The good news is that up close the reality turns out to be not as awful as the cynics have feared. After all, for years the profession has avoided a frontal discussion of its record on ethnic diversity, choosing to submerge the topic within the umbrella of diversity and inclusion even as law firms became more intent on selling their progressive credentials.
And in fairness, avoiding that debate has been as much about a general British reticence to tackle issues of race head on with commentators and the media often treading with excessive delicacy in such matters. Still, the end result has been little frank discussion, certainly compared to the increasingly forthright debate on the profession’s record on female representation and retention or tackling social mobility. Continue reading “The influx of BAME lawyers may yet be squandered”
This title is on the record as having doubts regarding the Big Four’s legal ambitions, at least judged against claims typically made by some outside observers. Readers will all know such assertions: that the group are more sophisticated, slicker and tech-savvy than law firms and set to disrupt law on a global scale.
Amid a quiet month for the lateral recruitment market in London, Addleshaw Goddard made the most significant play, bolstering its City banking practice with the hire of leveraged finance partner Peter Crichton from US firm McDermott Will & Emery. Well known in the deal community, Crichton joins Addleshaws’ active mid-market practice led by Alex Dumphy.
Crichton’s career as an acquisition finance lawyer saw him act for AIB, HSBC, The Royal Bank of Scotland and Santander on Caledonia’s acquisition of the drinks business Liberation Group in 2016 and AIB, HSBC and Santander on the refinancing of the Jockey Club. He has spent around 16 years advising on the debtor side of the loan markets and specialising in leveraged finance, becoming partner at DLA Piper and CMS Cameron McKenna Nabarro Olswang before joining McDermott before the three-way merger took effect in 2017. Continue reading “‘Necessary bandwidth’: Addleshaws lures deal finance veteran from McDermott”
US giant Kirkland & Ellis has lost private equity duo David Arnold and Gavin Gordon (pictured) to Willkie Farr & Gallagher. Long-rumoured to be on their way out of the City office, the pair joined Kirkland from Ashurst in 2010 in one of the firm’s first major private equity lateral hires in London. Clients Gordon has worked with include Cinven, ABRY Partners, KKR and Vista, while Arnold’s list include CapVest Partners and Montagu Private Equity (see Deal View).
Watson Farley & Williams head of litigation and arbitration Andrew Savage has joined McDermott Will & Emery as a partner in the dispute resolution team in London as the firm looks to bolster its international arbitration practice. Savage spent 15 years at Watson Farley, becoming head of litigation in 2007. Continue reading “Significant hires”
The recent spate of leadership elections has seen Ashurst, Slaughter and May and White & Case all sticking with tradition while Stephenson Harwood and Quinn Emanuel Urquhart & Sullivan bet on new leaders.
May saw Hugh Verrier’s term as White & Case chair extended to 16 years after he was re-elected for another four years at the helm of the New York-bred giant. First elected to the role in 2007, Verrier’s tenure has seen sustained growth for the firm, most strikingly in London, where the 2020 strategy led by partner Oliver Brettle, and its core ambition of taking on the Magic Circle in its own backyard, have paid dividends. Continue reading “Ashurst, Slaughters and White & Case re-elect leaders as rivals ring in the change”
Greenberg Traurig’s executive chair Richard Rosenbaum has pointed to his firm’s track record for independent thinking as it enters Italy through a merger in Milan.
In July, the northern Italian city will become the location of the Miami-bred firm’s 40th office, after Greenberg absorbs its local ally of 14 years, Santa Maria Studio Legale. Two Freshfields Bruckhaus Deringer veterans will also join the firm’s first Italian base: local real estate head Marzio Longo and finance partner Corrado Angelelli, giving it a starting team of around 50 lawyers. Continue reading “‘Independent thinker’ Greenberg Traurig picks Milan as latest step of unusual European footprint”
Despite having launched five international offices in Asia and the Middle East since 2012, top-20 UK law firm Addleshaw Goddard had no presence in continental Europe until last month. That was when it announced the hire of five partners from Bryan Cave Leighton Paisner (BCLP) to spearhead a launch in Hamburg.
The hires include the two founders of legacy Bryan Cave’s German offices in 2007, Eckart Budelmann and Michael Leue. Partners Martin Lüderitz, Maximilian Karacz and Hubertus Schröder joined the duo in the move from BCLP, alongside five other lawyers. Continue reading “Addleshaws enters continental Europe through BCLP Hamburg hires”
Latham & Watkins is acting alongside US counterpart Kirkland & Ellis in advising EQT as the private equity house looks to acquire Nestlé’s skincare business, in what could be one of the largest transactions in Europe this year.
Nestlé, which is being advised by Linklaters corporate partners David Martin and Michael Honan, confirmed talks with EQT in May following a competitive auction process with rival buyout funds and industry players all eager to make the acquisition. The group of investors includes Canada’s Public Sector Pension Investment Board and the Abu Dhabi Investment Authority. Continue reading “Global Elite line up on Nestlé’s $10bn skincare business sale to EQT”
The Emerald Isle may be small – its two million-workforce delivers a tax take of just €50bn – but last year’s exceptional 6.7% GDP growth followed an equally strong 2017 and makes Ireland the standout performer among the EU27. All would be well were it not for another six-month delay to Brexit. ‘There was a noticeable nervousness in the lead up to the original Brexit date of 29 March; things have been very busy again since then,’ says Brian O’Gorman (pictured), managing partner at Arthur Cox.
‘The economy is buoyant and, for now, we’re getting a Brexit bounce without a Brexit burden,’ says Declan Black, managing partner of Mason Hayes & Curran, where 2018 revenues were up 6%. He points to energy (particularly renewables), technology and financial services as sectors that are doing particularly well.
Overall, performance has varied – from 4% revenue growth at William Fry to more than 10% at Matheson. ‘The first quarter of 2018 was a bit quieter than expected, but performance thereafter was very strong with activity in M&A and private equity,’ says William Fry’s managing partner Bryan Bourke. ‘It was a record year of growth – advances were made across all practice areas,’ says Michael Jackson, Matheson’s managing partner, who highlights technology, fintech, pharma/life sciences, energy and financial services as standout sectors.
Other large Irish independents also enjoyed a good year: Arthur Cox and A&L Goodbody both saw 5% growth. O’Gorman points to a strong performance in corporate, finance and dispute resolution, while Goodbody’s managing partner, Julian Yarr, says: ‘We had an excellent year in winning client mandates in a very competitive and uncertain market with good revenue growth across our core areas: litigation, corporate, property and financial services.’ The firm was involved in the majority of mandates in the renewable energy sector and was named International Law Firm of the Year at the 2019 Legal Business Awards.
‘There was noticeable nervousness in the lead up to the original Brexit date; things have been very busy since then.’ Brian O’Gorman, Arthur Cox
As evidence of its strength across the board, McCann FitzGerald managing partner Barry Devereux quotes the Irish Law Society report: ‘The star performer in 2018 was McCann FitzGerald, with an increase of 31 practitioners – probably the biggest single-year growth number for an Irish firm ever.’ Growth areas included: funds and asset management, aircraft finance, energy, real estate, tax and litigation, investigations and large commercial disputes.
More international firms have also been lured by Ireland’s potential. Clyde & Co, DLA Piper and Simmons & Simmons have all opened Dublin offices since January 2018, and have since expanded their footprint, while Fieldfisher recently entered a full-scale merger with Irish independent McDowell Purcell. In anticipation of Brexit, the impact of dual qualification has been significant. Of the 18,460 solicitors on the Irish roll, 2,200 first qualified in England and have joined since the referendum vote.
Demand for Irish lawyers is causing an inevitable spike in salaries. ‘One of the biggest challenges is the battle for talent,’ says Bourke. ‘The cheques being written to get people feels like when the US firms arrived in London.’
Black adds: ‘It’s a great time to be an Irish lawyer. The arrival of new entrants into the market is driving considerable wage inflation, because they are hiring local lawyers.’
Dominic Carman
Nordics
Nordic firms have good reasons for a cautious forecast for 2019 as expectations of an economic slowdown start to loom and last year’s lively private equity (PE) market shows some signs of cooling.
According to Arne Møllin Ottosen, managing partner for Copenhagen at Kromann Reumert, PE activity has slowed this year compared to the last three because price expectations on the sell side are too high. Paula Röttorp, managing partner of Hannes Snellman’s Stockholm office, notes a shift in investor focus away from PE to public M&A deals in the last year.
But if a downturn is on the horizon following a sustained period of steady economic growth in Europe, independent firms are yet to feel the pinch with many still reporting a healthy stream of M&A and transactional work. Fredrik Rydin, Roschier’s managing partner for Stockholm, says Helsinki in particular and the wider Nordic region’s growing reputation as a hub for tech unicorns has resulted in more M&A work for the firm. Last year Roschier acted for PayPal in its $2.2bn purchase of iZettle, a Swedish fintech company. ‘I’m surprised that the market has been this good for so long,’ adds Ottosen.
Meanwhile, last year was a record year for Swedish firm Mannheimer Swartling, with revenue now standing at around €130m. ‘We’ve had a super strong start to the year, which has been 7% up over the last few months compared with January to April last year,’ comments the firm’s managing partner for Stockholm, Jan Dernestam.
‘DLA Piper came to Denmark last year, but no-one can see how one international firm can compensate for inbound referrals.’ Simon Evers Hjelmborg, Bech-Bruun
Competition from international law firms seems to be more of an ongoing expectation among Nordic independents than a pressing concern, but there are fears alternative legal providers could prove a more immediate threat to the future of major independent firms.
Ottosen says: ‘The Big Four have been building up their internal legal departments and setting up shop in Denmark. They could establish themselves at the lower end of the market but EY and PwC have stated their intentions to build up their legal services here and they’re huge players with over 1,000 lawyers.’
Bech-Bruun’s managing partner Simon Evers Hjelmborg observes: ‘DLA Piper came to Denmark last year and that was good for them, but no-one can see how one international firm can compensate for inbound referrals. There are rumours Dentons might set up here, but more in the mid-market.’
There has, however, been disruption in Sweden. Last year, well-established mid-tier law firm Lindahl was forced to separate its Stockholm office after two partners broke away to start their own firms. ‘Lindahl is an old firm and it was the talk of the town when it split its offices in two, which was a big deal,’ says Rydin. ‘The leading firms have taken a stronger position and smaller independent firms have been struggling to find their market. It’s difficult for mid-tier firms to find their spot.’
Anna Cole-Bailey
Iberia
Despite economic slowdown and political unrest in the Catalan region, those anticipating a year ago that international law firms would continue to ramp up their investment in Iberia have not been disappointed.
Spain and Portugal are still among the fastest-growing economies in western Europe, with GDP rising by 2.6% and 2.1% in 2018 respectively. Foreign investors, including private equity houses, keep bringing their money in and the crucial real estate sector remains active.
Undoubtedly, the year has not been without its challenges for the local champions. Uría Menéndez remains the top Spanish player for high-end work and leads Legal Business’ Euro Elite Top 25 table this year. It acted for domestic toll operator Abertis on its €16.5bn acquisition by a consortium of Italy’s Atlantia, Spain’s ACS and Germany’s HOCHTIEF. However, it recorded slower revenue growth of 2% to €240.7m in 2018 compared to 6% in 2017 due to a more difficult year in some Latin American jurisdictions, which remain a key component of the business of leading Spanish firms.
Continental Europe’s largest and highest-grossing firm, Garrigues, also increased revenue by 2% to €364.6m. Mandates included advising CVC Capital Partners in the €3.8bn acquisition of 20% of Gas Natural Fenosa from Repsol. But the challenges and enduring strengths of Spanish firms are best embodied by Barcelona-bred Cuatrecasas.
The status of Catalonia’s capital as a key legal centre is in question amid the unrest following the 2017 unconstitutional referendum in which a majority voted for the region’s independence. Cuatrecasas is now implementing a strategy to grow its Madrid business, with five laterals in the capital in the last 18 months, including Spain’s former deputy prime minister Soraya Sáenz de Santamaría. Last year’s financials provided a validation to the strategy, the firm hiking turnover 12% to €277.4m. ‘The events of 2017 brought a certain alarm. We had a very restrictive budget for 2018 and the reality is it’s been the best year,’ says managing partner Jorge Badía.
Sáenz de Santamaría: Cuatrecasas’ lateral hiring spree included Spain’s former deputy prime minister
Meanwhile, the aggressive growth of a group of foreign firms has been triggering more action in a traditionally quiet lateral market. Since the headline-grabbing hire of DLA Piper’s senior partner Juan Picón at the end of 2017, Latham & Watkins has relentlessly grown its local ranks from 18 to almost 50, including three further laterals from DLA and one from Linklaters. DLA’s response hit Garrigues, which lost its M&A partner José María Gil-Robles in February.
But the list of international growth stories goes much wider, ranging from long-standing players Allen & Overy and Clifford Chance to new entrants Fieldfisher and Pinsent Masons. International interest in Iberia is strong enough to reach even Spain’s smaller neighbour, with Dentons said to be working on a merger in Portugal, a market traditionally pretty much ignored by the global elite.
‘2017 was the first year people acknowledged Portugal had come out of the crisis: suddenly everyone was doing things. The good news is that’s continuing,’ says Morais Leitão, Galvão Teles, Soares da Silva & Associados (MLGTS) partner Filipe Lowndes Marques. MLGTS and Vieira de Almeida & Associados had slower revenue growth than previous years partly due to economic and political turmoil in Portuguese-speaking Africa. But the third Portuguese champion, PLMJ, hiked turnover by 11%. All three remain around the €50m turnover mark.
Iberian firms will have to get used to more competition from abroad and less helpful news from local politics and economy. But there is still enough money flowing into Spain and Portugal to keep many players happy.
Marco Cillario
Switzerland
Given the economic and political uncertainty elsewhere in Europe, Switzerland has few obvious concerns and so do its law firms. ‘It was a very good year with record turnover,’ says Daniel Hochstrasser, senior partner at Bär & Karrer, where revenues rose by 6%. Financing transaction partner Martin Anderson and financial products partner Frédéric Bétrisey joined the firm from Baker McKenzie in Geneva last September.
A similar performance applied at Homburger, which saw a 5% revenue increase. ‘In this zero-inflation, zero-interest rate environment, that is pretty decent – our profits per partner are getting better and better as well,’ says Daniel Daeniker, the firm’s managing partner. Switzerland, he argues, is a remarkable success story. Largely unhindered by international competition, these two heavyweight firms continue to feature in major corporate and transactional work. But without any major Swiss deals taking place last year, mid-sized M&A predominated.
Growth among other independents focused on developing wider market share was more dramatic: with revenues of €95m, Walder Wyss experienced a 15% uplift. ‘This was a huge increase in a special year: it will be a challenge to sustain that level of growth,’ says partner Hans Rudolf Trüeb. ‘2018 was like 2007 – a stellar year for Swiss firms, with an abundance of transactions just before the financial crisis hit. The party may yet go on for another year or two.’ Tax partner Fouad Sayegh joined the firm from Oberson Abels last May. Since 2013, the Walder Wyss lawyer headcount has doubled to 210, of whom 55 are partners, making it the second-largest Swiss firm. Meanwhile, a recent merger has created a new Swiss entrant to the Euro Elite – the creation of Kellerhals Carrard in 2015 follows the prominent merger of two independents.
‘2018 was a stellar year for Swiss firms. The party may yet go on for another year or two.’ Hans Rudolf Trüeb, Walder Wyss
For Lenz & Staehelin, still Switzerland’s largest firm, tax has been the standout, according to managing partner Guy Vermeil. ‘The tax department people are working day and night,’ he says, adding that M&A has also been strong. Meanwhile, Pestalozzi, which had a revenue decline in 2017, recovered to see double-digit growth in 2018. ‘Finance, in particular commodity trade finance, and technology were strong,’ says managing partner Urs Kloeti. ‘Litigation was also active and we had several arbitrations.’ In international arbitration, some Swiss independents ‘act as sub-contractors to the major international players, such as Freshfields,’ notes one managing partner.
Hochstrasser points to ‘busy practices across the board with some big investigations in banking and insurance, triggered primarily by foreign authorities requesting information from Swiss enterprises – probably the most important driver for a very good year’. Deals apart, Homburger was similarly busy, acting for Raiffeisen Bank in what Daeniker describes as ‘a most spectacular piece of investigation work’. Trüeb suggests that at Walder Wyss, IT/IP and asset-backed financing were particularly strong.
The yes vote in the recent referendum on a new corporate tax regime prevented what the Swiss finance minister had termed an existential threat to the country’s role as a business hub. ‘This is very important for Switzerland,’ says Vermeil. Although managing partners expect a strong 2019, one problem persists. ‘We need to get our institutional relationship with the EU in order,’ says Daeniker. ‘Brexit discussions have made this more rather than less difficult.’
Dominic Carman
Germany
The German economy grew by a modest 1.5% in 2018 – its weakest performance in five years. But while revenues at some large independents only increased in line with this figure – Gleiss Lutz was up from €195m to €200.1m, while Hengeler Mueller remained stable at around €265m – elsewhere they increased dramatically. Noerr’s revenues swelled by 12% to €249.8m while Heuking Kühn Lüer Wojtek reported an 18% increase to €177m.
‘We continued the dynamic growth that we’ve experienced over the past decade – our firm has perhaps the best growth story in the market, which has been good for major firms, not just us,’ says Alexander Ritvay, Noerr’s co-managing partner. ‘The market has been solid and we don’t feel any impact of a slowdown yet.’
Alexander Schwarz, managing partner of Gleiss Lutz, says: ‘It was our third record year in a row – the first time we exceeded €200m in turnover and all other indicators are at a record high.’ Andreas Urban, managing partner of Heuking, comments: ‘It was a very good year, our best ever. In Germany, there was a lot of business.’
So what were the drivers of growth? ‘Corporate and M&A to a significant extent, but equally litigation and digital transformation,’ says Ritvay. ‘Litigation was the biggest practice area last year – we have a lot of class action-type disputes,’ says Urban. In this realm, ‘dieselgate’ remains a prominent feature. ‘We have been advising Volkswagen and Audi,’ says Schwarz, adding that compliance and antitrust work have also been very strong.
Hengeler Mueller’s standout deals included advising on the sale of RWE’s stake in innogy to E.ON
In M&A, Hengeler remained at the forefront of big deals, advising Linde in its $90bn merger of equals with Praxair, innogy on the sale of RWE’s 77% stake in its business to E.ON in a $53bn deal, and Finnish energy company Fortum Oyi in its $8bn acquisition of Uniper. ‘We have been deeply entrenched in the energy market,’ says Rainer Krause, Hengeler’s managing partner. Gleiss and Hengeler were on opposite sides in the recently-aborted merger of Deutsche Bank and Commerzbank.
Lateral moves continue unabated: Noerr recently hired tax partner Elmar Bindl from Linklaters and real estate partner Christoph Hons from Jones Day, while Gleiss hired M&A/corporate partner Andreas Löhdefink from Shearman & Sterling, further underlining Shearman’s continued retrenchment in the German market.
But other international firms continue to pose a significant challenge. Despite its long-term plan to reduce its German partner headcount from 100 to 80 by next year, the strongest remains Freshfields Bruckhaus Deringer, while independents also point to Linklaters as a strong rival in Germany. Elsewhere, Latham & Watkins has been on a near-continuous German hiring spree, most recently taking banking partner Thomas Weitkamp from Clifford Chance and corporate partner Tobias Larisch from Freshfields. Schwarz refers to Latham’s extensive recent lateral hiring spree as ‘brave but also risky’.
Krause adds: ‘It is the depth of the bench that really makes the difference. Some US firms have established a footprint in Germany. But when it comes to complex transactions, you need to give the full range of advice across multiple practice areas.’
Legal Business’ Euro Elite comprises independent law firms based in more than 40 European jurisdictions, rather than the local offices of international firms.
To compile the 100 firms featured in this report Legal Business analysed more than 150 of the largest law firms in Europe by the number of lawyers, as well as more than 150 of the top-ranking firms in the current edition of The Legal 500 EMEA. A combined score was given for the size of the firm and its Legal 500 rankings, providing a qualitative as well as a quantitative analysis. The 100 firms with the highest combined score make The Euro Elite. Continue reading “The Euro Elite Methodology”
Stewarts, Mishcon de Reya and Weil, Gotshal & Manges have emerged among the top-performing law firms for client service in the UK, according to brand new Legal 500 research assessing what clients really think about their external advisers.
As part of our annual Euro Elite report, management at independent firms in Europe give their views on today’s market challenges
International focus
‘In 2017 we had a record performance. 2018 was a year of big investment to consolidate our development in Africa and the Middle East but we did it halfway through the year. We are going to continue and consolidate our strategy. A lot of attention and energy will be on the international development. Our strategy is still to become a leader in the Mediterranean area, Africa and the Middle East. For now we are optimistic but from the second half of 2018 we have seen a decrease of investment in M&A.’ Continue reading “The Last Word: Elite forces”
A woman who filed a sexual harassment case against her employer was allegedly told by a Herbert Smith Freehills (HSF) lawyer the case would end her career.
Bank of England (BoE) general counsel (GC) Sonya Branch puffs her cheeks as she ponders how much work Brexit has created for her team. ‘It has been absolutely vast,’ she says.
About 65% of the UK central bank’s legal team, which has grown from 90 to more than 150 since she joined four years ago, has been involved since the mid-2016 referendum in reviewing about 10,000 pages of legislation and tracking 39 statutory instruments, to which it has contributed drafting. ‘The total count was 6,000 pages of binding technical standards, 6,000 rules that had to be changed, as well as 4,000 pages of secondary legislation,’ she comments. ‘That’s just having a regulatory framework for the UK financial services sector that’s fit for purpose on the point of exit.’ Continue reading “The Client Profile: Sonya Branch, Bank of England”
Gloria Sánchez Soriano, head of transformation – legal department, Santander
When our group general counsel (GC), Óscar García Maceiras, joined two years ago, he came with the idea of transforming the legal department. But Santander as a business is also in a huge process of transformation. Maceiras had a concern that we in our legal department in the market – and in many other legal departments – were working the same way as 100 years ago. We have legal databases, word processing, some digital resources – but we were not doing anything special. So the project he envisioned was not only to implement a range of technologies, but to foster a savvier legal department, with fewer pain points and better co-ordination and efficiency. Continue reading “Three GC perspectives on change”
