The Lex 100: Archives

An announcement to the London Stock Exchange on 29 October confirmed Gordon Dadds had agreed to acquire all of Ince, including its international LLP. The new firm, to be called Ince Gordon Dadds, will jump into the UK top 40 with revenue of more than £110m, and have 100 partners across offices in nine countries.

Gordon Dadds managing partner and chief executive Adrian Biles (pictured) will lead the new firm with support from Ince’s chairman, Peter Rogan. It will be headquartered in Ince’s Aldgate Tower offices in London. The transaction is expected to be completed by the end of this year.

Ince Gordon Dadds will become the UK’s largest listed law firm by revenue, eclipsing Gateley. The total paid for Ince is expected to be £34m, which equates to a percentage of the turnover generated by Ince’s equity partners over the next three years.

Biles commented: ‘The merger will build upon the complementary strengths of the two firms in terms of industry expertise and range of services. Our management model will also allow Ince’s partners and fee earners to focus even more on providing market leading legal advice to a stellar client base.’

Rogan added: ‘This is an exciting day for us at Ince, with this cutting-edge deal being very much in line with our long-established strategy. I’m proud that the Ince name will continue and am very excited to be moving forward together as part of this innovative new structure with access to new capital allowing us to gain greater competitive advantage in the market.’

As part of the deal, Ince partners will each receive a minimum guaranteed amount in the first year based on budgeted turnover. Gordon Dadds will also settle the £9.1m capital and current account balances due to Ince partners, bringing the total value of the deal to more than £43m.

Today’s announcement comes a month after the two confirmed merger talks. Earlier this year, Biles told Legal Business the firm had its sights on becoming a ‘nine-figure’ business after its acquisition of Thomas Simon. He was seeking a ‘scale transaction’ involving the buyout of an underperforming £20m to £40m firm: a tie-up with Ince has taken that ambition to a different level.

Ince, meanwhile, has suffered a number of setbacks this year. First, the marine and insurance specialist lost a four-partner team to sector rival Clyde & Co in Hamburg in February. Then, in July, Ince made 25 business services staff and seven fee-earners redundant.

The biggest setback came in August, when the firm’s senior partner, Jan Heuvels, stepped down from his position after being relocated to Hong Kong.

Ince’s tumultuous year was underlined by a poor financial performance: it shed 6% of its revenues, falling to £83.4m. Profit per equity partner (PEP) remained flat at £256,000.

Gordon Dadds shares will remain suspended pending further clarification on the final terms and conditions and financing of the proposed merger.

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The initiative, called Future Law, is expected to generate revenue this year and will be led by digital sector head James Touzel. The firm has ring-fenced the fund as part of its budget for this year.

Touzel told Legal Business that dedicated budget and internal resource would allow it to try new technology and ideas more quickly than getting bogged down in presenting business cases as part of the normal governance process. The firm’s business services professionals and fee earners will be involved.

‘If you’re doing innovation no one has a clue what the return on investment is yet, that’s the whole point,’ he said. ‘This will be an educated playing around: identifying the client need, trying a few things out, getting the one that works and rolling it out.’

Future Law will complement TLT’s captive shared services centre, launched in 2015, and a regulatory consulting service it launched in the last year with the hire of former BT regulatory affairs director Stuart Murray. The firm also partnered with AI contract review company LegalSifter last December, taking a minority stake in the business.

Touzel said Future Law was implemented in response to changing client expectations in the last year or so. The largest clients had effectively built their own law firms in-house and were facing the same challenges around people, process and technology that law firms had faced for decades.

‘There is no reason why a law firm cannot, and should not, be a consultant on how to run in-house legal functions. The next change will come in advising which technology to use. What’s the best e-discovery platform? We should be able to answer that question.’

TLT will resell technology to clients, similar to the LegalSift partnership. It wants to partner with other early stage tech companies to improve their products, as well as advise and sell mature technology in areas it could be used more effectively.

Touzel said there would be a few early wins this year around new offerings in e-discovery and contract automation, but the aspiration was to create multiple business models at the firm by selling more technology and more consultancy services. The firm’s revenue rose 10% to £82m in the most recent financial year.

‘The consistent message from clients is that they are getting increasingly frustrated with law firms bringing forward products that they don’t need. We’re trying to start off on the right foot,’ Touzel said. ‘This isn’t a model I’ve invented, it happens in other industries: it’s just legal catching up.’

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Mullins returns to ITV having previously been its group legal director between 2000 and 2007. She also had spells as GC at EMI Music and energy company Mitie before joining budget airliner easyJet in 2015.

ITV’s chief executive Carolyn McCall commented: ‘Kyla brings great commercial and strategic experience and acumen as well as a proven track record in the media and entertainment sectors. I am sure she will be a great addition to the management board and a fantastic leader for her team.’

Mullins’ arrival fills a crucial gap in ITV’s in-house legal team after the departure of former GC Garard in the summer. He joined ITV as GC in 2007 and continued to provide assistance to ITV after his departure, including helping the company find his replacement.

Garard oversaw a key ITV panel review in May 2015, which sought to extend its eight-firm roster by up to four more. Historically, firms including DLA Piper, Hogan Lovells and Reed Smith have advised ITV.

Mullins is replaced at easyJet in an interim capacity by Clifford Chance (CC) partner Daud Khan. Khan was only promoted to the Magic Circle firm’s partnership in May this year and was based in CC’s London office, focusing on corporate and M&A.

Khan’s highlight matters at CC include advising BBVA’s investment in Atom Bank’s £149m capital raising and Chinese conglomerate Fosun on an investment in travel agent Thomas Cook.

In December 2015, easyJet lost its then-head of legal and compliance, Andrew Winterton, to taxi app company Karhoo. Winterton had been in his position for nearly a decade after joining from Virgin Atlantic Airways. The former Clyde & Co lawyer was succeeded in his position by Rebecca Mills.

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1. Daily Telegraph blocked from naming businessman who ‘sexually harassed staff’ [via Sky News]

2. UN rules that Muslim veil ban ‘violates human rights’ [via The Week]

3. Tracy Chapman sues Nicki Minaj over unauthorised sample [via The Guardian]

4. Amazon opens pop-up fashion shop in central London [via The Guardian]

5. Dyson chooses Singapore for new electric car plant [via BBC News]

Thomson Reuters is accepting applications for its first dedicated legal tech incubator until the end of this month, with further details expected to be announced in December. The company is shifting its focus towards legal tech, having also hosted a fintech incubator in Zurich, following the sale its financial risk business earlier this year.

The programme is interested in working with more mature start-ups who have successfully secured significant funding, with Thomson Reuters not seeking any equity in return for access. The initial duration is likely to be a minimum of three months, but can run longer depending on the success. Start-ups will not have to take residence in Zurich as the incubator can run virtually.

The company will also vet out any start-ups considered direct competitors, and believes the company’s tech clout will be a unique attraction for potential cohort members.

‘We have the advantage of knowing what it takes to sell technology into legal,’ Thomson Reuter’s customer proposition lead Jim Leason told Legal Business. ‘Law firms are the buyers of technology whereas we are the creators of it.’

Meanwhile, Slaughters’ highly-symbolic legal tech incubator, which it confirmed in June, is now expected to launch as early as the first quarter of next year.

The incubator, which will sit alongside Slaughters’ existing Fast Forward fintech incubator, mirrors moves from Magic Circle counterpart Allen & Overy, which has its own space called Fuse. Mishcon De Reya and Dentons also have similar ventures, while banking giant Barclays this year entered the legal tech space through its Eagle Labs programme.

A leading start-up’s co-founder told Legal Business Slaughters’ foray into legal tech was an exciting development for start-ups, citing potential exposure to Slaughters’ premium corporate client list. Meanwhile for Slaughters – typically viewed as conservative – the move will further its tech credentials, with the firm also having one of the sector’s leading equity stakes courtesy of a 5% share in AI platform Luminance.

Accelerating development of legal tech incubator programmes come as an increasing amount of money finds its way into the start-up market, with Kira, Legatics, Eigen Technologies and Apperio among the companies winning significant funding in recent months.

Overall interest in legal tech is booming, with about 2,000 people attending yesterday’s (17 October) Legal Geek conference as companies and firms alike look to gain a long-term advantage over their competitors.

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1. WPP in talks to buy FT’s London HQ in £90m-plus deal [via The Guardian]

2. Son sues over mum’s airing cupboard death in Pennal resort [via BBC News]

3. Apple secures ‘critical’ iPhone tech in $600m deal with UK-based firm [via The Week]

4. Data gathering ‘may deny rape victims access to justice’ [via The Guardian]

5. Ladbible rescues Unilad – with 200 jobs saved [via Sky News]

6. Transgender law reform has overlooked women’s rights, say MPs [via The Guardian]

7. Sainsbury’s-Asda inquiry to examine sale of petrol, toys and kids’ clothes [via The Guardian]

8. Audi fined £700m for dieselgate gains and oversight failings [via Sky News]

Rookies at the City law firm will see their pay jump from a solid £76,000 to an impressive £82,000.

London managing partner Simon Beddow (who was given a special shout out in Ashurst’s Lex 100 verdict this year) said: “We had a very strong start to the financial year and this has continued through September. This, together with the desire to remain as competitive as possible, led us to undertake a review of salary and in consequence we have made a number of changes which will take effect at the firm’s half year on 1 November.”

Read more about Ashurst here.

The drilling merger – an all-stock deal and a court-sanctioned scheme of arrangements – will see the shareholders of Ensco and Rowan own 60.5% and 39.5% respectively of the combined business.

Kirkland & Ellis clinched a significant win in UK plc land in advising Rowan with a team including City partners David Higgins, David Holdsworth and Dipak Bhundia. The deal was led out of Houston by corporate partners Sean Wheeler and Doug Bacon and included Dallas partner Ryan Gorsche and New York-based executive compensation partner Scott Price and tax partners David Wheat, Lane Morgan and Mike Carew.

Latham & Watkins is advising Rowan on antitrust aspects, with a team including corporate partner Michael Egge in Washington, Brussels managing partner Lars Kjolbye, and London partner Jonathan Parker.

Meanwhile, Slaughters is acting for Ensco with a team led by corporate partners Hywel Davies and Christian Boney and including partners William Turtle (competition), Jonathan Fenn (pensions) and Mike Lane (tax).

Elsewhere, a Legal & General deal on Monday (8 October) saw the UK insurer complete a £2.4bn buyout of pensions relating to the now-defunct telecoms equipment provider Nortel.

The buy-out relates to around 15,500 pensioner members and around 7,200 deferred members of the pension scheme, which entered a Pension Protection Fund (PPF) assessment after Nortel went into administration in 2009, pending litigation and insolvency proceedings.

The Travers team advising the trustees was led by Dan Naylor and Susie Daykin and also included partner Peter Hughes. Advising Legal & General was an Eversheds team led by Hugo Laing.

Naylor told Legal Business that the deal represented the biggest ever PPF plus arrangement, in which the pension scheme members receive more options, via a member option exercise, and better benefits than the PPF compensation would have offered. A further transaction is likely to follow as more recoveries are made.

The deal is also the second biggest pension buyout ever, after the £2.5bn transaction with Legal & General relating to pensions of US-headquartered automotive supplier TRW in 2014.

Hughes and Naylor, the latter then an associate, were also part of the team advising the trustees of the TRW Pension Scheme, while Laing, then an associate at Clifford Chance, was part of the team advising Legal & General on that deal.

Another major deal this week saw Kirkland, Latham and Allen & Overy score key roles on the sale of shareholdings in fin-tech company FNZ to Canadian pension fund La Caisse de dépôt et placement du Québec (CDPQ) and private equity investor Generation Investment Management.

The deal sees Kirkland advise the sellers, FNZ and funds advised by HIG Capital and General Atlantic, led by London corporate partners Gavin Gordon, Carl Bradshaw and Tom McCarthy. A Latham team led by Michael Bond advised CDPQ and Jonathan Wood at Weil Gotschal & Manges advised Generation. Karan Dinamani at Allen & Overy advised the CEO of FNZ.

The acquisition is the first investment by CDPQ-Generation, the sustainable equity joint venture launched by CDPQ and Generation. Kirkland has a nine-year relationship with FNZ, having advised on HIG Capital’s initial investment in 2009, General Atlantic’s investment in 2012 and FNZ’s recently announced deal to acquire European Bank for Financial Services (ebase) from comdirect bank.

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1. Ashers ‘gay cake’ row: Bakers win Supreme Court appeal [via BBC News]

2. HSBC in $765m settlement with US Department of Justice [via BBC News]

3. Convicted former UBS trader to be freed from UK immigration centre [via The Guardian]

4. Patisserie Valerie parent suspends share trading amid fraud probe [via Sky News]

5. Supreme Court rules hospital negligent over misleading waiting time [via The Law Society Gazette]

The initiative responds to challenges faced by legal professionals with overkill setting in as unconnected products flood the market, forcing lawyers to upload client information and documents on a new platform each time the firm adopts a new tool.

It sees CC’s chief information officer Paul Greenwood and Latham’s Ken Heaps chair a group which will meet monthly to advise newly launched startup Reynen Court on the development of a platform where different tech vendors will be able to sell their products.

The consortium aims at steering the project towards products law firms really need, while also setting common standards for the development of new tools. The ambition is to give firms and vendors a one-stop shop for legal tech, a move which if successful might lead to much-needed consolidation in the sector.

The group also includes the IT heads of US firms Paul Weiss Rifkind Wharton & Garrison, Covington & Burling, Cravath Swaine & Moore, Gibson Dunn & Crutcher, Orrick Herrington & Sutcliffe, Ropes & Gray, Skadden Arps Slate Meagher & Flom and White & Case.

‘There is a lot of very interesting new legal tech tools coming out every week, but many law firms are not getting the full value because all of these apps use different platforms and they don’t interact with each other,’ Greenwood told Legal Business. ‘It means every time you use a different product you have to upload client documents on it. Reynen Court will engineer this so that vendors will put all their products on a single platform and each law firm will be able to keep its documents on its own premises or cloud.’

Founded and led by former Cravath, Swaine & Moore associate Andrew Klein, Reynen Court employs around a dozen people and aims to go live with a first group of ten vendors selling their products on its platform within 12 months.

The initial focus will be on contract analysis, discovery, compliance and practice management technologies.

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