ft innovative lawyer europe 2014 report

ReseaRch paRtneR suppoRted by

FTInnovaTIveLawyers2014

www.ft.com/innovative-lawyersOctOber 9 2014

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Innovative Lawyers 2014

Growth areasIn-house lawyers are striding ahead as the biggest drivers ofchange in the legal industry. The requirement for corporatelegal departments is to generate revenues as well as trim costs.This can be seen in developments that ingeniously reduce thecost of bought-in legal services and even potentially cut out thetraditional role of lawyers completely.

Many leading European law firms are also reforming theirofferings – the highest scorer in the FT 50 ranking of law firminnovators this year has embraced changes such as differentdelivery models and online legal services. And it is far from alone.

Growth and profitability are accelerating at the big firms inEurope. But success in riding out the financial crisis runs the riskof making them complacent about further innovation.

That would be a mistake, as reforms such as the UK’s LegalServices Act continue to give opportunities to forward-thinkersusing technology to streamline the delivery of legal services.

These trends are highlighted in this unique analysis of theEuropean legal sector, the ninth annual FT Innovative Lawyersreport. In less than a decade the FT reports, rankings and awardshave gone from strength to strength. This year we launched theAsia-Pacific Innovative Lawyers report, introducing our rigorouslyresearched rankings to the most dynamic legal environment inthe world. And our US report will appear for the fifth year thisDecember, expanded to cover the whole of North America.

For this year’s European report and rankings, our long-termpartner RSG Consulting researched 188 law firms, legal serviceproviders and in-house legal teams, interviewing and seekingfeedback from 550 clients, lawyers and experts.

The overwhelming evidence is that models for the delivery oflegal services have changed, clients have higher expectations, andthe in-house section of the profession has grown exponentially –one in four lawyers in the UK now practises in house. Law firms'use of technology is still low compared with other industries,though. This is an area to watch. The volume of data firms haveto handle will force the intelligent adoption of the best tools fromthe technology sector. If law firms want to avoid becoming justone supplier among many, they will have to keep innovating.

Lionel BarberEditor, Financial Times

Special reportS editorMichael Skapinkerhead of editorial contentHugo GreenhalgheditorRohit Jaggiproduction editorGeorge Kyriakosart directorDerekWestwooddeSign conSultantMichael CrabtreeSub editorSPhilip Parrish, Liz DurnoilluStratorMartin O'Neillglobal SaleS directorDominic Goodglobal aSSociate directorprofeSSional ServiceS &technologyStephanie CollierpubliShing SyStemS managerAndrea Frias-AndradeadvertiSing productionDaniel LesarrSg conSultingReena Sengupta, Yasmin Lambert,DominicWilliams, Laura Ansell,Lucy Pearson, JamesWood,Ian Richards

foreword

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Special achievement7 Rosemary Martin, generalcounsel at Vodafone, hastransformed in-house legalteams, making them integralto companies' growth

introduction10 The rise of integratedservices, and how in-houseteams are leading the way inimplementing technology

corporate Strategy14 New legislation has led tothe creation of imaginativenew business models

client Service18 How firms are harnessingtechnology to become virtualin-house legal teams

diSpute reSolution20 Firms have found ways tospeed up normally lengthylegal processes in sectorsfrom banking to technology

legal innovatorof the year24 Many of the candidateshave fostered a spirit ofinternational co-operation

Contributors

MuradAhmedEuropean technologycorrespondent

CarolineBinhamLegal correspondent

JaneCroftLaw courtscorrespondent

YasminLambertSenior consultantRSG Consulting

ArashMassoudiM&Aand corporatefinance correspondent

SarahMurrayFT contributor

Gill PlimmerIndustry reporter

Reena SenGuptaChief executiveRSG Consulting

Michael SkapinkerEditor, Special Reports

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This year...

pioneerS30 The post-deregulationperiod has provided evidenceof some real change in the waythe legal market works

finance32 A law that encouragesimaginative ways of securingfunding for infrastructureprojects has revived lawyers’appetite for risk

corporate & commercial36 Tax inversions have gainedin popularity in cross-bordermergers and acquisitions butneed considerable skill toexecute

value reSourcing38 Other industries areproviding law firms withinsights into business processimprovement

general counSel40 The best in-house legalteams are coming up withrevenue-generating ideas

Social reSponSibility44 Not only are law firmsintroducing internal policies tobecomemore diverse, but theyare also looking externally totackle global social issues

inSide

11 FT 50: law firm innovators

15 Most innovative law firmsin corporate strategy

17 Most innovative law firmsin international strategy

19 Most innovative law firmsin client service

21 Most innovative lawfirms in dispute resolution

31 Legal industry pioneers

33 Most innovative law firmsin finance

37 Most innovative law firmsin corporate and commercial

39 Most innovative lawfirms in value resourcing

40 Individual in-houselawyers

42 Most innovative Europeanin-house legal teams

42 Innovation in operationalchange

45 Most innovative law firmsin social responsibility

46 Most innovative law firmsin diversity

2014 Rankings

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For more detailed rankingtables and a methodology go to

ft.com/innovative-lawyers

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Special achievement

Since 2008 there has been a sig-nificant shift in the status of in-house lawyers.The voice of the client has become a stridentcall for change and, as the FT reports show, it isthe company legal department that is most ableto alter how lawyers work.

Rosemary Martin personifies the forward-thinking in-house lawyer. Her first such rolewas with Reuters Group – she joined the mediaand information company in 1997 and becamegeneral counsel in 2003. The Reuters legal teamwas the first winner of the FT’s in-house inno-vation award in 2007, having broken the cost-centre mould of many legal departments ofthe time. It acted as a strategic partner to com-mercial colleagues and helped drive economicgrowth for the business.

After Reuters, Ms Martin was chief execu-tive of Practical Law Company, itself an innova-tor in the dissemination of legal knowledge inthe profession. It was a natural role for one ofthe original students on the Nottingham TrentUniversity MBA in legal practice, a pioneeringcourse and one of the first to look at the “busi-ness of law” as a discipline.

The ability to run award-winning legal teamscontinues into her current role as group generalcounsel at Vodafone. The team has been praisedfor its work on the Verizon deal in 2013 and haswon awards for its pro bono work and telecomsexpertise. Ms Martin has been instrumental intransforming the legal function. Always open tonew ideas, she is known for leading major pur-chasers’ acceptance of alternative legal serviceproviders such as Axiom and Riverview Law.

Currently chairing of the European GeneralCounsel Association and a non-executive direc-tor at HSBC Bank, she is also on the FinancialConduct Authority’s listing advisory committee.

Ms Martin’s interest in the development ofthe profession has permeated her career. Aftertraining at Rowe & Maw, the City law firm thatlater merged with US firm Mayer Brown, andbecoming a corporate partner in 1989, she wasone of the first non-executive directors of theLegal Services Board between 2008 and 2010. n

MouLdbreakerRosemaryMartin has redefined therole of in-house legal teams, makingthem integral to the growth of theircompanies, writesReena SenGupta

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introduction

The pace of change in the legalprofession is often described as glacial. Crit-ics say that in the legal world, innovation onlyhappens at the edges and fundamentally theprofession has not changed in 50 years.

The same names populate the magic cir-cle of leading UK-based firms; Slaughter andMay continues to be the most profitable firmin the UK. And most European firms pursuethe same service delivery model – expertisevalued on the time spent to deliver it.

But the FT Innovative Lawyers 2014 ►

The trend towards integratedservices is well established but firmsare losing ground to in-house legal

teams through the use of technology,writes Reena SenGupta

the rIseof the

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1 Allen & Overy 248 138 110 2 5 4

2 Linklaters 198 70 128 2 3 4

3 Baker & McKenzie 140 99 41 3 2 1

4 Eversheds 138 49 89 1 4 1

5 Berwin Leighton Paisner 135 42 93 2 2 2

6 Garrigues 134 92 42 2 1 3

7 Ashurst 128 68 60 0 2 4

8 Freshfields Bruckhaus Deringer 123 60 63 2 0 4

9 White & Case 102 40 62 0 0 5

10 Latham & Watkins 96 51 45 2 1 1

11 Skadden, Arps, Slate, Meagher & Flom 95 95 0 1 3 0

12 CMS 94 50 44 2 2 0

13= A&L Goodbody 92 49 43 0 3 1

13= Bird & Bird 92 21 71 2 0 2

15 Slaughter and May 89 70 19 1 1 2

16 Pinsent Masons 87 24 63 0 3 1

17= Dechert 85 44 41 0 1 3

17= Macfarlanes 85 65 20 1 0 3

19 Weil, Gotshal & Manges 84 65 19 1 0 3

20 Vieira de Almeida & Associados 82 19 63 0 1 3

21= Addleshaw Goddard 81 42 39 0 1 3

21= Uría Menéndez 81 61 20 0 0 4

23 Axiom 71 0 71 2 1 0

24 King & Wood Mallesons (EU) 69 46 23 0 2 1

25 Jones Day 68 68 0 0 2 1

26 Herbert Smith Freehills 65 22 43 1 0 2

27 NautaDutilh 63 63 0 0 1 2

28= Gómez-Acebo & Pombo 61 0 61 1 0 2

28= Ţuca Zbârcea & Asociaţii 61 61 0 0 0 3

30= Arthur Cox 60 39 21 0 1 2

30= Van Doorne 60 19 41 0 0 3

32 Shearman & Sterling 50 50 0 1 1 0

33= Hogan Lovells 46 46 0 1 0 1

33= Matheson 46 46 0 0 2 0

35= DLA Piper 44 0 44 2 0 0

35= Fried, Frank, Harris, Shriver & Jacobson 44 44 0 0 1 1

35= Morais Leitão, Galvão Teles,Soares da Silva & Associados

44 21 23 0 1 1

35= Paul Hastings 44 44 0 0 1 1

35= Shoosmiths 44 0 44 1 0 1

40 Pérez-Llorca 43 25 18 1 0 1

41 PLMJ 42 0 42 0 1 1

42 DWF 39 0 39 0 0 2

43 Simmons & Simmons 28 28 0 1 0 0

44 Schillings 27 0 27 1 0 0

45 Olswang 25 0 25 1 0 0

46= Cadwalader, Wickersham & Taft 24 24 0 0 1 0

46= Schellenberg Wittmer 24 24 0 0 1 0

46= Wiggin 24 0 24 1 0 0

49= Cuatrecasas, Gonçalves Pereira 23 23 0 0 1 0

49= Kennedy Van der Laan 23 0 23 0 1 0

49= Radiant Law 23 0 23 1 0 0

● FT LAW 50: LAW FIRM INNOVATORS 2014

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report chips away at that view. The extensiveresearch carried out for the report on the Euro-pean legal industry shows both premium lawfirms and corporate legal functions structur-ally changing from the centre.

The law firm that most demonstrates thischange is Allen & Overy, the top-ranked firmin the FT Law 50 this year. It is the fourth timesince this report was first published in 2006that the firm has taken the top slot. Given theintensity of the competition for the FT rank-ings – we receive nearly 600 submissions everyyear – the firm’s track record on innovation isnotable. Of the top-end law firms in Europe, itis at the forefront of willingness to use its pre-mium brand to cover a suite of deliverymodelsfrom quality lawyering to online legal servicesthrough to contract lawyers.

To put the significance ofthis in context, one has tounderstand the pain withwhichmost lawyersworkingat the top 100 internationallaw firms view the idea ofcommoditisation. Law firmstrategy is for the main partfocused on one mantra:doing premiumwork at pre-mium prices. Any deviationfrom this, many feel, dilutestheir hard-maintained elitebrands. This has made theconcept of service disaggre-gation a difficult one for theprofession to swallow. Thefirst significant outsourcingarrangements were con-cluded only in 2007, and formany firms the establish-ment of offshore centres to do back office orstandardised legal work is still an innovation.

While rebundling services is very newfor the legal sector, other industries, such astelecommunications, have made big stridestowards integrated service models. But formost law firms, the idea of offering legal advicein a way other than through a highly trained,highly paid human being is anathema.

Allen & Overy is not the only firm to realisethe direction in which client demand is head-ing. Other firms, such as Eversheds, BerwinLeighton Paisner and Pinsent Masons, havealso travelled the path of disaggregation andare beginning to look at integration. Evershedsnotably introduced business process engineer-ing as early as 2003 and launched its consultingarm for clients in 2010.

These firms have also picked up on the trendin the market towards single-supplier relation-ships between clients and law firms. They haverealised that client loyalty in future will not beengendered by individual relationships overdinner or at the races, but by deep knowledge

and extensive data. Similar to Apple’s businessmodel, law firms will increasingly need to cap-ture clients and be able to serve them acrosstheir business needs, from top-end legal adviceto everyday legal matters to implementation.

The view of change among law firms as gla-cial does, however, have more substance in thetake-up of new technologies. This is slowerthan many have predicted and has not yetcaused significant change in lawyers’ workinglives, other than to make them more mobileand able to work longer hours. At an FT dinnerfor the top 20 European law firms earlier thisyear, many partners confessed that technologywould not have an impact until they,metaphor-ically speaking, let their chief information offic-ers out of the basement.

It is not surprising,therefore, that some of thetechnological innovationswith the biggest impact arebeing seen in the in-housesegment of the profession.It is here that the trend toremove lawyers from thelegal process is most pro-nounced. In an environmentwhere the speed at whichlawyers work has a directeffect onbusiness outcomes,a growing number of legalfunctions use automatedcontract management toolsand processes.

Some technological inno-vations devised by in-houselawyers also have the poten-tial to affect private prac-tice. Hewlett-Packard’s new

mergers and acquisitions tool captures years ofexperience from internal lawyers to systematisetheprocess andhelpsmakebetter judgments onacquisitions.

Sergio Letelier, M&A counsel at HP, says itcould affect the whole M&A legal industry. “Atool like this will reduce the need for relation-ship-dependent knowledge,” he says. Not onlydoes it trim the reliance on external counsel forprocess advice during a transaction, but therewill be fewer deals, he says, “as the corporatewill be able to make better risk assessments.Law firmswill be getting fewermandates.”

If more deal-making companies follow HP’sexample and the amount of premium legalwork does fall, many more firms may find, likeAllen & Overy, that being able to provide inte-grated legal solutions to clients across differentlevels of legal work becomes compelling.n

introduction

For most firms,offering legaladvice other

than through ahighly trained

human being isanathema

RESEARCH & AWARD SUPPORTED By

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corporate strategy

HEALTHYOPTIONS

New legislation is fostering diversification andimagination, writes Caroline Binham

It is three years since the UK’s £25bnlegal market became one of the most liberal-ised in the world.The Legal Services Act, which took effect in

October 2011, promised to overhaul the legalprofession. Companies that were not law firmswere able to start offering legal services for thefirst time, while law firms could begin to takeinvestment from third parties. These new enti-ties would be known as alternative businessstructures, or ABSs.The idea was to make the buying of legal

services as easy as shopping for a tin of beans.Supermarkets were even potential sellers ofadvice – hence the legislation became knownas the Tesco Law, even though that supermar-ket giant did not itself choose to branch out intolegal services.Three years down the line from implemen-

tation and it is not just new entrants that arebeginning to disrupt the legal market thanksto the Legal Services Act. Innovation is comingfrom firms themselves as they begin to scruti-nise whether transformation into an ABS couldhelp them diversify and stand out.The grip of the financial crisis –which hit law

firms hard, with unprecedented job cuts acrossthe market – has also begun to loosen, mean-ing that firms are beginning to sketch corporatestrategies that go beyond generic expansion ordefensive mergers.Schillings, for years the scourge of wayward

journalists, is hoping to capitalise on its pre-eminence in protecting the reputations andprivacy of the rich, famous and infamous bybranching out into cyber security and risk anal-ysis. The Legal Services Act enabled the firm toapply for two ABS licences so that it could offerpartnership to professionals other than law-yers, and it swiftly bought an information tech-nology security boutique.This diversification makes sense when one

considers the convergence of not only the finan-cial crisis and its effects on firms’ bottom linesbut also the rise in cyber crime over the pastfive years, along with the implementation ofthe Legal Services Act. Moreover, one legacy ofthe phone-hacking scandal that rocked the UKmedia is that libel actions are on the wane asjournalists choose theirwords – and news-gath-eringmethods –more carefully.While good forpress ethics, this makes for perhaps a toughermarket for defamation specialists.This simple logic has borne fruit and since

it embarked on its new strategy, Schillings hasreported a 30 per cent increase in revenue in

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the 2013-14 financial year compared with thesame period a year earlier.Wiggin, another lawfirmknown for itsmedia

work, has also used the ABS model to build onits traditional strengths.Rather than diversify, however, Wiggin has

chosen to embed itself deeper into the sector byinvesting in other types of business, such as anon-demand television service that has launchedon a Swedish subscription platform.Once again, this innovation is having real

results: Wiggin’s revenue jumped 22 per cent inthe 2013-14 financial year compared with a yearearlier, while its net profit leapt 80 per cent.While some firms are seeking to innovate

their business models, some new entrants aretaking inspiration from the positive elements ofwhat a traditional law firm can offer.Axiom has been disrupting the provision of

legal services for a decade now – serving as themodel for a swath of copycat companies alongthe way – but one conundrum legal-servicesproviders face has been how to retain qual-ity lawyers. Axiom’s answer was to introducea form of equity. While equity underpins thetraditional law-firm model, Axiom’s take on itinvolves stock awards that vest over three years,rewarding not just rain-making talents or sen-iority but all levels of employee who can dem-onstrate they have used qualities such as client-facing skills and good “corporate citizenship”.Certainly Axiom seems to be able to attract

new hires: of its 225 lawyers in the UK, 93 werehired in 2013 – about 4 per cent of applicants aresuccessful – with another 100 recruits plannedfor 2014. The company has introduced trainingandmentoring programmes that aim to ensureboth a seamless service to clients and a colle-giate working environment.Training programmeswere also a prominent

theme at firms across Europe in ways that wentbeyond a technical grasp of the law.Spanish firm Gómez-Acebo & Pombo lost

both its founding partners in 2011 and has beenforced to think about nurturing its next gen-eration of leaders – a skill perhaps elusive atsome of Europe’s most celebrated firms. Abouta quarter of Gómez-Acebo & Pombo’s partnersare aged under 40, with few lateral hires com-ing into the partnership. Training in leadershiphas becomemandatory for all partners and sen-ior associates, while elements such as how tobetter sell legal services have been introduced.Entrepreneurship was also integral to

Vienna-headquartered Wolf Theiss when itdeveloped a bespoke training programme forits associates across the firm, the first of whomgraduated fromtheWolfTheiss “schoolof excel-lence” in 2013. Industry-specific knowledge tai-lored according to legal practice area is stressedalongside themore traditional elements of legaltraining – proof, if any is still needed, that thelegal market is just that: a market.

Score

Schillings 27 Moved to an alternative business structure (ABS) tointegrate the firm’s defamation legal practice with riskconsulting and cyber security services.

Bird & Bird 24 Developed a strategy to focus on disruptive technologywork, having recognised the area as an emergingmarket.

Gómez-Acebo &Pombo

24 Devised a strategy to develop and empower youngpartners and the next generation of leaders.

Wiggin 24 Under a new ABS, the firm has invested in media-related businesses, increasing profile and profits.

Axiom 23 Launched a series of linked programmes to strengthenits employee model, including an equity initiative.

Eversheds 23 Brought legal services online in a new way via itspensions and employment team’s auto-enrolment legalcompliance tool.

PLMJ 23 Maintained its competitive edge through the creationof new pricing units in debt recovery, due diligence,trademarks and patents.

Allen & Overy 22 Developed more powerful communications followingan internal survey that showed that its strategy was notsufficiently understood.

Berwin LeightonPaisner

22 Changed the way the firm communicates with clients toinclude powerful visuals.

Vieira de Almeida& Associados

22 Designed and implemented a fast-track careerprogramme based on an appraisal process thatidentifies “A players” and “B players”.

Wolf Theiss 22 Implemented a cohesive, standardised trainingprogramme focusing on dispute resolution, finance,corporate and property.

DirkzwagerAdvocaten &Notarissen

21 Devised an intensive social media and information-sharing campaign including a new public law library.

Latham & Watkins 21 Developed an internal competitive intelligence platformthrough an online database of press articles anddemographic data.

Van Doorne 21 Created the Beating Experience programme to helpassociates understand the complexities of the Dutchhealthcare system.

Linklaters 20 Brought transparency and consistency to treatment andexperiences of employees across the firm.

Linklaters 20 Established a holistic group to deal with regulatory risk,governance and compliance issues for clients acrossborders.

Macfarlanes 20 Set up a financial services regulatory group followinga gap-analysis that showed the need for non-complex,commercial compliance and risk advice.

Miranda 20 Implemented a new branding philosophy to help thefirm stand out from peers, entitled “Reach Further”.

Mishcon de Reya 20 Created a programme for the use of pre-emptiveinjunctions, assessing and analysing the results toeffectively add value for clients.

PwC Tax & LegalServices

20 Developed an innovation model, driven out of Spain,with a focus on speed, efficiency and creativity training.

Shoosmiths 20 Formed a monthly client investment forum to addressand resolve financial and personnel resource decisionsaffecting client relationships.

● most innovative law firms in CorPorate strateGY

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Latham & Watkins 24 Systematic and strategic growth of the Londonoffice to take advantage of renewing Europeanmarkets.

Allen & Overy 23 Created a Middle East office network to captureinvestment flows from wealth generated out ofoil and gas.

King & WoodMallesons (EU)

23 Combined with SJ Berwin to create the first global lawfirm to be headquartered in Asia.

A&L Goodbody 22 International expansion included opening of a SanFrancisco office and development of an originalplacement programme in China.

Magnusson 22 Developed a regional model to deliver connected legalservices across Baltic states.

Norton RoseFulbright

22 Completed its transatlantic combination and launcheda new global regulation and investigations practice.

● most innovative law firms in international strateGY

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AmericAn AdvAnces

As the UK and Europe tentatively emergefrom the financial crisis, recovery inthe US has been stronger and more

sustained. US-originated deals dominate cross-border mergers and acquisitions, better liquid-ity means European private-equity houses areturning to the US high-yield market, and thereis an increasing Americanisation of regulationand financial crime.All this could explain why US firms are hav-

ing a moment in London, none more so thanLatham & Watkins, which boasts UK revenueof more than $200m – quite a turnround for afirm that a decade ago had just 25 lawyers inLondon; it now has 250 fee-earners, including60 partners, after an aggressive hiring spree.While the US economy is influencing which

firms dominate and how firms respond to thechallenge, China is just as important, and themarket has become saturated with firms head-quartered in the US and UK looking to adviseon inbound, and increasingly outbound, Chi-nese investment.

King & Wood Mallesons, the Chinese-Aus-tralian law firm, moved into the ranks of theworld’s largest 25 firms by revenue by integrat-ing the third part of its merger with London-headquartered SJ Berwin in November. Thetie-up is still the only sizeable combination of aChinese firmwith a western one.n

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The scenariowill be familiar to anyvideo game enthusiast. Your team is engulfedin a global battle but loses two key playersat a crucial moment, leaving you stuck in animpossible position. Is there a hero who willcome to the rescue?That was the situation facing Codemasters,

the games developer behind franchises such asF1 and Colin McRae Rally. The British companyhad a small and stretched in-house legal teamof two solicitors. The pair were dealing withtricky international deals on everything fromfinancing and sponsorship to licensing agree-ments. But in June 2012, both lawyers left thestudio, leaving Codemasters with the problemof how to tackle its legal workload.It found its hero in Howard Rubin, a partner

at Bird & Bird, the London-based law firm thathas offices throughout Europe, Asia and theUS. Mr Rubin masterminded a new service,the Virtual General Counsel, which enabledthe games company to hire a “virtual” legaldepartment, in effect accessing Bird & Bird’s1,200 lawyers worldwide for a monthly fee.The concept is an example of outside-the-

box thinking employed by legal firms. Accord-ing to groups such as Axiom, Berwin LeightonPaisner and CMS, which all feature in thisyear’s FT Innovative Lawyers client serviceranking, the reasons behind adopting newtechnologies and practices are similar.These firms say they face clients ever more

keen to make savings, as corporate customersattempt to recover in the aftermath of reces-sion and difficult financial conditions. But the

client service

to therescue

Virtual legal teams aregiving clients a cheaper,more efficient option,writesMurad Ahmed

firms are also aware of new trends that aretransforming other industries beyond the law.The groups want to embracemodern practicesaround big data, attempting to find better waysto deal with the enormousmass of informationtheir organisations collect, and cloud comput-ing, which allows employees to share and storedocuments over the internet.Bird & Bird’s virtual legal counsel is an

example of a service that could only be cre-ated in the digital age. Instead of relying onoverworked in-house solicitors dealing withan array of legal issues, Codemasters was ableto access Bird & Bird’s lawyers, who betweenthem have expertise in finance, real estate andintellectual property.The law firm set up a video link, phone

line and email box, with software allowingeach task to be picked up by the right person.Instead of worrying about increasing legalcosts, Codemasters was charged only a fixedfee. The company saw a 40 per cent reductionin its legal spend as a result. “I could see allthe problems you had as an in-house lawyer,”says Mr Rubin. “I had known Codemasters fora long time. Its legal bill with externals wentup and up. I suggested there was another way.”Bird & Bird says it is attempting to expand

the reach of the system, with other small andmedium-sized companies that do businessglobally interested in adopting it.Sharing top spot on the client service rank-

ing is Berwin Leighton Paisner. The firmgained high marks for using state-of-the-arttechnologies, butwithin a structured team that

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allows its clients to save significant sums in liti-gation costs. BLP argues that commercial dis-putes have become increasingly complex. Themore complicated they are, the more advisersare required. This can create inefficiencies anddelays, which add to a client’s costs.

However, the firm’s “integrated disputeresolution service” gives its clients access toall of its 175 dispute resolution specialists. Inone case, BLP acted for a UK bank defendingclaims arising from a Ponzi scheme – a fraudu-lent investment scam. This work required law-yers to sift through printed bank statements.Instead, they utilised the department’s foren-sic technology specialists, who converted thedocuments into spreadsheets using specialsoftware. The lawyers were then able to ana-lyse the statements, allowing the bank to builda robust defence.

“It is a seamless service, which means thatthis is more efficient and there is less cost,”says Jonathan Sacher, a partner at BLP. “Manyothers are doing different parts of this, but notall in one firm.”

Other firms are also attempting to use bigdata to provide a better service to customers.CMS has created an innovative desktop tooldubbed Contract Quality. The system was cre-ated for its client Catlin, a leading insuranceunderwriter.

The software allowed lawyers to reviewhundreds of contracts, running into tens ofthousands of pages, and check for errors.Solicitors were able to see whether clausesrelated to war and international sanctionshad been mistakenly omitted. It also ensuredthat recurring clauses, which appear in typicalinsurance contracts, were included.

“It enables a consistent approach,” saysSimon Kilgour, a partner at CMS. “When youhave lots of underwriters reviewing variouscontracts, you don’t get consistency. With this,the company now has the technology to helpthe process and to analyse complex contracts.”

Meanwhile, Axiom has created an onlineportal called Iris that allows clients to keeptrack of the progress of the firm’s work andprovides them with a wealth of information toguide decision-making.

The Iris system allows clients to initiaterequests, track the status of enquiries andcommunicate with the lawyer. It also providesan analytics engine – allowing Axiom’s cus-tomers to see statistics and data that give thembusiness-critical intelligence.

Nick West, general manager of Axiom Lon-don, says: “This solution equips our team todeliver high-quality legal services with fastturnround times and gives our clients a uniquelens on their contracts: they have real-timedata and analytics to improve their contract-ing processes and deliver better commercialoutcomes.” n

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Bird&Bird 26 Created a virtual legal department service for companieswith no internal lawyers, giving themaccess to 1,200lawyersworldwide for amonthly fee.

BerwinLeightonPaisner

26 Integrated legal advice, forensic accounting andtechnology services, advocacy and flexible contract lawyersto save clients litigation costs.

Axiom 24 Created Iris, a contractsmanagement tool with dataanalysis to help general counsel report to the business.

Shoosmiths 24 Delivered non-legal services to lawyers at VolkswagenGroup to help themdevelop their value to the business.

Herbert SmithFreehills

23 Used its Belfast facility to helpManGroup implement a bigcontractual review in-house.

Radiant Law 23 Combined high-value legal advicewith process out-sourcing to expand the contractsmanagement service.

CMS 22 Created a contract analysis tool with software companyAdensa for a reinsurance client.

Eversheds 22 Enabled Barclays to retain small andmedium-sized clientsandmeet regulatory obligations in a review of the possiblemis-selling of interest-rate hedging products.


21 Used its own processmapping technologies to help Tescocreate betterworking relationships to deliver strategicprojects.

Dechert 21 World Compass, itsmarketing compliance service, offersinvestment firms advice inmore than100 jurisdictions.

Linklaters 21 Abespokewebportal for DeutscheBank's Alternative FundSolutions helpsmeet regulatory and compliance challenges.

PinsentMasons 21 Expanded its sole-adviser clients to include E.ONUK,servicing all its legal needs for an annual fee.

EmsleysSolicitors

20 A comprehensive approach to delivering legal advice thatseeks to improve and tailor the experience for all clients.

White&Case 20 Developed a team to oversee the entire life cycle of privateequity investments.

Allen&Overy 19 Lobbied after the 2013 Cyprus banking crisis for anamendment to newand potentially damaging legislation.

Baker&McKenzie

19 Developed a real-time customs enforcement solution tohelp tackle the proliferation of counterfeit goods.

DWF 19 Abespoke crisis response service for business continuity,reputationmanagement and psychological support.

FreshfieldsBruckhausDeringer

19 Developed assessment toolswith amanagementconsultancy to deliver risk assessments for largeinfrastructure projects in 48 hours.

Garrigues 19 CollaboratedwithTelefonica todevelopand implementacorporatepolicyand information technology tool toapply taxexemptions for internationallymobile employees.

Ius Laboris 19 Created an online global guide for labour and employmentlaw, covering 46 jurisdictions.

KochańskiZięba Rapala&Partners

19 Developed IRAAPORT, a sophisticated communications,document access and casemanagement system.

PLMJ 19 Offered a combined legal and technical audit on dataprotection through partnershipwith Critical Software.

Vieira deAlmeida&Associados

19 Aholistic,multidisciplinary approach to legal servicesallowed the development of electronic andmobile paymentservices in Portugal.

Weil, Gotshal&Manges

19 Designed a global toolkit for newly acquired portfoliocompanies to implement best practice.

AddleshawGoddard

18 Incorporated newdiagnostic products into its ClientDevelopment Centre to further assist in-house legal teams.

● most innovative law firms in Client serviCe

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dispute resolution

On thedatatraIL

From data privacyissues at banks to

intellectual propertyonline, firms have

found ways to speedup legal processes,writes Jane Croft

21


For the past year a dark cloud of liti-gation risk has hung over the European and USbanking sector, dragging down share prices.Analysts at JPMorgan Cazenove recently

estimated legal costs would set back UK banksa further £15bn over the next three years, on topof the £30bn they have set aside since 2011.Dozens of banking institutions in Europe

and the US, including Bank of America, HSBC,Lloyds, UBS and Deutsche Bank, have beenfacing an array of civil litigation and regula-tory issues relating to their past, ranging frommis-selling of mortgage-backed securities andalleged sanctions-busting to conduct related toLibor and interest rate swaps.The legal strategies that some banks are

deploying to deal with their litigation and han-dle their regulatory risks are, therefore, beingclosely watched by others in the industry.One example is how some of the Swiss banks

handled the US Department of Justice’s clamp-down on offshore bank accounts as it sought topursue institutions for allegedly helping US ►

Score

Simmons &Simmons

28 Applied a novel litigation strategy to alleviate thepressure on banks and the courts created by paymentprotection insurance (PPI) complaints.

Allen & Overy 27 Established the right of an English court to enforce ananti-suit injunction even before arbitration.

Baker &McKenzie

25 Negotiated more than 40 non-prosecution agreements onbehalf of Swiss banks following US Department of Justiceinvestigations.

Pérez-Llorca 25 Convinced the Supreme Court of Spain to apply a newmethodology for trademark infringement compensation.

Weil, Gotshal& Manges

25 Successfully argued for Littlewoods in a £1.2bn claimagainst HM Revenue & Customs that compound interestshould be applied to VAT overpayments.

Baker &McKenzie

24 Defended Meltwater in a Supreme Court copyrightdispute against the Newspaper Licensing Authority.

CMS 24 Clarified the terms of the Financial Ombudsman Servicemaximum claim award.

Garrigues 24 Convinced Madrid’s high court to order income tax berepaid to a number of non-resident EU investment funds.

Pinsent Masons 24 Used big data analysis to deliver success for Interflora in atrademark dispute with Marks and Spencer.

SchellenbergWittmer

24 Engineered the ACT, an alternative dispute resolutionforum for commodity trading, shipping and trade finance.

Matheson 23 Co-ordinated a multi-jurisdictional, multi-party dispute,gaining a favourable settlement for a banking client.

Matheson 23 Set a market precedent for duties and liabilities oftrustees in Ireland with defence of Element Six trustees.

Skadden, Arps,Slate, Meagher& Flom

23 Secured a precedent in implied choice of governing lawarbitrations, dismissing a multimillion dollar arbitralaward for its client.

Allen & Overy 22 Advised Magyar Telekom on its approach to an auction formobile frequencies in Hungary, clarifying EU directives.


22 Resolved a critical limitation issue in breach of trustclaims in the UK Supreme Court.

Carey Olsen 22 Defended a challenge to the sharing of information,clarifying the interpretation of inter-state tax informationexchange agreements.

Garrigues 22 Defended Google’s YouTube against copyright claimsfrom Telecinco, clarifying the EU ecommerce directive.

Bird & Bird 21 Persuaded an English court that it could rule ondeclarations of non-infringement on non-UK patents.


21 Defended Holcim against claims of cartel infringementbrought by a private antitrust enforcement company.

Morais Leitão,Galvão Teles,Soares da Silva& Associados

21 Achieved annulment of the additional assessment ofcorporate income tax in the case of reverse mergers in EUstates.

Ţuca Zbârcea& Asociaţii

21 Advised the Romanian Football Federation on a disputewith a premier league club about arbitration jurisdiction.

White & Case 21 Shifted the burden of proof and established the validity ofelectronic evidence in a case against a Russian bank.

Jones Day 20 Defended Texas Keystone in a cross-jurisdictional disputeover an interest in Kurdistan petroleum fields.

NCTM StudioLegale Associato

20 Advised luxury carmaker Ferrari on trademarkinfringements in Italy and Germany, clarifying "unfairadvantage" in trademark disputes.

Uría Menéndez 20 Co-ordinated the approach of a Spanish energy companyin its dispute with Argentina over its expropriation.

● most innovative law firms in DisPUte resolUtion

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been assessing whether to sign up to the pro-gramme. It has tough requirements, includ-ing paying penalties for all non-disclosed USaccounts held by a bank since March 2009 andgiving information on accounts held directly orindirectly by US taxpayers since August 2008.About a third of the Swiss institutions

affected turned to law firm Baker & McKenzie,which has offices in the US and Switzerland, forguidance. The firm’s global approach and itsSwiss partners helpedbridge the cultural dividebetween the US and Switzerland – a crucialissue as theUSpressed for total disclosure froma notoriously secretive industry. This includeddealing with the thorny issue of data privacy –under Swiss law, employee data cannot be dis-closed without the employee’s consent.MarninMichaels, a tax partnerwith Baker&

McKenzie in Zurich, says the programme waschallenging for a number of reasons. “Typi-cally, DoJ investigations take years, yet this wasdone within six months,” he says. “At one timeor another we worked with 40 or more institu-tions. We had to balance the local data protec-

account holders commit tax evasion. Follow-ing an agreement with the Swiss government,the DoJ announced a programme in August2013 through which it encouraged Swiss banksto co-operate with its investigations rather thanface criminal proceedings. The programme,which meant institutions could reach a non-prosecution agreement with the DoJ if they metstringent requirements, was unique.Since then, more than 100 institutions have

◄

dispute resolution

23


tion laws with the US’s need to have as muchinformation as possible and we had to trainour people to do this as quickly as possible toencourage clients into self-disclosure.”Other law firms have had to adopt an innova-

tive approach tohandling civil litigationbroughtby consumers who claimed they had been mis-sold payment protection insurance (PPI).In recent years, thousands of consumers in

the UK have brought court proceedings, thathave clogged up county courts in lengthy liti-gation. Where banks chose to settle, they facedpaying the high legal costs of “no-win, no-fee”solicitors. An additional issue was that the PPIclaims were all specific, so the banking indus-try could not bring a legal test case where ajudgment would bind all subsequent claims –as the industry had donewith consumer claimsover current account charges in 2007.However, law firm Simmons & Simmons,

acting for Barclays, brought two legal casesthat led to rulings clarifying the legal posi-tion. This effectively resulted in claims beingdirected away from the county courts into thebank’s internal complaint functions.In the first case of Andrew & Ors v Barclays,

Mr Justice Waksman ruled in favour of thebank, staying PPI claims for eight weeks so thatthe bank could process them as complaints.He gave guidance that complaints should bebrought first to the bank, rather than swamp-ing the scarce resources of the court system.A second ruling, Binns v Firstplus Financial,

effectively meant any consumer who turned tothe court after having their complaint upheldby the bank would see their claim struck out.While the banking industry has been busy

dealingwith its legacy issues, the volume of liti-gation in the technology sector has increasedsignificantly because laws have failed to keepupwith the rapid pace of technological change.One of the most significant rulings this year

has been by the European Court of Justice,which gave European citizens the right to askinternet search engines to remove results forqueries that included their name – the rulingwas dubbed “the right to be forgotten”.Other cases have also trodden fresh ground

in the developing area of intellectual property– law firmGarrigues won five cases for Google.One notable case saw the Spanish court sid-

ing with Google and Garrigues on a disputewith broadcaster Telecinco, finding that Goog-le’s YouTube service did not have to check tel-evision clips for potential copyright violationsbefore posting them online.Other caseshave involved trademarkdisputes

between retailers, which are increasingly seeingthe internet as a sales driver. Law firms haveused new techniques, such as big data, to helpthem win these trademark cases. One exampleinvolved Marks and Spencer, which lost a long-running court battle after a judge ruled that the

Litigation inthe technology

sector hasincreased

because lawshave failed to

keep pace withtechnological

change

retailer had infringed the trademark of Inter-flora, the flower delivery business, by using it topromoteM&S flowers on the internet.Interflora had sued M&S in the High Court

because it said the retailer had used its trade-marked name as a keyword on Google, viathe Google AdWords system. AdWords allowscompanies to buy online advertising that willappear when users type particular words intothe search engine. As a result, typing in “Inter-flora” as a search term into Google brought upan M&S advert under the “sponsored links”heading, even though that advert bore no rela-tionship to Interflora.Law firm Pinsent Masons, which won the

case for Interflora, broke new ground by usingGoogle Analytics and online metrics, ratherthan traditional survey evidence, to demon-strate to the court the confusion caused amongconsumers when they used Google.This was the first time the courts had

accepted this type of anonymised big data asevidence of consumer confusion – and demon-strates the value of using the latest tools.n

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25


LegaL innovator of the year

Many of this year’s shortlisted candidateshave been instrumental in fostering aspirit of international co-operationPhotographs by Charlie Bibby

towards newfrontIers

The shortlist of 10 candidatesfor the individual Legal Innovator of the Yearaward this year formed a strong field. Four,however, came in for greater discussion by ourjudging panel of lawyers and experts.

Paris-based Orrick partner Pascal Agboyi-bor’s role in the Grand Inga hydropower pro-ject in the Democratic Republic of Congo inter-ested the judges, but it was his work on helpingto build African institutions and combatingcorruption that aroused particular admira-tion. The judges commented on how impor-tant this work was if Africa was to develop itsclear economic potential.

Stephen Hopkins’ work on single-supplier,fixed-fee deals, starting with Eversheds’arrangementwith Tyco, was seen by the judgesas exemplifying the direction inwhichmodernlaw needed to go.

Kevin Gold’s role in helping to install a dis-tinctive culture at Mishcon de Reya was well

WinnerJoanne WheeLer, Partner,Bird & Bird

JoanneWheeler has had aninterest in space since shewas a child. More recently,she had the chance to spendthree years at the EuropeanSpace Agency, which hasenhanced her profile in aburgeoning industry.

The commercial spacesector is developing rapidlyin a number of ways –regulatory, legal, technological

and economic. The challengeis to ensure it does so in afair and sustainablemanner.MsWheeler has beeninstrumental in projectsand consultations across theworld, commenting on howlaw directly affects the growthof the sector.

While at CMS, she helpedshape the space economyin the UK through herinvolvement in the UK’sSpace Innovation and GrowthStrategy working group onregulation.

This consultation processidentified and suggestedrequired changes togovernment policy, taxationand law tomake the UK amore competitive, better-regulated environment forthe industry. One client saysMsWheeler “has been acatalyst for that change”.

She has also been selectedas one of two expert UKgovernment representativesto the United NationsCommittee on the PeacefulUses of Outer Space.

known to the judges, as was the firm’s conse-quent growth.

But the overwhelming choice of the judgeswas Joanne Wheeler (now of Bird & Bird) forher role at CMS in the development of spacelaw. Spacewas an early enthusiasmof hers andthe judges were impressed both by the way shehad turned her hobby into her job and by thepioneering work she had done in the area.

Satellite communications affect almostevery aspect of our lives, yet this is an areawhere extraterritoriality (in the literal as wellas the legal sense) has sometimes left the lawstruggling to catch up. The judges were alsoimpressed by Ms Wheeler’s strong referencesfrom satellite industry figures and by her rolein advising companies and government in anarea of the law that is developing rapidly andboldly going into new legal worlds.

Michael Skapinker, editor of FT SpecialReports and head of judging panel

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SuSana aLmeida LoPeS,corPorate ServiceSdirector, vieira deaLmeida & aSSociadoS

Susana Almeida Lopes joinedVieira de Almeida as humanresources manager in 2008as the Portuguese economywas in crisis. The country’slaw firms were quick to feelthe economic contraction.Some of the larger oneslooked to Africa, Asia andSouth America for work, butan equally important plankof their survival strategieswas the ability to retain andengage their lawyers.

Ms Lopes found therewas little literature ontalent engagement andmanagement in firms, so shedecided to conduct a researchproject; in 2013 alone shecollected data from 800participants across severallaw firms and countries.The data form the basis of anewmethodology Vieira deAlmeida uses to analyse andanticipate future leadershipstyles of senior lawyers.It is used to build morebalanced legal teams, andin performance appraisalsand career progression forlawyers.

In 2010, Ms Lopes becamecorporate services directorand amember of the firm’sexecutive committee. Herwork on talent managementhas helped the firm thrive indifficult market conditions.

StePhen hoPkinS, Partner,everShedS

Stephen Hopkins is the driving forcebehind a number of Eversheds’ mostinnovative submissions to the FTInnovative Lawyers reports over thepast nine years. The single-supplierdeal with Tyco in 2007, the firm’s GlobalAccount Management System (GAMS)and DealTrack project managementapproach set new standards for howlaw firms use metrics to manage clientrelationships and large projects.

Over the past three years, single-supplier deals between law firms andclients have created waves in the UKmarket. Under long-term, fixed-feearrangements, they force law firms totrack, manage and report work and costswith far greater detail than before. Theyalso set new expectations among largecorporate clients for what law firms can

deliver and how efficiently work can bedone. These deals all refer back to thedeal between Eversheds and Tyco.

Law firms often struggle to make thesesingle-supplier deals work financiallyin their first stages. Mr Hopkins wasresponsible for building in greaterefficiencies, better project managementand properly scrutinising costs. GAMS,which he developed, allowed Evershedseffectively to managematters handledby a network of international firms onbehalf of Tyco. It has continued to evolveand is now used withmore than 50clients. In March 2014, Eversheds secureda fixed-fee contract with the InternationalAir Transport Association, giving thefirm sole responsibility for legal projectmanagement in 158 jurisdictions.

LegaL innovator of the year►

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27


manueL martín,managing Partner,gómez-aceBo & PomBo

Manuel Martín has ledGómez-Acebo & Pombo fromMadrid since 2001, but hisleadership capabilities weretruly tested, and recognised,following the financial crisis.The tough decisions he andhis management teammadehave helped the firm emergewith a new, bold strategicdirection. Their focus: ageneration of young leadersand a honed list of selectedclients.

Gómez-Acebo & Pombohas always focused on thedevelopment of its people, butthe downturn forced it to takea closer look at performanceand progression.

MrMartín’s strategy,backed by the firm’s seniorpartners, was to reinvigoratethe firm’s governance witha consensual “one-partner,one-vote” approach to big

ferdinand maSon,Partner, JoneS day

Success in cross-borderdeals, says FerdinandMason, requires morethan a knowledge offoreign laws. His advice tolawyers operating in theinternational arena is thatyou need to understandlocal corporate culture: “Ifsomething seems peculiar,odd or impossible… youshould assume legal orcorporate ignorance beforetaking any further steps.”

This thinking drove theinnovation behind his twohighly commended entriesin this year’s FT InnovativeLawyers report. In a ground-breaking transaction, hechallenged the US PatriotAct by creating a Dutchorphan foundation toprotect Amsterdam InternetExchange’s data.

decisions that has enabledyounger partners to drivethe business forward.This strategy has seen fivepartners under the age of35 promoted to high-profileoffice-leadership positions.

Market pressures in Spainhave meant difficult choicesfor MrMartín, who has tojuggle streamlining both hispartnership and his clientroster, neither of which iseasy to do without a “hugeshake-up”.

However, MrMartín hasbeen able to achieve strategicsuccess with the consensus ofthe partnership. Part of thathe puts down to “listening,listening, listening to yourpartners”.

He was also involvedin the first-ever mergerbetween Japanese and USpublic companies – thatof Tokyo Electron withApplied Materials. Theresulting $29bn company hasbecome a global leader insemiconductor and displaymanufacturing technology.

Mr Mason benefits froman international background.He was born in the UK andhas lived all over Europe,studying in Belgium and theNetherlands. He believesthe key to successful cross-border negotiations isfinding the “cultural click”.While the default is often touse US or EU law, comfortcan be given to clients in adeal by using local law.

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LegaL innovator of the year

henning Schneider,Partner, Latham& WatkinS

When Henning Schneiderstarted his career at theGerman law firm Schön Noltein 1996, much of his initialwork was in the healthcareand life sciences sector. Atthe time, nursing homes andhospitals were not viewedas an exciting area for legalwork, but Mr Schneider sawan opportunity to build aspecialist practice.

In 2001, the Germanmarket opened tointernational law firms andSchön Nolte joined Latham&Watkins. Other firms inGermany and continentalEurope began to pursuesector specialisation, butMr Schneider’s foresightpaid off and he is now arecognised industry leader.

Mr Schneider’s workadvising Rhön-Klinikum,Germany’s second-largesthospital operator, on the saleof 43 hospitals andmedicalcare units is featured in thisyear’s FT report. He createda new transaction structureto allow the sale to gothrough. In doing so, he hashelped create one of Europe’slargest hospital operators,while avoiding litigation byminority shareholders andcompetitors. It has createda newmodel for similaracquisitions in the future.

graham Penn, Partner,SidLey auStin

As a youngman, GrahamPenn was fascinated byeconomics. So much so,that he began his career inbanking and read law onlyas part of his professionalqualifications. Finding thelaw equally stimulating, hetook a law degree. After astint in practice, he spentthe 1980s teaching financelaw. In 1984, he set up theInternational FinanceMasters for the University ofLondon, and it has becomeone of the most popular lawcourses in the world.

This deep immersion inacademia early in his careerinformsMr Penn’s approachas a practitioner. Now thehead of the global financepractice at Sidley Austin, theUS law firm, he has been apioneer in structured financeand securitisation. Clientsmay still refer to him as “theprof” but Mr Penn has beeninvolved in some of the mostground-breaking transactionsof the past two decades.

He is recognised forhis work on the Toys R UsDebussy DTC commercialmortgage-backed securitiestransaction, which wasthe first to use the investorguidance document knownas European CMBS 2.0, whichMr Penn drafted.

PaScaL agBoyiBor, Partner,orrick

Pascal Agboyibor has long beenpassionate about bringing infrastructureand commercial stability to Africathrough his structured finance practice,run out of Paris. In 2013, under strainedpolitical and economic conditions, here-secured the Grand Inga power projectin the Democratic Republic of Congofollowing the near-fatal withdrawal byBHP Billiton. The project, one of theworld’s largest hydroelectric dams, willprovide power across Africa.

Mr Agboyibor has an in-depthunderstanding of local businessmarkets and socio-political contextson the continent. He is regularlycalled on by local African authoritiesandmultilaterals to advise onthe development of policy andregulation, particularly with respect toL’Organisation pour l’Harmonisation enAfrique du Droit des Affaires (OHADA)and financial markets. As a younglawyer, he helped to establish the legalstandards for the OHADA and advisedon the development of theWest AfricanMonetary and Economic Union.

Since establishing his energy andinfrastructure practice full time, he hassecured financing for dozens of projects,including working with Gécamines asjoint-venture partner in the context of a$1.36bn offer by Jinchuan for Metorexand a big project with the AfricanDevelopment Bank and other seniorlenders in connection with the financingof a sugar plant in Mali.

ReseaRch & awaRd suppoRted by

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29


eLLiott geiSinger,Partner, ScheLLenBergWittmer

Elliott Geisinger is arecognised figure in the worldof international arbitration,having established hispractice in 1994. Since thenhe has been both counseland arbitrator in complexcommercial disputesconcerning internationalconstruction contracts. Hehas also participated indrafting rules for arbitrationin commercial, commoditiestrading and sports cases.

In 2008, he began work oncreating ACT, the arbitrationservice for commoditytrading, shipping andtrade disputes launchedby the Geneva Chamber ofCommerce and Industryand the Geneva Tradingand Shipping Association.Mr Geisinger’s work on ACTis ranked in the disputeresolution category of thisyear’s FT Innovative Lawyersreport. The extensiveresearch andmethodologybehind ACTwas tailoredto the industry, which is anessential part of the personalphilosophyMr Geisingerbrings to all his work.

He has been praised for hisability to “see and understandthe needs of the users and therequirements he has to meetto draft in a pragmatic way”.Mr Geisinger has now turnedhis attention to contractmanagement practices in theconstruction sector.

kevin goLd, managing Partner,miShcon de reya

Under the leadership of Kevin Gold,Mishcon de Reya, with a plannedconversion to a full-equity limitedliability partnership and a formalapplication to become an alternativebusiness structure, is making bold movesto become a new-style law firm.

Since becomingmanaging partnerin 1997, Mr Gold has overseen thefirm’s development into one of themost recognisable brands in the legalmarket. The firm’s revenues havedoubled since 2009 and profitabilityhas increased – testament to Mr Gold’sstrategy of remaining true to well-definedcore values, smart lateral hires andinvestment in people.

Mishcon has featured in the SundayTimes 100 Best Companies toWorkFor for the past five years, illustratingMr Gold’s emphasis on the importanceof talent and working environment.This is the result of a number ofinitiatives such as theMishconAcademy, founded to provide the firm’slawyers with continuous education incommercial and legal skills.

This year has seen the launch ofMayfair Private, a private client advisorybusiness. The joint venture, with offshorefiduciary company Opus Private, willdraw onMishcon’s long-establishedprivate client practice.

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30


pioneers

When the legal marketwas deregulated three years ago, many likenedthe changes to the 1980s Big Bang that revolu-tionised banking in the City of London.The reality may not have quite lived up to

the hype, but since October 2011 there has beenevidence of real change as new players haveentered the legal sector hoping to gain signifi-cant advances by using fresh capital or adaptingnew technology.The Solicitors Regulation Authority, the

industry regulator, has approved almost 300applications for alternative business structure(ABS) licences so far, with many new entrantscoming into the field, particularly in areas thatprocess high volumes of low-value claims, suchas personal injury.Research published in May 2014 by the SRA

found ABSs accounted for a third of turnover inthe personal injury market. There are also rela-tively high concentrations ofABSs in thementalhealth, consumer and social welfare sectors.Even local councilshavebeen lookingatABSs

as a way of improving efficiency. In August, itwas announced that the legal teams at Buck-inghamshire county council and Harrow andBarnet councils would become ABSs under theLegal Services Act.Private equity investors have been active in

the field. Parabis Law, whose activities include

buzzof

IdeasDeregulation of the legal

market is starting tomake itself felt in greater

efficiencies andvalue-added services,

writes Jane Croft

31


Score

Parabis Law 24 The umbrella businessmodel that combines law firmsand alternative business structures (ABSs) set up inpartnershipwith insurance clients is nowoffering arange of consumer legal services.

PwCLegal 23 The first legal armof the big four accounting firms to begranted anABS licence, the firm is pursuing growth andraising its profile.

Allen&Overy –DerivativeServices

22 A licensingmodel to provide legal contentwhilepartneringwith technology suppliers and financialinstitution clients.

RedBar Law 22 AgrowingABS thatmanages the secondment ofbarristers directly to corporate clients at a fixed price.

AccessSolicitor.com

21 The comparison site pools available informationon firms of barrister and solicitors and generatessuggestions for consumers.

KempLittleConsulting

21 Anew consulting armallows the law firm to offercombined legal and business advice to technology anddigitalmedia clients.

Berwin LeightonPaisner – LawyersonDemand

20 A transactions service to staff complex legal projectsfor law firmand corporate clients.

Halebury 20 Provides the outsourced equivalent of an in-houselegal service for clients and an alternative career forexperienced lawyers.

Keystone Law 20 The dispersed law firmhas continued to growandrecently launchedKeypoint Law inAustralia.

Obelisk LegalSupport

20 Developed an online platform tomanage teams andbuild a community among nearly 700 lawyersworkingfromdifferent locations.

Refund.me 20 A technology-driven business that automatescompensation claims against airlines.

RichmondChambers

20 The first barrister-only ABS, the chambers providecost-efficient services by using online technologies andparalegals.

RiverviewLaw 20 TheABS business has invested in new technology anddata analytic capabilities to serve large corporateclients.

Emsleys Solicitors– ReviewMyClaim

19 A free service to reassess personal injury claimssupported by awebsite and consumermarketingcampaign.

Outer TempleChambers

19 The reorganised chambers introduced a newcontribution structure to incentivise and retain high-earning barristers.

● LEGAL INDUSTRY PIONEERS

Hig

hly

com

men

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Com

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Stan

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from offices in the UK’s northwest where clientspay an annual fee for all their legal needs up tothe point of litigation.The legal profession is notoriously conserva-

tive and some leading figures, while welcomingthe reforms, sound a note of caution.LordNeuberger, thepresidentof theSupreme

Court, the UK’s highest court, said in a recentspeech that it was “hard to quarrel” withmovesto make legal advice as cheap and accessible aspossible.But he added: “We must be careful of invok-

ing consumerism to justify legal advice and rep-resentation which is not properly independent,or which is second-rate – or worse.” Access tojustice, he said, “cannot be equated to any otherconsumer commodity”.n

providing claims management for insurancecompanies and defendant insurance work, wonthe first private equity investment in the sectorwhen it became an ABS in 2012. It was backedby £50m from Duke Street, the private equityfirm.Since then it has established two independ-

ent ABS business units as joint ventures toworkwith insurers – DLG Law, majority-owned byinsurer Direct Line, and Saga Law, which ismajority-owned by Parabis.This year sawthefirstof theBigFouraccount-

ancy firms gain an ABS licence. PwC said afterwinning approval that it would be able to investin PwCLegal, which had been a separate firmoflawyers under the PwC brand.Margaret Cole, PwC’s general counsel, a

litigation lawyer and a former managing direc-tor of the now disbanded Financial ServicesAuthority, said PwC had applied to be anABS to“provide high-value services to clients”.The evidence suggests that other firms of

accountantsare lookingatgainingABS licences.Asmany as 25members of the Institute of Char-tered Accountants in England and Wales haveexpressed an interest doing so.Many firms becoming ABSs have been quick

to use new technology to reduce costs and bringin new capital.Richmond Chambers is a barrister-only ABS,

based in London’s Covent Garden, rather thanthe Inns of Court. It controls costs and cutsoverheads by sharing documents electronicallyand having only one administrator.Direct access to the Bar now means that

authorised barristers can deal with the publicdirectly, rather than though a solicitor. Rich-mond is the first barrister-only ABS in what hasbecome a new business model for barristers.Paul Richmond, the barrister who set up

Richmond Chambers, says: “Technology isat the heart of what we do here and we are apaperless chambers.“We have tried to replace the clerk’s room on

the administrative side by secure cloud-basedsystems and on the marketing side by usingblogs, social media and websites.”Other ABSs are also utilising technology.

Refund.me is a technology system that auto-mates compensation claims against airlinesand can inform travel agencies when there is aproblemwith a flight. Agencies can then informcustomers whomay be entitled to claims underEU legislation; the system simplifies the claimsprocess.Some firms have sought to innovate by

changing the way clients are billed or by sec-onding barristers to corporate clients.LawVest, a holding company part-owned by

multinational law firm DLA Piper, operates alaw firm and chambers under the name River-viewLawand offers a fixed-rate contract, ratherthan billing by the hour. Riverview Law is run

RESEARCH&AwARDSuPPORTEDBy

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finance

The Thames Tideway Tunnel, Lon-don’s new super sewer that will snake for 25kmbeneath the UK capital’s main river, will havethe capacity to prevent 39m tonnes of wastebeing pumped into the Thames every year.

It is the biggest investment since Sir JosephBazalgette built London’s waste network inresponse to the “great stink” of 1858 and is thesecond-largest infrastructure project in the UK,after Crossrail, the trans-London railway line.

But while the £4bn super sewer is notable forits engineering expertise, it also stands out for

buILdIngbLocks

Changes to the law on infrastructurefinancing have rekindled law firms’willingness to experiment in setting

up deals, writesGill Plimmer

33


►

Score

Linklaters 27 Created securitisation structures based on new regulatoryframeworks to finance energy and infrastructure projects.

Baker&McKenzie

26 Developed a structure to enable the first domesticsecuritisation of consumer loans in the Russianmarket.

CMS 26 Helped drive changes to theUKSpaceGrowthAction Planand creation of the Satellite FinanceNetwork.

Garrigues 26 Advised Spanish bank BBVAon the first Europeancontingent convertible securities issue under the CapitalRequirements Directive IV.

Shearman&Sterling

26 Acted for bondholders of the Co-operative Bank on arecapitalisation plan that led to the first voluntary bail-inof aUK bank.

Skadden, Arps,Slate,Meagher& Flom

26 Advised Cyprus-basedQIWI on the first listing of foreignequity securities on theMoscow stock exchange.

A&LGoodbody 25 Worked on the liquidation of Irish Bank ResolutionCorporation, the first eurozone bank liquidation.

Allen&Overy 25 Deviseda risk-allocationmechanism forGECorporateFinanceBank touse in theEuropeanLoanProgramme (ELP).

King&WoodMallesons (EU)

25 Overcame capital requirements to introduce equity bridgefinancing into the Frenchmarket.

Latham&Watkins

25 Conducted risk analysis for Ares Capital Corporation in itsjoint venturewithGECorporate Finance Bank for the ELP.

Baker&McKenzie

24 Advised on the first sale of a property loan portfolio bySareb, the Spanish "bad bank".

Cadwalader,Wickersham&Taft

24 Found away for Centerbridge Partners to restructure aGerman company that heldNewYork lawbonds throughtheUK.

Eversheds 24 AssistedHMTreasury andHMRevenue&Customs on theestablishment of UK-authorised contractual schemes.

NautaDutilh 24 Modified existing covered bond structures to create a €5bnconditional pass-through programme for NIBCBank.

Shearman&Sterling

24 AdvisedDowChemical on the joint venture constructionand operation of a $20bn Saudi petrochemical complex.

AddleshawGoddard

23 Created a hybrid administration and insolvencymodel torestructureUKCoal in theUK’s shortest administration.

Cuatrecasas,GonçalvesPereira

23 Engineered a novel structure to allowUnicaja Banco toacquire Banco CEISS through security swaps.

Skadden, Arps,Slate,Meagher& Flom

23 Advised alcoholic beverages company CEDC on itsrestructuring,which involved a series of firsts for a Polishor Russian company under US bankruptcy law.

Ashurst 22 A teamof lawyers, projectmanagers and informationtechnology consultants assisted Commerzbank on its saleof Hypothekenbank Frankfurt’s UK operations.

Dechert 22 AdvisedWells Fargo on the acquisition ofHypothekenbankFrankfurt's UK operations, and on financing provided toLonestar to acquire the non-performing assets.

Dechert 22 AdvisedDevelopment Bank of Kazakhstan on the firstintermediated exchange offer under USRule 144A.


22 Devised risk analysis for project financing to build investorconfidence in Kenya and help it achieve its energy goals.

Paul Hastings 22 Advised on refinancing Toys RUs Properties (UK), whichincluded the first commercialmortgage-backed securities(CMBS) transaction not involving a bank.

Sidley Austin 22 Helped to create European CMBS2.0 investor guidelines,used in theDebussy DTC transaction by Toys RUs.

SlaughterandMay

21 PartneredAvivaGroup on the de-risking of the Aviva StaffPension Scheme.

● most innovative law firms in finanCe

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its complicated and innovative financing struc-ture. It is a sign of a willingness among lawyersto take more experimental, riskier approachesto financing than was the case immediatelyafter the financial crisis six years ago.

In many cases, the shift towards more imagi-native financing has been driven by legislationto deal with the fallout from the credit crunch.The government has also been forced to intro-duce laws to pave the way for specific projects.

The Thames super sewer is one of these.With the British government unwilling to payfor the project and seeking private cash, thesewer required new financing structures andlaws. The Specified Infrastructure ProjectsRegime was set up by the government in 2010to allow authorities to make regulations thatlay the foundations for specific projects withoutwhich regulated operators would struggle toprovide services for their customers.

Julian Davies is a partner at Linklaters,which helped to develop the model, and wasone of the first lawyers to use the new regime.He says there was no framework for creating adedicated, regulated cash flow to fund specificnew infrastructure for a regulated company.

“The existing frameworks were set up to cre-ate regulated cash flows from existing infra-structure, but not to fund specific new infra-structure and create a risk/profit profile withina specified project,” he says.

Although investors are willing to back exist-ing assets that already have a steady incomestream, such as airports and railways, they arereluctant to take on new construction risk.

The funding structure for the super sewerwas developed to address this. Thames Wateris setting up a company that will own the tun-nel and receive a licence from Ofwat, the waterregulator. This company, which is likely tobe owned by a group of pension or sovereignfunds, will be responsible for overseeing pro-curement and raising bank debt.

To overcome concerns about the risks associ-ated with the seven-year period when the tun-nel will be built, investors will receive earningswhile it is being constructed. This will be paidfor by an 11 per cent increase in customer bills– up to £80 a year – over the rest of the decade.The UK government will also act as a back-

34


stop or insurer for the project. Although themodel has been criticised for shifting the riskto taxpayers while private companies take theprofits, Mr Davies says this funding structurecould be used in other infrastructure projects.“People are going to look to this first transactionto see how it worked,” he says.

Other law firms are also seizing opportuni-ties arising from new regulation. For example,Joanne Wheeler, a partner at CMS, pushed forlegal changes to help make the UK a viablemarket for financing commercial space pro-jects. CMS was instructed to lead industry play-ers and senior government officials in identify-ing the regulatory and policy barriers to the UKspace industry. Ms Wheeler, now with Bird &Bird, is working with the Treasury to removeinsurance premium tax currently payable onspace risks for companies in the UK.

Other law firms have acted slightly ahead ofregulatory change or have been instrumentalin its development. Baker & McKenzie advisedHome Credit and Finance Bank, one of the larg-est consumer finance providers in Russia andthe Commonwealth of Independent States, on

◄

finance

the Rbs5bn ($1.3bn) securitisation of its con-sumer loan portfolio. There was no domesticsecuritisation law for consumer loans, but inthe wake of the transaction a securitisation lawhas been passed in Russia to cover these deals,coming into effect in 2015.

There has also been a wave of deals as USfinancial services institutions show interest inEurope. GE Corporate Finance Bank, advisedby Allen & Overy, and Ares Capital Corpora-tion, advised by Latham & Watkins, enteredinto a joint agreement to provide traditionalbank lending and alternative credit to Europeanupper mid-market leveraged finance. The Euro-pean Loan Programme will be €3bn in total.

John Goodhall, partner at Allen & Overy,says negotiating the “sheer weight of docu-ments” proved a challenge, but the most excit-ing part was bringing together legal expertisefrom numerous areas to create somethingnovel and really helpful to the market.

The firm’s success unlocks a potentialimprovement in Europe’s financial wellbeing– just as the financing of the UK super sewershould improve Londoners’ physical health. n

CMS pushedfor changes tomake the UK aviable marketfor financingcommercial

space projects

RESEARCH & AWARD SUPPORTED BY

36


corporate & commercial

The resurgence of corporate mega-deals is creating optimism among global lawfirms. While the pick-up in mergers and acqui-sitions activity is restoring an important sourceof income for firms, the creative structures that

wheeLsIn deaLs

Tax inversions have gained in popularity butneed skill to execute, writesArashMassoudi

are being devised for large cross-border dealsare drawing the most attention.In particular, so-called tax inversions have

become the most discussed trend in deal-making. Inversions account for at least 10 dealsstruck so far in 2014, including three worthmore than $50bn, and comprise 7 per cent ofall deal activity this year, according to Dealogic.Inversion deals have been criticised by US

politicians as seeking to subvert the Americantax regime, and President Barack Obama hasweighed in against them. In late September,the US Treasury Secretary unveiled a series ofexecutive orders aimed at curbing the scope ofinversions.In an inversion, a company uses an acquisi-

tion to re-domicile from countries such as theUS or Japan, where corporate tax rates areamong the highest in the world, to countriessuch as Ireland, the UK and the Netherlandswhere tax rates are lower and the repatriationof foreign incomemay also avoid taxation.While investment bankers have been dream-

ing up dozens of these deals, inversions are diffi-cult to execute. AUS acquirer, for instance,mustensure that at least 20 per cent of its stock isowned by the target company to satisfy the ruleson re-domiciliation. After a deal is agreed, law-yers must marry securities and corporate lawsacross jurisdictions as well as navigate existingsubsidiaries to close thedeal. Thatmakesunder-standing how a transaction will work before adeal is reached evenmore critical.Ireland has been a leading destination for

inversions, especially for healthcare compa-nies, with at least five inversion deals for com-panies domiciled there since 2010, accordingto Dealogic. But as suitable targets of scale forwould-be inverters have been snapped up,companies have had to become more creativein their quest for targets that can furnish themwith a lower tax rate.After failing to find an Irish match, Endo

Health Solutions, a US-based drug maker thathas struggled with declining sales, elected toacquire Canada’s Paladin Labs for $1.6bn lastNovember. Using advisers from Irish law firmA&L Goodbody and counsel from US law firmSkadden, Arps, Slate, Meagher & Flom andCanadian law firm Torys, as well as account-ants from Deloitte, Endo was able to establish anew Irish holding company that in effect wouldacquire Paladin by itself, allowing it to achievean unusual inversion. Under the new structure,Endo said it expected its effective tax rate todrop from 28 per cent to 20 per cent.“Whatmakes Endo unique is that it is the first

time a corporate inversion by aUS company intoIreland has occurred without the acquisition ofan Irish target company,” saysAlanCasey, a part-ner at A&L Goodbody, which has been involvedin some of the biggest tax inversions in Ireland,including Medtronic’s $43bn acquisition of rival


37

medical devices company Covidien in June.While the healthcare sector has been the

most active for inversions, other industries havejumped on the bandwagon. Another atypicaldeal involved two cable groups, Liberty Globaland Virgin Media. Virgin agreed to be acquiredfor $24bn in a deal that would see both Dela-ware-based companies first merge and theninvert into a holding company based in the UK.

The deal had not always been dreamed upas a tax inversion by Liberty, though, whichwas instead focused on using Virgin’s operat-ing losses for future tax advantages. Lawyersat Fried, Frank, Harris, Shriver & Jacobsonadvised long-time client Virgin on its negotia-tions with Liberty. The resultant tax inversionplan ended up allowing Virgin shareholders toadd an extra $4 a share to the final offer.

“When I first came to the UK in the early1980s, the idea was that the businessman didthe deals and the lawyers then wrote them up.That has changed a lot since I have been here.Lawyers are now playing a much bigger role ingetting deals over the line, much like in the US,”says Robert Mollen, a partner at Fried Frank.

TheNetherlandswouldseemanunlikelyplacefor a holding company to serve as the parent forthe $29bn combination of two semiconductormakers, Applied Materials of the US and TokyoElectron of Japan. The deal required a neutraljurisdiction for a new holding company – bothsides planned to keep their corporate headquar-ters in California and Japan respectively.

Using its familiarity with Dutch, US and Japa-nese laws, Jones Day devised a structure usingthe Netherlands that would allow for the firstever stock-for-stock merger between Japaneseand US public companies. “It’s about having abroad, international view of corporate law,” saysFerdinandMason, anM&Apartner at JonesDay.

“For cross-border deals that is essential. It’sabout knowinghow far youcanpushan ideaandhaving a sense ahead of timewhat the problemsare likely to be.”n

Score

Hogan Lovells 27 Restructured the Kodak Pension Plan and helped it acquireEastman Kodak business units, protecting pensions andsaving the UK government £1bn in liabilities.

Latham &Watkins

26 Created a merger structure to allow Rhön-Klinikum to sell43 hospitals without general shareholder approval.

Macfarlanes 26 UK counsel to Verizon during its $130bn cash and stockacquisition of Vodafone's stake in Verizon Wireless.

Slaughterand May

26 Advised Vodafone on the sale of its US group to Verizonand oversaw its $84bn payout to shareholders.

Eversheds 25 Worked with Legal & General to devise a long-term leasestructure that has created a market for institutionalinvestment in social housing.

A&L Goodbody 24 Irish counsel on Endo's merger with Paladin, the first USmigration into Ireland without acquiring an Irish target.

Allen & Overy 24 Created a common equity tier one capital instrument forNationwide to meet EU requirements while preservingprinciples of mutuality.

Fried, Frank,Harris, Shriver& Jacobson

24 Negotiated Virgin Media's $24bn merger with LibertyGlobal, the first large merger and inversion to the UK.

Jones Day 24 Engineered Japanese client Tokyo Electron's all-stockmerger with US company Applied Materials.

Jones Day 24 Created a Dutch orphan foundation to protect AmsterdamInternet Exchange's data from US Patriot Act claims.

Linklaters 24 Advised on a complex dual-track structure and financingto allow Japanese company LIXIL Corporation's €3bnacquisition of German manufacturer Grohe.

Ashurst 23 Advised Aviation Industry Corporation of China companieson a pioneering takeover of a German listed company.

Ashurst 23 Advised on Agilitas Partners' "genesis deal", the first fundto set up while simultaneously launching its first deal.

Skadden, Arps,Slate, Meagher& Flom

23 Devised a structure to provide liquidity to Nokia during thesale of its devices and services business to Microsoft.

Slaughterand May

23 Represented Ocado Group on its 25-year agreementto supply Wm Morrison with information technology,research and development and logistics services.

Paul Hastings 22 Acted for CVC to help set up the first closed-end fund listedon the London Stock Exchange to have built-in liquidity.

King & WoodMallesons (EU)

21 Helped Universal acquire EMI Music Group by guiding itthrough European Commission merger conditions.

Uría Menéndez 21 Negotiated complex Spanish tax rules to create a tax-efficient hybrid debt and equity instrument for Telefónica.

Allen & Overy 20 Led Co-operative Bank through its restructuring, the firstEuropean bank recapitalisation without taxpayers’ money.

Arthur Cox 20 Advised on the IPO and follow-on offering to launch GreenREIT, Ireland's first real estate investment trust.


20 Worked for auditor BDO to help shape a CompetitionCommission market investigation into the dominance ofthe big four auditors.

Garrigues 20 Advised Apollo EPF II on its acquisition of EVO Banco, thefirst acquisition of a Spanish bank by an international fund.

NautaDutilh 20 Used loyalty voting shares for the first time in theNetherlands on CNH Global’s merger with Fiat Industrial.

Ţuca Zbârcea &Asociaţii

20 Lead counsel to Vodafone during the company's Romanianinfrastructure-sharing deal with Orange.

Weil, Gotshal &Manges

20 Led Pharma Strategy Partners in its bid for Acino, the firstSwiss private-equity public-to-private transaction.

● most innovative firms in Corporate & CommerCial

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38


Value resourcing

Combined revenues of the top50 UK law firms reached a record high last year.While the figure of £14.4bn does not suggest aprofession in the midst of an operating modelcrisis, the rankings in the value resourcing cat-egory reveal systemic change.Law firms in struggling economies such as

Spain and Portugal are reinventing internal pro-cesses at a greater pace than in the past decade,and those at the top of the UKmarket are show-ing a new readiness to make more fundamen-tal changes. “The traditional law firm model isunder pressure and you have to decide whetheryou stick with a diminishing market for ‘pure’premium work or accept that, to win a greatershareof thepremiumwork, youhave to combineit with alternative delivery models,” says WimDejonghe,managing partner of Allen&Overy.The top 20 law firms in the UK by revenue all

use some combination of outsourcing, paralegalsupport centres, contract lawyers, processmap-ping, project management and technology forlegal and support work. Legal matters continueto be broken down into smaller componentparts and resourced inmore cost-efficient ways.What has changed is that large law firms are

focused on rebundling and repackaging thoseservices for clients under the firms’ ownbrands.Lucy Dillon, director of knowledge manage-

ment at Berwin Leighton Paisner, says whileofferings such as the firm’s contract lawyer

OutsIdethe bOx

Other industries can offer insights for businessprocess improvement, writes Yasmin Lambert

39


cost-efficient options but, as Laurence Muscat,headof business improvement, says, “Weneed tobe open with clients and learn fromwhat worksandwhat doesn’t.”Real industry transformation will not be

delivered by innovative technologies or specificfixes, but through shifting lawyers’ mindset toone that is open to change and seeks continu-ous improvement. The evidence from some ofEurope’s legal leaders suggests that this processhas started.n

business, Lawyers on Demand, evolved sepa-rately, the firm is now “using the different toolstogether in an integrated way to create processefficiencies”.Allen&Overyhas taken the integratedmodel

a step further, combining traditional legal ser-viceswith contract lawyers, consulting services,technology solutions and document review runout of its Belfast centre to build what it calls“hybrid legal solutions” for clients.The task requires a leap forward in how firms

approach project management and technology.These are not commonly part of a lawyer’s skillset, so it isnosurprise themajorityof innovationsranked in this year’s report were led by businessprofessionals fromnon-legal backgrounds.The solutions themselves are often simple

– certainly compared with operational innova-tions in other industries – but their success restson solving a more complex problem: how tochange behaviours and mindsets in a success-ful, profitable law firm. Lawyers are notoriouslyresistant to change and it is difficult to capturetheir imagination with talk of process.Olswang took a creative approach.As part of a

broader process improvement initiative, a teamfrom the firm’s property department spent a dayat GKN’s automotive and aerospace factories.“We wanted something that was starkly differ-ent from the office environment,” says Nigel Rea,head of strategic development at Olswang. “Wewanted them to see what good looks like, andGKN is the best at what it does. We also wanteda non-client as there is a lot that can be gainedfromhaving a very open dynamic.”The approach is an example of “open innova-

tion”, a term coined by organisational theoristHenry Chesbrough that suggests firms shouldlook outside their own businesses and evenindustries for new ideas. Mr Rea says the paral-lels are not hard to draw: “Lawyers are focusedon minimising risk and have a low tolerance offailure, which means they can understand thiskind of precision engineering. Partners and engi-neers can have a conversation using the samelanguage, as they are both talking about quality.”Others have adopted product development

best practices employed by business entrepre-neurs. In his book, The Lean Startup, Eric Reisadvocates taking new products and services tomarket before they are perfected, in order tobuild customer feedback into new iterations.Allen &Overy took a similar approach to devel-oping and testing its alternative delivery mod-els. “We take a seed capital approach to all theseservices: we start the offering, take it to market,then readjust it. It’s a low-risk model of innova-tion for law firms,” says Mr Dejonghe.Diversified and integrated offerings are still in

their early stages. Linklaters’ operational expertsare helping the firm resource client mattersmore efficiently with a suite of project manage-ment and process improvement tools and more

Score

Allen & Overy 25 After developing a range of alternative delivery models,the firm is combining them in an integrated legal servicesoffering.

Olswang 25 A job swap between the firm's property department andengineering company GKN to bring process improvementto life.

Axiom 24 Using data and technology to redesign how commercialand legal contracts are managed for large companies.


24 Combining lower cost and flexible resources, third-partyproviders and process improvement expertise for a fixedprice.

Eversheds 23 Collaborated with technology provider Searchflow toreduce the average time for a property search from 28 tosix days.

Kennedy Vander Laan

23 Central management and hub for the Nike Alliance, aninternational network of local law firms.

Linklaters 23 A dedicated business improvement team has driven afresh approach to managing work and greater use ofparalegals.

Morais Leitão,Galvão Teles,Soares da Silva& Associados

23 A review of the client engagement life cycle has led to anoverhaul of process and a change in the firm’s culture.

Pinsent Masons 23 A litigation modelling tool and new project managementmethods give greater control and visibility of costs in bigdisputes.

Vieira deAlmeida &Associados

22 Combined the firm's human resources, client and financialinformation on an original and interactive visual platform.

White & Case 22 Matter Pathways map the life cycle of differenttransactions and collect related knowledge resources inone place.

AddleshawGoddard

21 Long-term career paths and new training anddevelopment programmes for paralegals working in theTransactions Services Team.

Bird & Bird 21 An integrated planning tool to help the UK government rollout Smart Meters to 30m homes.

Eversheds 21 Training programmes to change the way lawyers usetechnology and manage increasing volumes of client data.

Ashurst 20 Career development for legal analysts in the firm'sGlasgow office to develop broad legal and business skills.

Pinsent Masons 19 A single supplier deal to handle Asda's employee disputeswork for a fixed-fee that reduces over time, rewardingincreasing efficiency.

Gómez-Acebo& Pombo

18 A value-based billing approach supported by legal projectmanagement and pricing training.

Pérez-Llorca 18 Collaborated with Thomson Reuters Aranzadi to combinefirm know-how and external legal content in a singledatabase.

● Most innovative law firMs in valUe resoUrCinG

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40


general counsel

►

The annual publication of lawfirms’ fees and profits are an exciting event forpartners. They use the infamous PEP (profitsper equity partner) figure to compare theirperformance with peers in other firms andto feel reassured that their own firm is doingwell. Traditionally, these financial leaguetables have only been of consequence to pri-vate practice. But some clients are beginningto probe these figures to use in fee negotia-tions.

The legal team at RB, formerly ReckittBenckiser, the multinational consumer goodscompany, is one such client. It devised a modelto control litigation costs that ties law firms’profitability to their performance.

Group general counsel Bill Mordan and histeam, using the published results of the top200 US law firms, worked out average law firmprofitability. They put it at 38 per cent – a highlyefficient profit margin by any corporate meas-ure. They felt that such a high margin gavelaw firm partners room to manoeuvre on feearrangements.

The model Mr Mordan’s legal team devisedis a new twist on the “fixed fee plus successbonus” arrangements that are becoming prev-alent in the profession. The twist is that themodel is couched on investment principles: alaw firm handling a litigation case covers itscosts but invests its profit margin (about 30per cent) in the outcome of the case. Underthis “litigation investment model”, if a law firmperforms well against the RB legal team’s suc-cess criteria, it can earn up to 2.5 times its usualprofit margin.

Critical to the viability of the model is thedetailed criteria that the RB legal team hasworked out for what success looks like in liti-gation. Tying it to the economics of law firmsdifferentiates it from other success-fee modelsand is one that Mr Mordan is having successwith in work on deals.

“When you start a conversation with profitalone, it sets up a true discussion about invest-ment,” says Mr Mordan. Another important out-come of the model is the change in attitudes bythose within the company to business litigation.“They no longer see it as unredeemed costs butas the investment it truly is,” says Mr Mordan. Infact, he adds, the business often insists that itsexternal lawyers have “skin in the game”.

The litigation investment model is one partof the RB legal team’s innovation portfolio. Ithas also developed a sophisticated, cloud-basedcontract management system that gives inter-

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nal business people the tools and know-how toconclude commercial contracts, obviating theneed for heavy lawyer involvement. While theprofession is not known for its visual creativ-ity, the team’s internal sales films for the systemrank alongside those of any advertising agencyin terms of quality and impact.

The in-house legal teams ranked in thisyear’s FT Innovative Lawyers report show

● Individual In-house Lawyers

geoff Wild, director of governanceand laW, Kent county council (Winner)After transforming the council’s legalteam into a revenue generator, Geoff Wildis recognised as an industry leader andhas had a positive impact on perceptionsof public-sector lawyers.

funKe abimbola, managing counsel –uK and ireland, roche ProductsFunke Abimbola is leading a consultationwith the Department of Health on thefunding for cancer drugs in the UK. She isalso a strong advocate of diversity in thelegal profession.

chris hamill, head of legal andcomPany secretary, edf energy –nuclear neW buildChris Hamill has a track record ofbuilding and developing in-house teamsfor large infrastructure projects. Inhis current role, he is supporting thedevelopment of nuclear power in the UK.

graham line, marKetinvestigation lead, e.on uKWith experience of various businessroles, Graham Line led the reorganisationof E.ON’s British legal team. After thissuccess, he is leading E.ON’s response to aUK energy market investigation.

bill mordan, senior vice-Presidentand grouP general counsel, rb(formerly recKitt bencKiser)A proponent of profit-based successfees for litigation cases, Bill Mordanencourages firms to invest in a dispute inthe same way as companies. He has alsointroduced online contract managementto support business colleagues.

41


CreatIvethInkers

● Head start: BillMordanleads the lawyers at RB,formerly Reckitt Benckiser,winner of the FT’smostinnovative in-house legalteamaward

The best in-house legal teams areproactive and come up with ideas thatgenerate revenue, says Reena SenGupta

42


◄ that innovation is not the preserve of large,well-resourced teams, though. Two of the topfive have only five lawyers in the divisions beingranked – Roche Products and Guardian MediaGroup. Their alignment with their businesses,and speed and willingness to try new ideas,are notable. Funke Abimbola, UK and Irelandmanaging counsel at Roche, has made herfunction one of the more innovative in the com-pany overall and leads negotiations with theNHS. The team at the Guardian, meanwhile,is responsible for facilitating the newspaper’sdigital strategy.

The ability of legal teams to be revenue gen-erators for their companies is evident through-out the 2014 FT ranking. The days of reactivelegal functions are gone, and teams ranked inthe operational change table have shown theability to effect rapid transformation in theirfunctions.

Forexample,whenJosSclaterwasappointedgeneral counsel at engineering group GKN twoand a half years ago, he inherited a traditionallegal department. Since then, he has madesweeping changes and has been appointed toGKN’s executive committee. The legal team,which has only 17 lawyers, supports a businesswith revenues of almost £8bn. This is particu-larly impressive in light of the team’s £180,000external legal spend in theUKlast year.Describ-ing his team as a “small, high-impact function”,Mr Sclater says his effectiveness is about choos-ing a few simple ideas to follow and then beingable to combine and implement them.

One of the startling developments in the in-house branch of the profession is the growingnumber of specialist legal practitioners mov-ing into it. In-house lawyers are now seen at theforefront of devising complicated legal solu-tions. The team at Aviva, the insurance com-pany, came up the original idea behind how tode-risk the company’s staff pension scheme in ahedging transaction worth £5bn.

Some teams have created tools that lever-age their capacities. The mergers and acquisi-tion tool at information technology companyHewlett-Packard enables a relatively smallteam of 15 professionals to deal with 100 acqui-sitions a year. It cleverly uses historical dataand captured know-how not only to improvethe performance of the legal team but also toenable the business to make better buy/selljudgments during the M&A process.

With one in four lawyers in the UK, forexample, now practising in house, such trendsare yet another reflection of how this branch ofthe profession is transforming the contributionthat lawyers deliver to business. n

Score

RB, formerlyReckitt Benckiser

37 An all-round value-adding team that piloted a litigation investmentmodel to base fees paid to law firms on their profitability andperformance.

Aviva 35 A function that has used virtual secondees, leadership training andlegal solutions to bring essential efficiency and changes in line withstrategic business objectives.

Roche Products(UK)

35 The legal function, integral to business strategy, combines competitionexpertise and commercial skills to launch new products and commenton government consultations.

Atos 34 A contract management programme, including online tools, a trainingacademy and key performance indicators, has produced significantsavings and revenues.

Guardian MediaGroup

34 The legal team’s guidance on new jurisdictions, launching productsand working with European regulators has helped the business at achallenging time for the industry.

AIG (EMEA) 33 Assisting the business to restructure its European operation includednumerous regulatory and legal firsts, and significant operationaladvances for the legal team.

Dell (EMEA) 33 Technology and social media sites are used to share know-how andmake lawyers better leaders and problem-solvers.

Hewlett-Packard(M&A)

33 A cloud-based portal acts as a process guide to mergers andacquisitions transactions. Efficient, consistent and secure, it enableslawyers to manage the deal pipeline and risk.

Bpost 32 After merging with the regulatory department and realigning tobusiness needs, the team successfully led the company to an initialpublic offering on the Brussels stock exchange.

BT Group 32 Embracing non-traditional providers of legal services, the legal teamcreated a flexible "alternative panel", generating savings and allowingits lawyers to increase their skills.

Dentsu AegisNetwork

31 Reporting and training are made more accessible for the companythrough an online tool, allowing business colleagues to improveessential legal knowledge.

Dyson 31 Lawyers, leading multidisciplinary teams, work with engineers tosafeguard Dyson's intellectual property worldwide.

NationwideBuilding Society

31 The team devised a financial instrument, core capital deferred shares,to allow Nationwide to raise capital without affecting its status as amutual.

Nike (Europe) 31 Created the Nike Alliance to bring European law firms together as asingle service provider.

Schroders 31 Information technology solutions such as contract and documentmanagement systems have been developed to help manage risk, withcaptured data supporting business growth.

Score

GKN 35 Implementation of new processes has allowed the team to remain lean,create risk and compliance training for the business, and keep complexwork in-house.

BT TV 33 Guided BT through the launch of its TV division, negotiatingcontracts worth billions of pounds and influencing the strategy to addsignificantly to operating revenues.

Snam 33 The Italian gas company set up a business development legaldepartment to identify targets, develop strategy, advise on legal riskand negotiate deals to expand the company after its split from Eni.

AggregateIndustries UK

32 External legal spend has been reduced to increase internal headcountand expertise. The team runs divestments and land transfertransactions to generate revenue.

RovioEntertainment

31 The team has supported Rovio’s rapid growth with efficient internalprocesses and licensing, and international intellectual propertyprotection.

● Most InnovatIve european In-House LegaL teaMs

● InnovatIon In operatIonaL CHange

RESEARCH&AwARDSUPPoRTEDBy

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social responsibility

For law firms, fulfilling their socialresponsibilities often means writing a chequeto a charity or offering pro bono services tonon-profit organisations. However, deeperquestions are being asked about the role thelegal sector plays in society.Social responsibility involves lookingwithin,

and one issue law firms struggle with is diver-sity. Recruitment of ethnic minorities remainslimited and while gender balance is relativelyequitable at entry level, far fewer women thanmen go on to become partners.In an attempt to effect change, firms are

introducing a range of policies and pro-grammes.Baker & McKenzie is focusing on changing

its internal culture. It has introduced a globalpolicy of zero tolerance to discriminationagainst lesbian, gay, bisexual and transgenderpeople – even in its offices in countries such asRussia and Saudi Arabia, where the culture canbe hostile on the matter.For some, the approach has been to look

beyond their own walls. To address the legalsector’s under-representation of black andmixed-race individuals from low-income back-grounds, Freshfields Bruckhaus Deringer lastyear launched the Stephen Lawrence Scholar-ship, named after the black teenager murderedin London in 1993. Those selected receive aninterview for a training contract (the final stageof a legal education), customised development

equaLItyfrom

wIthInLaw firms are changingthemselves as well ashelping others, writes

SarahMurray

programmes, access to mentoring and a mod-est sum of money.In addressing diversity, firms are tackling an

issue that directly affects them. However, somehave realised that they can use their knowledgeand expertise to play a broader role in society.Lawyers have experience in navigating com-

plicated regulatory environments and broker-ing relationships between public- and private-sector entities. As the non-profit sector looks totap into capital markets, lawyers can use theirexpertise to put together innovative financialproducts and services.They can also tackle global social questions.

In 2013, Linklaters set up international govern-ance and development practices at the firm,serving public- and private-sector organisa-tions, with pro bono and fee-paying clients.Linklaters partner Lance Croffoot-Suede

co-heads the practice. He says his backgroundin criminal and regulatory law and working ininternational development is essential to thegovernance work taken on. One example, headds, might be in advising a non-governmentalorganisation (NGO) serving teenage girls in sub-Saharan Africa on how to ensure that all of itsactivities are clearly focused on the girls’ inter-ests. Or a mining company might need to max-imise profits while minimising environmentaldamage, managing its exposure to corruptionand improving relations with communities.In these situations, lawyerswith a regulatory

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Linklaters 24 The firmhasmade an active commitment to theUN’s principles of good governance, pulling togetherexpertise fromacross its practices to improve standardsin the private, public and not-for-profit sectors, andworking on both a pro bono and a paid-for basis.

Garrigues 23 WithCorporate Excellence, a think-tank that includesmost leading Spanish companies, the firmpredicts socialresponsibility trends to aid the companies’ behaviour.

CMS&DLAPiper 22 Joint research to analyse domestic violence laws in 24countries in Europe, Asia andAfrica to enable Chinesenon-governmental organisations to lobby for betterlegislation.

DLAPiper 22 The firmutilised its global resources to help build thelegal infrastructure in Timor-Leste.


22 The first firm to sign up to the Ban the Box campaign,which seeks to help ex-offendersmove into theworkforce.

A&LGoodbody 21 Formed a three-year partnershipwith educationdevelopment charity Suas to raise literacy standards inIreland.

Allen&Overy 21 The firm's two-year global partnershipwith AfriKids,a child-rights charity inGhana, is enabling theorganisation to become financially independent.

Arthur Cox 21 Aprogramme that is runby trainee solicitors at the firmto raise the standards of living in a rural regionofZambia.

Reed Smith 21 The firm’s Social Impact FinanceGroupworks pro bonoto aid social change programmes.

Ashurst 20 Structured the first “co-mingling” fund to combinecommercial and philanthropic funding for UK artisticand social projects.

Dechert 20 Conducted an analysis of Kenya's ratification of theMaputo Protocol, a bill onwomen's rights, setting theframework for other African nations.


20 The firm supported the set-up of Impossible, a UKsocial network designed to start a gift-economy,through incorporating themicrofinance social businessprinciples of Nobel prizewinnerMuhammadYunus intoits constitution.

Linklaters 20 Comprehensive support to the International Centre forAdvocates Against Discrimination through researchand analysis to help it in its fight against structuraldiscrimination.

UríaMenéndez 20 Apartnershipwith FundaciónObra Social “La Caixa” tohelp social entrepreneurs realise their potential.

VanDoorne 20 Facilitating social entrepreneurship in theNetherlandsthrough a research centre at Utrecht University andadvice to clients on social impact bonds.

White&Case 20 Applied EU andUKdata privacy laws toUSAID’santi-terrorism vetting procedures in support of NGOsoperating in conflict areas.

Gómez-Acebo&Pombo

19 Created the EXEQUOprogramme to enable lawyersto improveNGO frameworks that protect vulnerablepeople in Spain.

● most innovative law firms in social responsibility

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As organisations look to harness privatecapital to address social or environmentalproblems, new mechanisms are emergingfor which legal advice is needed. Take socialimpact bonds, also known as pay-for-perfor-mance contracts. They raise private investmentto fund innovative programmes that, for exam-ple, reduce youth re-offending or move morehomeless people into shelters rather than

background can establish structures that takeinto account individuals’ rights. Those witha criminal law background can play anotherrole. “As criminal lawyers, we’re trained to tellwhite fromblack,” saysMr Croffoot-Suede. “Wewalk into situations that are grey and sort outwhether it’s a problem or not.”As public-sector and non-profit entities seek

to tap into private-sector dollars to advancetheir social aims, lawyers can create firm legalstructures for new types of enterprise.Reed Smith’s social impact finance group

was created to offer pro bono advice to organi-sations that work to generate economic andsocial returns. It has lawyers whose expertisecovers everything from structured finance andcapital markets to taxation and litigation.Clients include investors, social entrepre-

neurs, NGOs and microfinance institutions.What unites them is that they are all develop-ing market-based models to tackle social prob-lems such as financial exclusion and poverty orinadequate access to healthcare and education.This means managing such complex issues

as the implications of local tax regimes andforeign exchange questions, the transfer offunds to NGOs and who owns the intellectualproperty rights for a social innovation. “You’relooking at a solution a client wants to achieveby bringing all these different building blockstogether,” says Reed Smith partner RanajoyBasu. “Lawyers bring the structuring advice.”

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have them sleeping on the streets. Investorsreceive a return when the cost savings andsocial objectives of an initiative have beenmet.Structuring such deals, which tend to

involve public- and private-sector partner-ships, demands legal skills. Netherlands-basedVan Doorne has worked with Dutch financegroup ABN Amro, the Start Foundation and

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Baker&McKenzie 22 The firm implemented a global lesbian, gay,bisexual and transgender policy of zero tolerance todiscrimination.


22 Launched the Stephen Lawrence Scholarship to changecultural attitudes and effect a real shift in law firmrecruitment practices.

Ashurst 20 A comprehensive global diversity strategy designedto increase the number ofwomen inmanagementpositions.

DWF 20 As part of its effort to be an inclusive recruiter ofdisabled talent, the firmbecame the first to certifywiththe Clear Assured assessment programme.

SlaughterandMay

19 Collaboratedwith television company ITV to helpstudents fromdisadvantaged backgrounds gainadmission to leading universities.

● most innovative law firms in diversity

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the City of Rotterdam to develop a socialimpact bond. “We’ve really been able to con-tribute to the preparation of these bonds withour knowledge,” says Sjoerd Kamerbeek, a VanDoorne lawyer and corporate law specialist.As well as working on one-off deals, Van

Doorne is helping to lay the legal foundationsfor the social sector’s growth. After learningabout US benefit corporation legislation –which gives registered companies legal protec-tion to pursue social and environmental goalsas well as profit – Mr Kamerbeek looked intowhether similar legislation might apply in aDutch context.When he found almost no research on the

subject, he approached Utrecht University,which led to the university’s social entrepre-neurship initiative, a research partnership. Apossible result of its work might be the intro-duction of benefit corporation legislation inthe Netherlands – an obvious opportunity forlawyer participation.“The key element here is that we can take up

our role in society by doing the thing we arebest at,” says Mr Kamerbeek. n