FT InnovaTIve Lawyers 2013

OctOber 4 2013 www.ft.com/innovative-lawyers

ReseaRch paRtneR suppoRted by

Innovative Lawyers 2013

foreWord Structural shift

The role of is changing rapidly. Legal expertise is still prized, but it is no longer enough to guarantee success. The task today is how to exercise influence, lead project management and transform the business of clients, industries and government. This is the eighth year of the FT Innovative Lawyers reports and awards, and I am delighted to report that interest from the profession has never been stronger. This year, we received entries from 140 law firms, against an average of 100 over the past three years. The nature of the submissions reflects the pace of change in the profession. There is a greater understanding and awareness of innovation that is striking. Firms are increasingly willing to embrace change; in-house counsel have come of age; new players

Special reportS editor have entered the market and are here to stay. Michael Skapinker This year, RSG Consulting, our long-term research partner, head of editorial content Hugo Greenhalgh conducted 800 interviews against the usual 600 – underlying lead editor why FT Innovative Lawyers has become best-in-class in Europe- Rohit Jaggi production editor wide rankings. George Kyriakos What does a firm or a team of lawyers need to do to be art director Derek Westwood recognised? First, they need to demonstrate excellence and deSign conSultant innovation. But they also need to transcend the boundaries of Michael Crabtree Sub editorS everyday legal work. Philip Parrish, Liz Durno, Richard Gibson, David Scholefield The top-ranked legal firms this year garnered exceptional illuStrator client affirmation, drove through deep-seated change and set new Martin O'Neill standards. The role of a lawyer in 2013 is a long way from when publiSher, eMea Dominic Good we started publishing these reports in 2005. head of Strategic SaleS Articles by our expert writers in this special report examine Patrick Collins head of project delivery the pressures that are forcing a shift in firms’ structures. They Rachel Harris also highlight how lawyers are writing policy and how they are head of b2b & World reportS Robert Grange safeguarding the conduct of business in risky political climates. advertiSing production We also look at the risks for firms that fail to change. Daniel Lesar rSg conSulting The legal profession is a vital player when it comes to steering Reena SenGupta, Yasmin Lambert, Dominic Williams, James Wood, societies, governments and economies through these times of Imogen Holden, Caroline Davies uncertainty in the eurozone and beyond. This report shows the extent to which they are stepping up to that task. And, if it follows the pattern of previous reports, it will also help to spur the sector to expand still further its role as an agent of change.

Lionel Barber Editor, Financial Times

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Innovative Lawyers 2013

InsIde This year...

IntroductIon remain competitive during 8 Changes in the profession tough economic times by are gathering pace but there moving away from tradition are already many indications of how lawyers’ mindset has european law been transformed 18 During the economic crisis, law firms have come delIvery models up with bespoke solutions to 12 Sticking to old ways of financial problems doing things is unrealistic, especially when clients are pIoneers looking at costs 22 Law firms are accelerating the pace of change by europe constantly rethinking their 16 Firms all over the model in order to separate continent are looking to process from value 44

legal Innovator Contributors of the year 26 Candidates share an ability Caroline Binham to turn client needs into Legal Correspondent groundbreaking initiatives Alicia Clegg FT contributor future leaders 32 With the rise of the mega- Jane Croft firm, training partners in Law Courts correspondent leadership skills will become increasingly important Heidi K. Gardner Assistant professor of 18 foreIgn expertIse business administration 36 Knowing how to deal in the organizational with local governments behavior unit, Harvard gives firms an edge when Business School 2013 Rankings negotiating in difficult Yasmin Lambert jurisdictions Senior consultant, RSG Consulting 9 FT 50: law firm innovators 34 Most innovative firms in general counsel Sarah Murray international strategy 40 The evolution of in-house FT contributor 13 Most innovative law firms teams means pure legal in value resourcing 35 Most innovative law firms work is just one part of a Neil Rose in client service bigger role Editor, 19 Most innovative firms in LegalFutures.co.uk corporate law 39 Most innovative law firms hybrId skIlls Reena SenGupta in dispute resolution 44 Diversification into non- Chief executive, 21 Most innovative law firms legal sectors is helping law RSG Consulting in finance 42 Most innovative European firms generate more income Michael Skapinker in-house legal teams from legal advice Editor, Special Reports 23 Legal industry pioneers 42 Innovation in operational harvard study Paul Solman 33 Most innovative law firms change 46 Sharing clients with other Former lead editor, in corporate strategy lawyers in the same firm FT Innovative Lawyers 45 Most innovative law firms might be expected to hit Michael Steen in private wealth earnings. But the opposite Frankfurt bureau chief is true

5 Innovative Lawyers 2013

News

No longer the upstart outsider

■ Legal advice and innova- trated at the expense and tion is often reactive, with inefficiency, yet I didn’t know lawyers creating solutions any of my colleagues who felt in response to client needs. they were underworked or This year, the winner of the overpaid.” Financial Times Innovative This was 1999, and the time Lawyers Special Achieve- of the internet boom. As busi- ment Award is Mark Harris, nesses on the US west coast founder and chief executive underwent a technology-led of legal service provider revolution, Mr Harris began Axiom, for anticipating to question why the legal market changes and creat- business, another knowledge ing a business model that industry, was immune from has challenged expecta- change. On the last day of his tions of how legal ser- sabbatical, he started writing vices can be delivered. the business plan for Axiom. Mr Harris spent time as The company has now a clerk for the Ninth Circuit been active for well over a Court of Appeals in the US decade. It initially offered and at leading law firm Davis seconded lawyers to in-house Polk & Wardwell before tak- legal departments. In the ‘Axiom has and now employs 1,000 staff ing a sabbatical to consider past two years its managed across Europe, the US and what he wanted from his projects and contract legal always had Asia. legal career. services have gained trac- In the research for this “The most fundamental tion in Europe and fuelled an eye for year’s FT Innovative Lawyers observation was that there rapid growth in the region. recruiting the with the new generation was unhappiness on both Since 2011, the company has of legal service providers, : THOr SwifT sides of the service exchange,” doubled its global revenue, right people’ Axiom was the most often TO tripled revenue from Europe cited example of a busi- he says. “Clients were frus- PHO sits at the top of the tree

■ Elite law firm Linklaters, coming initial public offering boom. It has entered into an corporate work in mergers one of the , or top of Royal Mail. alliance with Webber Wentzel and acquisitions and flota- four UK firms, has shrugged Linklaters posted revenue in South Africa and is advis- tions, and has worked on off the economic downturn growth of 1 per cent to £1.2bn, ing on 220 live matters in 41 many of the biggest M&A and better than many of its rivals as its profit per equity partner jurisdictions in Africa. restructuring deals in recent because of its expansion in (PEP), a closely watched The deal with Webber years, including the $70bn faster-growing markets such guide to a law firm’s financial means that the two firms merger of mining companies as Asia. With more than health, rose nearly 6 per cent will share clients but not Glencore and Xstrata. 2,700 lawyers in 29 offices to £1.26m for the year ending profits, and is similar to a It advised Lehman’s admin- in 20 countries around the April 30 2013. deal between Linklaters and istrators within hours of the world, the firm advises FTSE The law firm has expanded an Australian counterpart, bank’s collapse in 2008, and is 100 companies including into new markets such as – that has more than still dealing with the fallout. Vodafone and BP, and it is one Africa, helped by a China- trebled its Australian work. It recently drafted a consen- of the advisers on the forth- fuelled natural resources Linklaters is known for its sual agreement using a “best

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Research methodology

FT Innovative Lawyers 2013 is a rankings report and awards for Europe-based lawyers. Shortlists for the awards comprise the top-ranked submissions in each section of the report. The FT and its research partner RSG Consulting have ness that was “providing a devised a unique methodology to rank lawyers on innovation. challenge to the law firm Joining up Law firms, in-house legal teams and other legal service structural model”. Mr Harris organisations are invited to submit their innovations. These are says: “The wave of change ■ Growing numbers of law then fully researched through telephone interviews. No entry that’s started to wash over firms have followed their appears in the FT report without a robust client or independent this industry feels logical and clients into overseas mar- reference. Market experts are also called in to assess the inevitable. The industry is kets as they seek to increase submissions and the research. A list of the experts is available segmenting itself, and no one revenues – but they have online. can stand in the way of that.” adopted many differing Each entry is scored out of 10 points on originality, rationale From origins as an upstart approaches to expansion. and impact for a maximum score of 30. They are benchmarked outsider, Axiom has won big Some law firms have opted against each other to arrive at the final rankings. Lawyers are project contracts from FTSE to open a string of offices ranked for delivering exceptional value to business. 100 clients such as Vodafone, in unexpected places such The Legal Industry Pioneers and the In-House and is now collaborating with as Eversheds in Baghdad or Lawyers rankings are drawn from nominations as well as top-10 UK law firms to unbun- in Casablanca. submissions, but all entries require third-party validation and dle complex legal work. With Others have struck association commendation. , Axiom deliv- deals to refer business to a FT 50: Innovators 2013: This year, the FT 50 Law ered a regulatory change pro- local firm. A handful of firms Firm Innovators ranking is a pure aggregate of each firm’s ject under a hybrid model that have opted for full-blown performance across the private practice categories of the report. combined the UK law firm’s mergers, including Herbert The scores comprise: expertise with Axiom’s project Smith and Australia’s Free- management experience and hills, which voted to combine ► Legal Expertise: total score for entries ranked in the Corporate, lower-cost resources. last year. The new firm has Finance, Dispute Resolution and Private Wealth categories. When talking about his 2,800 lawyers across 20 offices ► Business of Law: total score for entries ranked in the business, Mr Harris points and will share revenues and Client Service, Value Resourcing, Corporate Strategy first not to technology and one profit pool. and International Strategy categories. process, but to people. Others have opted for merg- ► Total score: total score for entries ranked in all eight categories. Axiom has always had an ers using the Swiss Verein Tie-break for inclusion in the list was the total score for all eye for recruiting the right structure, in which the firms entries submitted, including those not ranked. people to the leadership team, are joined under one banner he says. The weeding-out pro- but do not share profits. For the FT Innovative Lawyers 2013 report, more than 600 cess is unusually rigorous – to These include DLA Piper submissions and nominations were received and almost 800 ensure that Axiom only takes and Lovells, which in 2010 interviews were conducted with senior lawyers and executives. on people with the vision and merged with Washington- Submissions were received from 111 law firms, and an passion to create new, game- based Hogan & Hartson to additional 48 in-house teams and 97 “legal industry pioneers” changing models. create – one were studied. The research was conducted by eight RSG Yasmin Lambert of the world’s 10 largest legal researchers between May and September 2013. practices. Another is Norton The one award that uses a panel of judges to decide the Rose, which this year com- winner is Innovative Individual of the Year. bined with Houston-based This year’s judges were: Michael Skapinker, FT Special Reports Fulbright & Jaworski. editor; Rohit Jaggi, FT Innovative Lawyers lead editor; Caroline The verein approach allows Binham, FT legal correspondent; Claire O’Brien, global head, claim” approach to allow member firms to control their business services, Integreon; Susan Taylor Martin, managing Lehman Brothers Interna- own earnings. director, Thomson Reuters Legal, UK & Ireland; Professor Laura tional (Europe) customers to Some argue that such Empson, director, Centre for Professional Service Firms, Cass recover $9bn. a structure is not a “real Business School; and Professor Stephen Mayson. Linklaters also advised merger” – but it has many RSG Consulting has more than 20 years’ experience News Corporation’s inde- advantages including a quick analysing the legal profession, and devising ranking pendent management and tie-up, and being able to avoid methodologies for professional services firms. Chief executive standards committee on complex wrangling about Reena SenGupta helped launch the FT’s Law & Business page investigations into phone aligning each firm’s profitabil- in 2001 and has been a regular writer on the legal profession hacking, and advised BP on ity. The structure is attractive for the FT for the past 13 years. its $9bn joint venture with in US mergers as a verein Reliance – the largest invest- shields other parts of the All the ranking tables from this and previous years can be ment of capital into India on firm from tax and regulatory found online at www.ft.com/innovative-lawyers a single deal. Jane Croft issues. Jane Croft

7 Innovative Lawyers 2013

introduction

aLLIances shIft up a gear

Changes in the profession are gathering pace but there are already many indications of how lawyers’ mindset has been transformed, says Reena SenGupta

8 Innovative Lawyers 2013

●FT 50: LAW FIRM INNOVATORS 2013 mmended entries tal score for andout entries Rank Firm To ranked entries Legal expertise score Business of law score St Highly commended entries Co 1 Linklaters 126 67 59 321 2Allen & Overy 120 63 57 114 2Slaughter and May 120 80 40 033 4Eversheds 118 57 61 132 5Addleshaw Goddard 103 21 82 221 6Pinsent Masons 102 59 43 212 7Skadden, Arps, Slate, Meagher & Flom 99 81 18 104 8Berwin Leighton Paisner 97 78 19 023 8Freshfields Bruckhaus Deringer 97 58 39 032 10 Garrigues 96 77 19 014 11 Weil, Gotshal & Manges 91 71 20 310 12 Vieira de Almeida & Associados 88 24 64 220 13 Axiom 85 085211 14 DLA Piper 84 40 44 112 15 Baker & McKenzie 82 22 60 211 16 79 37 42 112 17 Simmons & Simmons 77 38 39 022 18 Fondia 61 18 43 102 18 Hogan Lovells 61 21 40 030 18 61 42 19 111 21 White & Case 60 40 20 021 22 Uría Menéndez 59 59 0 012 23 Ashurst 57 41 16 012 23 57 37 20 012 25 Dundas & Wilson 55 055012 25 PLMJ 55 18 37 003 27 NautaDutilh 43 24 19 101 28 Cuatrecasas, Gonçalves Pereira 42 42 0 101 28 Loyens & Loeff 42 21 21 020 30 Houthoff Buruma 41 041101 30 Latham & Watkins 41 041020 32 Vinson & Elkins 40 40 0 011 33 Paul Hastings 39 39 0 002 34 A&L Goodbody 38 38 0 002 34 Taylor Vinters 38 18 20 011 36 Hausfeld & Co 25 25 0 100 37 De Brauw Blackstone Westbroek 24 24 0 100 38 CMS 23 23 0 100 The legal profession has under- 39 Sidley Austin 22 22 0 010 gone a sea change. The once-traditional indus- 39 Sullivan & Cromwell 22 22 0 100 try now uses the term “innovation” as casually 41 21 21 0 010 as it did “precedence”. Evidence of this can be 41 Shearman & Sterling 21 21 0 010 seen throughout the Financial Times Innova- tive Lawyers 2013 report – some of the initia- 41 TLT 21 021010 tives featured in the ranking tables would have 44 MAQS Law Firm 20 020010 been unthinkable just five years ago. 44 Milbank, Tweed, Hadley & McCloy 20 20 0 001 For example, a quick glance at the value 44 Miranda Correia Amendoeira 20 020010 resourcing table shows how the move to adopt 44 Nabarro 20 020001 efficient service delivery models is well past 44 RPC 20 020010 its tipping point. Five years ago, few managing 44 Wolf Theiss 20 020010 partners in the top 20 law firms thought that legal process outsourcing was relevant to their 50 Matheson 19 19 0 001

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introduction businesses. Now, many have gone several steps helped it secure a record number of years at the further and have opted for their own facilities top of the FT Law 50 ranking. in low-cost UK locations to offer volume or Traditionally, law firms have not been cost-effective legal services. One example is respectful of the talents of the other profession- Simmons & Simmons’ Bristol office, another als working in their businesses. Empowerment is Ashurst’s Glasgow facility. But more inter- has been hard won. Mr Chamay is the first non- esting is how many firms are unbundling their lawyer partner in a magic-circle law firm – one services to deliver them more cost-effectively. of the top four UK-based firms. “I have had a The need for flexible, cheaper legal services driving passion to reduce that line between has driven the exponential growth of start-ups lawyers and non-lawyers,” Mr Chamay says. such as Obelisk, a company set up to enable But he admits that change has been incremen- working mothers to maintain a foothold in tal. “The legal profession is on a long journey their careers through short-term contract work of changing the way it uses non-lawyers. When in legal departments. After just two years, it you look at all these new models appearing, has 500 lawyers on its books. Berwin Leighton you can see that you will need professionals Paisner’s Lawyers on Demand, a flexible, legal who are not lawyers to drive that change.” contractor resource, was a pioneering win- The hallmark of Eversheds, another peren- ner of the FT client service award in 2008. It nial performer in the FT Innovative Lawyer has been emulated by others such as Pinsent reports, is its ability to utilise its internal busi- Mason’s Vario, set up in January 2013. ness professionals and collaborate with out- New delivery models may side agencies to encourage new be the most visible signs of the ideas. This is reflected in one of changes in the profession but ‘The explosion its latest alliances with Miami there are subtler indicators of of collaborative University on its Law Without how much the lawyers’ mind- Walls programme, which seeks set has changed. solutions to tap the creativity of young The 2010 edition of the FT law students about the future report was themed as the Col- means the of the profession worldwide. laboration issue. However, the profession is A result of more collabora- idea was ahead of its time, and tions by law firms with both the research team that year more open to lawyers and non-lawyers, could find few examples of internally and externally, is different partnering arrange- new ideas’ potentially a paradigmatic ments. Just three years later, shift in law firm culture. Cur- though, there are so many rently even internal collabora- examples of new collaborations that there is tion between partners in the same firm is not now a specific article exploring them. a default setting for firms. Getting partners to Collaboration is important because the law stop guarding their work is not straightforward has traditionally been a vertical profession in because of the way many firms compensate the sense that the career track is linear. Law- them and the fear felt by partners that if they yers tend to work in law firms with other law- share work they risk losing clients or personal yers, and then for lawyers at client companies. billings. “Partners are coin-operated,” is the A significant number often marry each other. complaint of one leading law firm’s chairman. The opportunity for exposure to new ideas and To get over this, some law firm leaders are now networking outside the profession is limited. consciously putting culture at the top of their But a 2002 Stanford Business School study of agendas for change. 750 of its MBA graduates showed that those with Simon Davies, the managing partner of Lin- horizontal network of peers were more likely to klaters, this year’s top-performing law firm in become successful entrepreneurs. Horizontal as the FT report, says: “We are focusing a lot on opposed to vertical networking is, say academic culture.” In particular, he adds, the firm is more commentators, more conducive to innovation. accepting of potentially winning strategies that The explosion of collaborative solutions also run the risk of failure. highlighted in this year’s FT report shows a For a high-performing, long-established law profession that is becoming more open to new firm such as Linklaters, this focus on creating ideas. Particularly significant this year is the the right cultural conditions for lawyers to take number of innovations that have been driven more risk and be more experimental is a reflec- by non-legal professionals working in law tion of the degree to which innovation has firms. For example, for the second year in a become embedded in the sector. row, the top 10 innovative individuals profiled in the report include a non-lawyer, Marc-Henri RESEARCH & AWARD SUPPORTED By Chamay, managing director of ebusiness at Allen & Overy. He has initiated many of the firm’s technology innovations for clients and

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Innovative Lawyers 2013

delivery models fIt to T survIve he Financial Times Innovative Lawyers report and awards are intended to showcase exceptions to the general rule that law Sticking to old ways of doing things is firms are among the most conservative entities known to business. To not change – their busi- unrealistic, especially when clients are ness model, their client service, their biscuits in looking at costs, writes Caroline Binham the meeting room – is generally viewed by firms as A Good Thing. Whether such a mindset is also good for clients is another question. Sometimes, how- ever, forces beyond the control of partnerships, law firm management, and consultancies bring change out of necessity. The financial crisis, which has dramatically and definitively affected law firms’ ways of structuring themselves, was such a force. The consequent loss of deals advice and so- called commodity work on financial products – for which firms could bill an army of junior associates and upon which firms were reliant – has had a fundamental effect on their profit- ability, which most have still not fully regained five years after the height of the financial crisis. The traditional pyramid structure of law firms – with a small number of highly paid partners sitting above larger numbers of junior associates – is increasingly threatened. This is principally because general counsel will not go back to paying by the hour or paying for associates’ on-the-job training now that they have seen the alternatives, which have become the norm since firms have been forced to com- pete on price as never before. Other developments such as the Legal Services Act have served as a catalyst for change in delivery models. The act makes the UK’s £25bn legal market one of the most lib- eralised in the world, enabling third parties to invest in law firms and allowing companies that are not law firms to offer legal services. While the majority of City firms publicly state that they will not take advantage of the act, privately they concede that it has made them think about how firms can be restructured. New entrants unencumbered by traditional partnerships can see that there are efficiencies to be made, which means law firms also need to adapt if they want to compete and survive. Dundas & Wilson has reverse-engineered the firm’s model in trying to work out what types of work should be done by what sort of lawyer: it makes no sense for an expensive partner to be billed out on work that could be done by a much more junior lawyer. This fundamental rethink applies to even the most traditional of firms. Ashurst, viewed as a

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● Most innovative law firMs in valUe resoUrCinG

Score City stalwart, has had to redesign the blueprint Axiom 23 A managed projects service line to unbundle and of how it delivers legal services. In a first for the execute large-scale, complex legal work and collaborate UK legal market, the firm has devised a new role with leading law firms. of legal analyst, an amalgamation of the work 22 A comprehensive smart delivery model combining tools done by paralegals and junior associates. The and flexible resources, allowing the firm to partner with analysts will specialise in document review for clients on fixed-fee arrangements. litigation and financial services work. The role’s Addleshaw 21 Reinventing the legal service delivery model through creation is a nod to the fact that traditional Goddard the detailed mapping of 45 core legal processes. career progression through firms is not appeal- Standout ing to every law school graduate. Eversheds 21 A service to help in-house legal teams identify recovery opportunities and transform from cost centres into Most notably, the 30 analyst positions revenue generators. that Ashurst wants to create are not based in but in Glasgow. The firm is opening a Baker & McKenzie 20 An online compliance resource to inventory and map laws and regulations affecting American Express’s law and business support office there, in a simi- global business. lar vein to those in Belfast that support Allen & Overy and Herbert Smith Freehills. The busi- Dundas & Wilson 20 A legal project management and organisational change programme for associates to transform behaviours and ness rationale for so-called near-shoring is sim- drive efficiency. ple, and has already been emulated across the Atlantic by firms such as WilmerHale, which Freshfields 20 CourtNav, an online diagnostic tool developed in Bruckhaus response to legal aid cuts, guiding litigants-in-person use lower-cost centres away from pricey east- Deringer through civil court procedures. coast offices to review documents for litigation. Latham & Watkins 20 A dynamic knowledge management system providing Simmons & Simmons has taken this a step Highly commended easier access to precedents and know-how. further. Rather than near-shoring discrete services such as document review, its Bristol Berwin Leighton 19 A legal process improvement approach using visual office is a mini version of its City one – just Paisner mapping tools to manage projects. cheaper. The Bristol office houses partners and NautaDutilh 19 A secure, cloud-based, automated document writing lawyers experienced in property, finance, litiga- programme for a financial institution client’s standard credit and security documents. ‘It makes no sense for Clarke Willmott 18 The human resources consultancy unit combines employment lawyers, HR consultants and an advocacy an expensive partner to unit to provide a fully integrated service. Fondia 18 A fixed-price suite of legal services for small and be billed out on work medium-sized enterprises.

that could be done by a Simmons & 18 A second UK office in Bristol is staffed by partners and more junior lawyer’ Simmons associates to service high-end legal work at a lower cost.

Commended Dundas & Wilson 17 A specialist team of paralegals is now part of the firm’s key value proposition in client pitches. The team’s work ranges from routine assignments to aspects of complex tion and employment law, with work done in transactions. London only when it has to be. One US-originated device gaining traction Mills & Reeve 17 An online automated agreement tool focused on the efficient in-house production of basic human resource in the UK is process mapping, part of the Six agreement documents. Sigma management technique made famous by General Electric in the 1990s and now enjoying Ashurst 16 A new centre in Glasgow incorporating business support and legal analysts. something of a renaissance. In the legal world, Seyfarth Shaw has evangelically taken up the Six Sigma message in the US – and previously vice providers: BlackRock was faced with the won an Innovative Lawyers award for its efforts. onslaught of regulatory change under the banner UK firms are catching on to process map- of the EU’s Alternative Investment Fund Manag- ping’s use: and Berwin ers Directive. It looked to Herbert Smith Freehills Leighton Paisner are among those that have for top-drawer regulatory advice, while Axiom created maps for complex legal procedures. executed this advice and project-managed the The maps are useful because they enable venture. The result was some £4m in savings firms to predict accurately how much time a compared with the cost of normal legal advice. particular litigation, say, may take, and which This melding of traditional firms with new kinds of lawyers it will require. This enables a ways of delivery could be the future. If savings firm to quote a realistic project fee to general are made while quality is retained, clients will counsels, who prefer such billing arrangements be very happy indeed with this change. to an hourly rate. Moreover, mapping is often done hand-in-hand with a particular client. RESEARCH & AWARD SUPPoRTED By This was particularly true in a ground-break- ing venture between a client, a traditional law firm, and one of the new breed of legal-ser-

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EuropE darIng to be When Fondia set out to break the mould of the law firm, it put being different at the heart of its business. The Finn- ish group has no partners and is based on a dIfferent shareholding structure that it believes fosters original thinking. Yet in spite of its unusual set-up, Fondia has Firms all over the continent are much in common with other European firms that are making innovation a central part of looking to remain competitive their strategy. While the UK’s top firms have during tough economic times tended to dominate legal innovation in recent years, the eurozone crisis has prompted many by moving away from tradition, continental European firms to raise their game. The result is that a growing number of writes Paul Solman firms, from the Nordic region to the Mediter- ranean, are using technology and imaginative approaches to client service to challenge the traditional image of a legal group. “We wanted to break the rules in the legal ● New Amsterdam: Dutch firm sector pretty broadly,” says Jorma Vartia, man- Houthoff Buruma is using the aging director of Fondia, “and the shareholding Netherlands’ reputation as a centre structure is one of the ways of giving all employ- of trade to win work from Asia ees the chance to own part of the company.” Like many countries, Finland has restric- tions on law firm ownership. Those that are members of the country’s bar association can only be owned by lawyers. But law firms can operate without being members of the bar association, and it is this rule that has allowed Fondia to broaden its ownership. The unusual arrangement has a limited direct impact on the organisation’s clients, Mr Vartia says. “We tell them about what we are doing, but I don’t think it directly affects their relationship with us,” he says. Nevertheless, the structure emphasises the firm’s mission to do things differently. One example is Fondia’s VirtualLawyer service, which provides free online legal information to anyone who registers on its website. “We first developed the tool for our own lawyers,” Mr Vartia says. “But we saw there could be benefits in opening it up to the public.” The service could help attract new business, Mr Vartia believes, but it also satisfies the firm’s desire to provide legal services to small compa- nies and start-ups. In Portugal, Vieira de Almeida is also using technology to spearhead its innovation. A cor- porate intranet provides a forum for partners and junior employees to share ideas. But the intranet is just part of a broader aim to adopt innovation as one of the firm’s core val- ues. This decision was part of Vieira de Almei- da’s strategic plan, says Paulo de Barros Bap- tista, a partner. “We reached the conclusion ►

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Innovative Lawyers 2013

EuropE

◄ that we needed to institutionalise the innova- we have done some mergers and acquisition tion concept,” he says. work,” he says. “But it is a large pond and there ‘Like many The firm created a structured programme are not many fish.” firms, we had to promote innovation that includes creativity Then the firm hit upon an alternative workshops and ideas campaigns. Even though approach. “China has invested a lot in African been looking it was introduced only in 2012, the approach infrastructure for a long time and it has always has already created important initiatives such been welcome,” says Mr Bosman. “But recently at the Chinese as the “A Step Ahead” programme, a contract the climate has changed, with some African market for a management service that helps clients control states questioning Chinese investment, so pro- and manage their commercial obligations over tecting investment has become important.” long time ... the life cycle of a contract. The Netherlands’ extensive network of “It is often difficult for junior lawyers to go to bilateral investment treaties (BITs) with African but it is a large partners with ideas, but the web system means nations can offer protection against risks such pond and there everyone can put ideas forward to be evalu- as expropriation. “These BITs are open to use by ated,” Mr de Barros Baptista says. “It is still in non-Netherlands companies,” Mr Bosman says. are not many its early stages, but people have accepted it “A Chinese company investing in an African well. People are able to spend time on it as if it nation can establish an entity in the Netherlands fish’ were billable hours for a client.” and get the protection of the Dutch BIT.” Meanwhile, Dutch firm Houthoff Buruma is This kind of lateral thinking is becoming using the Netherlands’ reputation as a centre of essential in the European legal market. trade to win work from Asia. China’s expand- Mr Vartia of Fondia says: “I don’t see how ing economy should offer a big opportunity, anybody [in the legal sector] could think they says Jaap Bosman, the firm’s chief commercial can survive without innovation, or rely on officer. “Like many firms, we had been look- traditional ways of doing things – there is no ing at the Chinese market for a long time, and longer such a thing as traditional.”

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EUROPEAN LAW

TAILOR MADE

During the economic crisis, law firms have come up with bespoke solutions to financial problems, writes Michael Steen

The popular image of the lawyer may be as more executor than innovator but it is exactly in times of crisis, such as the one that the eurozone has been immersed in, that legal imagination is most prized. Companies are much more risk-averse in times like these, but still need to invest in research and development. Governments find that they want to tap domestic retail investors and new foreign

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● Most innovative firMs in CorPorate law

Score Weil, Gotshal & 25 Devised a structure allowing Lion Capital to protect its Manges interests after its sale of a majority stake in Weetabix.

De Brauw 24 Advised ASML, a leading manufacturer of computer-chip Blackstone machines, on a novel customer co-investment programme Westbroek to fund research and development.

NautaDutilh 24 Acted for Intel in its investment to develop technology through a deal with supplier ASML.

Allen & Overy 23 Structured a novel twin-pronged public takeover offer to redomicile Egyptian company OCI to the Netherlands.

Standout Linklaters 22 Advised Glencore on its multi-jurisdictional merger with Xstrata to create a mining giant.

Norton Rose 22 Used a novel reverse locked-box mechanism to enable Fulbright Barclays’ African merger with Absa Group.

Sullivan & 22 Managed Coca-Cola Hellenic’s redomiciling involving four Cromwell jurisdictions, three listings and two exchange offers.

Ashurst 21 Advised William Hill on its simultaneous acquisition and buyout of regulated assets in the online gaming sector.

DLA Piper 21 Devised a deal structure for Discovery Communications’s acquisition in Eurosport.

Slaughter and 21 Structured a novel retention and incentive arrangement May for managers of Investec to take a 20 per cent stake.

White & Case 21 Helped Banco Itaú move operations to London in the UK’s markets for funding. Bad banks need to be set first cross-border merger by absorption. up to clean out the banking sector. Real estate Berwin Leighton 20 Synchronised the introduction and disposal of joint markets have been extremely jittery. Paisner venture partners in a giant regeneration project. In all these areas it has taken legal innovation Eversheds 20 Worked with a Dutch hospital to draft a novel “spend less to make many of the deals happen that have to earn more” contract for medical equipment. kept the eurozone going through the dark night of a recession that is only now showing signs of Linklaters 20 A combined corporate and litigation strategy to lead BP’s ending. An example is ASML, the Dutch maker withdrawal from its Russian oil and gas joint venture. of huge, car-sized precision photolithography Highly commended Norton Rose 20 Devised an innovative investment strategy for assets in machines crucial to the digital revolution. They Fulbright the renewables sector. cost €20m apiece and are used to etch the nano- Simmons & 20 Structured an unusually competitive process for the scopic circuitry on to silicon wafers in order to Simmons disposal of Veolia’s UK water business. manufacture computer chips. The company is at the sharp end of Moore’s Slaughter and 20 Devised a novel financing and distribution structure for May Talisman’s joint venture with Sinopec. Law – the prediction by Intel founder Gordon Moore that the number of transistors, and thus Uría Menéndez 20 Advised IssuerSolutions on new disclosure procedures for the raw computing power, of microprocessor Spanish tax-resident investors. chips doubles every two years. A&L Goodbody 19 Lead Irish counsel on Eaton Corporation’s migration to To keep up with the pace of that prediction, Ireland via the $13bn takeover of Cooper Industries. ASML’s lithography machines have to etch Freshfields 19 Structured a first-of-its-kind share swap for Abertis’s smaller and smaller circuits. Every now and Bruckhaus €2.5bn acquisition of a Brazilian highway concession. then this necessitates a step change in the tech- Deringer nology behind the machines. Matheson 19 Created an innovative tax structure for Eaton One such change is the shift to “extreme- Corporation’s takeover of Cooper Industries. ultraviolet lithography” that ASML has been working on for some time. Noerr 19 Creatively interpreted Germany’s new insolvency laws to Last year, in the midst of a very poor capital help Centrotherm retain its listing. markets climate, it decided it needed to turn Paul Hastings 19 Deployed a structure new to the German market to enable to its biggest customers for help financing the restructuring of commercial mortgage-backed the billions of euros required to continue the Commended securities. research and development of this technology. Skadden, Arps, 19 Acted for Renault-Nissan in the first non-Russian- The challenge for the company and Dutch Slate, Meagher & incorporated joint venture to own a controlling stake in a law firm De Brauw was creating a structure that Flom strategic Russian state asset. would allow Intel, Samsung and Taiwan Semi- Uría Menéndez 19 Managed conflicting Spanish and Colombian laws to conductor Manufacturing Company (TSMC) enable Cemex to list a subsidiary in Colombia. to invest in ASML and receive a shareholding to reflect their investment – without, crucially,

19 Innovative Lawyers 2013

EUROPEAN LAW

◄ diluting existing investors or dominating shareholder voting. The solution, announced with a $4.1bn investment in July from Intel, advised by NautaDutilh, with the other tech companies following later, was a combination of a syn- thetic share buyback and the use of a Dutch foundation structure that would allow the new shareholders to vote only under very restricted circumstances. It was a deal that needed to combine intimate knowledge of Dutch legal structures with cross-border know-how and co-operation. If the ASML deal was about creating a bespoke answer to a question posed by the difficult economic conditions caused by the cri- sis, the work done in Spain by law firms Cuat- recasas and Garrigues was right at the heart of the crisis. Garrigues helped the Bank of Spain and Frob, the state banking bailout fund, negotiate with Brussels to enable it to inject €100bn into the banking sector without breaking state aid rules. Later, fellow Iberian firm Cuatrecasas was charged with issuing €54bn in bonds from

20 Innovative Lawyers 2013

● Most innovative law firMs in finanCe

Score Sareb, the bad bank that succeeded Frob, to Linklaters 25 Drafted a consensual agreement using a "best claim" restructure the sector under very tight dead- approach to allow Lehman Brothers International lines. In the former case, Garrigues, with its (Europe) customers to recover $9bn. knowledge of the EU competition commis- Cuatrecasas, 24 Leading role in establishing SAREB, Spain’s “bad bank” sion in Brussels, was an essential intermediary Gonçalves Pereira and to restructure the banking sector. between the Spanish side and the Commis- sion, and the other two “troika” members, the CMS 23 Worked closely with Oil & Gas UK to develop decommissioning relief deeds, providing certainty of tax International Monetary Fund and the Euro- relief and attracting new investment. pean Central Bank. Cuatrecasas, meanwhile, had to help draft new Spanish laws and organ- Paola Leocani 23 Modified the Italian bond trading platform and Standout (White & Case, procedures to allow Treasury bonds worth €18bn to be ise the bond issuance in very short order. while at Allen & sold directly to retail investors. In Italy, Paola Leocani, then at Allen & Overy Overy) and now at White & Case, was behind the ini- Weil, Gotshal & 23 Produced a unique distribution plan to return assets to tiative that allowed retail investors to buy sov- Manges clients of MF Global UK in the first special administration ereign debt directly from the issuer, rather than under post-Lehman UK regulations. from banks, for the first time – in the process Sidley Austin 22 Successfully restructured the first commercial mortgage- setting a record for direct offers to retail inves- backed security to default at note maturity. tors by raising €18bn. The one country in the eurozone that has Allen & Overy 21 Facilitated Europe’s largest ever commercial mortgage- backed security restructuring for Deutsche Annington. ridden through the crisis relatively unscathed is Germany, where unemployment has remained Freshfields 21 Took a creative and commercial approach on behalf of near record lows and borrowing costs are rock Bruckhaus bondholders to ensure implementation of Deutsche Deringer Annington's restructuring plan. bottom. But in 2012 Deutsche Annington, the coun- Loyens & Loeff 21 Advised on the first ever sukuk issuance by a German try’s largest privately owned residential land- and Vinson & corporate, and the first globally to securitise intellectual property rights. lord, was faced with €4.3bn of maturing debt, Elkins

Europe’s largest securitised loan, in market con- Highly commended Shearman & 21 Restructured a Greek company's high-yield notes using Sterling an innovative ring-fencing covenant to protect money ‘Deutsche Annington generated by its international operations. Berwin Leighton 20 Devised a winning credit bid structure for TPG and Paisner Patron Capital in the restructuring of the Opera Finance could have gone commercial mortgage-backed security.

into bankruptcy, Garrigues 20 Crucial role advising Spain in negotiations with the EU to with unpredictable enable a €100bn loan to recapitalise Spanish banks. Milbank, Tweed, 20 Structured the Sadara Project sukuk using a novel split consequences ’ Hadley & McCloy closing mechanism. Paul Hastings 20 Advised on the first agency commercial mortgage- backed security since the 2008 financial crisis. ditions that would not support refinancing in spite of the company’s continued solvency. Pinsent Masons 20 Devised an electronic platform for the efficient transfer The group needed a means of restructuring of customer assets between banks. the debt, a task considerably complicated by Skadden, Arps, 20 Novel cashless rollover for TMF Group to exchange the fact that the notes were held by 300 credi- Slate, Meagher & collaterised loan obligations for new high-yield notes. tors, in different jurisdictions and split into six Flom different classes with different payment pri- Slaughter and 20 Implemented a new capital structure and unique "dark orities. Any single small noteholder could thus May green" trading platform for energy company Drax Group. effectively derail an attempt to restructure. A&L Goodbody 19 Facilitated the first transfer of insurance policies from The solution alighted upon by Freshfields, Ireland to an insurer outside Europe.

acting for the creditors, and Allen & Overy, Commended for Deutsche Annington, was to persuade an DLA Piper 19 Advised Agility Trains on its £4.5bn Intercity Express English court to approve a deal under which all Programme. noteholders would be treated as a single class Herbert Smith 19 Structured the Yuzhno-Russkoye gas field financing by – an innovation in implementation rather than Freehills synthesising English and Russian law structures. notion that took a year of work to pull off. The success of the plan was critical. With- Roschier 19 Worked on a first debt-to-equity swap for Swedish high- yield bonds and equity securities. out it Deutsche Annington could have gone into bankruptcy, with unpredictable conse- Slaughter and 19 Advised on the pivotal aspects of CEMEX's quences for what were at the time extremely May global refinancing. nervous financial markets. The plan worked Vinson & Elkins 19 Advised Uz-Kor Gas on a multi-sourced financing for a for Deutsche Annington. But it also serves as $4bn gas and petrochemical complex in Uzbekistan. illustration of how such deals, and their deal- White & Case 19 Led the transfer of ownership of onshore oil assets in makers, prevented further calamities while the Nigeria to a local company. eurozone was being sorely tested.

21 Innovative Lawyers 2013

pioneers More for Less

Law firms are accelerating the pace of change by constantly rethinking their model to separate process from value, says Neil Rose

In the past two years alternative busi- ness structures (ABSs), enabling non-lawyer ownership and management of law firms, have been the catalyst for a new breed of entrepre- neur eyeing up the £25bn UK legal market. Numerically, ABSs are still a relatively small phenomenon – about 220 have been licensed, against about 11,000 law firms in England and Wales – but they loom large in many minds because of the size of the new competition they are bringing, and more generally for the mood of innovation that others are looking to exploit without the need for an ABS licence. A good number of the ABSs approved so far are small firms bringing a non-lawyer mem- ber of staff into ownership – a development unthinkable just a decade ago. But among those 220 are some big names. The Co-operative was the first mover, but now former Dragons’ Den star James Caan and BetFair founder Bert Black have invested in law firms – Knights and Bril- liant Law respectively. Some of the country’s largest insurers – including Direct Line, Admiral and Ageas – have formed ABS joint ventures with law firms, and other corporate names such as the AA, Saga, the Stobart Group and BT are making their play too. Most of these are consumer-driven enter- prises, although BT captures another strand of these changes, turning a cost centre – the in- house legal team – into a profit centre by offer-

22 Innovative Lawyers 2013

● LEGAL INDUSTRY PIONEERS

Score ing services, mainly around motor claims, to radiant.law 24 A new model combining technology, legal process other companies. Carillion Advice Services is outsourcing and a pure fixed-fee service. doing something similar by offering support for lower-level legal matters to both companies New Street Solutions 23 A standalone business set up by to deliver efficient contract and due diligence services. and law firms, although it is not an ABS because

of the nature of the work it does (a lot of legal Standout Obelisk 22 Built on experienced and City-trained lawyers work is outside the regulatory net). working flexibly, the business has seen rapid growth. The big corporate firms are not yet engag- Addleshaw Goddard's 21 A team of nearly 100 paralegals and graduates has ing with ABSs – they do not see the need for Transaction Services become a key part of the firm’s offering to clients. external capital while hostility to the concept Team in countries such as the US and Germany could make life difficult internationally. Instead they Brilliant Law 21 Adapting a retail model to offer a range of fixed- price business legal services online. are responding to the economy and what legal futurist Professor Richard Susskind describes Gunnercooke 21 A high-end virtual law firm offering lower-cost as the “more for less” challenge when finding advice on complex mid-sized litigation and new ways of operating. corporate transactions. That has particularly manifested itself in two 21 With five alternative business structure (ABS) ways: large practices finding lower-cost ways licences, a series of lateral hires and acquisitions, to handle work that does not require partner- the firm has passed £200m in turnover. level brainpower, such as Berwin Leighton Pais- Rocket Lawyer 21 The US technology business launched its online ner’s new “On Call” service line for Lawyers on Highly commended document creation service in the UK backed by a Demand, or the transaction services team cre- referral network. ated by Addleshaw Goddard; and the growth of Wiggin 21 The media boutique is pursuing growth through “virtual” firms comprising senior lawyers work- non-legal satellite businesses offering intellectual ing remotely with sophisticated IT but without property and video-on-demand services. the overheads of shiny city centre offices. Kent County Council’s 20 A public legal provider run along private-sector But the big firms need to be looking over their Law:Public lines, it has generated more than £3m of profits. shoulders; Riverview Law has been one of the Parabis 20 An umbrella group providing legal services to large most eye-catching new entrants to the market, UK insurers, the company has recently diversified. offering smaller business customers fixed price annual contracts and larger companies a new Slater & Gordon 20 The publicly traded law firm has used its access to model of outsourcing without the need for pan- capital to fund an series of acquisitions. els of law firms, again at a fixed fee. The Co-Operative 20 Recently expanded into family law and embarked on What marks out many of these new ventures Legal Services a high-profile marketing campaign. has been the ability to rethink the law firm model Berwin Leighton 19 A new cloud-based model allows the secondment – Riverview has no partners, no billable targets, Paisner's Lawyers on business's lawyers to work flexibly from remote and recruits people for jobs previously unknown Demand ‘On Call’ locations. to the law, such as project manage or data ana- BT Law 19 An ABS-licensed, wholly owned subsidiary of BT set lyst. They run themselves as companies. up to provide legal services to other companies. Outside the largest consumer practices such as Slater & Gordon – the fast-expanding UK arm Commended Keystone Law 19 Using technology and creative marketing to grow a dispersed firm of senior “consultant lawyers” for of the listed Australian law firm – that want to commercial clients. position themselves alongside The Co-operative, the response from firms has been sluggish. Knights 19 External investment and structural changes have positioned the firm for rapid growth. It is too early to judge the success of the new entrants and models, and of the liberalisation Riverview Law 19 Fuelling growth through an association with law agenda more generally, but the pace of change firm DMH Stallard and a shift in focus to large corporate clients. in the past three years or so has been breath- taking compared with the previous 30 (or even Evident Legal's 19 A platform to deliver online content and tools 300). The profession is slowly waking up to the Simplify the Law allowing companies to "self service" basic legal requirements. need to separate process from value, to focus on what lawyers are really needed for. There are some other clear trends. Law is now being much more actively marketed – this the flagship of new entrants to the market. is expected to increase the overall size of the ABS is no panacea. An Aim-listed online con- market to the benefit of all. Unbundling – where veyancing ABS called In-Deed bought a law firm lawyers offer limited retainers to help people as part of its bid to change the way that market conduct their own cases – is a fast-growing operated and threw in the towel earlier this year, phenomenon, especially in the area of family selling back the law firm to its founder for £1. law following the removal of public funding for ABS is also not a strategy in itself. It is a means RESEARCH & AWARD SUPPORTED By divorce earlier this year. The pressure on the to an end. That end, almost certainly, will leave partnership model, confusing ownership with lawyers in a very different market to the one they management, is growing. Fixed fees are usually inhabit now.

23

Innovative Lawyers 2013

LEGAL INNOVATOR OF THE YEAR

PILLars of creatIvIty and vIsIon

Candidates share an ability to turn client needs into groundbreaking initiatives. Photographs by Charlie Bibby

Do you have to be a lawyer to lawyer or not, who had been a model of inno- win the FT Innovative Lawyers Innovative vation in the legal world. Individuals award? In the end, Mr Chamay came close but not This was the question facing the judges as quite close enough. we considered the case of Marc-Henri Chamay Our winner is Graeme Nuttall, head of the of Allen & Overy. While Mr Chamay has been tax practice group at Field Fisher Waterhouse. at Allen & Overy for 12 years, he is not a lawyer. He has the distinction of having a review He began his career at the firm running named after him. The Nuttall Review was technology projects. Today, he is chief execu- commissioned by the UK government to help tive of its Derivative Services and managing encourage employee ownership of businesses. director for ebusiness. He has created an Mr Nuttall’s recommendations have already online legal risk management service used by led to tax changes. As the capitalist system more than 160 institutions – and the judges felt struggles to regain trust and credibility after he certainly was a candidate for our award. the financial crisis, we feel that Mr Nuttall is Indeed, as chair of the judging panel, I felt playing an important part. very strongly that we had to consider anyone, Michael Skapinker

26 Innovative Lawyers 2013

wINNER in the area, he has built his tax changes were made via a role in setting the agenda GRAEmE NuTTALL, expertise motivated by a private member’s bill. –to develop an important, pARTNER, FIELd FIsHER belief in the importance and As a result of his review, the multibillion-pound segment wATERHOusE potential of the model for UK UK government has accepted of the UK economy. business. a number of key recommen- The Nuttall Review has Graeme Nuttall heads the Mr Nuttall has a long dations, amended the Compa- been described by the indus- firm’s tax practice and is the history of driving change in nies Act 2006 and confirmed try as “pivotal” and is credited recognised leader in the field the sector. He was appointed two new tax exemptions in for creating the road map as of employee ownership in the to the Treasury Employee July this year. In addition, well as the political appetite UK. In 2012 he was asked by Ownership Advisory Group to £50m was allocated in the for change. One client said the government to prepare develop the UK’s share incen- recent Budget, with a line “Graeme almost single-hand- an independent assessment tive plan (SIP) and enterprise naming Mr Nuttall, to extend edly transformed that politi- to guide the first UK policy management incentives (EMI) employee ownership. His cal mood into something on employee ownership – the arrangement, and drafted influence is reaching beyond tangible. The review, recom- Nuttall Review was the result. the employee share schemes the legal profession –where mendations and outlines are With 20 years’ experience bill in 2001-02, the first time he is playing an essential an absolute game changer.”

27 Innovative Lawyers 2013

mARc-HENRI cHAmAY, mANAGING dIREcTOR, EbusINEss, ALLEN & OVERY

In his 12 years at Allen & Overy, Marc-Henri Chamay has transformed his role and, in the process, is changing perceptions about the contri- bution that non-legal profes- sionals can make to law firms and their clients. Swiss-born and an engi- neer by training, Mr Chamay designed and launched the first financial internet and intranet products at infor- mation company Reuters, and created the ecommerce division for book supplier Blackwell’s. In 2001 he joined Allen & Overy to run technology projects and was involved in early alternative resourcing initiatives. Convinced that, to instigate real change, he needed to work at the revenue-generating front end rather than behind the scenes, in 2002 he took on a role to launch Derivative Services as a standalone business. Rulefinder, netalytics and diligence are just some of Allen & Overy’s 11 flagship Derivative Services products that have featured in editions of this FT report since 2007. With more than 160 clients and 6,000 users, it is now a multimillion-dollar business that has in turn contributed to Allen & Overy’s reputation as an innovative and techno- logically advanced law firm. In recognition of Mr Chamay’s contribution, the firm invited him to go through the partnership selection process. He now holds a partnership equiva- lent status, the only non-legal professional to hold such a position at the firm.

28 Innovative Lawyers 2013

LEGAL INNOVATOR OF THE YEAR

ANdREw cHAmbERLAIN, pARTNER, AddLEsHAw GOddARd

Believing that the traditional model was broken, Andrew Chamberlain began to change the way legal services were delivered within his practice area of employment law and is now rolling these initiatives out firm-wide. In the past year he became head of client delivery and is a driving force behind a comprehensive re- engineering of how services cHARLEs JAcObs, pARTNER, pAuL dAVIEs, pARTNER, are delivered to clients. ANTÓNIO dE mAGALHÃEs LINKLATERs mAcFARLANEs Mr Chamberlain, who has cARdOsO, pARTNER, VIEIRA been described as a change dE ALmEIdA Charles Jacobs grew up in Paul Davies has drawn on his catalyst by his firm and cli- South Africa before moving established environment and ents, says the revamp started António de Magalhães to the UK and joining Linklat- natural resources legal prac- two years ago with the recog- Cardoso’s work on patent ers as a trainee. He started tice to create new products, nition that most legal services enforcement in the Portu- acting for large mining com- forge different kinds of rela- are processes. This led the guese administrative courts panies and has built a leading tionships with other advisers firm to map about 100 pro- features in the Dispute Reso- reputation in the industry. He and accelerate Macfarlanes’ cesses, including more than lution category in this year’s heads the firm’s global mining entry into new markets. 45 core legal processes, and awards. When pharmaceuti- and metals team and has also He recently created a com- create maps that are at the cal companies were faced led some of the largest public prehensive risk management heart of its service delivery. It with being unable to enforce mergers and acquisition deals flood report working with was the first UK law firm to their patents in Portugal due in Africa, including advising Argyll Environmental con- do this on this scale, and won to an overloaded Commercial Absa on its recent acquisition sultants. In 2008 he worked Addleshaw Goddard the Value Court, he developed the idea of Barclays’ African banks. with WSP Environmental on Resourcing award in 2012. of using Portugal’s Adminis- Last year, he advised Glen- the introduction to Europe In the past three years, he trative Courts instead. core on its $70bn all-share of Active Transfer, a liability has built the firm’s Transac- The strategy solved the merger with the FTSE 100 transfer product from the US. tion Service Team up from a gridlock and directly influ- mining company Xstrata. Mr External environmental bright idea and five staff into enced a change in Portuguese Jacob’s tactful, commercial advisers praise his “willing- a service centre that employs law and the creation of a and insightful approach was ness to invest his time, focus, 95 paralegals and support special court for intellectual essential to completing the networks and seemingly staff. The centre is developing property right cases to settle transaction. Clients involved limitless energy” and an abil- a range of project manage- patent disputes in Portugal in the deal say that he is an ity to bring commercial legal ment services alongside more effectively. “exceptional” person – an advice, vision and an under- technology-based services. Mr Cardoso, described by extroverted team player who standing of shifting market The TST launched a legal clients as “tenacious, dili- brings a breath of fresh air to dynamics to the creation of service apprenticeship pro- gent and creative”, has been mergers and acquisitions. innovative solutions. gramme in August and plans involved in a number of firsts. Mr Jacobs also advised He was key in the London to offer a seat to legal trainees In the mid-1990s he created Glencore on a convertible firm’s expansion into China, at the firm. a legal structure to allow the bond issue in 2009 and its where environmental law government to enter into a listing on the Hong Kong and issues are increasingly impor- deal with the pharmaceuti- London Stock Exchanges in tant, creating a flow of busi- cal industry to limit public 2011. ness to other practice areas. expenditure on medicines. He He has a history of guiding was also involved in draft- companies through critical ing the contracts for the first phases of growth. In 1994, privately financed railway in he worked with Gencor to Portugal. He founded Vieira acquire the Billiton business de Almeida’s intellectual from Shell, then on the spin- property practice and has off, redomicile and IPO of built it into one of the firm’s Billiton, and on its dual-listed most successful. merger with BHP in 2004 to create the world’s largest min- ing company, BHP Billiton.

29 Innovative Lawyers 2013

LEGAL INNOVATOR OF THE YEAR

pETER mARTYR, GLObAL cHIEF ExEcuTIVE, NORTON ROsE FuLbRIGHT

As managing partner of Norton Rose, Peter Martyr has led a number of bold strategies that have made the firm stand out in a market segment with tough competi- tion. Each initiative has taken leadership and conviction in the face of market cynicism and the profession’s inherent resistance to change. His was GuY O’KEEFE, pARTNER, one of the first of the top-10 cLAudIA pARzANI, UK firms to focus on an pARTNER, LINKLATERs industry-sector strategy. Guy O’Keefe’s work leading In May 2009, the firm Italy has one of the poorest the refinancing of the Drax avoided making redundan- records in the EU for female Group power company fea- cies by changing the terms of board membership, with tures in the Finance category employment for more than women holding only a small of this year’s FT report. 90 per cent of its global work- proportion of board and sen- The capital restructure saw force for a 12-month period. ior management positions. the first European imple- This allowed staff to be put Claudia Parzani has been at mentation of a new “dark on to four-day weeks or leave the forefront of a number green” trading platform to to accommodate fluctuations of Linklaters initiatives to hedge coal, carbon and power in demand. The strategy has promote diversity within the products. Clients said he did been commended by clients. profession and in business a “cracking job” bringing More recently, Mr Martyr more broadly in Italy. together diverse funding from has overseen Norton Rose’s Ms Parzani worked with leading banks, the Treasury transformation into a global GE Capital and Egon Zehnder and the first investment from giant. After acquisitions in to develop the idea for Valore the Green Investment Bank. Australia, it became the larg- D, launched in 2009. It is the Mr O’Keefe has led numer- est law firm by head count largest organisation support- ous complex and innovative in Asia until competitors fol- ing women’s leadership in financing transactions. He lowed suit. Under a Swiss Ver- Italy, with 80 corporate mem- advised Punch Taverns on ein structure, similar to that bers including many of the a series of whole-business used by Big Four accounting country’s largest companies. securitisations, and recently firms, it has grown from the Ms Parzani, also a leading advised on the first issuance 67th largest law firm in the capital markets lawyer, then of a residential mortgage- world by revenue to a top-10 co-created the In the Board- backed securities transaction position in 2013. In June, it room initiative to provide involving five currencies, completed the most impor- training and skills to prepare closing over five time zones. tant part of the global puzzle women for boardroom posi- Mr O’Keefe has a PhD in by merging with US firm tions. Italy recently passed a quantum physics and had a Fulbright & Jaworski to form regulation requiring com- previous career as a research Norton Rose Fulbright. panies to build towards one- scientist. During the financial third female directors over a crisis, he was given the lead nine-year period, making this role advising the government kind of training essential. on Bradford & Bingley and Ms Parzani also created on separating Northern Rock Breakfast@Linklaters, a into “good” and “bad” banks. networking and talent- This had never been done in promoting forum for Italian the UK and required a unique businesswomen, which is combination of statutory and featured in this year’s Client contractual solutions. Service category. Feedback on the initiatives credits Ms Parzani’s leader- ship, enthusiasm and drive. She was elected chair of Valore D in July 2013.

30 Innovative Lawyers 2013

TIm sTOcKs, is now a rising standalone but clients continually high- The idea and the approach pARTNER, business. light these areas as those in of New Street Solutions are TAYLOR wEssING Mr Stocks has an estab- need of most change. considered by many industry lished legal practice and While other firms have commentators to be at the New Street Solutions was set heads the firm’s Financial struggled to make improve- cutting edge of legal service up as a business to deliver Institutions & Markets group. ments around the edges, Mr delivery. It is not just a new legal due diligence, contract However, seeing a client Stocks established a start-up technology, but a response management and data min- need and an opportunity for and navigated through the to clients’ demand for both ing services to clients. his firm, he approached the financial, corporate and high-end legal advice and Tim Stocks developed the problem as an entrepreneur. marketing challenges to build increasing efficiency. It has idea, saw it through incep- Law firms have traditionally a business that is considered been shown to provide up tion, and partnered with struggled to make corporate a pioneer in legal services. He to 60 per cent cost savings technology provider Swiss due diligence and contract now serves as the chairman compared with traditional Post Solutions to build what management more efficient of the new business. methods of contract review.

31 Innovative Lawyers 2013

Future leaders room at the top

With the rise of the mega- firm, training partners in leadership skills will become increasingly important, writes Sarah Murray

32 Innovative Lawyers 2013

● MOst innOvative law firMs in COrPOrate strateGY

Score Fondia 25 A strategy that breaks with traditional law firm culture to transform the experience of clients and staff.

Axiom 24 A strategy to reassess the industry's approach to contracts by treating them as a separate legal

Standout discipline, regardless of purpose.

Vieira de Almeida 22 A talent management strategy to identify and develop & Associados individual lawyer innovation.

Hogan Lovells 21 Predicted the emerging payments services market to position its cross-practice team as the go-to experts.

Latham & Watkins 21 Marketing initiatives devised in collaboration with a mobile apps agency to create a new legal business.

Loyens & Loeff 21 A one-day brainstorm session of the firm's 700 fee earners to shape its future business model.

Addleshaw 20 A client-focused strategy that combines adaptable Goddard delivery models, flexible and value based pricing and a more collaborative culture

MAQS Law Firm 20 A coaching programme for all partners that encourages them to play only to their strengths and allies individual development to the firm's objectives.

RPC 20 A counterintuitive strategy to focus on high-end growth in the downturn has seen the firm win higher-value work.

Weil, Gotshal & 20 A successful strategy to develop the London office of Manges a US law firm into a market-leading business through hiring, retention and a different approach to clients.

Wolf Theiss 20 A multidisciplinary property service for the financial industry in connection with non-performing loans and distressed assets.

Highly commended Axiom 19 Beginning to reinvent the lawyer's career path through its different business model.

In discussions about law firms and Eversheds 19 Strategic support of Miami University's Law Without leadership, the phrase “herding cats” is some- Walls venture that brings together students, academics, lawyers and clients to develop the industry's future. times used. But if autonomy, individuality and personality were the old way of manag- Freshfields 19 Building a global investigations practice through cross- ing, a new model is emerging as firms grow in Bruckhaus discipline expertise and insightful thought leadership. Deringer size and complexity, and clients increasingly seek strategic advisory services from their Hogan Lovells 19 A comprehensive and intensive training programme lawyers. The question for firms is how best to focused on preparing high-potential lawyers to become effective future partners. develop the skills they need to operate in this new environment. Linklaters 19 A new framework to change the approach of individual First, however, law firms have to work out lawyers to corporate social responsibility. what leadership means to them, as their struc- Vieira de Almeida 19 A strategic programme that encourages creativity by ture has not favoured complex chains of com- & Associados consciously putting culture, knowledge and ideas at the mand. With each partner responsible for run- heart of the firm. ning his or her part of the business, hierarchies Allen & Overy 18 Unusual in-depth investigation and hard data have been relatively flat, giving leadership in collection formed foundations for the stress testing, the legal sector a different flavour from that of benchmarking and interrogation of its strategy. other organisations. Bird & Bird 18 Development of international cross-sector and legal Traditionally, firms simply promoted char- practices to become the go-to firm for data centres. ismatic individuals who were big fee earners, rather than developing a pipeline of leaders. Gómez-Acebo & 18 Expansion strategy focused on the client's needs, And those who were promoted received little Pombo investment in the next generation of lawyers and international offices. training in how to manage. This is all changing. “The idea that you Houthoff Buruma 18 An experiential incubator programme matching smart could become a partner and then work out Commended associates with Dutch start-ups. what you need to do just doesn’t happen any NCTM 18 Successful creation of a new team for food and more,” says Ruth Grant, people development drink businesses to develop the firm's focus on the partner at Hogan Lovells. At her firm, she says, agriculture sector. the emphasis is on developing an individual’s career path, from learning how to be a good ►

33 Innovative Lawyers 2013

● MOst innOvative law firMs in internatiOnal strateGY

Score ◄ lawyer to preparing to become a partner. Houthoff Buruma 23 Encouraging Chinese businesses investing in Africa to use Dutch bilateral investment treaties. Gómez-Acebo & Pombo, the Spanish firm, has a similar approach to developing the next gen- Macfarlanes 21 Building a China business through sharing eration of leaders. environmental law expertise.

Standout While this is commonplace in the corporate Herbert Smith 20 Going for a full-equity merger rather than the usual sector, professional development programmes Freehills Swiss Verein route to create a UK-Australian firm. are relatively new to some law firms. However, Miranda Correia 20 Fast-tracking its connection into sub-Saharan Africa to in an increasingly competitive environment, Amendoeira build a presence to support UK and US firms. lawyers are recognising that they need leader- ship and project management skills. Slaughter and May 20 Building an Africa business through providing extensive support to local firms to help them modernise. “Law firms are having to manage themselves far more as businesses than they did a genera- Taylor Vinters 20 Coming out of its Cambridge base to use its tech focus tion ago,” says Ms Grant. to build links with Singapore and win clients. One of the factors driving this is the advent White & Case 20 Building its English Law capacity around the world to of the mega-firm, with mergers turning some challenge UK law firms in international work. practices into large global businesses – as in the Allen & Overy 19 Building close relationships with worldwide law firms case of DLA Piper and Hogan Lovells, both the through a suite of activities. result of tie-ups between US and UK firms. These new organisations require the kinds Norton Rose 19 Swift creation of a global law firm has allowed it to add Fulbright a vital US component to its Swiss Verein. of leadership skills multinational companies have long been used to fostering. PLMJ 19 Expansion to a presence on five continents. In some cases, leadership development is L&E Global 18 An unusually focused network of employment boutiques. part of the battle to maintain profitability, Commended Highly commended particularly in some of Europe’s weaker econ- Linklaters 18 Pursuing an alliance route to international expansion. omies. Portuguese firms, for example, are

34 Innovative Lawyers 2013

● MOst innOvative law firMs in Client serviCe

Score facing pressure from clients to cut fees, creat- DLA Piper 24 Set up a large, dynamic in-house lawyer network that ing a need to do more with less. gives clients training on the law and their careers. For this reason, Lisbon-based Vieira de Almeida has a strong focus on developing lead- Vieira de Almeida 23 Created a contract management service that allows clients to derive real value from their business deals. ers who can innovate to help the firm differen- & Associados tiate itself in a competitive market. “We need Addleshaw 22 Set up a leadership training programme for the rising to provide more value to clients and this kind Goddard stars of in-house legal teams. of value is underscored by innovation,” says Baker & McKenzie 22 Designed a global proactive risk-management tool that Susana Almeida Lopes, the firm’s corporate Standout prepares companies for dawn raids. services director. If economic constraints in some markets Linklaters 22 Devised a specialised training programme for high- are pushing firms to find ways of developing profile women, to encourage gender diversity in Italian innovative leaders, the expansion of legal ser- boardrooms. vices is another catalyst for change. While in Eversheds 21 Pioneered a pre-emptive assessment tool that uses the past lawyers often acted as passive counsel- big data to manage reputation risk across multiple lors, they now have to be able to take the lead jurisdictions. in advising clients. “Clients expect lawyers to Macfarlanes 21 A risk-management flood report, created in understand their business and adopt a com- collaboration with Argyll, that provides comprehensive mercially focused approach,” says Ms Grant. “It advice for property developers. is a changing relationship and the expectations Pinsent Masons 21 Collaborated with Balfour Beatty in creating a single- are higher.” supplier, fixed-fee arrangement resulting in improved In response, professional development in time and team management. legal entities is going far beyond what once was Simmons & 21 Developed an online toolkit that summarises complexities largely a case of building up legal skills. The Simmons of the Alternative Investment Fund Managers Directive, helping clients implement the directive effectively. training Axiom gives its lawyers, for example, Highly commended provides a mixture of the legal and business TLT 21 Represented UK automobile distributors against skills it believes will help them become prob- anti-competitive manufacturer practices and played a lem solvers and project managers who can leading role in the European Retail Action Plan. work more collaboratively with clients. Allen & Overy 20 Kick-started an entire market by creating a project As the client-lawyer relationship evolves, finance product, in collaboration with ING, for some firms have gone further, taking leader- institutional investors. ship development outside their own four walls. DLA Piper 20 Established a programme for key establishment figures Through its Global Fellowship initiative, DLA in emerging markets to help them modernise. Piper is using its lawyers and senior executives Nabarro 20 Designed a networking programme for in-house lawyers to advise and train emerging leaders in public- focusing on thought leadership and career development. sector organisations – including government officials and regulators – and corporations. Slaughter and May 20 Designed a user-friendly iPad app and e-book digital Addleshaw Goddard has created its Client version of the Takeover Code index. Development Centre from which it delivers Addleshaw 19 Devised a training programme for junior African cross-sector leadership training. Launched last Goddard lawyers in Diageo to improve commercial awareness. year, the Future Leaders programme brings together rising stars from clients across the Axiom 19 Developed a tool to collect and leverage contract data to improve the efficiency and transparency of in-house UK for a five-day course (in three sessions legal teams. spread over the year) to help them prepare for leadership positions. While it might seem odd Garrigues 19 Designed a technology tool to help clients monitor, prepare and respond to criminal risk in business. to spend money beefing up the skills of those outside the firm, both these programmes are Baker & McKenzie 18 A particularly effective client feedback programme to driven partly by a desire to improve prospects introduce new services and improve service levels. for long-term profitability. Commended Dundas & Wilson 18 Developed a report that analyses the full added value For DLA Piper, building legal capacity in the firm delivers to its clients. emerging markets also presents an opportu- nity to develop relationships in places where, PLMJ 18 A litigation assessment system that limits court for now, the firm has no offices or connections. involvement for clients through more detailed risk analysis and early settlements. As well as helping the firm stand out in a crowded market, offering leadership pro- Schultze & Braun 18 Created a blended security service for a German bank to grammes to clients is a way for Addleshaw improve consistency and efficiency across jurisdictions. Goddard to generate loyalty, says Tim Ham- Skadden, Arps, Slate, 18 Provided valuable input into developing case ilton, the corporate partner who led the pro- Meagher & Flom management software in the largest ever private dispute. gramme’s development. “It is about building long-term relationships with individuals Taylor Wessing 18 Created a free online portal that encourages proactive who at some point may turn to us for help,” risk management through the use of interactive tools. he says. “We want to be seen as the firm that Ţuca Zbârcea & 18 Published the first case law directory on the financial invests in relationships.” Asociaţii corrections in EU-funded projects in Romania.

35 Innovative Lawyers 2013

FOREIGN EXPERTISE

Cross-border CounseL

Knowing how to deal with local governments gives firms an edge when negotiating in difficult jurisdictions, writes Jane Croft

As economic growth in company has transferred its listing to a more Europe has stagnated, many companies have developed country. The unusual two-pronged looked to expand in faster-growing emerg- transaction proved controversial in Egypt as ing markets. In these riskier jurisdictions, law it was interpreted by some commentators as a firms have become trusted advisers to their cor- decision to seek safer shores after the political porate clients, not only helping them to invest upheavals of the past two years and the rise of money safely but also helping them to extricate an Islamist regime. themselves when political risks increase. Orascom Construction – which retains its Earlier this year, Orascom Construction Cairo stock market listing and headquarters Industries transferred to a new domicile in the and 45,000 staff in Egypt – argued that the deci- Netherlands – the first time a Middle Eastern sion to list on NYSE Euronext Amsterdam ►

36 Innovative Lawyers 2013

● Atlantic becomes narrower day by day

Ten years ago, US law 30 per cent revenue rise in are our day-to-day direct These mergers are firms with an office in the UK in 2012, boasting an competition,” says Charles not full profit-shares, London faced snobbery average profit per equity Martin, senior partner and while critics at more from the locals. partner of £2.5m – well above of Macfarlanes – which traditional partnerships The US firms were, of most of its magic circle rivals. works closely with a few may say that one single course, good – whisper it – Big-ticket litigation was leading US firms that have profit pool is vital for in their own way, perhaps one reason for its success no (or limited) English-law aligning lawyers around for a touch of legerdemain after it represented Oleg capability. “You get the sense the world, the firms in in the high-yield market. Deripaska, the Russian that the good ones will die question point out that But if you needed billionaire, against a $1bn in a ditch for their clients; this issue never held back representation in claim filed by Michael that sets the standard for the large accountancy serious litigation, then Cherney, his former associate, all of us on client service.” firms, which structure naturally you’d seek out represented by Dechert. Perhaps a bigger question themselves in a similar a magic circle firm. The matter was eventually is whether geographical fashion, and that clients No longer. Cast an settled confidentially. affiliations will mean much really don’t care. eye over the European US firms do not, of course, in the future. Certainly, With a similarly Innovative Lawyer approach the London market leaders of elite firms from arranged merger between rankings, and US firms in a homogenous fashion: both sides of the Atlantic King & Wood Mallesons, have become prominent high-yield expertise using bristle at being described as the Chinese-Australian in all categories, from US law still serves Cravath a “London-headquartered” hybrid firm, and SJ corporate to financial very well, for instance; while or as a “US firm” rather Berwin, a London stalwart, products to litigation. firms such as White & Case than an international one. announced this summer – Amid the stagnant and Debevoise & Plimpton The last two years have and management openly results of the past have an established and also seen a number of stating they were hunting reporting season, a US wide English-law presence. transatlantic tie-ups, such for a US partner – perhaps firm’s London office has “US firms are often very as that between Norton both the US and the UK defied the gloom: Quinn effective in completely Rose and Fulbright & firms should ask where the Emmanuel Urquhart & welding themselves to their Jaworski, or of Hogan & new rivals may come from. Sullivan posted a near- clients – many of them Hartson and Lovells. Caroline Binham

37 Innovative Lawyers 2013

FOREIGN EXPERTISE

‘Law firms have had to be innovative to protect their clients’ interests… by using different laws to govern different parts of transactions’

◄ meant it would be able to borrow at a lower rate and have deeper access to capital markets. Law firm Allen & Overy advised Oras- com, which launched an exchange offer on its London-listed global depositary receipts (GDRs) under a share exchange backed by US investors including Cascade Investment, owned by Microsoft co-founder Bill Gates. The deal involved setting up a Netherlands subsidiary, OCI NV, which bought out its Cairo- listed parent. An offer was made first for OCI’s London-listed GDRs. Then a share-for-share offer backed by a mandatory cash alternative was launched for remaining OCI shares. “People said it couldn’t be done,” Andrew Schoorlemmer, corporate partner at Allen & Overy, says. “In the end, we did this from a standing start to arrive at the deal in seven weeks to announcement, including financial commitments in place from investors.” The structure of the deal meant that Egyp- tian takeover rules did not apply to the first stage – that could have delayed the transaction. Local knowledge, and knowing how to deal with the government, gives law firms an edge in difficult jurisdictions. One example is the assis- tance Linklaters gave to its longstanding client BP on its exit from a joint venture in Russia. Linklaters advised BP on the sale of its 50 per cent share in TNK-BP to Rosneft, the Rus- sian integrated oil and gas company. TNK-BP was established in 2003 as a 50:50 joint venture between BP and a group of Russian investors. The joint venture was financially successful but BP’s frequent disputes and difficulties with

38 Innovative Lawyers 2013

● Most innovative law firMs in DisPUte resolUtion

Score its partners, a consortium of billionaires known Hausfeld & Co 25 Pioneered a unique and market-changing litigation as Alfa-Access-Renova, attracted unwelcome funding structure that improved accessibility and headlines and alarmed investors. enabled victims to pursue actions with little or no risk. In 2012, BP initiated the sale process. Linklat- Vieira de Almeida 24 Preserved revenues of pharmaceutical manufacturers ers’ role was to help BP navigate the legal pit- & Associados by defending patents in the Administrative Courts. falls so that it could sign sale agreements with Rosneft and the Russian government leading Skadden, Arps, 23 Successfully protected a foreign judgment despite the Slate, Meagher & client’s UK residency, resulting in a new jurisdictional to AAR agreeing to sell its stake in TNK-BP to Flom law in international disputes. Rosneft. This turned a hostile sale process into Standout a more or less consensual transaction. Weil, Gotshal & 23 Challenged and forced renegotiations of natural gas Manges pricing terms, creating a new model for pricing. In other cases, law firms have had to be innovative to protect their clients’ interests or Baker & McKenzie 22 Represented FedEx in an appeal to the European give confidence to western bank lenders – by Commission, preventing the merger of UPS and TNT. using different laws to govern different parts of Addleshaw 21 Prevented widespread change in the insurance industry transactions, for example. Goddard by preserving the way “mitigation costs” are used in Herbert Smith Freehills acted as adviser to professional indemnity insurance claims. project company SNGP in relation to a €1.1bn Hogan Lovells 21 Clarified English intellectual property law and the project financing of the Yuzhno-Russkoye gas meaning of the term “making”, using German precedent field in western Siberia, Russia. in the defence of a client at the UK Supreme Court. Russian law governed the gas sale agree- Mishcon de Reya 21 Used a novel legal strategy to gain a favourable ments but the indemnities and guarantees settlement for minority loan-note holders. were covered by English law, reassuring west- Highly commended Ashurst 20 Helped achieve a European Court of Justice ruling that ern bank lenders. it is discriminatory to withhold tax on cross-border Under Russian law, mandatory legal prin- dividends paid to non-resident undertakings for ciples and the ability of parties to cancel con- collective investment in transferable securities. tracts in certain circumstances made it difficult Uría Menéndez 20 Acted for NCG bank on a consumer arbitration preventing to get financing of this nature. 15,000 cases appearing before Spanish courts. Alexander Currie, partner at Herbert Smith Allen & Overy 19 Dealing with the burden of pension liabilities in a Freehills, says: “English law was used to fill in precedent-setting case for QinetiQ. the gaps and adjust the risk allocation.” In other cases, law firms have had to use Berwin Leighton 19 Defended HSBC’s decisions to block suspicious Paisner transfers and clarified reporting obligations for banks. smart forum shopping to help them fight litiga- tion on behalf of their clients. Eversheds 19 Defended Associated British Ports against a challenge This has been the case in complex, cross- by Humber Oil over an oil terminal. border litigation such as that involving Russian Fried, Frank, 19 Successfully argued for a trustee to be recognised as a oligarchs where legal disputes have broken out Harris, Shriver & creditor under French law. The decision is expected to over where a court case should take place. Jacobson promote international loans for French companies. The Oleg Deripaska and Michael Cherney Garrigues 19 Argued that a US law applied to Spanish insolvency case was the subject of a hard-fought applica- proceedings, allowing bankruptcy Judges to assign tion in the High Court about whether it should contracts free of debt in bankruptcy sales. be heard in Russia or London. Garrigues 19 Argued for rebalancing of long-term leasehold rentals Mr Cherney’s lawyers, Dechert, had argued in the Spanish retail and hotel industries. that it should be heard in London. Mr Justice Macfarlanes 19 Successfully challenged provisions in the International Christopher Clarke, who heard the applica- Swaps and Derivatives Association master agreement tion, agreed saying in his ruling at the time that in litigation against Lehman Brothers administrators. although Russia was the natural forum for the Commended Peters & Peters 19 Prevented the extradition of a Russian client, leading to litigation “there is a significant risk that Mr the reversal of burden of proof in future Russian cases. Cherney will not obtain in Russia a trial unaf- fected by improper interference by state actors Pinsent Masons 19 Assisted in the prevention of early “pensions liberation” and that substantial justice may not be done”. through a legal challenge and a public campaign. The case did eventually begin in London last Skadden, Arps, 19 Assisted South Sudan in recovering oil revenues from July but was settled out of court last September. Slate, Meagher & the Republic of Sudan by incorporating settlement The number of jurisdictional challenges Flom arrangements into wider negotiations. has increased in recent years and not all have Dechert 18 Proved UK jurisdiction for in the Cherney v Deripaska resulted in cases being heard in London. dispute against a complex political backdrop. The complexity and risks faced by clients in Freshfields 18 Defended a telecommunications provider against emerging markets has driven law firms to do Bruckhaus corruption charges through a strategy involving innovative legal work as they help corporates Deringer independent investigators. move in and out of these riskier jurisdictions. Herbert Smith 18 Adopted an effective collaboration strategy as part of Freehills the UK’s largest fraud case. RESEARCH & AWARD SUPPORTED By Simmons & 18 Ensured Samsung protected its design reputation Simmons through a fast-thinking, successful challenge in a design infringement case brought by Apple.

39 Innovative Lawyers 2013

ADDED VA LUE

The evolution of in-house teams means pure legal work is just one part of a bigger role, says Reena SenGupta

● Aiming low: Richard Tapp has kept Carillion’s legal costs the same as a decade ago

40 Innovative Lawyers 2013

general counsel

Early in 2013 Liberty Global, Legal & General’s in-house legal team is a the telecommunications provider, bought Vir- case in point. The insurance and financial ser- While PR gin Media for $23.3bn, making it the world’s vices company, with a market capitalisation of people want largest broadband company. The deal, using £11bn, has a small team of only 15 lawyers. The a mixture of high-yield and senior debt, was group’s general counsel, Geoff Timms, is one of quick responses completed in just three weeks. the longest serving in the FTSE 100. The speed and ability with which Liberty Over the past few years, Legal & General has in a reputation Global has grown over the past 10 years owes developed a leading market share, following incident, the much to the financing innovations of its in- a series of billion-pound merger and acquisi- house lawyers, a relatively lean team in the UK tion transactions. The legal team has played lawyers have a led by Jeremy Evans in London. “They are a key a crucial role in running negotiations, organ- contributor to [our growth] and we would not ising regulatory approvals and aligning key default position be able to do it without their input,” says Char- stakeholders. of zero risk and lie Bracken, co-chief financial officer. Nigel Wilson, chief executive, says the in- This sentiment is echoed by many of the house lawyers have been key “in allowing us no comment commercial referees for the in-house legal to execute perfectly. Not being goalkeepers but teams who appear in the 2013 FT ranking. The free-scoring mid-field players in the mould of days when the in-house branch of the profes- Frank Lampard. They put the ball in the back sion was seen as the inferior relation to private of the net.” practice have all but gone. In fact, law firms In the wake of the credit crisis, the brief of the are increasingly seeing in-house lawyers as in-house lawyer has been gradually expanding an interesting talent pool. Chris Mullen, sen- to include other corporate functions. Many ior partner of Pinsent Masons, a top 10 UK general counsel now say that pure legal work is law firm, says: “The tide is turning and we are only a fraction of their roles. beginning to recruit from in-house.” From often performing the company sec- The terms used by senior-level referees to retary role to taking on government affairs, describe the contributions of in-house legal some general counsels now manage corporate teams range from them being the glue that communications – a reflection of the growing holds complex organisations together, to being importance of reputation risk to the bottom the conscience of the business. Increasingly, in- line. For example, the corporate communica- house lawyers find themselves not only “in the tions department at Balfour Beatty now reports room” but also leading negotiations and imple- to Chris Vaughan, the chief general counsel and menting company strategy. corporate officer. ►

● Individual in-house lawyers

richard Tapp, for the company. Mr Tapp is University of Pennsylvania for Heathrow Airport company secreTary responsible for keeping legal to pave the way for Holdings and is leading the and direcTor of legal services, costs at Carillion the same further development of project to get extra capacity carillion (winner) as they were 10 years ago a new cure for children for Heathrow airport and while improving the quality suffering from cancer. The connectivity for London. Richard Tapp (pictured) of service. Colleagues say that collaboration between a is an unusual lawyer. not only is he the company’s commercial organisation massimo manTovani, general counsel, The general counsel of conscience, but he has and academic institution to legal affairs, eni Carillion, he has just also been changing things develop a product without launched Carillion consistently over the past regulatory precedence took One of the leading general Advisory Services (CAS) 15 years to drive quality and innovative lawyering and counsel in Italy, Massimo an onshore legal resource efficiency into the company. project management. Mantovani has created to provide legal support a world-class legal team services to Carillion, its felix ehraT, group carol hui, general and is spearheading general counsel, counsel, heaThrow network of law firms and airporTholdings the approach by the other major companies. novarTis energy company and CAS carries on a tradition Felix Ehrat led the deal Carol Hui has developed the industry to tackling : rick PusHinsky of smart legal resourcing between Novartis and the a best-in-class legal team corruption and bribery. TO ► PHO

41 Innovative Lawyers 2013

● Most InnovatIve european In-House LegaL teaMs

score eni 31 Leading the way in compliance and one of the first to set up an anti- ◄ This marks a significant shift in the devel- bribery unit, the legal team has centralised to become one of the most opment of the corporate legal function. Tradi- embedded in Italy. tionally, corporate communications and corpo- rate legal have been uneasy bedfellows. While Legal & General 31 an integral part in helping L&G increase market share, colleagues say they provide “the glue” across the business. public relations people tend to want quick responses in a reputation incident, the lawyers balfour beatty 30 Focusing on savings and changing paradigms in working with outside have a default position of zero risk and no com- counsel, the general counsel also has an unusually broad role. ment. The conflation of corporate communica- Liberty Global 30 driving business growth through innovative legal processes, helping tions under the legal function in Balfour Beatty the company to move quickly on financing acquisitions. reflects how lawyers have moved on from being perceived as obstacles to being facilitators. ItV 29 active in ItV’s five-year transformation strategy through leading “Managing reputation is about taking commercial negotiations while building rewarding relationships with team members and external law firms. actions to head problems off before they arise and dealing with them appropriately when drax Group 28 the legal team constantly innovates to help the business grow, they have arisen,” says Mr Vaughan. “The roles devising new finance structures and risk profiles through its commercial approach. of the legal and communications functions fit into both these categories, and the opportunity bp 27 development of standardised contract terms and a new knowledge to join them up and work more closely together management system have allowed the legal and procurement departments to transform bp’s purchasing negotiations. seemed sensible.” Another close relationship between legal colt 27 continued work developing the business services unit to produce high- and communications can be seen at ITV, the quality legal work at lower cost as part of an overall realignment of the legal team. media company. Its legal team, a previous win- ner of the FT innovation award, continues to blackRock 26 adopted a hybrid approach to resourcing that brought herbert smith improve its value proposition to the business. Freehills and axiom lawyers together to become part of the blackRock in-house team that successfully implemented alternative Investment ITV’s director of communications, Mike Fund Managers directive. Large, says the legal team is very responsive. “What is special about the ITV legal team is siemens 26 a comprehensive approach to career development in the legal team has promoted diversity and individual progression to benefit the company. their open-door policy, the appreciation that PR and legal have to work together to produce Royal dutch shell 25 an overhaul of its legal career progressions and a dynamic ethical best results for the business.” The legal team compliance unit has seen the in-house function develop cutting edge also takes the commercial lead in negotiations practices. and has played an important part in executing standard Life 25 Leading a £100m recovery claim for the business, the legal team is ITV’s five-year transformation plan. described as both practical and pragmatic. Many of the top-ranked teams are small in telecom Italia 25 a sophisticated mentoring scheme partners in-house lawyers with size relative to their organisations but they senior business members for a year. the scheme has integrated the show that to innovate in-house does not require legal function into the business. extensive resources. citi Group 21 pioneering a management solution involving new technologies for For example, Carol Hui, the general coun- complex, long-term contracts. sel at Heathrow Airport Holdings, has a small but high-impact 14-strong team. With a posi- tion on the executive committee alongside the chief executive, Ms Hui also has a broad remit ● InnovatIon In operatIonaL CHange and is spearheading the controversial drive for another runway at Heathrow. It is a job that score involves a variety of skills including communi- heathrow airport 31 the in-house legal team has taken on a broad role, adding value to cations, legal, strategy and economics. holdings the business and saving money. It continues to lead on expansion Making scarce resources work is about tal- strategies. ent management, say many innovative in-house arcelorMittal 30 a strategic overhaul to transform the legal function into one that better teams. Even larger legal functions such as at Sie- serves the future development of the company. mens and Shell have overhauled their approach Land securities 29 undertook a complex panel review to make external firms commit to to managing their lawyers to emphasise diver- property work and pioneered a short-form tenancy lease agreement. sity, versatility and bespoke career plans. In-house legal careers are difficult to man- pGGM 28 encouraging high performance from the team through smart age given the flat structure of legal departments management, cutting costs and making the legal department one of the most respected in the company. and the limited opportunities for promotion. However, as the role and stature of the in-house amey 26 contributing to the bottom line by helping the company win lawyer grows, there are more appreciative sen- competitive tenders and improving internal efficiency through education. ior executives willing to recruit them into busi- ness positions. Google Italy 21 helping Google set up in Italy, winning content battles and regulatory disputes. ReseaRch & awaRd suppoRted by

42

Innovative Lawyers 2013

HYBRID SKILLS RANGING INTO fResh PAsTURes

Diversification into non-legal sectors is helping law firms generate more income from legal advice, writes Alicia Clegg

A data storage conference One example is a collaboration between might sound an unlikely starting point for Allen & Overy and one of its clients, ING, the legal innovation, but such was the occasion, Dutch bank. To encourage pension funds and last year, when Paul Caris, chief information insurance companies to invest in greenfield officer at Eversheds, came up with the idea for projects, such as the construction of roads and Big View, an analytical tool that helps compa- schools, the two businesses developed “Pebble”, nies take care of their reputation. a new class of financial product, addressing By capturing and analysing comments on the factors − low credit ratings and burden- Twitter and other social media, Eversheds’ some administration − that traditionally have technology gives businesses early warning of deterred institutions from engaging in project problems that may be brewing for their brands, financing. The hope is that if the product proves thereby creating an opportunity for its lawyers popular, investors that previously avoided the to suggest remedies. infrastructure market will take the plunge and Sometimes these remedies might involve use Allen & Overy as their legal adviser. legal action – to stop copyright infringement, Latham & Watkins, meanwhile, has linked say. Other times, when the brand has let down up with digital media agency Nation1 to explore, customers, the advice to the client might be to through a series of seminars, how the success work on its public relations. of consumer mobile apps might be replicated in The development of Eversheds’ technology, business-to-business markets. the brainchild of a data professional, mirrors Latham & Watkins says the seminars have an industry trend towards tapping the skills of secured it “multiple instructions” from seminar non-legal sectors. Freed by the to make non-lawyers partners and to diversify their services, UK law firms have become more entrepreneurial. Freed by the Legal Where City lawyers might once have spent almost their entire career interacting with Services Act 2007, fellow lawyers from opposing counsel and their UK law firms have clients’ in-house teams, today’s innovators are ranging into commercial territory, in collabora- become more tion with clients and colleagues from a variety of backgrounds. entrepreneurial

44 Innovative Lawyers 2013

● Most innovative law firMs in PrivatewealtH

Score attendees. In the longer term, it hopes that by ut Pinsent Masons 20 A novel litigation funding structure allowed the firm to

getting big established technology corporations do successfully challenge jurisdiction in a client's Islamic marriage and overseas divorce case. and small start-ups together in one room the an events will boost the enterprise software mar- St Berwin Leighton 19 In a conflict of laws case, successfully argued that neither ket, which it considers ripe for reinvention. Paisner English nor Russian law gave the claimant a direct interest “The first software revolution was in the in a Russian client's UK assets following a divorce. mid-1980s, when Microsoft, Oracle and SAP Garrigues 19 Invented the first valuation product for football players to produced PC-based enterprise software. The Highly assess tax implications when licensing image rights. question now is: how do we create the next commended revolution over mobile?” says Martin Cotterill, Cuatrecasas, 18 Devised a model to protect Spanish investors in Gonçalves undertakings for collective investments in transferable a partner at the firm. Pereira securities by removing the Spanish custodian requirement. Marketplace changes, such as the growth of digital sales channels, ultimately have reper- Eversheds 18 Obtained jurisdiction in the Netherlands to reinstate a client’s arbitration award after it was set aside in Russia. cussions for the skills that law firms bring to bear for clients. Latham & Watkins credits the Fondia 18 Created an online document management system in popularity of its seminars, partly, to the involve- collaboration with a wealth management company. ment of Nation1. Whereas in the past, the law Macfarlanes 18 A co-ordinated set of strategies to help clients respond to firm would have viewed an infant market such the French tax authority’s attack on private trusts. as enterprise apps through a legal lens, having 18 An inheritance tax solution preserved a client's Portuguese Commended PLMJ a digital partner on board has allowed it to look portfolio and transferred it to a US non-profit organisation. holistically at how market strategy affects tech- nology choices and how technology choices, in Schellenberg 18 The first settlement of a significant Swiss property asset turn, dictate what intellectual property protec- Wittmer into a living trust, potentially opening up a new market. tion or licensing arrangements are needed. Taylor Vinters 18 In-house wills and estate planning "surgeries" to provide Industry trends also have implications for accessible advice to a business client's busy professionals. how law firms organise their practices and plug gaps in their expertise. Three years ago, Hogan Lovells spotted an opportunity in the payments services market, which was booming thanks to an influx of inno- vations such as contactless payments, digital wallets and mobile money transfer. However, it quickly realised its financial services lawyers, though well versed in handling big banks, were not necessarily the best people to put in front of hotshot entrepreneurs. Conversely, its technology lawyers were con- versant with technology developments but lacked the sector expertise to deal comprehen- sively with payments services and the large financial institutions entering the market from a background in traditional bank-based payments. The firm’s solution was to bring both types of lawyer into a cross-practice payment services group that operates across the firm, part- nering with local lawyers in markets where Hogan Lovells does not have its own payment specialists. Members of the group participate in monthly multi-country conference calls and produce a newsletter that pulls together pay- ments services news from around the world. Ben Regnard-Weinrabe, co-leader of the hybrid team, says collaborating across profes- sional, national and firm boundaries allows the group to take a view on how local markets might evolve, both commercially and from a regulatory standpoint. “What happens in Europe doesn’t happen in a bubble,” he says. “Regulation developed in Europe often finds its way elsewhere, and innovations from one part of the world − such as micropayments in Africa or contactless pay- ments in Japan – find their way to Europe.”

45 Innovative Lawyers 2013

HARVARD STUDY rewardIng partnershIps Sharing clients with other lawyers in the same firm might be expected to hit earnings. But the opposite is true, says Harvard academic Heidi Gardner

Many law firm leaders advantages, but three stood out. First, for the believe that collaboration is essential for gen- partners who generated business, the more they erating sophisticated solutions to the increas- shared their originated client work with others, ingly complex issues that clients bring. But the greater their own book of business grew in why is it often so difficult to get partners to subsequent years (even while allowing for other collaborate? Those who have been rewarded factors likely to affect origination values, such for developing individual reputations may as office, practice group and organisational question why they should risk their standing by tenure). Specifically, for partners who referred introducing colleagues to their clients. work to 28 colleagues in a year compared with In my research at Harvard, I studied the their average peers who referred work to 14, timesheets and financial records over a 10-year their book of business from new and existing period at two global law firms, interviewed clients grew by more than a third the next year. hundreds of professionals around the world Second, the more that lawyers collaborated and conducted detailed case studies of several on others’ client work, the more their billed global professional service firms. I was looking revenues grew in subsequent years. For each for an answer to the question: “Is there any real additional partner lawyers worked with in year evidence to show that a culture of collaboration one, they billed 0.2 per cent more the next year. makes any difference to the financial perfor- That would translate into incremental billings mance of the firm and of individual partners?” of $22,000 extra in the first year for the average The results I found were dramatic. I found lawyer in the Am Law Global 100 who increases that where clients are served by multiple prac- their collaboration network by just one extra tice groups within a firm, they generate signifi- partner per month – even before accounting for cantly more annual revenue and profits than can the associated increase in hourly rates. These be explained by the mere addition of extra work. revenue gains stem from the original lawyers’ In fact, I found that clients served by four prac- ability to attract more work – from those with tice groups generated almost double the annual whom they have worked directly, and from collected revenue of those served by three prac- other partners in those firms. tices. Clients I interviewed suggested that multi- Third, over the period that I studied, lawyers practice legal teams often have better insight into who worked on a greater number of cross- company priorities, and provide more innova- practice projects increased their value in the tive, sophisticated solutions because they share market. The more cross-practice matters that knowledge across normal boundaries. lawyers worked on in a given year, the more I also found that when many practices engaged their hourly rate increased relative to peers a client, the nature of the work changed. Individ- who worked on only single-practice matters. ual deals and matters were more complex – each And the more complex those matters were – one involving a greater number of practices and in terms of the number of people or practices offices of the firm. Clients served by these larger, involved – the larger that increase. more complex teams were also more loyal – and Just as striking is that all this is not confined surprising to some – more profitable. to when the economy is doing well. I tested all Also striking were the benefits of collabora- these findings with data from 2005 to 2012 – so tion for individual partners. There were many the results apply to the best, and worst, of times.

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