handshake deal

Global M&A deal value drops 50% but Wachtell tops rankings

The value of UK M&A deals dropped by 45 per cent in the first nine months of 2016, new research has found.

deal-handshake-merger-acquisition-mergers-m-and-a-shake-hands-300x182

Despite the decline, Freshfields Bruckhaus Deringer, Herbert Smith Freehills and Davis Polk & Wardwell came out on top in terms of deals done.

According to data from Thomson Reuters, the combined value of UK M&A deals between the start of 2016 and now stood at $195.5bn. This compares to $354.1bn at the same point last year.

The drop in value is in spite of ARM Holdings’ takeover by Softbank for £24bn earlier this year, which gifted roles to Freshfields, Slaughter and May, Davis Polk and Morrison & Foerster.

While Freshfields continues to rule the roost in terms of UK M&A (it has worked on 56 transactions worth $77.2bn so far this year) it still lags behind Clifford Chance in the worldwide rankings.

Clifford Chance came in eleventh place globally, having acted on 177 deals worth $164.2bn this year, compared to Freshfields’ 142 transactions valued at $163.7bn.

Clifford Chance’s success in the global rankings can be in part attributed to its work in the European market, trailing just Cravath Swaine & Moore in terms of deals on the Continent. Recent top roles including working on ChemChina’s $43bn of Syngenta and Bayer’s $62bn bid for Monsanto.

While the value of UK M&A deals has dropped by 45 per cent this year, the value of European M&A deals has fallen by 25 per cent from $919bn to $734bn.

The US market has also decline, down 39 per cent on this time last year. Globally deal value has fallen nearly 50 per cent compared to last year, despite the same number of deals being announced at around 30,000 in total.

Wachtell Lipton Rosen & Katz takes the crown at the top of the global M&A rankings so far this year, overtaking Sullivan & Cromwell.

US corporate heavyweight Wachtell advised on 72 deals including Monsanto and Bayer, as well as Johnson Controls’ merger with Tyco. Wachtell’s transactions amounted to a deal value of $336.6bn ahead of Sullivan’s total of $335.7bn.

White & Case and Davis Polk remain in the top five, although Simpson Thacher & Bartlett has dropped slightly making way for Skadden Arps Slate Meagher & Flom. White & Case has advised on a large number of deals – a total of 204 – while Sullivan & Cromwell still leads the tables in terms of transaction value after acting on just 92 transactions since the start of this year at a value of $335.7bn.

toronto

DLA Piper combines with IP boutique in Canada

DLA Piper has boosted its presence in Canada with the takeover of Toronto intellectual property (IP) firm Dimock Stratton.

toronto5

The deal, which takes effect as of 1 November, combines one of Canada’s top IP firms into the 3,756-lawyer Swiss verein that is DLA Piper.

Dimock, which was founded in 1994, has 16 lawyers. The firm has been involved in one out of every five patent trials in Canada and its co-founder, Ronald Dimock, has handled more patent trials than any other lawyer in the country, arguing before the Supreme Court of Canada in several of the nation’s most important cases in IP law.

Despite Canada’s struggling economy, global firms remain keen on increasing their local presence, drawn by its petroleum and other natural resources, as well as its connections to the Asian market.

DLA’s expansion comes just a week after a pair of rival global legal giants announced notable moves in Canada. Norton Rose Fulbright absorbed 92-lawyer Vancouver firm Bull Housser & Tupper, while Dentons announced a joint venture with a consultancy led by former Canadian Prime Minister Stephen Harper.

DLA entered the Canadian market 18 months ago by combining with 260-lawyer Davis. The Dimock takeover boosts lawyer headcount in Toronto to about 73 lawyers, according to its website, and to just shy of 300 nationally, said the firm’s Canada managing partner Robert Seidel.

Dimock has an enviable client list, including the likes of BMW, Cisco Systems and Procter & Gamble.

“[Dimock was] looking for opportunities to go beyond what a boutique platform could provide,” Seidel said. “DLA Piper was a very attractive offer for them.”

money

HSBC slapped with fine from Hong Kong securities regulator

Hong Kong’s Securities and Futures Commission has hit global banking group HSBC with a fine for regulatory misconduct dating back to 2014.

58172557_s_300x180

HSBC was fined HK$2.5 million ($322,294) for failing to put in place adequate internal controls to monitor its positions in Hong Kong Futures Exchange’s futures and options contracts to ensure compliance with the prescribed limit, the regulator said.

The breaches happened from May 26 to Aug 1 in 2014, said the Securities and Futures Commission in an e-mailed statement.

The SFC probe found there was a “lack of adequate knowledge within HSBC” regarding the bank’s position limits and its state of compliance with the relevant regulatory requirements, the statement said.

It, however, added HSBC had since taken steps to improve its internal controls on monitoring of position limits and cooperated with the Hong Kong regulator in resolving its concerns.

“HSBC apologizes for the breaches identified and reported to the Securities and Futures Commission in 2014,” the bank said in a statement.

“The Bank has cooperated fully with the SFC throughout this investigation and has taken actions to improve our internal controls regarding our compliance with the prescribed position limits in Hong Kong. No clients were impacted by these breaches,” it said.

SFC has been aggressively clamping down on operational and control failures in banks’ trading businesses over the past year.

Last month it fined the local securities unit of Morgan Stanley HK$18.5 million for internal control failures related to disclosure of short-selling orders and comprehensive documentation of electronic trading services.

traffic lights

Gowling WLG revives annual pay review

Gowling WLG has regained confidence after the surprise EU referendum result and decided to lift its freeze on salaries.

35031616_s_300x180

The salary review, which was backdated to July 2016 was applicable to all staff excluding fixed share and equity partners. However bonus payments, for 2015/16 for those eligible were paid as usual in the July payroll and summer promotions had gone ahead as planned.

In August, Fennel said: ‘Like a lot of firms our annual pay review is effective the 1 of July, and it still will be. But given the significance of Brexit and the uncertainty and pandemonium in stock markets and the fall of the value of the pound immediately after that result it was prudent to pause and take stock and see how the markets and the economy reacted to Brexit. So that’s what we’ve done.’

The news came amidst a subdued year for the recently-merged Gowling WLG, which posted essentially flat revenue and profits for its UK arm for financial year 2015/16.

Revenue was up 2% from £180.4m to £184.7m, while profits per equity partner (PEP) remained static at £383,000. Although the Canadian arm of the firm does not report financials, according to Gowling WLG, the total revenue for both LLPs was £410m.

Construction and engineering which recorded a 23% increase, and IP which posted a 17% increase, were the highest preforming practice areas for the firm, alongside pensions, corporate and real estate.

According to Gowling WLG, the overseas offices also performed well, with the Munich office increasing by 38% while Guangzhou in China delivered a 16% increase. Paris, the firm’s largest overseas office, saw an increase of 3%.

Last month it was reported that Addleshaw Goddard had also frozen its August salary review as a result of Brexit.

The move followed Berwin Leighton Paisner’s decision to freeze pay and bonuses until November. In June managing partner Lisa Mayhew told staff in an email the reason was ‘political and financial uncertainty in the UK following the recent vote to leave the EU.’

singapore

Vedder Price opens doors in Singapore

US firm Vedder Price has opened its second international office, launching in Singapore this month.

singapore%205

The firm, which specialises in global transportation finance, has five offices in the US and one in London.

It will relocate partner Ji Woon Kim from New York and solicitor Lev Gantly from London to head up the new office.

A statement from the firm said the new base “satisfies client demand for a physical presence in Asia” and gives the firm “a foothold for future expansion in the epicentre of this expanding market”.

The office will not practise Singaporean law under local rules regarding international law firms, instead practising both US and English law.

K&L gates

K&L Gates to replace Kalis with leadership duo

K&L Gates has unveiled the two partners who will succeed outgoing global chair and managing partner Peter Kalis, effective from 1 March next year.

21454312_s%202

Current vice chair for practice management Michael Caccese will take on the role of chairman of the firm’s management committee while James Segerdahl, currently vice chairman, becomes global managing partner and CEO of the firm.

Kalis said both men practised in two of K&L Gates’ strongest global practices, investment management and insurance coverage respectively, and understood the firm’s business, markets, practices and personnel.

“They have the firm’s compete confidence,” added Kalis.

Caccese and Segerdahl’s appointment followed a two-month process that began in early July. K&L Gates’ 75-partner global management committee unanimously recommended the duo during the period of partner consultation and then finalised the appointments through a unanimous vote.

Kalis is one of the global legal market’s longest serving managing partners, having served continuously as K&L Gates’ leader since 1997.

He told the firm’s management committee over the summer that he would not stand for a sixth term in 2017.

Kalis has led the firm’s growth from 400 lawyers in six offices in the US to 2,000 lawyers in 46 offices on five continents, with revenues mushrooming from $140m to in excess of $1bn. London is the firm’s biggest non-US base, with 53 partners in the UK.

Segerdahl, a commercial litigator whose client base includes corporate policy holders with insurance coverage disputes, is a K&L Gates lifer. He joined legacy Kirkpatrick & Lockhart in 1987 following his introduction to the firm the previous year as a summer associate.

Caccese joined the firm in 2001 in its Boston office. He had previously had a succession of in-house roles including latterly senior vice president and general counsel to the CFA Institute.

melbourne

HSF launches new hub in Melbourne with 50-lawyer team

Herbert Smith Freehills (HSF) has launched its third major alternative legal services hub in Melbourne.

mebourne

The new centre will be staffed by around 50 fee-earners and a further 15 support staff initially. The launch comes less than a month after HSF also extended its legal services business to China.

The 13-lawyer Shanghai alternative legal services centre is understood to be the first of its kind run by an international firm in the country.

Both the Melbourne and Shanghai centres will be run centrally from HSF’s 240-lawyer global alternative legal services base in Belfast, which launched last year.

HSF’s Melbourne play follows a significant team exit from the firm’s Asia and Australia offices. A group of 10 project finance partners left HSF to launch White & Case offices in Melbourne and Sydney earlier this month.

The departing partners are: HSF Asia head of finance Brendan Quinn, head of projects Andrew Clark, finance partners Alan Rosengarten, Josh Sgro, Tim Power, Jared Muller and Joanne Draper in Melbourne, Joel Rennie in Sydney, Fergus Smith in Hong Kong and Matthew Osborne in Singapore.

HSF launched its global alternative legal services centre from its Belfast office in June 2015 and has grown the team to have 350 legal and technology staff in Belfast, Brisbane, London, Perth, Sydney, Shanghai and now Melbourne.

HSF launched a legal services pop-up in Perth earlier this year to “test the potential for this type of business in Australia,” said global head of alternative legal services delivery, Libby Jackson. “The team really flew out of the trap. We built it out of a successful pitch on a large piece of work and we felt the business case for an on-shore Australian hub had been made.”

The permanent centre will be located in Melbourne due to its comparatively cheaper rents. Meanwhile the Perth centre will continue to operate from HSF’s office in the city.

“We tested all the same due diligence drivers that we did for Belfast,” Jackson continued. “Perth enabled us to build a full team of people who understand our business in Australia and who can deliver services to our clients, which are mostly HSF partners.”

Jackson added the firm’s global legal services business was built on the principle that it can offer due diligence, document review and other services for “half the cost” of running the same work from one of the firm’s core offices.

Last year, the team processed 63 million documents, reviewed more than three million documents and 5,000 property leases, and managed the administration of more than 500 funds.

It is also focusing on technology solutions to create a “value proposition for the client”. Jackson said the legal services hubs are “fully integrated” into the HSF network and are blending “human work with predictive coding and other software that relates particularly to transactional and corporate work.

“That’s where the really exciting tech stuff is happening,” she added.

HSF’s UK rivals Allen & Overy and Freshfields Bruckhaus Deringer also offer low-cost legal services from Belfast and Manchester respectively, although HSF is the first to extend such services to Asia Pacific.

abu dhabi skyline

Ashurst Abu Dhabi head exits for US firm Curtis Mallet-Prevost

Ashurst Abu Dhabi managing partner Alastair Holland has exited the firm for US firm Curtis Mallet-Prevost Colt & Mosle

Holland was made up to partner at Ashurst in 2011 and was promoted to the role of Abu Dhabi managing partner just months later after energy partner David Wadham moved back to London.

abu-dhabi-skyline-grand-prix-011aacd2

He first joined Ashurst as an associate in 1999, subsequently working in London, Frankfurt and Dubai.

Corporate lawyer Holland will become a partner in Curtis Mallet-Prevost’s Dubai office, working on M&A and joint venture transactions in both the Middle East and North Africa.

Ashurst has two offices in the Middle East, as well as an associated office in Jeddah.

One partner is based permanently in Abu Dhabi, while Middle East head Joss Dare and dispute resolution head Dyfan Owen split their time between Abu Dhabi and Dubai.

Holland’s departure comes as Ashurst has witnessed a wave of departures in both London and Asia.

Finance partners Michael Smith, Diala Minott and Cameron Saylor are the latest to leave the firm, joining Paul Hastings in London earlier this month.

Other recent departures include: restructuring partner Simon Baskerville and financial regulatory partners Rob Moulton and Nicola Higgs for Latham & Watkins; litigation partner Mark Clarke and corporate partner Jonathan Parry for White & Case and financial regulatory partner James Perry for Gibson Dunn & Crutcher.

In Asia, Ashurst restructuring partner Bertie Mehigan is leaving the firm’s Hong Kong office with a team of three lawyers to join independent firm Howse Williams Bowers (HWB), while finance partner Doo-Soon Choi joined Mayer Brown’s Hong Kong office.

korea

Korea’s Lee & Ko opts for Lex Mundi after Dentons offer

Korea ‘big five’ firm Lee & Ko has joined the ranks of global referral network Lex Mundi, two months after reportedly being approached by Dentons to join its Swiss verein network.

untitled

In July, sources close to the market said Dentons’ management team had held talks with the country’s top six players including Kim & Chang, Bae Kim & Lee and Lee & Ko in recent months.

A source close to the firm said although partners were impressed by Dentons’ strategy, the negotiations were bad timing as it remains unclear how non-traditional firms are going to practice Korean law as the market slowly opens up.

“It’s still a little early for thinking of a single domination strategy,” a partner said, “but things can change over the next months and years.”

In the meantime, Lee & Ko has been confirmed as Lex Mundi’s exclusive Korean member, and it is understood that the attraction for the firm was the amount of referral work that it would receive from the combination of law firms in the network. The firm is also a member of the World Services Group (WSG) legal network and has worked with Interlaw.

Lee & Ko managing partner Jae Hoon Kim stated: “Our Lex Mundi membership will enhance our ability to serve our clients and contribute to their success, particularly our clients with global operations.  We look forward to working with Lex Mundi’s outstanding member firms around the world.”

hong kong

Hong Kong boutique takes team from Ashurst

Hong Kong boutique Howse Williams Bowers (HWB) has hired a team of restructuring and insolvency lawyers from Ashurst, led by partner Bertie Mehigan.

35851986_s%202

Mehigan’s appointment continues a year of key partner hires for HWB, which has added Janet Lee from the Hong Kong government’s Lands Department, Antony Yung from JP Morgan and Christopher Yu from Goodwin Procter since the April this year.

Mehigan, who moved to Ashurst’s Hong Kong office in 2014 along with two other partners from O’Melveny & Myers’ Singapore office, had previous stints with White & Case and Morgan, Lewis & Bockius in Singapore.

His departure comes just a month after Doo-Soon Choi left Ashurst’s Hong Kong office for Mayer Brown JSM.

Ashurst also lost four partners in London to Paul Hastings and Latham & Watkins.