Brexit: Supreme Court says UK Parliament must give Article 50 go-ahead

Parliament must vote on whether the government can start the Brexit process, the Supreme Court has ruled.

The judgement means Theresa May cannot begin talks with the EU until MPs and peers give their backing – although this is expected to happen in time for the government’s 31 March deadline.

But the court ruled the Scottish Parliament and Welsh and Northern Ireland assemblies did not need a say.

Brexit Secretary David Davis will make a statement to MPs at 12:30 GMT.

During the Supreme Court hearing, campaigners argued that denying the UK Parliament a vote was undemocratic.

But the government said it already had the powers to trigger Article 50 of the Lisbon Treaty – getting talks under way – without the need for consulting MPs and peers. It wants to do this by the end of March.

Reading out the judgement, Supreme Court President Lord Neuberger said: “By a majority of eight to three, the Supreme Court today rules that the government cannot trigger Article 50 without an act of Parliament authorising it to do so.”

The court also rejected arguments that the Scottish Parliament, Welsh Assembly and Northern Ireland Assembly should get to vote on Article 50 before it is triggered.

Lord Neuberger said: “Relations with the EU are a matter for the UK government.”

Outside the court, Attorney General Jeremy Wright said the government was “disappointed” but would “comply” and do “all that is necessary” to implement the court’s judgement.


NRB expands South African presence with takeover of boutique firm

Keller Snyman Schelhase’s four lawyers join Norton Rose Fulbright in Cape Town.

Norton Rose Fulbright has acquired four-lawyer commercial law boutique Keller Snyman Schelhase (KSS) in Cape Town, a move that comes six years after the global legal giant launched in South Africa via a merger with one of the country’s largest firms.

KSS partners Andrea Keller, Anton Schelhase and Lauren Fine are joining the firm’s South African partnership as directors. The Cape Town firm, which was formed in 2012, advises clients in the energy, infrastructure, real estate, retail, transportation and financial services sectors.

KWM China speaks out on Europe demise “there’s nothing we could have done differently”

King & Wood Mallesons’ new European partnership – which consists of 32 partners – has been invited to a partner conference in China in February where they will be told about the new strategy for the global firm following the LLP going into administration this week.

The news comes as KWM Shanghai M&A partner Mark Schaub has become the first Chinese partner to speak out about the European administration.

Speaking to The Lawyer he said: “We’ve reached out to clients whose matters are continued to be worked up on. Some Chinese clients have raised concerns, but we’ve been able to deal with their concerns.”

He added there was a “sense of sadness” in the Shanghai office today about what has happened with the European firm. “People here are thinking about their former colleagues in Europe today,” he said.

“At the heart of it, all of us would have preferred a different outcome, but it was unfortunate that the legacy SJ Berwin partners couldn’t commit to the rescue offer made by the Chinese and Australian firms a few months ago.

“We’re doing our best to minimise the impact on clients and we are more looking forward to see what we need to do to make it work.

“There was a feeling that the failure in Europe has nothing to do with the Chinese firm or Australian firm or the verein. Many people said the legacy SJ Berwin had issues prior to the merger and those issues percolated to the top a few years after.

“We’ve tried to support Europe and refer matters to our European colleagues as well as the rescue offer last year. There is a sense that nothing we could have done differently that could have changed the outcome.”

Schaub was the first foreign partner to join Chinese legacy firm King & Wood in 2000.

The lawyers who are remaining with KWM in London following the administration will move to a small serviced office in St. Paul’s in the next few days.

The Lawyer has learned EUME managing partner Tim Bednall, a legacy Mallesons partner, is likely to return to the Australian partnership following the European collapse.

It has not yet emerged who will run the European arm of KWM.

The partners remaining with KWM in London are: disputes partners Andrei Yakovlev, Dorothy Murray and Darren Rosier, corporate finance partner Greg Stonefield, M&A partner Joseph Newitt, corporate partner Mike Wang and structured finance partner Vanessa Docherty.

The Chinese-Australian firm will also maintain “core practices” in Frankfurt, Dubai and Riyadh, plus affiliated offices in Madrid, Milan and Brussels. It has closed the office in Luxembourg, while the Paris office has moved en masse to Goodwin Procter and Willkie Farr.

The Madrid office will keep 10 partners; Milan will keep five; Brussels one; Dubai four; Riyadh two and Frankfurt three.

The new European platform will continue to operate under the Swiss verein structure. KWM China established a new LLP in Germany, KWM Deutschland LLP, late last year.

Each office has received financial support from China this week. The Europe offices will operate as single entities and report their financial results individually, in accordance with local regulations.

KWM’s reduced London office will consist of 12 associates and 12 staff, including consultants, plus the seven partners.

Around 30 partners from the EUME operation, which is now in administration, will join KWM China. The Dubai office has been led by SJ Berwin lifer and former litigation head Tim Taylor QC.

KWM global chairman Wang Junfeng said in a statement: “I am proud and excited by the determination of our partners who have worked so hard with us to realise this practice in deeply challenging circumstances. This is a very good outcome for international clients and for the continued development of our firm.”

On Tuesday restructuring specialists Quantuma confirmed it had been appointed administrators to KWM LLP.

All of the firm’s remaining assets and control of the business will now transfer to Quantuma administrator Andrew Hosking.

Hosking has appointed a number of advisers to the administration process which have been approved by KWM lender Barclays. The advisers are CMS Cameron McKenna partner Rita Lowe, who famously advised on the Dewey & LaBoeuf administration, Pinsent Masons partner Steve Cottee, and Ashfords, which is providing regulatory advice. Ashfords head of financial risk Sam Palmer has been appointed solicitor manager to the administration.

Hosking will attempt to repay some of KWM’s substantial debts in the UK and Europe, including its £35m loan from Barclays.

KWM first filed its notice of intention to appoint administrators on 22 December, and renewed it last week to buy itself more time to sell off parts of the business.

A number of teams, including trainees, associates and support staff, have been sold off by KWM managing partner Tim Bednall to other firms in recent weeks.

Goodwin Procter took a 26-strong team last week. Other groups have moved to DLA Piper and Reed Smith, with more set to move to Macfarlanes, Covington & Burling and Keystone Law.

Last week Bednall broke the news to all remaining employees that it would not be able to pay salaries owed for January after Barclays rejected a call for extra funds from the firm.

On the same day KWM’s former administrators AlixPartners pulled out of the administration, with the firm instead turning to Hosking.

In total, more than 40 partners left KWM across the UK, Europe and Middle East in the last two months of 2016 as the LLP’s finances reached crisis point and an administration became inevitable. Around 90 partners left the firm in total over 2016.

Trump transition leaves DC legal market “saturated”

The inauguration of president elect Donald Trump is a topic that reaches pretty much every aspect of life, something that is apparent in this comment from one Washington legal market specialist: “I was talking to my therapist last Friday and she told me that every one of her patients was obsessing with Trump. Nothing is in equilibrium. It’s like Brexit, you simply cannot think of anything else.”

Baker & Mckenzie predict plunge in M&A activity as Brexit uncertainty continues

Corporate deals in the UK will continue to drop on last year in the wake of Brexit uncertainty, according to one law firm.

Baker McKenzie’s medium-term forecast report on M&A activity predicts that in the event of an “amicable separation Brexit will have only a modest impact on transactions in most of Europe”.

However, the immediate outlook is less positive, with the report arguing that the value of deals this year would plunge by more than 60 per cent compared to last year, resulting in a total of about £102.5 billion.

In the rest of the EU, however, the forecasters expect the value of deals to soar by almost 44 per cent to £376bn.

Tim Gee, a partner at the firm, said: “Given Brexit’s impact on business confidence, we expect M&A values to fall by two thirds in 2017 after numerous large deals in the first half of last year boosted 2016.”

He added M&A activity should stabilise next year “as greater certainty emerges about the UK’s new relationship with the EU and the rest of the world”.

Government predicts defeat in Brexit legal challenge

London expects to lose its legal battle over whether it can start the Brexit process without wider parliamentary approval. The British government appealed a High Court ruling that parliament must be allowed to vote on triggering Article 50, which starts a two-year deadline for an EU member to withdraw from the political bloc.

HSF becomes second overseas firm to launch in Malaysia

Herbert Smith Freehills (HSF) has secured a qualified foreign law firm (QFLF) licence from Malaysia’s Bar Council, meaning it is set to become just the second foreign firm to establish an office in the country.

HSF plans to open an office in Kuala Lumpur in May 2017 and will focus primarily on transactions, disputes and Islamic finance.

It will become the second international firm to have an office in the country after Trowers & Hamlins obtained the first Malaysian QFLF licence in 2015. The scheme, which was introduced in 2014, allows foreign firms and lawyers to practise foreign law in Malaysia.

Baker & McKenzie has a long established presence in the jurisdiction through its local member firm Wong & Partners since 1998.

HSF is yet to finalise details on staffing or appoint an office head, but it is expected to have six lawyers on the ground for the launch, including two or three partners.

HSF joint CEO Sonya Leydecher said the firm has been working with Malaysian clients for over 20 years and the new office will offer them “legal expertise on the ground in Kuala Lumpur, providing easier local access to our international network for their overseas business”.

Justin D’Agostino, the firm’s regional managing partner for Asia and Australia, added that the firm is increasingly busy with both transactions and disputes involving Malaysian clients.

“Malaysian corporates are getting bigger, stronger and sophisticated. They’re increasingly investing around the world and looking for international counsel to work with their local counsel. They are a big part of our Asia business. Having a strong team on the ground will deepen and strengthen these relationships,” D’Agostino said.

Most recently, the firm has advised Malaysian telecoms giant Axiata on a $600m investment in its telecoms infrastructure company edotco. Other major clients it has worked for include Petroliam Nasional Berhad and Sime Darby.

On the disputes front, the firm has recently acted in a major arbitration case, representing the Malaysian government in the ‘Railway Lands’ arbitration against the Republic of Singapore.

According to The Lawyer’s South East Asia Elite report 2016, HSF has the third largest practice in the region among international firms. It had 26 partners and 142 other lawyers across Bangkok, Singapore and Jakarta (through local association firm Hiswara Bunjamin & Tandjung) in 2015.

The Malaysian launch will give HSF its ninth location in Asia and fourth in South East Asia.

Malaysia moved to liberalise its legal services sector in June 2014, allowing foreign law firms to establish a presence in Malaysia for the first time through the QFLF licence scheme. The new regime also permits foreign firms and lawyers to form a joint venture, officially known as an international partnership, with Malaysian firms, owning up to 40 per cent foreign equity in the JV.

So far, only two firms have taken advantage of the liberalisation to apply for a QFLF, but interest from UK firms and chambers has been growing gradually.

In April 2016, DAC Beachcroft submitted an application to the Malaysian Bar Council for a licence to form a JV in Malaysia. In 2014, London set 39 Essex Street set up a base in the Kuala Lumpur Regional Centre for Arbitration.


President-elect Trump tasks Morgan Lewis with untangling his conflicts of interest

Morgan Lewis & Bockius has been instructed by US President-elect Donald Trump to untangle the conflicts of interest relating to his business interests and impending presidency.

In a press conference this afternoon (11 January), Morgan Lewis & Bockius partner Sheri Dillon, whose practice focuses on federal tax controversy, said that the firm had been instructed to “design a structure for his business empire that would completely isolate him from the management of the company”.

“President-elect Trump wants the American public to rest assured that all of his efforts are directed to pursuing the people’s business and not his own,” she said.

“Together [Trump’s sons] Eric and Alan have the authority to manage the Trump organisation and will make decisions for the duration of the presidency without any involvement whatsoever by President-elect Trump.”

Dillon claimed that Trump is “completely isolating himself from his business interests”.

She said: “He instructed us to take all steps realistically possible to make it clear that he is not exploiting the office of the presidency for his personal benefit.”

In the same press conference before handing over to Dillon, Trump said: “I could actually run my business and run government at the same time. I don’t like the way that looks, but I would be able to do that if I wanted to.”

Morgan Lewis partner Fred Fielding, who served as counsel to Presidents Ronald Reagan and George W. Bush, was named as a critical part of this process.

A Morgan Lewis spokesperson said: “It’s firm policy to not comment on client matters.”

It is understood that Trump’s son in law Jared Kushner, who was named senior adviser to the president, instructed WilmerHale to advise on his own conflicts of interest.

Morgan Lewis partner Dillon contributed $1,500 to the Clinton campaign in 2007, according to political funding website OpenSecrets.

Freshfields names Embley to lead M&A team alongside New York’s Herman

Freshfields Bruckhaus Deringer has appointed corporate partners Bruce Embley and Matthew Herman as its new co-heads of global M&A.

London-based Embley and New York-based Herman took up their new roles in December, replacing Peter Lyons, who became Americas managing partner and Ben Spiers, who is set to join Simpson Thacher & Bartlett in London.

Corporate partner Embley is currently advising brewing giant AB InBev on its sale of a number of Eastern European beer brands, including Czech market leader Pilsner Urquell, to Japanese brewer Asahi for €7.8bn (£6.5bn).

He previously led the magic circle firm’s Dubai corporate team between 2006 and 2008 before transferring back to London. Deal highlights during his time in the Middle East include advising on Dubai International Capital’s bid for Liverpool Football Club in 2006.

US corporate head Herman has been with Freshfields since 2003, when he joined as an associate from dissolved California firm Brobeck, Phleger & Harrison. He made partner at Freshfields in 2006.

As US corporate head he has played a role overseeing the firm’s expansion in New York, with key corporate hires including Mitchell Presser from Wachtell Lipton Rosen & Katz and Americas head Lyons, who joined from Shearman & Sterling.

Key deals for Herman include advising investment firm Henderson Group on its $6bn (£4.6bn) merger with Janus Capital in 2016.

Freshfields has made several changes within its corporate leadership team recently, with London corporate partner David Higgins taking over from Adrian Maguire as co-head of the firm’s global financial investors group.

Baker McKenzie picks up seven lawyer team from KWM

Baker McKenzie has hired a seven-strong team from King & Wood Mallesons (KWM) in London, led by the firm’s head of China group Will Holder and head of employment Carl Richards.

The pair will join with a team of five associates this month.

According to a statement from Baker McKenzie, Holder will work closely with a number of partners including private equity funds head David Allen and TMT M&A head Charles Whitefoord “to drive growth in the transactional space, particularly in complex, cross border, multi-practice deals”.

Holder was previously seconded to KWM’s China office for 10 months. In August he took a lead role advising on the acquisition of English premier league club West Bromwich Albion FC by Yunyi Guokai Sports Development, in a deal estimated to be worth £150m.

Meanwhile Richards headed KWM’s employment practice for six years.

Earlier this week, The Lawyer reported that KWM had informed 100 staff and fee-earners in the UK, Europe and Middle East that their pay has been halted.

KWM filed its intention to appoint administrators in late December following a failed recapitalisation of its EUME business and several senior exits. Since then groups of partners have departed for both US and UK firms, including former senior partner Stephen Kon, who is joining Macfarlanes alongside three partners.

KWM China is expected to pick up a handful of partners, fee-earners and staff from the firm’s offices in London, Dubai, Spain, Madrid and Italy when the EUME LLP goes into administration later this month.

Among those in talks to stay with the global firm in KWM’s City office is a 10-lawyer disputes team led by international arbitration partner Andrei Yakovlev and litigation partners Dorothy Murray and Darren Roiser. KWM China is also in talks to buy out part of the London corporate and M&A practices.

The firm has also established a new LLP in the last week named KWM Deutschland. It is understood the entity is a move by KWM China to fulfil its regulatory requirements in Europe.

Not all of the firm’s German partners will stay with KWM however. On Tuesday (3 January) it emerged Allen & Overy had hired Frankfurt corporate partner Michiel Huizinga, with further departures expected.

It is not yet known what will happen to KWM’s offices in Belgium and Luxembourg. KWM’s Paris team, which was largely depleted following amass departure to Goodwin Procter earlier this year, is understood to be in talks with another firm.

In total, more than 40 partners left KWM across the UK, Europe and Middle East in the last two months of 2016 as the LLP’s finances reached crisis point and an administration became inevitable. Around 90 partners left the firm in total over 2016.