The veteran criminal defence lawyer turned legal head on bridging the gap between journalism and law
While a student at the University of Wales, Angus McBride mulled his career prospects. During his first year at university, he was obliged to choose three subjects to study. ‘I took English literature and philosophy and then decided I was going to do law as well. It was a last-minute thought.’ Continue reading “Client profile: Angus McBride, News UK”
LB100 firms weather initial Brexit turbulence but good times remain a distant memory
Flattered by turbulent forex markets, the UK’s largest law firms outperformed smaller rivals in the Legal Business 100 (LB100), as the group weathered economic and political headwinds through 2016/17 to eke out an ultimately indifferent performance. Continue reading “The LB100: Forex flatters market leaders but most struggle to find their form in another tough year”
Tom Baker charts the evolution of dispute funding from case-by-base institutional backers
Litigation funding has been a growing aspect of the dispute resolution sector for a decade now, but news this summer that two law firms have entered into broader partnerships with funders highlights the emergence of a more fundamental role for such bankrollers.
Madeleine Farman assesses the impact of another round of pay rises on the City market
As US firms continue to hike associate pay for UK lawyers, members of the City’s legal elite are getting increasingly coy over what they are offering their junior ranks… but are such tactics sustainable in the long run?
In the wake of the banking crisis, some commentators claimed the legal industry was set for a bloodbath that would sweep away 10,000 solicitors’ jobs from a flabby trade. As so often, the profession defied the critics, handling its post-Lehman reboot with assurance. Now, after posting on the face of it impressive numbers for 2016/17 in the shadow of Brexit and two major electoral upsets, there is talk of the resilience of the industry. The Legal Business 100 (LB100) has, after all, grown from £12.25bn to £22.06bn over the last decade and this year the group at long last surpassed its record PEP of £703,000 set way back in 2008.
And yet scratch the surface and there is much cause for unease. A good chunk of the long-term growth of the UK’s largest firms is due to consolidation, while the 2016/17 results have been hugely flattered by currency movements. Taken as one year, the numbers are respectable, but the long-term view is ominous, particularly for the City’s traditional leaders. Continue reading “Bangs and whimpers – LB100 performance is a lot weaker than it looks”
Marco Cillario finds deal professionals heaving a sigh of relief after a nail-biting end to 2016
Economic and political shocks took their toll on the deal market in the first half of 2017 as activity levels dipped but M&A professionals are sizing up the crucial post-summer period in an unexpectedly upbeat mood thanks to a run of big-ticket bids.
The headline of the last lengthy piece Legal Business carried on Freshfields Bruckhaus Deringer said it all: The Last Champions. While there is no doubt that the Magic Circle has faced huge challenges asserting itself since the banking crisis, for many Freshfields was the member of the club with the best prospect of securing its place in the global elite.
But the City giant will be faring much worse on the profession’s saloon bar test if it keeps generating headlines like this summer, notably the news in July that co-managing partner Chris Pugh was stepping down less than halfway through his term. This surprise announcement came in the same month as financial results showed Freshfields being comprehensively outclassed by its City peers. Freshfields’ revenues have grown by just 17% in five years and the firm has been a fitful performer for nearly a decade now. While the metrics look better in profitability and revenue-per-lawyer terms, Freshfields has certainly not outpaced London rivals even on its core targets. Continue reading “What ails Freshfields? Time is running out for ‘The Last Champions’”
Kathryn McCann assesses the impact of the cyber attack on DLA and the wider legal market
For years, the possibility of a major cyber attack on a leading law firm has been discussed. Inevitably, it finally materialised. On 27 June DLA Piper was crippled for days after the global giant’s systems were hit by what the firm terms a ‘particularly sophisticated strain of malware’. (In cyber jargon, malware is malicious software designed to disrupt, damage or gain access to computer systems.) Continue reading “‘Collateral damage’: Profession gets a stark wake-up call on tech security in wake of crippling DLA cyber assault”
Q: For a routine instruction, how important are the following criteria when selecting a firm?
(1 = not at all important, 5 = expected, 10 = essential)
Analysis of the responses to this question from clients in the UK and US exposes marked differences between client priorities in the two jurisdictions. Scores are illustrated proportionally on the graphs below and to the right. Continue reading “Client Intelligence Report: Data view”
Five New York-based partners left Ashurst in July for US finance firm Chapman and Cutler, with a sixth partner departing for Allen & Overy (A&O) last month.
Partners Patrick Quill, David Nirenberg, Steven Kopp, Doug Bird and Tom Glushko all left Ashurst, completing the full departure of the ten-partner team the firm hired from McKee Nelson in 2009 to launch a structured finance practice.
Behind the scenes of recent panel decisions
Pinsent Masons, DLA Piper, Ashurst and Bird & Bird have all missed out on William Hill’s latest UK adviser panel, with Linklaters and Addleshaw Goddard the only firms to retain their places on the FTSE 250 bookmaker’s slimmed-down roster. Continue reading “Who Represents Who: The data behind the story”
Pinsent Masons is continuing its sustained international expansion drive with a new Australian arm in Perth and the hire of four infrastructure and energy partners from Norton Rose Fulbright (NRF).
The UK law firm’s new Perth branch, to open in the autumn, will be its third Australian office after Sydney and Melbourne and its fifth international launch in the last 18 months.
Eversheds Sutherland expanded in Germany in August, opening its fourth office in the country after acquiring Düsseldorf-based firm Grooterhorst & Partner.
The new office, which is focused on real estate and insurance, opened with three partners: Johannes Grooterhorst, Marc Christian Schwencke and Ralf-Thomas Wittmann. The trio were joined by a team of 11 lawyers.
Continue reading “Eversheds opens fourth German office in Düsseldorf”
‘Compelling rationale’ sees UK and US legal teams advise as Vantiv moves in
A host of US and UK-based international firms have lined up on the £9.3bn sale of UK payment processor Worldpay to US-based peer Vantiv in a deal that will create a company with a combined value of £22.2bn.
Continue reading “Squad of Global 100 firms lines up on £9bn Worldpay disposal”
While Clifford Chance and Linklaters both recorded impressive increases in revenue and profit per equity partner (PEP) in 2016/17, Allen & Overy (A&O) blew its closest rivals away with a 25% rise in PEP, which jumped from £1.21m to £1.51m, while revenue saw a 16% increase to £1.52bn from £1.31bn. On a constant currency basis, A&O saw a 6% increase in its revenues and a 14% rise in PEP.
A&O is now the second-largest Magic Circle firm in revenue terms, overtaking Freshfields Bruckhaus Deringer in the Legal Business 100.
Speaking to Legal Business, managing partner Andrew Ballheimer says its offices in the UK, Africa, Middle East, Australia, the US and Hong Kong had been significant successes for the firm this year with a strong performance across litigation, arbitration, capital markets, banking, leveraged finance, M&A, restructuring regulatory and project finance.
Making a splash in automation, Ballheimer adds the firm’s derivatives-focused product, MarginMatrix, has performed particularly well after A&O teamed up with Deloitte in the first joint venture between a Magic Circle firm and a Big Four accountant.
We are proud of the results, given the volatile backdrop. Our real growth appears higher than the legal market and that’s pleasing.
Andrew Ballheimer, Allen & Overy
In terms of talent investment, the firm made several lockstep-breaking hires in the US, bringing on a five-lawyer finance team led by leveraged finance partner Scott Zemser from White & Case, and a three-partner Paul Hastings team led by the US firm’s leveraged finance head Bill Schwitter.
A&O also made a substantial investment in IP, picking up three partners from Simmons & Simmons this year, including its former IP head Marc Döring following the hire of former colleague Marjan Noor, who moved to the firm in June last year.
There were, however, some high-profile losses, with Latham & Watkins picking up heavyweight banking lawyer Stephen Kensell and M&A partner Edward Barnett, while Milbank, Tweed, Hadley & McCloy also took on a three-partner team in New York, including the firm’s US senior partner, Kevin O’Shea.
LB: How do you view your performance?
Andrew Ballheimer: We are proud of the results, given the volatile backdrop, especially Brexit, the election of President Trump and stock market uncertainty. Our real growth appears higher than the legal market and that’s pleasing.
LB: Have you had any big pay days to bring revenues up?
Ballheimer: Nothing material. All of our practice areas and offices have done well in a challenging market. It’s a combination of our investments over the years, our geographies and our product base. Our footprint is now broader than our peer group.
LB: Headcount has stayed the same. Were there any partnership changes that would explain a 25% increase in PEP?
Ballheimer: If your question is asking whether we have played around with our denominators, the answer is absolutely not. It’s exactly how it’s always been; it’s full equity partners as a divisor of our profit and in the financial year we’ve achieved a significant growth of profit before tax with a small increase in the average number of full equity partners.
LB: You’ve had a number of impressive hires over the last year, how has that contributed to the firm’s success?
Ballheimer: The Americas has grown, our IP team has hit the ground running and we’ve made some other hires. We have made 31 lateral hires net and that has helped. It’s a constantly evolving business offering, adding on high-quality people with a cultural fit and we will continue to do that.
LB: What is the firm going to do over the next 12 months?
Ballheimer: We have to stay close to our clients and deliver at the highest standard in terms of what our clients require. The period ahead is going to be equally as uncertain, but our business is broad based, well hedged, and ultimately it’s about the quality of our offering and our client proposition. You have to evolve all the time because the demands are changing. It’s challenging, but if we continue doing all the things that we’re doing across all fronts, at least our business is in the best position that it can be in an uncertain world.
2017 has been a good year for Eversheds, which made significant strides internationally – first through its tie-up with US firm Sutherland Asbill & Brennan in February and then in gaining Singapore Ministry of Law approval and merging with local firm Harry Elias Partnership in June.
In a year of significant international change, the firm also posted its best growth in revenue terms for some time although profit per equity partner (PEP) dipped slightly. Turnover was up 8% to £438.6m for 2016/17, just eclipsing the 7% growth achieved on the top line in 2015/16. PEP now stands at £725,000, down £17,000 or 2% from the previous financial year but is up 16% from the £642,000 posted in 2011/12. Overall, Eversheds’ top line has grown 20% in the last five years, from £366m. Continue reading “Legal Business 100: Case study – Eversheds Sutherland”
Another of 2016/17’s standout performers, Fieldfisher had an impressive year underpinned by considerable geographic expansion. The firm recorded a 34% increase in turnover for the last financial year, rising from £121.5m to £165m against a 10% increase in lawyer headcount, to strengthen its position in the upper mid-market.
The firm’s profit per equity partner has also grown significantly, rising 16% from £551,000 to £639,000, while profit per lawyer increased 19% from £78,000 to £93,000.
It is clear that Fieldfisher’s rainmakers have benefited from the firm’s financial success, with the top-of-equity figure shooting up 72% from £1.16m to £2m. Bottom-of-equity figures suggest a much wider gap in partner earnings now, with the amount falling 31% from £333,000 to £230,000.
On a five-year track revenue is up 69% for a firm that shifted its strategy in June 2016 to a three-year business plan called ‘Our Future Refocused’, which placed an emphasis on technology, energy and natural resources, and finance and financial services.
Managing partner Michael Chissick says that corporate and disputes performed particularly well, pointing out an uptick in arbitration work. The firm’s corporate practice is now worth £27.5m while disputes is worth £37.6m.
The main driver for Fieldfisher’s rapid rise has been the number of new offices that the firm has opened during the past financial year. Beginning with a tie-up with Chinese boutique firm JS Partners in November 2016, the firm then solidified its presence in the country by opening a four-partner Shanghai office in February.
Chissick says that a key goal for Fieldfisher is to have an office in every major European capital city, and the firm has set about achieving that aim, already opening in Amsterdam in May with an office staffed by five partners from respected Dutch tech boutique Kennedy Van der Laan. There were also openings in Italy in July 2016 and Birmingham in March, and the firm has plans to open in Barcelona and Madrid before the end of this financial year.
Fieldfisher will also be hoping that its Condor business, launched in January, will be a major source of revenue going forward. Headed by former Ashurst head of securities and derivatives Christopher Georgiou, Condor is an alternative legal services platform focused on the derivatives and securities financing markets. Three large banks and two global investment banks have so far signed up to use the service.
Chissick contends that Condor will be a major asset to the firm, describing client interest in the business as ‘phenomenal’ and stating: ‘We’ve got something special there.’
Post-Brexit, we are trying to be more European. We don’t want to retreat into our little island.
Michael Chissick, Fieldfisher
LB: What do you attribute Fieldfisher’s standout year to?
Michael Chissick: A lot of long-term plans came to fruition: Birmingham, Italy and Amsterdam, they didn’t happen overnight, but most of them came in within the last financial year. There’s a real sense of momentum and togetherness, and we were aided by having a partnership that suffered few departures.
Are clients expecting a more technology-driven service now?
Chissick: Clients want great legal services at great value. Interestingly, huge investments in technology that enable us to do things much quicker could lead to a perception from clients that they should pay less. You have to be careful, and make sure clients don’t see investment in technology as leading to a hugely discounted price. It’s expensive to create these systems.
Do you have any long-term fears about the impact of Brexit?
Chissick: We’re making the best of Brexit. There will be an upturn in legal work for an international client base that wants to understand the UK regulatory environment and the UK as a global legal centre will continue. When the regulatory environment becomes clearer for the many industries affected by Brexit, we’re positioning ourselves as the go-to firm for advising on that.
Was there a conscious choice to be more international to hedge against any potential post-Brexit uncertainty in the UK?
Chissick: I wish I could say I had a crystal ball but I didn’t! Post-Brexit, we are trying to be more European. We don’t want to retreat into our little island.
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Travers Smith, Slaughter and May and Hogan Lovells all advised as Tata Steel last month signed a long-awaited agreement to separate its business from the £15bn British Steel Pension Scheme (BSPS), in what is the largest pensions scheme restructuring ever in the UK.
As a result of the separation, achieved through a regulated apportionment arrangement, Tata will pay £550m to BSPS, which will also be given a 33% equity stake in the steel company. With the support of The Pensions Regulator and the Pension Protection Fund (PPF), a new BSPS will be created after an assessment period.
This year’s Legal Business 100 coincides with the most inauspicious of anniversaries after a year with the most inauspicious of beginnings. A decade since the start of the global financial crisis and just over a year since the result of the Brexit referendum, the perception is that political and economic uncertainty has ultimately had little impact on the performance of top 100 UK law firms. Particularly on those at the top.
The drama has been well documented. UK and European markets continued to show resilience, mainly aided by foreign investment, despite the last financial year starting off with six to eight weeks of post-referendum impact. By Christmas, transactional practices were upbeat and grew stronger into 2017. Then article 50 was triggered just before the end of the financial year and unease settled in again. Continue reading “Legal Business 100 overview: Your story”
Pinsent Masons picked up the key advisory mandate as embattled British construction company Carillion was handed a lifeline this summer thanks to the award of two contracts worth £1.3bn on the High Speed Two (HS2) project.
Carillion is to build two sections of the UK’s second high-speed rail project from London to Birmingham along with its joint venture partners Kier Group and France’s Eiffage Génie Civil, which will take at least five years to complete.
Continue reading “Pinsents secures £1.3bn Carillion HS2 mandate”
