lessons to be learned. Our trainees, associates and all our staff are fundamental to the future of the firm, and we are determined to do everything we can to ensure that they are all happy here.’

The tribunal made recommendations for the firm to implement to help prevent similar discriminatory decisions in the future.

Elizabeth George said: ‘We are delighted for Katie. It takes courage and tremendous resilience to stand up to your employer, even more so when that employer is a leading City law firm and you are only just embarking on your legal career. All of the witnesses at the tribunal on behalf of Travers Smith were senior partners in that firm.

‘The evidence in this case was very clear: Katie’s level of performance meant that she would have been offered a permanent role at Travers Smith but she was denied that role because she was pregnant.’

George noted that recent statistics from the Law Society Gazette show that men are 10 times more likely than women to progress from trainee level to partner at major law firms.

She added: ‘This is not just an equality issue, it is a poor business model because firms are wasting their initial investment and losing talent.’

Discrimination hearings against law firms are still extremely rare, partly due to victims’ reluctance to take on large law firms but also due to firms’ tendency to settle cases before they become public, with the reputational damage that ensues.

A compensation hearing is scheduled for 5 June.

sarah.downey@legalease.co.uk

Legal Business

FFW and Travers Smith shake up senior roles

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City firms Field Fisher Waterhouse (FFW) and Travers Smith have overhauled senior management, with each seeing new appointments to the top roles.

Head of technology and outsourcing Michael Chissick has been named FFW’s new managing partner, replacing Matthew Lohn, who will take up the re-introduced role of senior partner.

Chissick said: ‘I am leading the firm through a transformation. We want to move away from the negative market perception and create a firm culture that is modern and forward thinking.’

Legal Business

Travers Smith launches review of US best friends network

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Travers Smith has always been one to plough its own furrow and last month the firm confirmed it was reviewing its roster of US best friend firms.

The corporate powerhouse is reviewing its line-up in the wake of a raft of US firms strengthening their own London offerings.