Legal Business

US results season: White & Case sees revenues increase 4% as PEP hits $1.87m

US results season: White & Case sees revenues increase 4% as PEP hits $1.87m

Despite the recent relative economic revival in the US, the world’s largest legal market remains turbulent but early numbers from major US players do indicate many firms are now sustaining growth. Early out of the gate, White & Case has published its 2013 financial results reporting a steady 4.1% increase in global revenues with profits per equity partner (PEP) rising 10%.

Gross turnover at the top-15 global firm increased to $1.44bn in 2013 from $1.38bn in the previous year. The New York-based law firm’s revenue per lawyer grew at a similar level of 4.4% to $760,064 from $711,000, while its PEP rose to $1.87m from $1.7m, climbing 10%.

The firm’s financial progress is comparable with its 2012 year when gross turnover was up 4% over 2011. The performance over the last two financial years will be welcome at White & Case, which has struggled for sustained growth since the banking crisis of 2008-09.

Speaking to Legal Business, City executive partner Oliver Brettle (pictured) said the firm had made substantial investments in its capital markets, disputes and merger and acquisitions (M&A) practice areas in 2013 and focused on growing these teams across its European network.

The firm boosted its global capital markets capability in July last year when a debt capital markets team from Allen & Overy joined its Milan office, including partner Paola Leocani.

In March, the 2,000-lawyer firm also recruited Latham & Watkins’ local corporate head Juan Manuel de Remedios to launch its Spanish corporate practice, and added five capital markets partners in Paris – three of which were former Linklaters partners – in February.

More recently, the firm hired Linklaters private equity partners Richard Youle and Ian Bagshaw, who resigned to join the firm’s City arm in October 2013.

Brettle added: ‘In recent years we’ve reinforced our commitment to clients with significant strategic investment across priority areas. We delivered another encouraging set of results in 2013 which continued to build on the success of recent years. I’m hopeful that further progress will be made during 2014 and beyond.’

Firm-wide chairman Hugh Verrier commented: ‘I am pleased with our investments over the last few years, and with the strides we’re taking for the longer term.’

Jaishree.kalia@legalease.co.uk

Legal Business

Comment: 2006 and all that – an oh-so-familiar mess at Linklaters

Comment: 2006 and all that – an oh-so-familiar mess at Linklaters

The most hackneyed cliché of the pundit is history repeating itself, a claim that rarely holds up upon closer examination. But with the recent departure of Linklaters’ private equity co-heads Ian Bagshaw and Richard Youle for White & Case, well, sometimes you just can’t escape the past.

Personality clashes, a mid-market practice not gelling with Linklaters’ M&A business, finance supposedly not supporting sponsor clients, prolonged rumours over exit talks, and, finally, a dramatic exit to a big spending US rival; yes, it’s 2006 all over again when Graham White and Raymond McKeeve quit for Kirkland & Ellis.

All in, it’s better that this was resolved than the soap opera kept running – no wonder Linklaters’ management asked for a pledge of loyalty from the pair following earlier discussions with Ropes & Gray and Fried, Frank, Harris, Shriver & Jacobson.

Still, it’s a set-back for Linklaters that over a decade after embarking on its bid to become a force in private equity, it has a practice that not only lacks the potency expected of Silk Street, but one in which it can’t even retain partners. With due respect to Sweden and its lawyers, you don’t expect to be drafting in partners from Stockholm to re-enforce your City operation.

The departure earlier this year of Chris Howard for Sullivan & Cromwell had deprived Youle and Bagshaw of one finance partner comfortable with leveraged buyouts but, given the depth and calibre of Linklaters’ deal finance team, it’s hard to see lack of debt coverage being a problem.

Linklaters is a superb firm but it seems at present to struggle to sustain the trick seen at Freshfields Bruckhaus Deringer and Slaughter and May of balancing institution-wide links in corporate with that splash of entrepreneurial drive essential to the best M&A teams; there’s just a little too much office politics these days. At least it can reboot with a practice more fitting its business and sensibility and now the firm boasts a broader buyout team than back in 2006. But, for Linklaters, you have to wonder if the goal of having a self-standing private equity team – as opposed to functional coverage – is really worth the trouble.

And White & Case? Well, the reputed multi-million dollar, multi-year guaranteed deal certainly looks aggressive. You have to give the firm credit in one regard – after its European banking team was gutted in 2010 by Latham & Watkins, the firm has come back swinging in a far more emphatic style than expected. But many would question how smoothly the strong-willed pair will integrate into White & Case, a firm which has also had more than its fair share of office politics in London.

The wider backdrop has changed in one key respect from 2006. Despite prolonged convulsions in the debt markets severely cutting the buying power of private equity houses, it has turned out that client portability has trumped deal size; US advisers have continued a steady and sustained encroachment into the City private equity market at the expense of London’s finest.

White & Case may not look the most threatening in this regard but there is no shortage of rivals out there. With Charlie Geffen prompted to re-examine his options last month – US law firms will surely try to secure one of the genuine heavyweights of the City buyout scene.

alex.novarese@legalease.co.uk

Click here for more analysis on Linklaters’ private equity practice

Legal Business

Linklaters private equity ambitions dealt a blow by departure of Bagshaw and Youle

Linklaters private equity ambitions dealt a blow by departure of Bagshaw and Youle

Linklaters‘ now decade-long effort to carve a credible position in the private equity market has been dealt a serious blow as co-heads Ian Bagshaw (pictured) and Richard Youle leave to join White & Case.

The high profile pair, long-term friends having started their careers together at Eversheds, had to build the Magic Circle firm’s private equity practice almost from scratch after the departure of Graham White and Raymond McKeeve in 2007, although it has been an enduring irony that their own reputations in private equity exceed that of the firm.

Youle, who joined the 2509-lawyer firm in 2001 from SJ Berwin (becoming a partner in 2006) and Bagshaw, who moved across from Clifford Chance in 2007, are credited with building a dedicated team of lawyers whose buyout expertise is supplemented by Linklaters’ strong banking, restructuring and high-yield capabilities. Newly promoted Alex Woodward, while still comparatively junior, shows significant promise.

But while the City buyout pair have undoubtedly pushed the private equity practice comfortably into the mid-market on the back of clients including HgCapital and Montagu Private Equity, many feel it has yet to make enough ground with leading sponsor clients.

News of Bagshaw and Youle’s departure will cause a stir in the private equity market but comes as no surprise, as the pair have been in talks with a number of US firms, including most recently Ropes & Gray and Fried Frank. It was these discussions with other firms that ultimately brought the pair’s future at Linklaters to a head, with two independent sources suggesting that it led to an internal ultimatum.

The move comes as White & Case’ London office pushes hard to raise its profile, having recently hired Kirkland & Ellis private equity star Ross Allardice. The top 15 Global 100 firm  today (17 October) welcomed the duo, with head of global M&A John Reiss commenting: ‘As the European economy continues its recovery, private equity in Europe will see increasing opportunities. The addition of these talented individuals will allow us to capitalise on these opportunities.’

However, rivals have yet to be convinced of the business case, with one leading private equity partner commenting: ‘I’ve more money on Linklaters doing well in private equity than White & Case, and another adding: ‘Linklaters are still a world class firm.’

A statement from Linklaters said: ‘We thank Ian and Richard for their contribution to the firm and wish them all the best in their future careers.

‘Linklaters has considerable strength in depth in its global private equity team and dual strength in both private equity and banking. We remain committed to providing our clients with excellent service in this area.’

The private equity market has been particularly fluid this year, with David Walker having left Clifford Chance for Latham & Watkins while Raymond McKeeve recently joined Jones Day from Berwin Leighton Paisner.

david.stevenson@legalease.co.uk

For a more detailed look at Linklaters’ private equity practice see Back at the gate: US invaders raise fresh questions over private equity status of CC and Linklaters

Legal Business

Aviation: Further consolidation predicted as Aegean acquisition of Olympic approved

Aviation: Further consolidation predicted as Aegean acquisition of Olympic approved

Aviation lawyers expect further consolidation within the airline industry as Aegean Airlines was on Wednesday (9 October) given the all clear to buy troubled Olympic Air, led by White & Case and Baker & McKenzie.

The European Commission (EC) took the first-time step of reversing its earlier decision to block an acquisition attempt in 2011, approving the buyout from investment group Marfin.

Aegean was represented by White & Case led by Brussels-based competition partners Mark Powell and Assimakis Komninos. Baker’s competition partner Gavin Bushell, also based in Brussels, assisted Aegean on the transaction.

Komninos said: ‘The decision is very welcome news for the Greek airline sector and for Greek passengers as it will permit badly needed consolidation that will allow Aegean to compete more aggressively on the European stage.’

One aviation partner at a top City firm added: ‘The Olympic Air saga was a Greek tragedy. The EC had ruled [in 2002] that the airline had received illegal state aid that must be paid back. With Greece on its knees Olympic collapsed into insolvency.’

The EC’s decision to reverse its 2011 ruling was largely based on the fact that if Aegean was not permitted to acquire Olympic, it would cease trading. As reported by Reuters, EU Competition Commissioner Joaquin Almunia said: ‘It is clear that, due to the ongoing Greek crisis and given Olympic’s own very difficult financial situation, Olympic would be forced to leave the market soon in any event,’ adding that the merger would have no additional negative effect on competition.

The move comes as aviation lawyers predict further consolidation at the smaller end of the market, with one aviation partner commenting: ‘People are still making money in aviation, although it is a difficult period for the industry. I fully expect some airlines to go bust this winter.’

This situation is in stark contrast with the proposed $11bn merger between dominant American Airlines and US Airways, which was blocked by the US Justice Department this summer. The deal, which would have created the world’s biggest airline, saw a clutch of leading US firms secure roles including Latham & Watkins, Weil Gotshal & Manges, Paul Hastings, Debevoise & Plimpton and K&L Gates.

david.stevenson@legalease.co.uk

Legal Business

White & Case continues capital markets drive as Milan boasts full DCM suite

White & Case continues capital markets drive as Milan boasts full DCM suite

White & Case has made no secret of its strategic objective to boost its global capital markets capability and last week saw a debt capital markets (DCM) team join in Milan from Magic Circle rival Allen & Overy (A&O).

A&O’s DCM and regulatory partner Paola Leocani (pictured) joins the Milan office alongside counsel Elena Radicella Chiaramonte, two senior associates, an associate and two trainees.

Rated by Legal 500 as third-tier for ECM and DCM in Italy, White & Case claims that it is now one of the only firms in the region with a full spectrum of capital markets and regulatory services across products, at a time when Italy has seen a decrease in bank lending and a corresponding growth in DCM.

Milan executive partner Michael Immordino told Legal Business: ‘The Milan office is unique in offering the whole range of capital markets instruments, including US registered bonds, Yankee bonds, US private placements, high-yield bonds and Eurobonds. In addition to providing top tier regulatory advice, Paola enhances our European and Italian domestic debt capital market expertise.

‘At a time when companies are resorting more to the capital markets instead of the traditional bank credit market, Paola’s excellent reputation and legal skills will be particularly beneficial to White & Case clients.’ White & Case recently advised Italian engineering and construction group Maire Tecnimont on its rights issue announced on 28 June.

The firm is keen not to be labeled as a one trick pony, and Immordino adds: ‘We are not just a securities firm, we are doing bank finance work and M&A work as well.’

However, so far capital markets is very much the flavor of the year; the move comes less than five months since White & Case hired a four-partner team from Linklaters in Paris and launched in Madrid in March, with the hire of Latham & Watkins M&A and capital markets partner Juan Manuel De Remedios.

The firm last week announced it will launch in Dubai, after obtaining a licence to practise in the emirate. However, the staffing details and focus of the office is unknown yet, and it is understood that a team of lawyers may be relocated to run the new office as an extension of its operations in Abu Dhabi.

Jaishree.Kalia@legalease.co.uk

Legal Business

City lawyers say court strike will cause minimal disruption but should be given due attention

City lawyers say court strike will cause minimal disruption but should be given due attention

As court staff go on strike this afternoon (17 June) in protest at the Ministry of Justice’s (MoJ’s) plans to cut £220m off the annual criminal legal aid budget, it is with the support of many City lawyers.

The unusual move comes as the Equality and Human Rights Commission (EHRC) last week claimed the MoJ’s plans could breach human rights laws and as lawyers warn that cuts made to civil legal aid earlier this year are already leading to a significant increase in pro bono requests and in areas outside of their expertise.

The strikes are not expected to cause disruption to existing cases – a HM Courts & Tribunals spokesperson said the courts are ‘aiming for business as usual’, while Hogan Lovells confirmed to Legal Business that one of its trials scheduled for today will continue regardless.

The court has put in place ‘robust contingency plans’ which prioritise delivery of its most essential services including custody cases and urgent family cases.

However, lawyers point out that with no history of striking, any kind of industrial action by court staff should be taken seriously.

John Reynolds, head of litigation at White and Case, said: ‘The people who work in the justice system are not known for being militant. When any part of the public sector not known for that goes on strike, it makes a big impact as it shows that normally mild mannered people have been pushed beyond the limit that they’re used to. It should make an impact.’

The strikes come after several hundred lawyers blocked the road outside the MoJ in central London earlier this month in protest against the cuts.

In a further blow to the MoJ’s plans, the EHRC last week (13 June) warned the Government that the proposed cuts could breach equality and human rights laws by excluding vulnerable people from access to justice, and proposed that it should run pilots for some proposals, a sentiment echoed by Legal Business guest blogger, fiscal realist and former government lawyer Carl Gardner.

Mark Hammond, chief executive of the EHRC, said: ‘The Commission recognises that the need to curb public spending applies to all public services, and agrees with the government that the taxpayer is entitled to the best possible value for money. But any budget cuts that are made to the administration of justice must preserve the basic rights of fair and equal access to the courts including for those who cannot afford to pay for a lawyer.’

Lawyers say they have already seen a significant increase in requests for pro bono work since cuts to civil legal aid came into force this year under the Legal Aid Sentencing and Punishment of Offenders Act 2012.

Hogan Lovells City partner and commercial litigator Crispin Rapinet said: ‘From the pro bono point of view here in London, we’re already seeing the effects quite dramatically and since April have experienced a rise in the number of requests from members of the public for free legal service providers.’

The firm has seen a particular increase in requests for advice on family work in relation to access to children and complex divorce case, as well as immigration, according to the firm’s international pro bono manager Yasmin Waljee, who said: ‘It’s difficult for us because that’s not our area of expertise. All of those [requests] would have normally gone to legal aid firms but now people are getting increasingly desperate and looking elsewhere for help.’

Reynolds added: ‘However unfair it is, one can only take on so many cases.’

Justice Secretary Chris Grayling has accused lawyers of making ‘over the top’ claims about legal aid cuts as he warned that spending on criminal cases must fall to protect NHS budgets.

sarah.downey@legalease.co.uk

Legal Business

White & Case launches in Madrid with Latham hire

White & Case has launched its first office in Spain, recruiting Latham & Watkins’ Spanish corporate head Juan Manuel de Remedios to joint lead its new Madrid office as an executive partner.

The Spanish launch comes as the firm concentrates on strengthening its global footprint to take advantage of Spain’s strong links to Latin America.

White & Case Spanish practice head Michael Doran, who is based in London, said the Madrid launch ‘provides our clients with local knowledge coupled with access to our global network’.

Legal Business

Without a paddle

Without a paddle

The continued exodus of high-profile partners from White & Case’s City operation suggests the Global London leader still has serious management issues. It’s time someone took charge

In last year’s Global London issue, White & Case’s newly appointed London executive partner Oliver Brettle reacted defiantly to LB’s suggestion that the office had morale issues. It wasn’t correct that ‘one or two vocal former members of the team should give rise to a more general impression that there is a problem with morale in the office’, he insisted.