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Burford Capital predicts Brexit boom will continue

The UK-based litigation funder predicts that Britain’s gradual exit from the European Union will continue to buoy the industry.

Burford Capital’s annual report has predicted that the litigation industry will enjoy fresh strength in the wake of Britain’s vote to leave the EU. ‘Substantively, Brexit will give rise to significant uncertainty for businesses, and demand for legal services tends to flourish during periods of business uncertainty, boosting our business collaterally,’ predicts the report. On Wednesday, Burford announced pre-tax first half profits of £42.5m – more than double the £18m reported for the same period last year. Meanwhile, total income for the half was up 88 per cent year-on-year from £40m in the first six months of 2015 to £76m this year.

Currency impact

Burford Capital, which has offices in both London and New York, has also benefited from the impact of the Brexit referendum outcome on the British pound. While the majority of the firm’s assets are in US dollars, the bulk of its debt is denominated in pounds sterling. According to Burford chief executive Christopher Bogart, the pound’s decline relative to the dollar has already reduced the principal owed on a $131m bond it issued in April by around $43m, saving Burford around $2.4m in annual bond payments. ‘[The] decline in the value of Sterling makes UK courts and arbitral centres (and the UK lawyers who practice in them) somewhat more economically competitive globally, which we would expect to be good for our business,’ the annual report adds.

Sources: Law Gazette; American Lawyer


Judge rules bitcoin is not money in laundering case

In what is believed to be the first money-laundering prosecution involving bitcoin, a Miami judge has ruled that the virtual currency isn’t the same as money and thrown out criminal charges against a man accused of selling it to undercover agents.

Judge Teresa Mary Pooler ruled on Monday that bitcoin ‘has a long way to go before it the equivalent of money,’ and, as a result, defendant Michell Abner Espinoza wasn’t operating an unlicensed money-services business.

Insufficient evidence

Judge Pooler also ruled there was insufficient evidence that Mr Espinoza, who stood accused of selling bitcoin to federal agents who said they were going to use the currency to buy stolen credit-card numbers, had committed the crime of money laundering.


Chancellor Hammond taps Clifford Chance partner for China delegation

Clifford Chance senior partner Malcolm Sweeting will join UK Chancellor of the Exchequer Philip Hammond as he attempts to cement Britain’s economic relationship with China post-Brexit.

Mr Sweeting has been named among a team of business and finance heavyweights invited to join Chancellor Hammond on his upcoming trip to China, where he will promote UK business interests and opportunities in the wake of the country’s decision to leave the EU. A statement released by the UK Treasury on Friday reported that there would be a strong focus on the financial services sector throughout the upcoming visit, with Chancellor Hammond set to host a financial services round-table in Beijing.

Industry heavyweights

Other invited attendees for the round-table include Standard Life chairman Sir Gerry Grimstone, HSBC chairman Douglas Flint and Aberdeen Asset Management deputy Asia Pacific head Ian Macdonald. Mr Sweeting has been a banking and finance partner with Clifford Chance for more than 25 years and was a leading voice in many of the firm’s client briefings in the lead up to the EU referendum.

Source: Financial News; Legal Week

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Cravath and Skadden among firms leading in Yahoo acquisition

Cravath, Swaine & Moore and Skadden, Arps, Slate, Meagher & Flom are among the firms to have advised in telecom behemoth Verizon’s US$4.83 billion cash deal to purchase internet giant Yahoo.

At least eight different Big Law firms were involved in the deal, according to a statement from Verizon.

Advising Yahoo

A team from Cravath, Swaine & Moore led the way for Yahoo, headed by Faiza Saeed and Eric Schiele. Skadden, Arps, Slate, Meagher & Flom; Wilson Sonsini Goodrich & Rosati; and Weil Gotshal & Manges also advised Yahoo. The Skadden team was led by M&A partner Marc Packer.

Advising Verizon

Wachtell, Lipton, Rosen & Katz; Gibson, Dunn & Crutcher; Covington & Burling; and Winston & Strawn acted as legal advisors to Verizon. Wachtell’s team was led by Steven Rosenblum and Edward Lee. Gibson Dunn was led by partners Rashida La Lande and Daniel Angel.

Source: Bloomberg Law


Messy UK exit from the EU could cost global M&A market $1.6trn

Baker & McKenzie has warned that a ‘disorderly’ exit of the UK from the EU could cost the global M&A market up to $1.6 trillion.

Baker & McKenzie‘s Global Transactions Forecast, based on financial modelling by Oxford Economics, shows the potential scale of damage for markets and deal making activity of both an ‘orderly’ and a ‘disorderly’ exit of the UK from the EU.

Political and market uncertainty

It suggests that a lack of a clear plan may bring about ‘a more damaging cycle of political and market uncertainty,’ the impact of which would be felt disproportionately in the UK and the rest of Europe but would also in the whole global market.

London still busy

The firm’s central scenario forecasts M&A activity worldwide to only be slightly down in the next few years and then to recover fully. Furthermore, while UK domestic deals are down under either scenario, the primacy of English law for many cross-border deals (including those which don’t involve UK assets or business) means that there will still be plenty of London-based activity.

Tim Gee, a London-based M&A partner at Baker & McKenzie, commented: ‘In the last few days we have seen evidence that the M&A market in the UK won’t come to a crashing halt even if it won’t be at its previous pace. There are still plenty of buyers and sellers for the right deal at the right price.’

Sources: Forbes; Baker & McKenzie

Law firm’s bank account linked to stolen Malaysian $1bn

Shearman & Sterling has unwittingly become caught up in the biggest ever asset seizure by the US Department of Justice’s anti-corruption unit.

According to civil filings to the United States District Court in Los Angeles, the law firm held millions of dollars in stolen funds in an account in the US; the money was allegedly used to finance the lavish lifestyles of several businessmen associated with the 1Malaysia Development Berhad (1MDB) sovereign wealth fund.

US federal prosecutors have filed a series of civil complaints to seize $1 billion in assets bought with money from the fund, including commercial properties and a private jet.

No knowledge

The New York-headquartered firm is not alleged to have committed any wrongdoing or to have had knowledge about how the funds were being misused.

Source: The Lawyer

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Record year for Linklaters as revenue tops £1.3bn

Linklaters has become the fourth Magic Circle firm to post its 2015/16 financial results, reporting a 3.1 per cent rise in turnover to £1.31bn.

The firgure marks the firm’s strongest result since 2007/08 and the first time that it has crossed the £1.3bn turnover threshold. Linklaters has pipped fellow Magic Circle firms Clifford Chance and Allen & Overy in terms of revenue growth but has fallen short of the 6.6 per cent lift reported by Freshfields Bruckhaus Deringer yesterday.

Net profit has also hit a record high, up 6.8 per cent to £612m for 2015/16. Average profit per equity partner is up 2.5 per cent to £1.45m, with lower-end equity partners up 4.8 per cent to £745,000 and top-tier partners up 3.3 per cent to £1.86m. Strong performances in the firm’s M&A, project finance, dispute resolution and TMT practices buoyed the results.

Sources: The Lawyer; Legal Business

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Travers Smith PEP hits £1m

Travers Smith’s average profit per equity partner has reached £1m for the first time, while revenue has jumped 13 per cent.

The 2015/16 financial year marks the seventh consecutive year of growth for the firm, with PEP increasing 8 per cent from £935,000 to £1.015m and revenue rising from £106m to £120m.

Revenue and PEP jump

Since 2009/10, Travers Smith has seen revenue increase by nearly 40 per cent from £72m, while PEP has jumped by the same percentage from £705,000.

Promotions and pay

Travers Smith made up six lawyers to its partnership this year in a larger than usual round. The firm also recently upped its associate pay, with newly-qualified lawyers now earning £71,500.


Brexit result ‘not legally binding’, say 1,000 lawyers

Legal professionals have penned a letter to Prime Minister David Cameron warning that the referendum result alone is insufficient to trigger Article 50.

The letter, signed by more than 1,000 lawyers, has advised the government to launch a fully independent investigation into the costs and benefits of leaving the European Union before reaching its final decision on Brexit. While Brexiteers came away with a slim 52 per cent majority in June’s referendum, the lawyers are concerned that the public’s ability to weigh the consequences of Britain’s exit was skewed by ‘misrepresentations of fact and promises that could not be delivered’ on the part of Vote Leave campaigners. Moreover, with the referendum result merely ‘advisory’ in nature, the lawyers recommend that primary legislation will need to be enacted before Article 50 of the Lisbon Treaty can be triggered. ‘Parliament is sovereign and the government of our democracy,’ said Philip Kolvin QC, who co-coordinated the letter. ‘In profound times of social, political, legal and economic crisis, it is important that we behave constitutionally and according to the law.’

Sources: International Business Times; The Independent; Sky News

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Turnover up at Watson Farley & Williams, Sacker & Partners

Both firms have posted modest growth in their revenues for the 2016 financial year.

Watson, Farley & Williams announced that revenue has grown 5 per cent at the firm over the last 12 months to £131.2m. The growth result is a notch below the 7 per cent increase to £125m recorded at the firm for the 2014/2015 financial year, which was itself a considerable step down from the 14.6 per cent increase achieved the year before.

Over the last year, WFW has broken ground in Vietnam through a flagship alliance with local firm LVN Associates and has bulked up its headcount in New York with two real estate hires and a new dispute resolution team.

Sacker hits double digits

Meanwhile, boutique firm Sacker & Partners has posted a 13 per cent lift in revenue to £26.8m for the last financial year, while profit was up 15 per cent from £13.6m to £15.3m in the 12 months to 31 December. With a client list that includes Lloyds Bank, HSBC, John Lewis and ITV, the strong result at Sackers is reflective of the growing number of large corporates looking to restructure their pension schemes: ‘It was a very good year. The general routine work was of a higher level and there were a few mega projects too. Generally, the pensions world is very busy,’ commented Sackers senior partner Ian Pittaway to Legal Business. Partner and staff headcounts were both flat at the firm year-on-year, at 26 and 76 respectively. Remuneration for firm’s highest-paid partner rose £300,000 last year to £1.45m.

Sources: Legal Business; The Lawyer