FB given advice from Gibson Dunn over data scandal

Gibson Dunn & Crutcher is advising Facebook in the ongoing probe into its data protection breaches, as it faces a £500,000 fine from the Information Commissioner’s Office (ICO).

Co-chair of the firm’s international arbitration practice group, dispute resolution partner Penny Madden is leading for Facebook in London, following a report by the ICO that claims the social media giant broke data protection law when it allowed millions of users’ data to be accessed by consultancy Cambridge Analytica.

The scanty but “symbolic” £500,000 fine is the highest penalty possible under the pre-General Data Protection Regulation rules that apply in this case.

In April, The Lawyer reported that four firms had launched a case against Facebook and Cambridge Analytica, which threatened damages of more than $70bn. Squire Patton Boggs is understood to have been advising Cambridge Analytica. The firms were made up of London-based McCue & Partners, Washington DC firm Fields Law, technology and competition firm RuyakCherian, and Delaware-based Cross & Simon. They filed a a joint lawsuit on behalf of US and UK Facebook users in the District Court of Delaware against a number of defendants.

RuyakCherian managing partner Robert Ruyak commented that: “Facebook utterly failed in its duty and promise to secure the personal information of millions of its users, and, when aware that this stolen information was aimed against its owners, it failed to take appropriate action.

“Facebook must be held responsible for failing to protect its users’ personal information. We must also make certain that organisations like Cambridge Analytica and their benefactors – the Mercer family and Steve Bannon – are held accountable for this egregious theft and misuse and cannot further exploit it”.

Prior to Gibson Dunn’s latest partner promotions round, Madden was only one out of two female partners in the London office, out of a total partnership headcount of 28.

In November last year, two more female lawyers made the grade – finance lawyer Amy Kennedy and antitrust lawyer Deirdre Taylor. Herbert Smith Freehills energy partner Anna Howell also joined the firm in January this year, as the US firm’s first London-based oil and gas partner.

A&O snares Shearman & Sterling M&A veteran

Allen & Overy has strengthened its M&A practice in New York with the hire of a partner from Shearman & Sterling’s corporate practice.

Stephen Besen joins the magic circle firm after 17 years at Shearman & Sterling, further bolstering its US M&A practice. Besen began his legal career in 1983 at Weil Gotshal & Manges.

At the beginning of April, A&O re-appointed corporate partner Paul Burns after he left in 2007 to take on a number of in-house counsel roles, including leading Novartis’ pharmaceutical business as general counsel.

Earlier this year, Shearman embarked on a leadership overhaul, electing global managing partner David Beveridge as senior partner and global head of M&A George Casey and global head of litigation Adam Hakki as co-managing partners.

The firm’s London leadership was also reshuffled, as the firm selected new office managing partner Matthew Readings to take over from Nick Buckworth, who had been in the role for seven years.

The Lawyer reported this week that A&O is the most prolific magic circle firm to advise on global public M&A bids so far this year, according to figures from Thomson Reuters. The firm is involved in 116 deals totalling $278bn, with the spike in its ranking largely due to the firm acting as 21st Century Fox’s main adviser in the ongoing battle for Sky.

Davis Polk & Wardwell is the most globally active M&A adviser, tallying 75 deals worth $367bn.

Richard Browne, global co-head of A&O’s corporate practice said: “Stephen has built an impressive M&A practice with considerable cross-border experience that fits very well with our global and U.S. M&A strategies. His depth of experience and insight is a great fit for our international practice and a significant addition for our clients”.

Latham elects London partner to succeed Bill Voge as chair

City capital markets partner Richard Trobman takes the reins at US legal giant

 

 

 

 

 

 

 

 

 

 

 

 

Latham & Watkins has announced that London-based capital markets partner Richard Trobman has won a partnership election to be the global legal giant’s next chair and managing partner.

Japan

Skadden, STB lead on $1.2 bln IPO of first-ever Japanese unicorn

Skadden, Arps, Slate, Meagher & Flom and Nishimura & Asahi have advised Japanese flea market app operator Mercari on its $1.2 billion IPO, the nation’s biggest such share sale so far this year.

Simpson Thacher & Bartlett and Mori Hamada & Matsumoto advised the lead managers as international and Japanese law counsel, respectively. Mercari, which offers a popular smartphone app that allows people to trade used items online, is the country’s third-largest tech listing in the past five years – behind the $3.2 billion raised by Japan Display in 2014 and the $1.3 billion by Line Corp in 2016 – according to Thomson Reuters data. Founded in 2013, Mercari was Japan’s first unicorn – a startup with a valuation above $1 billion – in a country that boasts numerous successful giant corporations but lacks a vibrant startup culture, said Reuters. It added that according to data provider CB Insights, Mercari and information technology startup Preferred Networks are the only two unicorns in Japan.

Is Linklaters’ China alliance a game changer?

The magic circle firm’s Shanghai Free Trade Zone joint operation wasn’t the first, but it might just be the tipping point

Linklaters announced last week that its unusual application for a joint operation office in the Shanghai Free Trade Zone had finally received approval from the local authorities, making it the first magic circle firm that can include Chinese law capability in a one-stop-shop offering.

“Linklaters’ successful joint operations application sends a very positive message to the market,” says Shawn Chen, who leads the China business for London-based SSQ, a legal search firm that helps global firms broker China alliances. “This will give confidence to firms that are preparing an application and those considering applying.”

Foreign law firms were for years barred from forming formal associations with Chinese law firms, which have enjoyed the exclusive right to give Chinese legal opinions and appear at local courts. However, a major breakthrough came in 2014 when the Ministry of Justice approved a pilot program that permitted foreign and Chinese firms to form joint operations in the then-brand-new Shanghai Free Trade Zone. In March, the Shanghai government said it plans to expand the pilot program beyond the FTZ—to the entire municipality.

From the Chinese government’s perspective, the purpose of the Shanghai FTZ programme is to create a platform for international law firms to share their experiences and help their Chinese partner firms improve. But the programme also effectively serves as an official endorsement, granting foreign law firms access to their major missing piece—Chinese law capability.

Linklaters was not the first firm to benefit from the FTZ program; four other global firms—Baker McKenzie, Hogan Lovells, Holman Fenwick Willan, and Ashurst—have entered similar joint operation arrangements since 2015.

But the formation of Linklaters’ alliance was unique. Instead of linking up to an established firm, Linklaters opted to send a group of its own lawyers to a lesser-known Shanghai-based boutique called Zhao Sheng Law Firm, making it the first global firm to successfully achieve a modified spin-off structure under the FTZ program.

In contrast, Baker McKenzie, the first global firm to launch a joint office in the FTZ, formed an alliance with the well-established, Beijing-based FenXun Partners. It was followed by Hogan LovellsHolman Fenwick Willan, and Ashurst, all of which also formed tie-ups with existing Chinese firms. Ashurst’s move was particularly notable, as it formalized a longtime best friend relationship with 750-lawyer domestic player Guantao Law Firm.

But Linklaters ostensibly spun off a local firm with which it would form an alliance—an unusual move that many consider significant.

Eric Liu, managing partner of the now 27-lawyer Zhao Sheng and a former Linklaters lawyer, said the alliance with Linklaters provides clients with seamless one-stop-shop service and minimises possible friction arising from working with two sets of counsel.

China’s legal market is not mature enough to separate top-tier firms from the rest of the crowd, Liu said. In Shanghai, alone, there are more than 1,500 domestic firms, and there are many foreign firms on top of that. “The market can’t really tell who’s who,” Liu said. “You are often pitching against firms that have never been your competitors elsewhere, and they offer one-fifth your price.”

If a law firm wants to be competitive, it has to offer good value for its clients’ money, he said. “For us, providing seamless high-quality Chinese and foreign law services is that value.”

Of course, many global firms have long recognised the importance of having access to a Chinese law practice. But the challenge for them has been to find the right Chinese firm to partner with. In 2015, Linklaters tried to form an association with existing Chinese firms, according to Legal Week, The American Lawyer’s London-based sibling publication.

But those talks failed to produce an agreement. The firm’s partnership then decided to pursue a so-called “greenfield” option, under which the firm would send out a group of its own lawyers and launch a separate Chinese law firm with the goal of later entering into an FTZ association. As the rules required the Chinese firm participating in the FTZ scheme to be at least three years old, Linklaters opted for Zhao Sheng, a local firm that was founded in 2010, and eventually launched the joint operations.

Zhao Sheng and Linklaters were aligned in every critical aspect, including firm culture, practice focus, and client service standards, said William Liu, (no relation to Eric Liu), who leads the U.K. firm’s China practice from Hong Kong. “This is the only way to ensure that we can provide a fully seamless service to clients.”

According to official records, Zhao Sheng moved in September of last year into Linklaters’ Shanghai office at the Mirae Asset Tower, in the Lujiazui financial district. William Liu said the two firms also share office systems and would further integrate.

A Shanghai-based partner from another Magic Circle firm agreed it makes sense for international firms to be able to access Chinese law capability in certain practices. “It’s very beneficial, especially for litigation matters,” said the partner, who did not wish to be named as he was not authorized to comment on his firm’s position on the issue.

Both firms stressed that Zhao Sheng would remain independent from Linklaters; Eric Liu said in addition to ex-Linklaters lawyers, Zhao Sheng has made several important external hires over the past year from leading Chinese firms. He hopes that the alliance will help increase Zhao Sheng’s brand profile in the mainland legal market and give both firms a competitive advantage.

But if Eric Liu’s predictions are correct, the Linklaters-Zhao Sheng joint operation won’t enjoy that competitive advantage indefinitely. Eric Liu believes that once the firms’ joint operation proves successful, more firms will consider this model. And when the number of Chinese-foreign joint offices reaches a critical mass, the competitive landscape in the market will change, he said.

Chen, from SSQ, believes that it is noteworthy in and of itself that Linklaters’ unusual business model got the long-sought-after green light from Chinese regulators. And he believes more global firms will now follow suit. More firms will likely file applications for FTZ joint operations in the second half of this year, he said.

“The question that everybody had in mind was whether or not this model was actually feasible; now we know that it is,” he said. “I won’t be surprised if by next year there are 10 firms operating joint offices in the FTZ.”

White & Case and Weil lead on $2.3bn Sony acquisition

White & Case and Weil Gotshal & Manges have taken lead roles on Sony’s $2.3bn acquisition of a majority stake in EMI Music Publishing, which owns songs by artists like Sam Smith, Queen and Kanye West.

Sony has bought  Mubadala Investment Company’s 60% stake in EMI to take its total share of the company up to 90%.

White & Case advised Sony on the deal, with New York M&A partners Mort Pierce and Chang-Do Gong at the helm of a team that also included tax partner William Dantzler.

Weil meanwhile advised Mubadala, fielding a team led by Dallas M&A partner James Griffin and New York senior counsel William Gutowitz, which also included executive compensation & benefits partner Michael Nissan, banking and finance partner Daniel Dokos and capital markets partner Faiza Rahman.

Sony’s CEO said the deal was motivated by a desire to capitalise on the rise of paid subscription-based music streaming services.

Sony already owns hits from Michael Jackson, Ed Sheeran and The Beatles, but the EMI acquisition will expand Sony’s music catalogue to approximately 4.5 million songs.

EMI was split into two in 2011, with the recording unit sold to Universal Music, while the consortium including Sony and Mubadala bought the publishing business.

The deal generated roles for a host of firms, including legacy SJ Berwin, Clifford Chance, Baker McKenzie and Weil. Weil advised Mubadala, while other firms advising members of the consortium included Bakers, Allen & Overy and Cleary Gottlieb. Meanwhile CC advised Citigroup and EMI on both sales.

Takeover

Eversheds Sutherland PEP jumps 12% to break £800,000

Firm’s non-US business sees PEP rebound on year as revenue rises 13%

Eversheds Sutherland has posted double-digit increases in both revenue and profit per equity partner (PEP) for its non-US business during the 2017-18 financial year.

The firm has boosted its PEP by 12% from £726,000 to £812,000, reaching a record high. Last year, the firm’s net profit and profit per equity partner (PEP) both fell, by 4% and 2% respectively.

BBC Broadcasting House

Pinsent Masons advises BBC over ‘Paradise Papers’ leaks

Pinsent Masons is advising the BBC as the broadcaster and the Guardian newspaper reach a settlement with offshore law firm Appleby over the ‘Paradise Papers’ data hack.

The litigation, which was settled Friday afternoon (4 May), comes after Appleby took legal action against both news outlets, citing breach of confidence following the data hack in May 2016.

In an agreed statement, the parties announced they had “resolved their differences”.

The statement continues: “Without compromising their journalistic integrity or ability to continue to do public interest journalism, the Guardian and the BBC have assisted Appleby by explaining which of the company’s documents may have been used to underpin their journalism. This will allow Appleby to initiate meaningful discussions with its clients, colleagues and regulators.”

The offshore firm had alleged that information leaked to German newspaper Sueddeutsche Zeitung (SZ) and subsequently passed on to the Guardian and BBC was “obtained unlawfully” in circumstances “likely to have amounted to the commission of a criminal offence or cyber-hack”.

Appleby said the leak coverered 6.8 million documents dating back to the 1950s, including loan agreements, financial statements, records of approaches from potential clients and records of legal advice, among other information.

The particulars of claim alleged that the Guardian and BBC should have known the information they had access to was confidential and subject to legal privilege, and that the publication of the documents did not meet the public interest test as “there was no ground to suspect that the confidential information disclosed illegal conduct” either by Appleby or its clients.

The offshore firm was seeking the delivery, destruction or deletion of the information, as well as financial damages covering the costs of dealing with “regulatory entities, clients, employees and agents”.

In their defence, both the BBC and the Guardian argued that there was a strong public interest in the publication of the information from the leak, while the BBC’s defence states that there were grounds for suspecting that the data contained evidence of unlawful activity by Appleby or its clients.

Both the BBC and the Guardian stated that they were unaware of the source that passed the leaked documents to SZ, and argued that they acquired the information lawfully.

A BBC spokesperson said: “We will continue to defend our journalism robustly.”

Pinsents technology, media and telecoms disputes partner David Barker acted for the BBC, with Catrin Evans QC of Matrix Chambers and Jonathan Scherbel-Ball of One Brick Court instructed as counsel.

ASHURST

Ashurst carries out secretarial review with 80 jobs at risk

Ashurst is carrying out a review of its business services function, scrapping the position of executive assistants to bringing in a new business services role of “practice executive”.

This move puts 80 secretarial roles in London at risk.

There will be 35 practice executives in London, covering a broader line of work than traditional secretaries such as business development and client relationships.

Alongside practice executives, the firm will also hire 31 team executives who will be based in London and Glasgow. An additional 12 team assistants will also be recruited to carry out the more routine secretarial and administrative tasks previously undertaken by EAs.

Walmart’s Asda agrees to UK merger deal with Sainsbury’s

Slaughter and May, Linklaters and Gibson Dunn & Crutcher are all advising on the proposed merger of supermarket giants Asda and Sainsbury’s, a deal which is set to reshape the UK’s grocery industry.

The merger discussions between the UK’s second and third largest food retailers were revealed this weekend, with an announcement to the London Stock Exchange this morning (30 April) confirming the details of the proposed deal.

The combination – which is set to face close scrutiny from the Competition and Markets Authority – is set to create a company worth more than £10bn, with a combined market share ahead of current market leader Tesco.

Slaughters is advising Asda’s owner, US retail giant Walmart, with a team led by M&A heavyweight Nigel Boardman and corporate partners Victoria MacDuff and Sally Wokes, alongside finance partner Guy O’Keefe, tax partner Steve Edge, pensions and employment partners Jonathan Fenn and Charles Cameron.

Other partners involved in the deal include Cathy Connolly (IP/IT), Jane Edwarde (real estate) and Ben Kingsley (financial regulation)

Asda is a longstanding client of the magic circle firm, which advised on its 2010 purchase of Netto Foodstores. Boardman also led the firm’s team on Walmart’s £6.7bn takeover of the company in 1999, a deal which saw Simmons & Simmons lead for Walmart.

Gibson Dunn is advising Walmart and Asda on competition issues, fielding a team led by London competition head Ali Nikpay and fellow competition partner Deirdre Taylor.

Nikpay joined the US firm in 2013 from the Office of Fair Trading, where he worked on some of the most significant mergers in recent years, including Anglo American and Lafarge, LSE and LCH. Clearnet and Rank and Gala. Since joining Gibson Dunn he has advised on deals including Gala Coral’s 2016 merger with Ladbrokes.

Linklaters, meanwhile, is advising Sainsbury’s with a team led by corporate partners Iain Fenn and Michael Honan, UK competition head Nicole Kar, competition partner Simon Pritchard and managing associate Margot Lindsay.

The magic circle firm has longstanding ties to the company. In 2003 it advised on its abandoned bid for rival Safeway, and it also sits on the supermarket’s UK legal panel, which was reviewed last year, with 11 firms appointed, including Addleshaw Goddard and CMS.

Other major law firms to have advised Sainsbury’s in recent years include Clifford Chance (CC), which took a lead role on its 2016 acquisition of Argos and Habitat owner Home Retail Group.