First Brexit-era financial results

The 2016/17 UK law firm financial reporting season has kicked off with a bevy of notably healthy results from the mid market.

West End corporate and property firm Fladgate has unveiled provisional turnover results showing a 15 per cent rise to £49.2m, the sixth consecutive year the firm has posted a double digit rise in revenue.

Fladgate chairman Charles Wander said the firm’s new three-year, “2020 vision” plan would result in it adding a further 40 per cent to the top line, taking it to around £65m-£70m turnover. “That would represent a 200 per cent increase in revenue since our move to Covent Garden,” added Wander.

Freeths has also announced another consecutive year of growth, with annual fee income rising to £72m, a 12.7 per cent increase on last year, while ABS Knights reports a 64 per cent rise in revenue over the past 12 months to £33.5m.

The latter firm’s biggest ever annual increase follows a sustained period of investment with the recruitment of more than 100 professionals and specialist teams.

In the personal injury sector Minster Law has reported a 50 per cent rise in turnover from £37.2m to £55.8m, its first set of accounts since BHL (UK) Holdings acquired it from BGL Group last year. Under the terms of the transfer of ownership, BGL agreed to write off the balance of an outstanding loan of £39.8m.

The results are the first to become public since the Brexit vote, an event that most firms agree significantly impacted trading levels during calendar year 2016.

Weightmans and Ward Hadaway call off merger talks

Weightmans and Ward Hadaway have abandoned plans to merge after four months of talks.

A tie-up would have created a northern-headquartered firm with a turnover of around £130m.

However, both firms said their strategies were not sufficiently aligned for a merger to work.

Weightmans managing partner John Schorah said: “We have many common interests, but after discussions it became clear that we each want different things from our respective futures.

“We sensibly agreed between us it was better to focus on those things.”

Ward Hadaway head Jamie Martin meanwhile added: “We wish to continue to pursue our strategy of developing a ‘Northern Law Firm for National Business’ across our three offices in Newcastle, Leeds and Manchester and our focus on providing legal services to Northern-based businesses.”

Weightmans would have been the larger of the two firms, with turnover reaching £95m in 2015/16.

Ward Hadaway’s revenue totaled £35.8m but its average profit per equity partner would have been over £100,000 larger than Weightmans at £352,000.

When merger discussions began in January, Schorah said: “The legal market is changing and it is always sensible to look at opportunities that might benefit a business, its clients and its staff.”

He added: “We have shared strategic objectives and a significant number of shared clients.”

Madrid

Pinsent Masons to launch third international office in 12 months

Pinsent Masons is set to launch its third international office in 12 months in Madrid, hiring a five-strong team including former Telefónica deputy general counsel Diego Lozano.

Madrid

Lozano, who headed the corporate and commercial practice at Spanish firm Ramón y Cajal Abogados, is joined by fellow partners Antonio Sánchez Montero, Inmaculada Castelló and Idoya Arteagabeitia.

Construction company OHL in-house lawyer Ricardo García has also joined the firm as part of the new lineup.

Pinsent Masons has reassigned existing London-based partner Sofía Parra, who was promoted earlier this year, to the Madrid office.

The firm has confirmed that the office will be operational from 1 May.

Pinsent Masons senior partner Richard Foley said: “Our vision is to be recognised as an international market leader in the global sectors in which we operate, and we recognise that we can only do that if we are serious about supporting our clients across key commercial centres.

“We have found a team in Madrid which not only exudes quality but also shares our sector-focused vision. In particular, they share our passion for innovating for and with our clients to redefine the landscape for private practice. We are looking forward to bringing a very different type of law firm to Spain.”

The announcement comes within 12 months of the firm opening an energy-focused office in Dusseldorf and an energy and infrastructure-focused practice in Johannesburg.

Last year, The Lawyer also reported that Pinsent Masons may consider opening an office in Dublin as it launches a review of its operations in Ireland in the wake of Brexit.

The firm already has an office in Belfast, which is headed up by corporate partner Paul McBride. A Dublin office would be Pinsents’ first base in the Republic of Ireland.

Tokyo

Clifford Chance’s Simon Davis wins Law Society presidential election

Senior Clifford Chance litigator Simon Davis will become president of the Law Society in 2019 after winning its latest election.

He will take office as deputy vice president in July, before becoming vice president in 2018 and president the year after.

Davis is a Clifford Chance lifer, joining the firm in 1982, qualifying in 1984 and making partner 10 years latter. He was the firm’s recruitment partner between 1995 and 2000, and spent two years as president of the London Solicitors Litigation Association.

In 2014, he was asked by the Financial Conduct Authority to lead an investigation after the body leaked an announcement of a pension market probe to the Telegraph newspaper in April, wiping billions off the value of life insurers.

Last year, he was instructed to investigate allegations of bullying in the Conservative party which found that senior party officials were unaware of bullying of junior members, taking on the job.

Davis said: “It is a great privilege to have been elected to represent the profession. I intend to represent the Law Society’s broad spread of members as I represent my clients – finding out and resolving the challenges they face, permitting our members in turn to devote their energies to representing the clients who depend on them.”

NewYork

RBS GC joins UBS as AsiaPac wealth management head

Former RBS general counsel Dan Williams has resurfaced as UBS’ Asia Pacific wealth management general counsel, after leaving the Scottish bank in the wake of a costs-cutting review earlier this year

Williams was previously a lawyer at Clifford Chance and Morgan Stanley before starting a number of GC roles at the Scottish bank, including for equities in 2008 and corporate and institutional banking in 2017, the role he left to start at UBS at the end of March.

Williams will sit on the management committee of global wealth management GC Maria Leistner, and will report to GCs Markus Diethelm and APAC president Kathryn Shih, the former assistant vice president of Citibank in Hong Kong. He will split his time between Singapore and Hong Kong.

It is thought Williams’s departure was influenced by a cost-cutting review launched by RBS in the summer of 2016 into its 400-strong legal team. In March of the same year the bank cut almost 1,600 jobs across the business. Williams was not directly replaced, but his duties were taken over by James Esposito, a managing director at the bank and GC for the Americas.

Williams will take over from Frances Wong, a former partner at Clifford Chance who was previously the GC representative for the APAC region. Wong continues in her role as the Hong Kong GC and will continue to act as a senior lawyer in the APAC region.

 

Reed Smith is launching its fifteenth US office in Miami

Reed Smith is launching its fifteenth US office with a seven-lawyer team joining the firm in Miami.

Miami

The team joins from arbitration and litigation boutique Astigarraga Davis, with founding partner José Astigarraga appointed to lead Reed Smith’s international arbitration practice.

Another founding lawyer – Ed Mullins – will become managing partner of Reed Smith’s new Miami base.

The pair will be joined by fellow partner Cristina Cárdenas, as well as one counsel and three associates. After the departures, Astigarraga Davis will be left with up to 11 fee-earners in Miami.

Seven staff members from Astigarraga Davis are also moving across to Reed Smith.

The Miami base is set to solely focus on arbitration and litigation, and expands Reed Smith’s Latin America business team to 50 lawyers. The group provides legal services to clients in Mexico, Central America and South America.

According to Reed Smith’s managing partner for the Americas Michael Pollack, one third of Reed Smith’s top 250 clients conduct business in Miami, as well as half of its top 50 clients.

Reed Smith follows in the footsteps of Clyde & Co last summer, which also opened in Miami by acquiring local litigation boutique Thornton Davis Fein.

DAC Beachcroft further opened an office in Miami in 2015 to complement its existing offices across Latin America.

Kingswood

KWM closes Riyadh office after Middle East relaunch

King & Wood Mallesons (KWM) has decided to close its Riyadh office, as the firm consolidates its new European and Middle East platform.

KWM is in the process of winding down its association with the Law Office of Majed Almarshad in Riyadh, the capital city of Saudi Arabia. KWM China took over the office in January this year following the administration of KWM EUME LLP (legacy SJ Berwin).

“Following KWM’s relaunch of offices in Europe and the Middle East earlier this year, the firm and the Law Office of Majed Almarshad have reached a mutual agreement to exit from their arrangement,” says a spokesperson of KWM.

The termination of the association will see KWM pull out from Riyadh and focus on servicing the Middle East region from Dubai, which will be its only base in the region.

“KWM China remains committed to its Dubai office which will allow KWM to continue to service its clients in the Middle East. The Dubai office will continue to support clients in dispute resolution, corporate and construction matters,” the firm says.

KWM’s Dubai office is headed by disputes partner Tim Taylor, one of the 32 legacy SJ Berwin partners who moved across to KWM China in January.

The Riyadh office was first opened in January 2014 by the now defunct legacy SJ Berwin. It was the first office opened following SJ Berwin’s merger with Asia Pacific based King & Wood Mallesons and was labelled at the time as “the first time a global law firm headquartered in Asia has established a presence in the Kingdom”.

The office was founded and headed by Almarshad, who is a Saudi qualified of counsel and has worked in the corporate practice of legacy SJ Berwin’s Dubai office since 2011.

The Riyahd office focused primarily on the energy and infrastructure sector, and advised on corporate transactions, investment funds, financial regulation and dispute resolution.

As legacy SJ Berwin entered into administration in January, the Riyahd office was one of the seven offices transferred to KWM China and formed part of the Chinese firm’s new Europe and Middle East offerings. At the time, the office had two partners, Almarshad and corporate partner Glenn Lovell, who joined from local firm Al Tamimi & Company in June 2016.

It is understood that the official closure date for the Riyahd office is yet to be set as the firms are still finalising the exit arrangements.

A number of international firms have closed offices in the region in the past year as they rethink Middle East strategies. In February, Clifford Chance exited Qatar six years after entering the market. Herbert Smith Freehills is also closing its Qatar office, less than two years after the firm pulled out from Abu Dhabi. US firm Weil Gotshal & Manges has decided to wind down its sole Middle East office in Dubai.

BufeteDíazMirón

Keeping it simple and being productive in Mexico.

Keeping it simple and being productive in Mexico. A basic guide to the legal principles of Mexican labor and employment law.

Understanding Mexican Federal Labor Law requires recognizing two undisputable facts:   1) It is part of a coded legal system (opposed to common law) where all regulations and by-laws are contained in one central governing statutory law, and 2) it is intrinsically an act that was passed in post-revolutionary Mexico (1900´s) when serious offenses, abuse and exploitation of workers occurred. Thereafter, it must be viewed and explained in lieu of historic circumstances that help vindicate the employee protective nature of its content.

Despite the heavy codification and an employee protective nature of Federal Labor Law, foreign investors and executives must not be erroneously influenced or alarmed regarding employee costs, severance packages, seniority rights, unions or profit sharing. Ironically, due to penalties, insurance costs, compensation packages and wage levels, the economic burden of employees and legal exposure therewith, can even be considered low when comparing Mexico to U.S standards. For all businesses and executives, it is essential to understand this economic tradeoff and what labor and employment compliance in Mexico looks like in terms of costs and exposure. Thereafter, all investments require consulting and training to understand and take advantage of every edge that Mexico has to offer

Rightfully so, when considering Mexico as an option or when trying to understand labor and employment requirements, one must fathom the following principles under which all employment norms and regulations are established.

The workplace stability principle: All labor relations in Mexico are centered on the premise that all employees must be guaranteed permanency and longevity in the workplace. Employers are fairly restrained in terms of available types of contracts, and termination procedures for there is no termination at will. Avoiding labor contingencies requires smart Human Resource strategies upon hiring and terminating as to avoid claims whilst building stable and productive workplaces.

The burden of proof principle: Any given individual may claim against any given employer without evidence or just cause. The employer has the procedural burden to disprove or prove otherwise unless the existence of a relation is denied in which case the burden will fall on the alleged employee. This creates the obligation as an employer to document and have command over all elements that govern an employee-employer relation such as:  contracts, payment receipts, releases, and any all covenants including resignation papers or termination agreements.

Minimal benefits principle: All statutory benefits must be met. Employer can grant further benefits or expand on legally mandated ones but may never decrease legal benefits. Some examples include 15 days Christmas bonus, 6 days of paid vacation after one year of service and a 25% premium on wages for vacation periods.

Acquired rights principle: Any expanded, additional or granted benefit beyond minimal ones set forth by law (see minimal benefit principle above) statutory benefits become acquired rights and compulsory for both parties. This is important to take into account when negotiating collective bargain agreements or employee benefit packages. All employers must be conscious when granting compensation or offer letters.

Equal liability principle: Employers may utilize third party service providers but will be equally liable for any provision that is not met by employer. No attorney, consultant or advisor should maintain that when utilizing outsourcing companies or third party service providers, labor contingencies may be avoided. Reality is that all businesses with outsourced employees have the obligation to audit providers to make sure that minimal rights principle is met and that all employment obligations are being fulfilled. Failure to do so may result in huge contingencies and legal responsibilities derived from the equal liability act.

Undeniable rights principle: Under no circumstance may an employee waive the minimal rights principle and statutory benefits set forth by Federal Labor Law. Employer may never negotiate or accept an employee relinquishing labor rights. All mandated benefits are non-negotiable and compulsory in all labor and employment relations.

In Dubio Pro Operario: When there is doubt, the law is not clear enough or there is room for interpretation, employees must be granted the benefit of the doubt. This principle that consolidates the protectionist approach of the federal labor law is the cornerstone for all employer obligations. All employers must have impeccable employee records and must have excellent Human Resource strategies to be able to avoid contingencies derived from this principle and all of the above.

It takes a lot for foreigners to navigate the legal world of Mexico and more so with a coded and protectionist employment system. Advisors of all sorts must be conscious of all the cultural and legal differences that this system offers as to guarantee stable conditions that may translate into productive and long term relations and not frustrated would be positive interactions.  Per all of the above-mentioned principles, specifically the minimal rights standard, it is a must that all investors, advisors and employers know the minimal facts that will allow them to be successful as far as employment relations go. Transparency, information and minimal working knowledge of these principles may serve to avoid corruption, fraudsters and contingencies, whilst guaranteeing the realization of all businesses upon more productivity, simplicity and transparency in the workplace

Juan José Díaz Mirón.