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Brexit: a pragmatic position for the worried managing partner

Theresa May’s claim from the distant history of July that ‘Brexit means Brexit’ has already become famous for answering nothing about the uncertainties facing the UK other than the government proposes to ultimately leave the EU.

Welcome to the uncharted waters of modern British politics – a claim often made but usually untrue. I don’t even follow the logic of those claiming Brexit is inevitable – you can as easily imagine an EU departure abandoned entirely as ending up with a hardline exit. There is nothing binding about the mandate – the public has had their say, but probably not their final say. No commitments – including indications from Downing Street that article 50 will not be triggered until well into 2017 – clear up the point.

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Soft law, hard sanctions – Human rights laws and the next risk front facing business

With human rights issues entering the mainstream of business practice, we teamed up with Herbert Smith Freehills to assess how new standards are changing the way in-house counsel operate

It turns out that the next risk front facing business and promising to reshape the role of general counsel (GCs) is a piece of legislation notorious among lawyers for having no teeth and little direct liability for companies.

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LB100 firms forced to make own luck as tough times continue

The headline isn’t great, but it’s not bad either. Judging our annual Legal Business 100 (LB100) results, the industry has done better than expected overall, at least compared to 2015, when the group barely achieved growth despite a relative rebound in the UK and global economy.

This year, revenues across the LB100 dipped 2% to £20.2bn, heavily influenced by the removal of Dentons and Squire Patton Boggs from our tables. Back-of-the-envelope calculations show the group managed to hike income by roughly 3% on a like-for-like basis. Given the slowing of deal activity since the start of 2015 and some easing of investment ahead of the EU referendum, it could have been worse.

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The LB100: The second 50 – Even money

Regional firms are reporting patchy performances overall but the arrival of new entrants to the LB100 shows firms outside the capital are holding their own

National and regional firms are historically outperformed by their London equivalents in the bottom 50, but this year these firms are holding their own. There are 30 non-City firms in the 51-100 bracket, compared to 20 London firms, with a combined revenue of £1.14bn, down on the £1.2bn shared between 32 firms last year. Average revenue for this peer group is unchanged at £38m – the same as for the London-based firms. Profit per equity partner (PEP) has increased 9% to £329,000, compared to the City firms, which managed 7% growth to £435,000.

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The LB100: The second 50 – Sterling performances

Brexit-related woes aside, City firms in the second 50 enjoyed a bumper year

When a firm depends on a signature practice area or specialism in certain sectors, a boom year can quickly turn bust during periods of economic turbulence. However, a number of the London-based practices and boutiques that occupy the second 50 of the Legal Business 100 (LB100) were the standout performers over 2015/16, despite Brexit-related headwinds during the second half of the year.

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LB100: relative revival for City elite in 2016 as a range of smaller players excel

The big four Magic Circle firms have posted their strongest performance in this year’s Legal Business 100 (LB100) since the recession, despite a subdued market overall. Although average revenue for the top 25 is down 3% to £622m, the combined revenue of Freshfields Bruckhaus Deringer, Linklaters, Clifford Chance and Allen & Overy (A&O) stands at £5.33bn, up 4% on last year, while average profit per equity partner (PEP) jumped 5% to £1.33m.

A&O managing partner Andrew Ballheimer said: ‘The year has seen mixed markets around the world. In that context these are another set of solid results which highlight our people’s ability to spot opportunities for growth.’

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SABMiller legal team faces autumn redundancies as £79bn AB InBev deal closes

credit suisseAs brewing giant SABMiller’s global general counsel (GC) John Davidson prepares to stand down in 2017, up to 35 staff in the UK-based legal team are to be made redundant.

In 2015, the world’s second-largest brewer became the focus of a takeover approach fromAnheuser-Busch InBev (AB InBev) (at press time valued at £79bn). Since the deal was signed, a review was held and the company’s structure overhauled in August.

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Tchenguiz brothers’ legal bill hits £5.1m in court battle against Grant Thornton

The drawn-out legal battle between property billionaires, Vincent and Robert Tchenguiz, and those they hold responsible for the Serious Fraud Office (SFO)’s botched investigation into their business dealings has proved a costly affair. It has emerged they have already paid out a collective £5.1m legal bill to date in their £3bn litigation against Grant Thornton and others, surpassing the SFO’s £4.5m settlement to the pair two years ago.

First filed by Vincent Tchenguiz after a settlement with the watchdog in 2014, the pair allege defendants, includingGrant Thornton, conspired to pass information, dishonestly, to the SFO in order to instigate and encourage an investigation by the watchdog into his relationship with collapsed Icelandic bankKaupthing, and that they did so for their own commercial gain.

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LB100 Focus: Don’t look back in anger: Ashurst leadership tries to rally partners but the drift continues

Five years on from its controversial Australian combination – and after a punishing 2015/16 – the storied City firm is still far from finding the form it needs in a competitive global market

‘We had known that the firm had been struggling for a while but we didn’t know, and certainly weren’t expecting, a 20% decrease to our [profit per equity partner] PEP,’ a recent Ashurst leaver tells Legal Business.

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Eversheds consults on new management structure

Lee Ranson clear favourite to take chief executive role

Eversheds has begun talks to forge a new leadership team as the firm strives to avoid a divisive contest after current chief executive Bryan Hughes steps down next May. Current managing partner Lee Ranson is expected to take Hughes’ role in a management structure with two other partners.

Legal Business understands that current international managing partner Ian Gray’s post will change or a new role may be created, while global company commercial head Keith Froud is likely to be appointed as the new managing partner by Ranson.

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RPC Consulting targets £50m turnover in plans to challenge Big Four

New software boosts expansion plans for firm’s start-up

RPC’s insurance management consulting arm is pursuing significant expansion as it bids to hit a £50m turnover target within the next five years.

RPC Consulting managing partner Rory O’Brien said the start-up had been boosted by its acquisition of financial modelling tool Tyche last year, which has led to new deals with high-profile insurance clients.

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The LB100: The second quartile – Short changed

After years of strong growth, the City’s mid-tier saw more mixed results in 2016

With Brexit looming large over the UK legal market, many of the second 25 of the LB100 have lost momentum. Outpacing the growth of leading players ranked in the top 25, last year firms including Macfarlanes, RPC and Nabarro defied critics who suggest the City mid-tier are in structural decline. This year, however, many firms have posted subdued results.

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Brexit effect hits home as mid-tier reveals job cuts and pay freezes

Large mid-tier firms in the UK were some of the first to feel the sting of the UK’s decision to leave the European Union, with Berwin Leighton Paisner (BLP), Trowers & Hamlins, Addleshaw Goddard and Gowling WLG all putting their summer salary reviews on hold.

In July, BLP postponed all UK staff pay reviews to November 2016.

The decision came on the back of a sluggish financial performance for 2015/16, with fee income falling 2% to £254m in 2015/16. The firm said in a statement: ‘Following market uncertainties arising out of the recent EU referendum vote, BLP has decided that the responsible and prudent thing to do is to defer making UK salary decisions for a further four months.’

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Linklaters PE team scores first-time instruction from BC Partners

Linklaters landed its first mandate from private equity (PE) house BC Partners at the end of July, with PE partners Alex Woodward and Vincent Ponsonnaille leading on a $1.6bn deal for a majority stake in Israeli furniture makerKeter Plastic.

BC, which has traditionally usedDickson Minto, turned toLinklaters as it trumped rivals The Carlyle Group and CVC Capital Partners to acquire an 80% stake inKeter from the Sagol family. Woodward and Ponsonnaille worked alongside Linklaters finance partners Brian Gray and Kathryn Merryfield, and tax partner Édouard Chapellier.

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Fighting back – a golden opportunity to take on the Big Four in tax services

Bakers City head Alex Chadwick argues that law firms are increasingly primed to take core tax work off Big Four rivals

As the international tax framework becomes subject to increased scrutiny and legal change, the demand for strategic global advice has never been stronger. In the UK, law firms have traditionally played second fiddle to the Big Four accountants when advising on tax. Today, however, law firms with the right infrastructure are incredibly well positioned to take more of a leading role in the tax affairs of their clients. This is down to a combination of greater regulation of audit services, tougher restrictions on the provision by accounting firms of non-audit services, such as tax, valuation and legal services and deregulation of the legal profession.

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