The UK legal sector could lose nearly £3bn in turnover growth and have 10,000 fewer jobs by 2025 with a no-deal Brexit, according to forecasts published by the Law Society.
The society’s research unit released a report today (22 August) which predicted the legal sector would grow at an average 2.2% annually from 2019 to 2025 with a soft Brexit. This, however, drops to just 1.5% with a harder Brexit and falls further to 1.1% in a no-deal scenario.
Predicting total sector turnover of about £29bn this year, the soft model forecasts turnover of £33.83bn in 2025, versus £30.86bn with no deal: effectively halving forecast turnover growth.
The society’s research used data and forecasts from the National Institute of Economic and Social Research (NIESR), the Office of National Statistics, and the International Monetary Fund. It then produced three Brexit scenario forecasts in collaboration with Thomson Reuters, which is soon releasing a report with Oxford Economics on the implications of Brexit for the legal sector.
The society’s soft Brexit scenario was based on the NIESR’s forecasts, while the harder Brexit deal used a Canada-style free trade agreement. The no-deal outcome was based on Britain reverting to World Trade Organisation (WTO) rules.
Law Society president Christina Blacklaws conceded the lack of agreement on Brexit negotiations and volatile global markets meant it was ‘standing on thin ice’ publishing forecasts. But the society said it intends to regularly review the figures and consider further Brexit scenarios ahead of Britain’s scheduled March 2019 exit from the European Union.
‘Our intention is to provide projections that are useful to the sector, to business and government as they steer a course for the years ahead,’ she said.
The report estimates turnover for the legal sector will be relatively buoyant from 2017 to 2020 because of work relating to regulatory changes from Brexit, an uptick in work for law firms from UK businesses, and increased work from international clients following a sharp depreciation in the pound.
But beyond 2020 it anticipates turnover growth will slow because of a weaker UK economy, slower growth in legal services exports, and a slowdown in the housing market. Legal sector turnover growth would be higher than overall economic growth, however, in part because of continuing regulatory work.
The models also expect employment in the sector to fall, based on both slower growth and the increasing adoption of new technology and working methods. Total full-time employment is predicted to fall to 283,000 in 2025 from 293,000 in 2015 under a soft Brexit, or closer to 274,000 with no deal.
Blacklaws added: ‘UK legal services look to have been relatively buoyant through 2017-18, thanks to a combination of Brexit-related work, steady demand from UK businesses and an uptick in business from non-UK clients taking advantage of the depreciation of the pound. However, Brexit is likely to have a significant negative effect on the legal sector in the medium and longer term.’
Dechert, Dentons and Addleshaw Goddard have joined the slew of firms raising the stakes for newly qualified (NQ solicitors).
Dechert has increased its NQ salary from £95,000 to a handsome £110,000.
NQs at Dentons’ London office will see their remuneration raised from £70,000 to £75,000, whilst NQs at the firm’s Watford and Milton Keynes offices have seen increases from £44,000 to £46,000.
Trainee salaries at Dentons have also increased. First-year London trainees will earn £42,000 (up from £40,000), whilst second years will earn £46,000 (up from £44,000). As for the firm’s Watford and Milton Keynes recruits, first and second-year trainees will earn £30,000 and £32,500 respectively.
Addleshaw Goddard’s autumn qualifying trainees have seen the NQ salary raised for the second time this year, from £65,000 to £70,000. Manchester and Leeds NQ salaries have been upped by £1,500 to £43,000. NQs at the firm’s Scottish offices will receive £38,000.
Trainees were not left wanting either. Addleshaw’s London first-year trainees will earn £39,500 (up from £38,000) whilst second years will earn £42,500 (up from £41,000). New recruits in Leeds and Manchester will earn £27,000, rising to £29,000 in their second year.
Baker McKenzie will retain all 14 of its trainees set to qualify this September; one trainee will commence work on a fixed-term basis.
The firm often boasts strong retention scores and this year is no different. Commenting on the 100% retention score, training principal Arron Slocombe said: “This is a reflection of Baker McKenzie’s commitment to retaining the best talent and demonstrates the growth of the firm. We are thrilled with the 100% acceptance rate from our trainees, who are embedded in the culture of our firm. Trainees accepted roles in both transactional and advisory departments.” The soon-to-be qualified solicitors will join the teams in M&A, dispute resolution, intellectual property, information technology and communications, finance, tax and EU, competition and trade, and be handed £77,000 pay checks to accompany their new role as associates.
A start-up from Allen & Overy’s (A&O) Fuse innovation hub is one of the first 17 companies to join banking giant Barclays’ legal technology lab.
Deal platform Legatics, which has been in Fuse for each of A&O’s first two cohorts, has taken up residence at Barclays’ 100-person LawTech Eagle Lab in London’s Notting Hill. AI provider ayfie, contract generator Ginie AI, and document collaboration platform Annotate are the only other start-ups in the lab to have been named.
The bank’s law-tech space was first announced in April with backing from 13 law firms and several other industry players including the Law Society, PwC, start-up community Legal Geek, as well as the University of Liverpool and University College London.
It has now opened with its first four companies, which each pay between £150 and £350 a month for access to the space. Packages range from a hot-desking option for six days a month to a private office year-round.
Legatics head of business development Daniel Porus (pictured) told Legal Business the start-up’s growing team – soon to be ten staff – had taken up a desk with Barclays it will use at least once a week. The company had been impressed by the Eagle Labs space and was looking to move its entire operation there post-Fuse.
Fuse has capacity for about 30 people, with seven companies resident there after an eighth, Bloomsbury AI, in July joined social media giant Facebook in a deal reportedly worth between $23m and $30m.
Porus commented: ‘One of the things we really appreciate about Fuse is how valuable it is to physically sit next to other legal technology companies, and it’s the same for Barclays. It’s a lot more useful sitting next to someone else who’s going through similar challenges to you.’
Porus added that there had been a strong level of engagement from the firms who had partnered with Barclays: ‘It has been great to see various law firms come together in Eagle Labs to discuss technology that Barclays is interested in.’
Ayfie is the most established of those joining the law-tech Eagle Lab, first founded in the US in 2009 and boasting more than 500 customers. It has developed a tool which combines natural language processing and linguistics to enable law firms to analyse unstructured data without having to train machine learning algorithms with large document sets.
Ayfie EMEA senior vice president of business development Peter Richards said: ‘Ayfie’s experience and technology combined with direct access to UK law firms and other technology vendors will uncover opportunities for both ayfie and the firms.’
The lab mirrors a network of other Eagle Labs Barclays has across the UK, originally converting old bank spaces to help start-up businesses. Barclays has already hosted three law-tech companies in its Eagle Labs, including Wavelength Law, Prose, and Aalbun.
It also builds on similar initiatives launched at law firms, including the aforementioned Fuse, Mishcon de Reya’s MDR LABS and Dentons‘ Nextlaw Labs and Nextlaw Ventures.
Barclays UK general counsel (GC) Stephanie Pagni commented: “Now that the first residents have moved into our LawTech Eagle Lab, we look forward to working with our partners to facilitate supporting their growth by providing them with an environment in which they are able to collaborate and learn fast.’
You want to fight for truth and justice… you want to help neglected children… or you want to wield power in corporate boardrooms… for whatever reason, you think you want to be a lawyer. But pursuing a legal career can take you down many different paths.
The life of a corporate lawyer at Slaughter and May bears little resemblance to the life of a family practitioner at Penningtons Manches, which in turn is nothing like the day-to-day business of a fraud litigation lawyer at Mishcon de Reya or a personal injury solicitor at Irwin Mitchell. Just as the work is different, so too are the people. And the firms themselves, while sharing the common goal of business success, are also dissimilar in style and outlook. We aim to give you a thumbnail sketch of the various types of firm available to you as you look for a training contract. Readers should be aware that we are generalising to a certain extent, and you should always investigate each firm as much as you can to get a sense of individual flavour and personality. Always check individual firms for trainee numbers and salary details. Although we have, of course, done some of the legwork for you – see the individual firm profiles.
Magic Circle
An elite group of London’s largest and most profitable corporate law firms, comprising Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer, Linklaters and Slaughter and May. These are huge firms with hundreds of partners and annual UK trainee intakes of between 85 and 120 candidates. They advise the world’s leading companies and banks on their most challenging deals and transactions. They have sleek, impressive offices with fantastic facilities and they offer thorough training, international travel and exposure to major clients and deals. However, they are also known for long hours and high stress levels, and they tend to offer less client contact and ‘real’ work than smaller firms. To make up for this, the salary and bonuses are at the top end of the scale. If you see yourself as a high-flying corporate or finance lawyer, juggling big deals and huge sums of money, and are prepared to put in the hours, then these are the firms for you.
Large global/City firms
This wide-ranging group of firms offers a similar approach and philosophy to the Magic Circle. We include here practices such as Ashurst, Baker McKenzie, CMS Cameron McKenna Nabarro Olswang, Dentons, Hogan Lovells, Norton Rose Fulbrightand Simmons & Simmons. Work still has a definite corporate/commercial focus, clients are household names and deals are big. Trainee numbers are generally smaller, but you’ll still be part of a large group, with perhaps an intake of around 60 trainees each year. The hours and stress levels might not be on a par with the Magic Circle firms, but the pay might not be quite as high either. A training contract at this type of firm can offer many of the rewards of City training, with perhaps slightly less of a stressful, hothouse environment.
US firms
Training contracts at US firms in London appear to present an enticing combination of high salaries and large corporate deals, with plenty of hands-on experience and a smaller, more manageable number of trainees (typically between five and 15). Firms such as Cleary Gottlieb Steen & Hamilton, Covington & Burling, Jones Day, Kirkland & Ellis, Skadden, Arps, Slate, Meagher & Flom and White & Case are all praised for thorough training in an environment where there is no room to hide, but plenty of space to shine. On the downside, hours can be long, with eye watering billable targets and stress levels to match.
Large national/regional firms
Another group of commercial firms, handling high-quality work and offering anywhere between 12 and 50 trainee places each year. We include here practices such as Addleshaw Goddard (with offices in Manchester, Leeds and London), East Anglian practice Mills & Reeve and Bristol-based Burges Salmon. You should be offered a good spread of work at firms like these, and the bias will still be corporate/commercial, with decent litigation and property practices too. These firms are among the highest payers outside London, and offer an excellent alternative to the City.
Mid-sized London firms
This group covers a variety of firms with a number of specialist areas. Examples include Watson Farley & Williams (particularly well known for shipping work); Bird & Bird (leading reputation in IP and IT); and Macfarlanes and Travers Smith (corporate boutiques). Typically there will be between 15 and 40 trainees, allowing room to shine but providing you with plenty of ready-made friends. There is often more one-to-one supervision from partners and more client contact.
Smaller London firms
The smaller London firms can provide an excellent training environment, with early responsibility, hands-on work and often your own caseload. You will get exposure to the main areas of corporate, property and litigation, but should also get to experience some of the niche practice areas in which these smaller firms excel. One main downside to these firms can be the slightly higher levels of uncertainty over retention rates, so check out recent stats. Firms falling into this category generally have between ten and 20 trainees. Farrer & Co(strong in media and family); Forsters; Penningtons Manches (family law) and Bristows (IP) are examples of this type of firm. If you want a different kind of training experience to the commercial firms mentioned above, you could consider a legal aid specialist such as Hodge Jones & Allen, where a large proportion of work is publicly funded. This type of firm gives trainees the opportunity to experience areas of law such as human rights, crime, family and clinical negligence, in a more socially conscious environment.
Leading regional firms
Outside London there is a huge range of firms to choose from. Many will be leaders in their fields, with both local and national (sometimes international) clients. The larger examples will have between ten and 30 trainees and should offer a good balance of structured training, significant work and hands-on experience. Not to mention pretty decent hours, a short commute (depending on where you choose to live) and a good work/life balance. Some of these firms are based in one city, while others have several locations, for example, Ward Hadaway (Newcastle, Leeds and Manchester).
Smaller regional firms
If the idea of a large, competitive group of trainees makes you want to run a mile, and you’d rather get stuck into real work as soon as possible, then a smaller regional firm will often provide excellent client contact combined with a relaxed working atmosphere and reasonable hours. Firms such as East Anglia-based Birketts show the positive side of legal training – where it is possible to obtain thorough, hands-on experience in a variety of practice areas without saying goodbye to your social life.
City firms RPC and Stephenson Harwood have unveiled their autumn 2018 retention rates.
RPC has retained 82% of the trainees who started with the firm in 2016, with 14 out of 17 London-based rookies securing NQ roles. 13 of the recruits will be based in the firm’s London office, whilst one lucky NQ will be based in Hong Kong.
Once qualified, the deserving 14 will be spread among the insurance (one in construction and one in professional and financial risks), commercial disputes, corporate, IP and technology, media and commercial and technology and outsourcing groups.
Simon Hart, partner and training principal at RPC said: ‘Our qualifying trainees are a strong, talented and cohesive group of junior lawyers. Having watched the through their training to qualification, I am delighted that so many are staying within the business for the next stage of their career. Their enthusiasm for their future roles will add further energy to the core, growing teams across our business’.
Meanwhile, Stephenson Harwood has retained an impressive 90% of its September-qualifying trainees. Nine of 10 qualifying trainees were offered and accepted positions at the firm, eight of whom will remain in London while one NQ will join the Shanghai office.
The NQs will join the firm’s corporate, marine and international trade, commercial litigation, real estate and finance practice groups.
Nell Noble, partner and trainee principal at Stephenson Harwood said: “The firm remains committed to nurturing and endorsing talent from within and providing its trainees with a supportive environment in which they can fulfil their potential’.
Mid-tier pacesetter Fieldfisher has become the latest firm to explore volume legal services, opening a low-cost hub in Belfast to be staffed by 125 people.
The new Northern Irish office will provide document negotiation and legal support from a team largely consisting of paralegals. The venture is being launched in conjunction with Donaldson Legal Consulting (DLC), with which Fieldfisher has had a Belfast tie-up since the end of last year.
Via the DLC combination, Fieldfisher already has a Belfast base for its alternative legal services platform, Condor, which combines document data management and technology solutions with low-cost legal expertise.
DLC founder Alison Donaldson has been appointed managing partner of Fieldfisher Belfast and will be in charge of both the new office and the Condor operations.
Economic development agency Invest Northern Ireland has put forward a £630,000 grant towards the creation of these new jobs. The office currently has around 30 members of staff, with a view to employing some 125 people within the next three years.
Fieldfisher managing partner Michael Chissick (pictured) told Legal Business: ‘We are not starting from scratch, we already have 30 people there supporting clients, mainly in the financial sector. We’ve got to remain competitive with other firms who have similar operations.’
The firms Chissick is referring to include Clifford Chance (CC), who in February unveiled a surprise acquisition of Carillion’s pioneering in-house legal arm. The Newcastle-based Carillion Advice Services (CAS) was acquired for an undisclosed sum and consists of around 60 paralegals.
Moving more towards Fieldfisher’s position in the market, Taylor Wessing announced in July that it was opening a low cost centre in Liverpool. The new base is slated to open in September and will launch with an initial team of 11 lawyers and business support staff.
Fieldfisher has been on a robust financial run in recent years, announcing a 24% uptick in revenue earlier this year. The firm’s UK business brought in £135.6m, up on last year’s £110m.
Allen & Overy has become the latest Magic Circle firm to announce pay increases for its trainees and newly qualified associates (NQs), alongside a slightly reduced September 2018 retention rate.
The salary for NQs has risen to £83,000 from £81,000, while second year trainees can now expect to take home £50,000, up from £49,000. First year trainees will earn £45,000, compared with the previous £44,000 salary.
A&O has held onto 37 of its 46-strong intake this year – or 80% – having offered jobs to 40 trainees. The percentage is slightly down from last year when the firm kept 85% of its intake of 47 trainees.
On the trainee retention figure, A&O graduate recruitment partner and training principal Claire Wright said: ‘This is a good result and one which demonstrates the consistently high quality of the trainees here at A&O. We are fortunate to have such a strong pipeline of talented young lawyers and I look forward to seeing their careers develop and progress.’
Last week, Clifford Chance (CC) said it would increase compensation for NQs to £91,000, up more than 4% from £87,300 last year. It also raised trainee pay by 4%, with first-year salaries up from £44,800 to £46,600 and second-year remuneration increased from £50,500 to reach £52,500.
Meanwhile, Freshfields Bruckhaus Deringer has kept its NQ salary at £85,000 but increased its trainee compensation. First year trainees will take home £45,000, up 5% on last year’s salary of £43,000, while second year trainees will earn £51,000, a 6% increase on last year’s £48,000.
Slaughter and May will pay first year trainees £44,000 and second years £49,000.
The salary increases come on the back of a moderate year of growth for the Magic Circle in 2017/18, notwithstanding their financials failed to make as much of a splash as the previous year’s performance.
Aside from application forms, cover letters and interviews, an additional part of the training contract application process involves psychometric tests.
Many law firms now use these tests as a shortlisting tool, whether at the opening stages of recruitment or further on at an assessment centre. Wherever they’re set, it’s important that you know what each test entails, so we’ve detailed below the five main types of psychometric tests used by law firms and also included a table which lists the tests various firms use.
Critical Thinking Tests The Watson Glaser Critical Thinking Appraisal is the most common critical reasoning test and is designed to test an individual’s critical thinking ability. It is used by recruiters – especially those in the legal industry – as a way of assessing whether an applicant has sufficient capabilities in recognising assumptions, evaluating arguments and drawing conclusions, all of which we’re sure you’ll agree are important when practising law. The 30-minute, 40-question test is divided into five sections which assess your skills in inference, interpretation, deduction, recognition of assumptions and evaluation of arguments. What does all this mean in practice? Let’s break it down…
Inference The inference section of the test is all about assessing your ability to draw conclusions from observed or presented facts. You will be presented with information which you should consider as true and below will be a statement that is inferred from the text. Your job will be to decide whether the inferred statement is true, probably true, neither true nor false (meaning there is insufficient data), false, or probably false. Easy peasy, right?
Interpretation This section measures your ability to carefully evaluate information. You’ll be given a short passage to read and then a suggested interpretation. You’ll have to judge whether the interpretation (or conclusion) follows or does not follow beyond reasonable doubt.
Deduction The section on deduction tests your ability to judge whether conclusions are justified. You’ll be presented with a short passage following which will be conclusive statements that have been deduced from the text. Your task is to decide whether the conclusion follows or does not follow based on the information from the original passage.
Recognition of assumptions In the assumptions section of the test you’ll be asked to determine whether an assumption has been made in a given statement. You will be presented with an opening statement followed by a list of assumptions based on the opening statement. You’ll then need to state whether the assumptive statements are indeed assumptive or not, has an assumption been made or not? An example question from Pearson’s Watson – Glaser Critical Thinking Appraisal test is below.
Evaluation of arguments Your main task in this section is to evaluate the strength of an argument. After reading a statement and corresponding arguments, you’ll have to decide whether the argument(s) is strong or weak. Strong arguments are both relevant and important to the topic being discussed.
Situational Judgement Tests Situational judgement tests are used to assess an applicant’s values and how well they align with those of the firm. The test comprises of a set of hypothetical workplace scenarios and asks the applicant how they’d respond to the given situation, either from a selection of answers or using a likert scale. The test gives recruiters an indication of an applicant’s behavioural and cognitive abilities and hints at their communication, teamwork and problem-solving skills. Because firms tailor their tests to their organisation, no two assessments will be the same. There’s no set way to pass a situational judgement test but our advice would be to answer truthfully whilst also keeping in mind the firm’s values and character – how would they expect their trainees to behave in a workplace setting?
Verbal Reasoning Tests Remember the reading comprehension tests you used to do at school? Well, verbal reasoning tests are very similar. They’re used by employers to suss out an individual’s communication capabilities – how well can they comprehend complex passages and deduce information? Effective communication is important in any workplace, perhaps even more so in law, which is why many firms ask job applicants to complete the verbal reasoning test. The test typically has between 20 and 30 questions which have to be answered within 30 minutes, and will measure an individual’s ability to identify logic through analysis, interpretation and evaluation. How will it work? You’ll be presented with a passage to read and then have to decide whether a subsequent statement is: a) True, meaning that the statement can be definitively assumed from the information given to you. b) False, the statement does not logically follow the text that has been given. c) Cannot say, there is no enough information given to you for you to be able to conclude that it is true or false.
With verbal reasoning tests it’s important to answer the questions based on the information presented to you, after all, the tests are assessing your ability to comprehend, analyse and deduce information, NOT how much you know about the topic being discussed.
Numerical Reasoning Tests If you’re already fretting at the thought of having to sit a numerical test, you needn’t do so – trust us! The test isn’t full of quadratic equations and probability questions, but rather, presents numerical data for you to interpret and evaluate. You’ll be given graphs, tables and financial reports to analyse, percentage and ratio problems to solve, and perhaps even a question on currency conversion. Recruiters are looking to see how well you can interpret numerical data and draw conclusions from it, as well as if you’re able to identify critical issues from the information. Bonus – you’ll be able to use a calculator when completing the test so you don’t have to worry if your long division skills aren’t up to scratch!
Inductive Reasoning Tests Inductive reasoning tests are designed to measure an individual’s ability to identify and interpret patterns. They’re similar to abstract reasoning tests in that they both present candidates with a word, number or image sequence to be analysed. Test-takers are asked to consider what is the rule of the sequence and how should the sequence evolve? Your overall test score will reveal how well you can apply logical reasoning and find solutions when presented with new and unfamiliar data. Recruiters use the test as an indicator of an individual’s problem-solving ability, analytic skills and mental flexibility.
Firms and which tests they use as part of their training contract application process* *Only firms that have specified which test(s) they use are listed in this table. There are additional firms that use psychometric tests as part of their application process but as their website does not specify which, they have not been included in the table.
FIRM NAME
TEST(S) USED
Akin Gump Strauss Hauer & Feld
Critical thinking
Baker McKenzie
Situational judgement and verbal reasoning
Bates Wells Braithwaite
Verbal reasoning
Bevan Brittan
Verbal reasoning
Bircham Dyson Bell
Situational judgement
Bird & Bird
Critical thinking (Watson Glaser)
BLM
Critical thinking
Charles Russell Speechlys
Situational judgement
Clifford Chance
Critical thinking (Watson Glaser)
CMS Cameron McKenna Nabarro Olswang
Critical thinking
Dentons
Critical thinking (Watson Glaser)
Fieldfisher
Inductive reasoning and verbal reasoning
Fladgate
Critical thinking (Watson Glaser)
Hill Dickinson
Critical reasoning
Hogan Lovells
Critical thinking (Watson Glaser)
HFW
Critical thinking and reasoning (at assessment centre)
Ince & Co
Critical thinking (Watson Glaser)
K&L Gates
Critical reasoning (at assessment centre)
Kennedys
Critical thinking
Mayer Brown
Verbal reasoning and situational judgement
Michelmores
Verbal reasoning (at assessment centre)
Mills & Reeve
Critical thinking
Mishcon de Reya
Situational strengths and critical reasoning
Osbourne Clarke
Verbal reasoning
Penningtons Manches
Critical thinking (at interview stage)
Reed Smith
Situational strengths
Royds Withy King
Critical reasoning (at assessment centre)
Simmons & Simmons
Judgement, logical and verbal reasoning
Stephenson Harwood
Critical reasoning
Taylor Wessing
Online game based assessment called cosmic cadet. This is a game-based psychometric test, which looks at your behaviour and approach to each task to highlight certain personality traits, such as your ability to innovate. After completion of the assessment you receive a personalised feedback report that details your strengths.
TLT
Critical thinking (Watson Glaser) and verbal reasoning
Weil Gotshal & Manges and Slaughter and May have scooped key mandates on Bain Capital’s proposed £1.2bn takeover of UK insurer esure as RPC and Clifford Chance (CC) wade into the House of Fraser saga.
Weil is advising Bain on the proposed take-private, which will see the private equity player acquire, via its Blue (BC) Bidco Limited subsidiary, all shares in the motor and home insurer for 280 pence per share. The Weil team is led by private equity partner Marco Compagnoni and senior consultant Ian Hamilton.
The mandate is significant for a firm which has historically acted for Bain in conjunction with Advent International on multiple payment processor transactions. These include the $745m acquisition of Concardis and its subsequent merger with NETS in 2017, a $1bn deal to acquire the payments units of Intesa Sanpaolo Banking Group in 2016, as well as the acquisition and subsequent London listing of Worldpay in 2015.
Compagnoni commented: ‘We have worked with the Bain team for a number of years on a range of opportunities, so it is also pleasing that this is our first announced solo deal for them.’
Slaughters, meanwhile, acted for esure in a continuation of its longstanding relationship with the company. The firm’s corporate team was led by partners John Papanichola and Robert Innes.
Papanichola told Legal Business: ‘The team is pleased to have advised esure on its London listing in 2013, its demerger from GoCompare in 2016 and now on this proposed take-private in a relationship that has spanned several years.’
A Skadden, Arps, Slate, Meagher & Flom team led by London corporate partner Scott Hopkins advised the joint financial advisers to Bain Capital: Goldman Sachs; Cenkos Securities and Dean Street Advisers.
The cash consideration will be funded from equity financing drawn down from Bain Capital funds as well as minority equity invested from a number of HarbourVest, Lexington Partners and LGT funds.
Elsewhere, the administration of UK department store chain House of Fraser last Friday (10 August) and its subsequent £90m disposal to Mike Ashley, the owner of High Street chain Sports Direct, has led to RPC and CC being added to the list of advisers.
RPC is advising Sports Direct and CC is advising EY, which is acting as the administrator of the company. The pre-pack administration came about after Chinese investor C.banner, the owner of iconic London toy shop Hamleys, earlier this month backed out of a deal to inject £70m into House of Fraser and issued a profit warning.
Earlier this year, House of Fraser had been looking at a controversial company voluntary agreement (CVA) with landlords, which would have seen several stores closed and rent reductions agreed with unsecured creditors.
To that end, Freshfields Bruckhaus Deringer was mandated by House of Fraser, with Kirkland & Ellis acting for the bondholders. The Freshfields team was led by restructuring partner Ken Baird and included partner Adam Gallagher, and dispute resolution partner Craig Montgomery.
Travers Smith, with a team led by restructuring partner Edward Smith, advised KPMG as the supervisor of the CVA.
The CVA took an interesting turn recently as a group of landlords, represented by restructuring firm Begbies Traynor and property agency JLL, filed a legal challenge to the proposed arrangement.
The petition in the Scottish Courts challenged ‘alleged unfair prejudice against certain creditors as well as material irregularities in the implementation of the CVA’, according to a joint statement from Mark Fry of Begbies Traynor and Charlotte Coates of JLL. The challenge was last week settled out of court.
