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Dual Core

With the number of large-scale tech M&A deals increasing in 2011, some believe that another technology bubble is forming. Following the coalition government’s pledge to help the developing local tech sector at Silicon Roundabout, LB finds out how law firms are placing their bets, and who is getting ahead of the game.

All eyes in the legal community are firmly fixed on East London. Taylor Wessing’s October move to open a second London office in Tech City, located near the Old Street roundabout, renews focus by commercial law firms on the technology scene, and signals a flourishing of the UK’s tech sector.

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Eurozone debt: Keeping it together

As the sovereign debt crisis threatens to bring the euro to its knees, a group of lawyers has been working behind the scenes to keep the cogs turning. LB finds out what happened backstage.

Lee Buchheit has faced a frantic few months. He has been advising the Greek government on how to sort out its massive debt problem. This has seen him shuttle between meetings across Europe for the past five months and spend more time in hotel rooms in Paris, Brussels, Berlin and London than in his hometown of New York.

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LA Lawyer

Father of five, two-time Hawaiian Iron Man competitor, climber, trial lawyer extraordinaire and co-founder of what can legitimately claim to be the leading global litigation-only firm. John Quinn has earned the right to put his feet up. Not a chance he says.

On a hiking trip to Wyoming a few years ago, a group of Quinn Emanuel Urquhart & Sullivan litigators, headed up by founder John Quinn, arrived at a freezing 9,000 ft lake. Quinn joked that the first summer associate to swim the lake would get a job offer at his firm. Turning his back on the group for a moment, he heard a splash as one of the keen students dived headlong into the water. True to his word, an offer was made.

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Red Tape – Banking and finance

As the regulators come down harder on banks and financial institutions, and Basel III, the Vickers reforms and Dodd-Frank are set to transform the banking and finance sector, which law firms are reaping the benefits?

The Financial Services Authority (FSA) raised £91.2m in fines from UK financial institutions during 2010/11. This marks a staggering increase from 2009/10 when it collected £33.5m. Since the start of 2011 it has fined individuals and institutions £38.4m. It also signals a backing up of the watchdog’s promise to flex its muscles, taking a more prominent position when it comes to enforcement, hoping to strike fear in the UK’s financial services community.

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Russia: Space Invaders

Global law firms have traditionally dominated the corporate market in Russia and the CIS. LB assesses the chances of those domestic firms taking on the internationals at their own game.

Dimitry Afanasiev, chairman of the Russian law firm Egorov, Puginsky, Afanasiev & Partners (EPA&P), is fully aware of the challenges that lie ahead. On 19 July, EPA&P announced that it was to take over the Ukrainian firm Magisters, creating a pan-CIS firm with over 300 lawyers and, as reported in the legal press, a combined turnover of €115m. In doing so, the firm has planted a serious flag in a market that has always been dominated by major internationals. Continue reading “Russia: Space Invaders”

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Russia: Shades of grey

earth from space

Russian business and politics can rarely be described as boring. Each year throws up its share of dramas, and 2011 is no exception to the rule.

From prime minister Vladimir Putin’s recent, and not entirely unexpected, self-anointment as Russia’s next president, through to Rosneft’s doomed oil exploration joint venture with UK oil major BP and its subsequent rebound into ExxonMobil’s welcoming arms. These events, and more, have shown that Russia hasn’t lost its flare for political and economic intrigue and infighting. Nevertheless, compared to the problems faced by some of its neighbours in the CIS and Western Europe, Russia has come through the year with a veneer of respectability and stability. Any knocks it has taken have come from external sources. Continue reading “Russia: Shades of grey”

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Taking off

As the airline industry continues to face a tough economic climate, falling passenger numbers and strict regulations, litigation levels have risen. But who’s getting the work?

Sir Stelios Haji-Ioannou could shake things up in the airline sector yet again. The 46-year-old founder of easyJet grabbed the world’s interest in September with rumours that he’s on the verge of launching a new long-haul budget airline likely to be called Fastjet.

But Sir Stelios has drawn more headlines of late for his legal disputes. In particular, a lengthy legal showdown with easyJet, which he founded in 1995 and in which his family still owns a 37.4% stake. It’s a dispute that has also seen him at odds with his former solicitors, Bird & Bird.

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Dynamic Duo

Clyde & Co’s Michael Payton has held the top job at the firm for 27 years and since 1997 has formed a formidable partnership with CEO Peter Hasson.

On the eve of the firm’s much-hyped union with Barlow Lyde & Gilbert, LB takes a closer look at this successful management duo.

Michael Payton has presence: there is no other word for it. As one of the longest-serving senior partners in the City, when he enters the room he instantly seems to take charge.

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Making Headlines

General Pinochet, Nick Leeson and Ian Maxwell are all former clients.

More recently, Rebekah Brooks and UBS rogue trader Kweku Adoboli have called in Kingsley Napley for help. LB speaks to managing partner Linda Woolley about a firm where the clients make the front pages.

The reception area at Kingsley Napley’s offices in Clerkenwell very much reflects the character of the firm. It’s small, but big enough to serve its purpose. It lacks the ostentation of many City rivals but isn’t too Spartan either. In fact, it’s just about right. Kingsley Napley hasn’t gone for the wow factor, which is probably just as well. Unlike some of its larger City neighbours, many of the firm’s most high-profile clients won’t ever step foot inside its office.

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Under the Weather

When US outfit Orrick, Herrington & Sutcliffe entered the London market in 1998, chairman Ralph Baxter had a dream of competing on the global stage.

But 13 years on, that dream looks to be souring. LB investigates what is going wrong.

Orrick, Herrington & Sutcliffe was once seen as one of the most successful and promising US firms resident in London. Achieving rapid growth and performing well financially, it seemed that nothing could go wrong. But a string of departures since the start of 2010 and a lack of strategic direction has left many asking if chairman Ralph Baxter’s sheen has come off. Added to the mix is the reputational damage done by its involvement in at least two very public and ultimately failed merger talks with SJ Berwin and Akin Gump Strauss Hauer & Feld. Orrick does not look like the unmitigated success story it purports to be.

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Power Surge

Energy clients are dictating law firms’ strategic direction and hiring policies. For now at least, energy is king. LB finds out why.

On the last day of August ExxonMobil dominated the business pages, when news broke of its $3.2bn Arctic exploration deal with Russian state-owned oil giant Rosneft. The story surprised energy specialists – a similar deal between BP and Rosneft was previously scuppered by TNK-BP, the partners in BP’s existing joint venture in Russia. The UK oil major suffered a double hit that day, when it was revealed that bailiffs had raided its offices in Moscow, linked to a case brought by TNK-BP shareholders over the failed Arctic deal with Rosneft.

These events attracted significant media attention, not just for the energy companies concerned but also the law firms involved. Freshfields Bruckhaus Deringer, which ironically advised BP on its failed deal with Rosneft, was now advising Rosneft in the deal with ExxonMobil. Skadden, Arps, Slate, Meagher & Flom and Akin Gump Strauss Hauer & Feld was advising the US oil major.

Deals and (more often than not) disputes between the energy giants and local incumbents have attracted significant interest in the press in recent years but it is also an inescapable fact that clients of the energy practices at some of the world’s largest law firms have dictated global growth strategies.

 

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BLP – Ten years gone

Berwin Leighton Paisner is a decade old this year, a period marked by impressive financials, a revolving door of partners and tentative international expansion. LB assesses the firm ahead of its difficult teenage years.

Berwin Leighton Paisner (BLP) managing partner Neville Eisenberg is impeccably well prepared for our meeting. Next to his black coffee he has printed e-mails and details of the firm’s financials over the past ten years. In his soft South African brogue, his responses are polished and littered with management-speak. He gives nothing away. But one question gives him pause – when asked if he will stand for re-election next year, he hesitates before answering cautiously: ‘Obviously I’m thinking about it.’ However, he says it’s still early days.

 

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City 50 – City Break

With a few years of pain behind them, City 50 firms are feeling better. But is it still too early to bring out the champagne?

Previous concerns that London’s place on the global financial stage could be eroded seem to have been forgotten this year. While the UK economy is still in a state of flux, the capital has maintained its standing as one of the world’s leading financial centres, adding some confidence to the majority of the industry’s leading law firms. Average London revenue across the 50 largest firms in the capital fell by just 4% during 2009/10. Still feeling the aftershocks of the global financial crisis, the numbers made for tough reading. But after a more stable period, in part thanks to some canny management, an increase in litigation mandates, a recovering corporate market and a rise in financial work, the landscape doesn’tlook too bad. This year, City 50 firms saw revenues remain flat compared with last year. And while London offices continue to contribute less to international firms’ global turnover, there were still some impressive performances.

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Wish you were here?

This year’s Legal Business 100 firms continue to grow in revenue, but how much is performance in foreign markets masking woes at home? LB finds out

Things have changed in the Legal Business 100 this year. At least seven firms have merged with others, either overseas or at home, while another three have bolted on chunks of the now extinct Halliwells. Five of these firms have seen superficial revenue rises as a result of consolidation, while it is impossible to analyse the fee income ebb and flow at Norton Rose and Hogan Lovells because of recently completed mergers.

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Mergers – Answers on a postcard

Despite much hype over mid-market consolidation recently, the number of mergers between law firms in the UK has been modest. LB discovers why not every struggling firm is looking for a tie-up

If you were to slap an ‘at risk’ sign on any segment of firms in the LB100 then it would have to go somewhere on that diverse group of City firms that pull in between £20m and £70m in turnover. The list of threats to their businesses is growing. From pricing pressures in a crowded market to a lack of differentiation and a stagnant transactional market, there is much to think about. ‘If you’re not growing turnover now, you’re not going anywhere nice,’ one commentator suggests.

 

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Global Elite – Scaling up

With an unerring consistency, the UK Global Elite has maintained its grip on the market throughout the recession and 2010/11 was no different. Some will have hoped that the global law firm may become an endangered beast, but if anything the last few years have made them stronger.

While it hasn’t been easy for the global giants, there has been a fair bit of soul searching, cost cutting and re-jigging of business plans, which has resulted in this group of six firms holding tight to a 36% market share of the entire LB100.

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Major International – Wedding Bells

In comes a new peer group to the Legal Business 100. Thanks to a flurry of transatlantic marriages over the past 18 months, it is no longer appropriate to sit the likes of DLA Piper, Hogan Lovells, Norton Rose, SNR Denton and Squire Sanders Hammonds in their old peer groups.

Take DLA Piper. Historically the firm has never been judged on the basis of its global business in the LB100 because the firm operates a Swiss verein structure with two separate profit pools and, up until now, it probably wasn’t appropriate to do so. Of this group DLA was the forerunner in terms of US ambition when it moved into the market, pulling off a three-way deal with Chicago firm Piper Rudnick and Californian firm Gray Cary Ware & Freidenrich in 2005.

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Major City – Bits and pieces

Many of the firms in the Major City group will look back on 2010/11 with mixed feelings. Some firms will feel a sense of relief that, broadly speaking, any further disasters were averted but others will be frustrated that key transactional markets refused to pick up significantly. Strategically, however, there are still a couple of firms in the group that have to ask themselves some difficult questions over the coming year.

The peer group has changed somewhat since last time around, with Hogan Lovells and SNR Denton, as a result of transatlantic mergers, moving to the newly created Major International group.

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