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  • September 25, 2008 |

    Shearman's German practice comes under scrutiny after fresh walk-outs

    Shearman & Sterling's German practice was dealt a fresh blow last week as half of the law firm's Munich partners left to launch Allen & Overy's (A&O's) fifth German office. The departures of Shearman's Munich office head Gottfried Breuninger (also German tax head and global co-head of tax) and M&A partner Astrid Krueger to A&O came after the US-based law firm lost global co-head of M&A Hans Rolf Koerfer, and M&A partner Birgit Reese to the magic circle law firm's Duesseldorf arm in January and March respectively.The losses come on top of Shearman's nine-partner Mannheim office walking away from the firm earlier this year.

    1 minute read

  • September 24, 2008 |

    Rewarded by results

    The recent decisions of several law firms to bring in merit-based pay systems for assistants have led some in the profession to speculate that pay based on post-qualification experience (PQE) might have had its day.We investigate the arguments for and against merit-based pay, look at how firms evaluate performance and speak to assistants to gauge their views on the topic.Merit versus PQENorton Rose recently made the move to implement merit-based pay at all levels from newly-qualified (NQ) upwards, replacing the traditional PQE gradings with a three-tier system that divides assistants into categories known as Associate 1, Associate 2 and Senior Associate. Assistants are paid and charged out according to the new categories.Managing partner Deirdre Walker explains the reasoning behind the firm's decision to adopt the model. "The PQE approach is antiquated and often simply not fair. Why should a really excellent one- or two-year qualified lawyer earn less than someone mediocre who just happens to have more experience than they do?" She adds that recently introduced age discrimination legislation played a part in the decision. "It was a factor, but not the driving one. As I understand it, legal opinion is still very much divided on whether PQE will fall foul of the new laws."David Gray, managing partner of Eversheds, which is in the process of bringing in performance-related pay for its assistants, also downplays the significance of the legislation. However, he believes that it is important to have a remuneration structure that allows flexibility in terms of how mature assistants are paid. "Say you have one three-year PQE who has 15 years' experience in another profession and is very capable with clients, and another who has come straight from university. Clearly it is a good idea to have a pay structure in place that allows you to pay the first guy more."Ashurst is another high-profile merit-based pay convert, while across the Atlantic, Howrey became the first firm in the US to adopt a totally merit-based structure earlier this month.

    1 minute read

  • September 23, 2008 |

    US trio act on Morgan and Goldman transformations

    A trio of elite US firms have taken the lead roles on the transformation of Morgan Stanley and Goldman Sachs into bank holding companies, reports The American Lawyer. Cravath Swaine & Moore, Sullivan & Cromwell, and Wachtell Lipton Rosen & Katz. played key advisory roles on the groundbreaking deals, and the same three firms also advised Morgan Stanley and Japan's Mitsubishi UFJ Financial Group in a deal under which Mitsubishi, known as MUFG, will purchase up to 20% of Morgan Stanley's common stock. The bank holding deal is the most momentous in terms of Wall Street history. In return for access to deposits and the Federal Reserve's lending facilities, Morgan Stanley and Goldman will now be subject to the tight federal regulations that will hamstring their ability to take billion-dollar risks. The Federal Reserve can demand more public disclosure and limit the level of debt the banks can take on in relation to their capital reserves.

    1 minute read

  • September 19, 2008 |

    FSA short-selling block backed by lawyers

    Lawyers have come out in support of the Financial Services Authority's (FSA's) decision to put a temporary hold on short-selling in a bid to restore market confidence. The dramatic intervention by the regulatory authority comes in the face of market abuses which have seen investors making huge profits from ailing businesses.The ban on shorting is effective until 16 January, 2009, when the FSA will take a view on the market conditions and decide whether to extend the trading restrictions.FSA chief executive Hector Sants said: "While we still regard short-selling as a legitimate investment technique in normal market conditions, the current extreme circumstances have given rise to disorderly markets."

    1 minute read

  • September 19, 2008 |

    A&O bolsters regulatory team with CC hire

    Allen & Overy (A&O) has bolstered its regulatory practice with the hire of Damian Carolan from magic circle rival Clifford Chance (CC). Carolan joins A&O's London office as a partner from CC, where he was a senior associate. He specialises in regulatory matters, specifically focusing on the regulation of wholesale market participants. London regulatory partner Paul Phillips said: "This appointment underlines the firm's commitment to this area at a time when financial regulation is taking on greater strategic importance for our clients."

    1 minute read

  • September 18, 2008 |

    Weil Gotshal, Linklaters take headline roles on dramatic Lehman collapse

    The collapse of Lehman Brothers and takeover of fellow Wall Street institution Merrill Lynch earlier this week have generated roles for a raft of top law firms on both sides of the Atlantic. Weil Gotshal & Manges and Linklaters have both secured lucrative mandates on Lehman's collapse as fears about the wider implications mount.Weil Gotshal was appointed as the main legal adviser to the stricken lender, which filed for Chapter 11 on Sunday night (14 September) after numerous failed attempts to shed its 'toxic assets'. Potential buyers including the Korean Development Bank, Bank of America and Barclays all walked away after weeks of discussions before the bank's spectacular collapse. The mandate will be seen as a coup for Weil Gotshal as the firm's top-tier restructuring practice has lost a stream of high-profile names in recent years, both in the US, where practice co-head Martin Bienenstock last year quit for Dewey & LeBoeuf, and in London, where Chris Mallon quit to join New York rival Skadden Arps Slate Meagher & Flom. Meanwhile in London, Link-laters' role for PricewaterhouseCoopers as the bank's administrator is likely to be the envy of many of its City rivals. The firm is fielding a team under restructuring chief Tony Bugg, banking partner Richard Holden and corporate partner David Ereira advising on UK aspects of the proceedings.

    1 minute read

  • September 17, 2008 |

    A&O set for Munich launch with double Shearman hire

    Allen & Overy (A&O) is to launch in Munich next month with the hire of Shearman & Sterling's Munich head Gottfried Breuninger and M&A partner Astrid Krueger. The departures will leave the US firm with only two partners in its Munich office and will heighten market speculation about Shearman's German arm, which saw its Mannheim office split away earlier this year (1 May) to set up independently as Schilling Zutt & Anschuetz.The Munich hires also mark A&O's third raid on Shearman's German practice this year as it brought in Shearman's global co-head of M&A, Hans Rolf Koerfer, and M&A partner Birgit Reese for its Duesseldorf office in January and March respectively.

    1 minute read

  • September 15, 2008 |

    A dark mood on Wall St

    The world's leading law firms are facing an uncertain new landscape following the demise of two of Wall Street's biggest and most established…

    1 minute read

  • September 15, 2008 |

    Wachtell, Shearman head up $50bn Merrill sale

    Elite US firms Wachtell Lipton Rosen & Katz and Shearman & Sterling have taken the lead advisory roles on the $50bn (£28bn) all-stock sale of banking giant Merrill Lynch to Bank of America. Bank of America was advised by a 23-strong Wachtell team comprising 12 partners, including Edward Herlihy, co-chairman of the firm's executive committee. The team included lawyers from the corporate, antitrust, executive compensation and benefits, restructuring and finance and tax departments.

    1 minute read

  • September 12, 2008 |

    Forget herding cats - leadership is key to success for law firms

    Leading City lawyers believe strong management has helped drive law firms' success in recent years, with new research showing partners are now ascribing far more value to effective leadership than in the past. The latest Legal Week/Big Question survey found that 96% of partners cited effective leadership as being either 'very important' or 'important' to the success of a sizeable commercial law firm. There was not a single respondent who believed management was not at all important in achieving success. Crucially, the survey, which is based on responses from 153 partners, revealed that partners believe those at the coalface are now much more appreciative of the importance of strong leadership at firms, with 55% saying partners attribute 'considerably more' value to leadership now than five years ago. A further 12% said attitudes have changed 'greatly' over the period. Linklaters private equity partner Ian Bagshaw said: "Strong leadership is fundamental to the success of a global firm. There are more and more opportunities open to firms now - sometimes more than they can handle. The quality of the managing partner is to maximise the potential of those opportunities - it is this strategic leadership that firms require."

    1 minute read