Tax overhaul threatens US firms with four-year cash drain but could boost global mergers

US law firms are facing a fundamental overhaul over the way they calculate and distribute their profits that could result in far higher short-term tax bills if controversial proposals currently before Congress are approved.

The proposals could see US firms with over $10m in revenues forced to switch their accounting model from a cash basis, under which money received in a financial year is taxable, to a UK-style accrual method, where taxable revenue includes work done but not yet billed or collected.

Continue reading “Tax overhaul threatens US firms with four-year cash drain but could boost global mergers”

Gateway to Africa: Hogan Lovells ties-up with Routledge Modise

The queue of international firms looking to enter the South African market became one shorter in November, as transatlantic giant Hogan Lovells announced it had tied up with Routledge Modise after ten months of talks.

The 40-partner South African firm, an ally of Eversheds until October last year, will operate under the Hogan Lovells banner, but will not share the same profit pool, as local regulations prohibit it.

Current Routledge chairman Lavery Modise will retain his title in South Africa, while the directors of the firm will now be referred to as partners. The new team is not expected to take up any positions on Hogan Lovells’ board. Continue reading “Gateway to Africa: Hogan Lovells ties-up with Routledge Modise”

After Charlie’s War – can Ashurst achieve post-merger prosperity under a new leader?

A recession-weary Ashurst has finalised a long-planned but high-stakes global merger – only to eject the leader synonymous with its brand and strategy. Is Ashurst heading for peace-time prosperity or factional warfare?

The former Ashurst partner sits back in his chair and reads the text message. Having asked a friend about the mood at Appold Street in the wake of Ashurst’s expected vote for integration with its Australian ally and unexpected vote that unseated its high-profile head Charlie Geffen, the text response is succinct: ‘It’s a mess!’ The ex-partner smiles. ‘Well, it’s hardly surprising.’

Continue reading “After Charlie’s War – can Ashurst achieve post-merger prosperity under a new leader?”

It’s a wrap – Penningtons acquires Manches after PWC brokers sale of business and assets

In what was initially billed as merger talks but has turned out to be far more of a takeover Penningtons yesterday acquired the trading operations of Manches in a deal brokered by PriceWaterhouseCoopers as administrators.

Under the business transfer agreement, 265 Manches employees, including 46 partners will now move to Penningtons. However, in a reflection of the fact that, despite their contrasting recent profitability the firms are close in lawyer size and revenues, the combined firm will be called Penningtons Manches. Continue reading “It’s a wrap – Penningtons acquires Manches after PWC brokers sale of business and assets”

Ashurst gears up for new chairman election as Oz merger vote is brought forward

As Ashurst nears a crucial vote on full integration with Australian partner Blake Dawson – now known as Ashurst Australia – the firm’s partners are also poised to elect the firm’s next chairman.

Partners were informed this morning (23 September) that Ashurst dispute resolution partner Ben Tidswell and Ashurst Australia competition and consumer protection partner Peter Armitage will be running for the role alongside current senior partner Charlie Geffen, whose role will be replaced by the new chairman position.

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Merger frenzy hikes Legal Business 100 income but growth masks another tough year

The latest Legal Business 100 results show the total revenue of the UK’s top 100 law firms has topped £19bn for the first time, while the number of lawyers across those firms has passed the 60,000 mark, also a first. However, this top-line growth is largely the result of another year of fervent merger activity, masking the fact that on a granular level many firms are struggling to achieve revenue and profit growth. Total revenue for the LB100 for 2012/13 is £19.1bn, an increase of 8%, while total lawyer headcount swelled 10% to 61,299. Continue reading “Merger frenzy hikes Legal Business 100 income but growth masks another tough year”

LB 100 – The Last Word: Eyes on the storm

From consolidation to price pressure, to market confidence, leading management figures at Legal Business 100 firms give us their views on the 2012/13 year and the challenges ahead

Value for money

‘We’re facing fee pressure of course – and it won’t ease – but there is recognition from clients of different levels of service. The key word is not price but value. Finding a pricing structure which works for the client is essential, as well as supporting the legal departments of clients – helping them to frame key issues to management, helping on staffing shortages, training and knowledge management and so on. These are all areas law firms should embrace.’

Paul Olney, practice partner, Slaughter and May

Continue reading “LB 100 – The Last Word: Eyes on the storm”

Financial results 2013: Burness Paull (minus the Williamsons) outstrips Scottish rivals with post-merger results

In the first few months since its eye-catching merger at the beginning of December last year, Burness Paull has climbed the ranks to post revenue and profit growth that contrasts starkly with the fortunes of the traditionally elite Scottish firms in recent years.

The 57-partner firm, formed following the union of Burness in Edinburgh and Glasgow and Aberdeen’s Paull & Williamsons, recorded a turnover of £38.7m, up 59% on legacy firm Burness’ turnover last year of £24.3m. The firm has also rebranded as Burness Paull, dropping the Williamsons part of its post-merger name. Continue reading “Financial results 2013: Burness Paull (minus the Williamsons) outstrips Scottish rivals with post-merger results”

Comment: Hogan Lovells was right to get hitched. It needs to remember that

I’m not a big fan of comparing law firm mergers to marriages. All those torturous metaphors and incongruous imagery. But in assessing the three-year old union between Lovells and Hogan & Hartson, it’s hard to escape the nuptial motif. The deal was forged amid high expectations and a simple analysis: both firms were better off together as neither looked compellingly positioned for an emerging elite of global law. Putting together a transatlantic merger of equals with two large firms that ranked just below the top tier in their respective markets made sense and was arguably a first for the profession. Continue reading “Comment: Hogan Lovells was right to get hitched. It needs to remember that”

Full speed ahead – Ashurst puts in place joint corporate structure as full integration looms

As Ashurst proceeds headlong towards its October vote on full financial integration with Asia Pac’s Blake Dawson the firm has put in place a democratic corporate structure that sees current managing partner (MP) James Collis confirmed as global MP of the merged entity.

Many of the appointments are expected; Ashurst Australia’s managing partner John Carrington will retain that role, although more of a surprise is the fact that the senior partner title currently held by Charlie Geffen will disappear, to be replaced on a new-look joint board by an elected chairman and vice chairman, who must come from different legacy firms (a betting person might suggest Geffen and Ashurst Australia’s chairman Mary Padbury are naturals for the roles.) Continue reading “Full speed ahead – Ashurst puts in place joint corporate structure as full integration looms”