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US law firms: overpaid, over here and taking over?
International | 2008/01/08 02:57

Among her 300 million citizens, America finds room for 2.2 million prisoners, half a million soldiers — and 1.1 million lawyers, increasing numbers of whom find their way across the Atlantic. From Park Lane to Mincing Lane, US law firms now deploy 3,900 lawyers in London. While one Washington wag labels them “our most ominous export”, some predict that, short of full-blown recession, their number may double within five years.

Wartime GIs in Britain, often caricatured as “overpaid, oversexed and over here”, have a contemporary equivalent: the London managing partners of US law firms, who entice elite City lawyers with seven-figure packages.

Rainmakers in finance, tax and mergers and acquisitions (M&A) have been charmed away by Cadwalader, Kirkland & Ellis, Skadden, Arps and Simpson Thacher. The result? US firms’ annual London billings comfortably exceed £1.2 billion, while 100 or more of their local partners are in the £1 million-a-year club.

"Our strategy has been to recruit well-known partners from well-known firms,” Mike Francies, London head at Weil, Gotshal & Manges, says. The former Clifford Chance M&A lawyer, a Watford FC and Zutons fan, is “an incredibly hard worker, who runs a very tight ship”, says one admirer. As relative latecomers, Weil, Gotshal has rapidly grown to 120 lawyers, fuelling its drive to become a world leader in private equity. “We already compete with the UK market leaders: Ashurst, Clifford Chance and Freshfields,” Francies says.

His most prominent recruit, Marco Compagnoni, the former Lovells’ private equity head, is on a £1.3 million annual deal, fixed for two years. “We looked at Marco’s seniority, experience and clients when deciding to hire him,” Francies says. “There have been people we would have liked where other firms paid more. If you start paying too much, you’re building problems for the future.”

He points to Kirkland & Ellis hiring the private equity stars Graham White and Raymond McKeeve — both from Linklaters — for packages of £3.5 million and £1.5 million respectively, guaranteed for three years. Kirkland also hired Stephen Gillespie, an Allen & Overy partner, in a reported £1.8 million annual deal. “I can’t see how it works. I’ll be interested to see if they’re all there in three years’ time,” Francies says.

A byword for prestige, pre-eminence and very strong profitability, Sullivan & Cromwell came to London in 1972. But when Bill Plapinger, the London managing partner, arrived from New York in 1987, it still had only five lawyers. Today, it has seventy. Fifteen are UK qualified, of whom five are partners. These include some big lateral hires: English corporate star Vanessa Blackmore, ex-Allen & Overy, and M&A heavyweight Tim Emmerson, formerly at Milbank Tweed, London.

“We have no interest in growth for growth’s sake. Critical mass does not mean having armies of lawyers,” Plapinger says. “We’ve grown almost exclusively in response to client demand. Competing against firms several times our size, we use relatively small, focused, highly integrated teams.” He adds unapologetically: “We work our lawyers very hard.” The strategy pays off. As advisers to 40 of Europe’s 300 largest companies, S&C dominates the capital markets and M&A league tables.

“Most clients are European rather than US-based,” Plapinger says. “Outside the ‘magic circle’, our competition is Cleary Gottlieb, Shearman & Sterling, Skadden, Arps, Davis Polk and Cravath. We want to be chosen for our experience and understanding of the deal technology. The legal world can be seen as a pyramid: the most desirable work is at the very top. Lots of firms want to be there; very few succeed.”

Several large London offices have evolved from transatlantic mergers: Mayer Brown, Jones Day, DLA Piper and Dechert. Last January, Reed Smith tied up with Richards Butler. Although the Clifford Chance-Rogers & Wells marriage is eight years old, no top-flight New York firm has yet been seduced by the overtures of Freshfields or Allen & Overy — both keen to find a suitable partner. “I can’t see it happening. The economics make it unattractive,” Plapinger says.

White & Case has grown exponentially since 2002, giving it the largest London office of any non-merged US firm: 346 lawyers, 80 per cent of them UK qualified. Deutsche Bank and Morgan Stanley are typical clients. Peter Finlay, the London managing partner, explains: “We’ve established a broad-based, local firm with disputes, pensions, IP, construction and employment capacity. Very few US firms have that.

“One key objective was to build the leading finance practice of a US-headquartered firm in London, to get on the panels of major companies. We now have the largest acquisition finance team. We also have 53 trainees, more than any other US firm.

“Our billable hours per lawyer are less than some. We don’t have the reputation of being a sweatshop. We have flexible and part-time working to attract and retain staff.” Finlay has discussed merger with London firms, but none recently. “It’s not part of our plan,” he says. So who does he benchmark? “Shearman & Sterling and Latham & Watkins.”

A bellwether for many US firms in London, Shearman & Sterling has been managed locally since 2003 by Kenneth MacRitchie: “Working for a US law firm is very liberating,” the former Clifford Chance project finance partner says. “The culture is very entrepreneurial. We’ve tried to develop an English law practice that competes with the magic circle. We took some leverage finance partners from Ashursts. We saw that the combination of English law debt finance and New York high yield would be a winner. Our English corporate law practice took off when we hired Peter King from Linklaters.”

Last month, he lured high-yield partner Jacques McChesney from Latham.

“The prize,” he believes, “is to create a firm that combines top-end New York law and English law capability in a global network. US firms have taken a significant share of London work. It will only increase.

“New York firms are much more successful here than London firms have been in New York.” Strong in banking and finance, Shearman now has 158 London lawyers — approximately 70 per cent practise English law. “We want to have a much bigger European footprint in M&A,” MacRitchie says. Although London has been among the most profitable of the firm’s 20 offices, he is quick to highlight that “New York supports a significant amount of overhead. We have not grown as fast as some because we won’t compromise on quality. We’re not at optimum size yet — we will grow substantially.”

Latham & Watkins wins many plaudits. Having built a strong European presence within a decade, it is the only US firm to join Skadden in the global Top Five. “Taking growth, the quality of their people and how far they’ve come, they really stand out,” one prominent City observer says. Latham came to London in 1990. Most of its 170 lawyers are more recent arrivals, including tax partners Sean Finn and Daniel Friel, hired from Lovells in 2006.

Andrew Moyle, the managing partner, joined in 2003 as an IT and outsourcing specialist from Shaw Pittman. Grown from an LA base, “Latham has no head office,” Moyle says. “In London, we’re full service. Disputes, private equity, M&A and finance have been the big growth areas.”

Moyle highlights a different culture from traditional Wall Street firms: “We never thought we could come in and dominate from Day One, a mistake that several firms made.

“We totally reject a star culture and pride ourselves on a consensus-driven model. We want team players, not prima donnas. You can’t become a partner here without the blessing of the associates committee. We don’t do special deals for laterals. How can a successful US law firm be so considerate and so profitable? Many people are sceptical. Somehow we manage both.”



China aims to replace shooting with lethal injection
International | 2008/01/03 09:01
China, which executes more people each year than any other country, will expand the use of lethal injections instead of gunshots for death sentences, a state-run newspaper reported Thursday.

Half of the country's 404 Intermediate People's Courts, which carry most executions, now use lethal injections, the China Daily quoted Jiang Xingchang, vice president of the Supreme People's Court, as saying.

Lethal injection "is considered more humane and will eventually be used in all Intermediate People's Courts," Jiang said in the report. He did not give a time schedule for the change.

China does not officially release capital punishment figures, but it is believed to execute more people each year than the rest of the world combined. Death penalty recipients include some people convicted of nonviolent crimes such as fraud.

The human rights monitoring group Amnesty International says China executed at least 1,770 people in 2005 — about 80 percent of the world's total. The true number is widely believed to be many times higher, however.

China has attempted to reform its capital punishment system following reports in 2005 of executions of wrongly convicted people, and criticism that lower courts arbitrarily impose the death sentence.

An amendment to China's capital punishment law, enacted in November 2005, restored to the Supreme People's Court the sole right to approve all death sentences, ending a 23-year-old practice of allowing provincial courts alone to sign off on executions.



Consumers Allowed Class Action from Next Year
International | 2007/12/26 11:55
Come 2008, consumers in Korea will be able to take class action to curb illegal activities by corporations.

The government has designated 13 organizations, including nine consumer groups and four economic institutes, such as the Federation of Korean Industries, to handle the job.

Non-profit private organizations with requests for a lawsuit from more than 50 people can also file if they meet certain conditions.

To that end the Fair Trade Commission and the Korea Consumer Agency are looking to hire lawyers to support legal procedures related to filing a lawsuit.

The Ministry of Finance and Economy says the new law will urge companies not to infringe on consumer rights so as not to hurt their image.



Italian Child Cannot Be Named Friday
International | 2007/12/20 03:53
Friday's child is loving and giving — but not if he lives in Italy.

Italian judges forbade a couple from naming their son Friday, saying it would bring the child shame and ridicule to be named after the character in "Robinson Crusoe."

"They thought that it recalled the figure of a savage, thus creating a sense of inferiority and failing to guarantee the boy the necessary decorum," the couple's lawyer, Paola Rossi, said Wednesday.

Mara and Roberto Germano, whose son was born on Sept. 3, 2006, had the boy named and baptized Venerdi, Italian for Friday.

Even though the boy was not born on a Friday — it was Sunday — his parents liked the name, said Rossi.

"They wanted an unusual name, something original, and it did not seem like a shameful name," Rossi said in a telephone interview. "We think it calls to mind the day of the week rather than the novel's character."

Since City Hall officials are obliged by law to report odd names, the matter ended up before judges in Genoa, the northern Italian city where the couple live.

Last month, an appeals court stated that Friday falls into the category of the "ridiculous or shameful" names that are barred by law, because it recalled the native servant in Daniel Defoe's novel.

The judges wrote that naming somebody Friday would bar him from "serene interpersonal relationships" and would turn the boy into the "laughing stock of his group," according to a report in La Repubblica this week.

According to the daily, the judges also said that, as a day of the week, Friday raises a sentiment of sadness and penitence, when not being associated with bad luck outright.

Rossi said the court, which upheld a previous ruling in June, also ordered the boy to be named Gregorio after the saint on whose day he was born.

The couple are considering appealing the decision to Italy's highest court, she said.



France Convicts 5 Ex-Guantanamo Inmates
International | 2007/12/19 01:07
A court Wednesday convicted five former inmates from the U.S. prison at Guantanamo Bay, Cuba, of having links to terrorist groups, while acquitting a sixth man.

The five were convicted of "criminal association with a terrorist enterprise," a broad charge frequently used in France. Although the court handed them one-year prison sentences, none of them will be returning behind bars.

The men all served provisional sentences upon their return to France that counted toward their new sentences. By the time the trial ended, all had been freed.

The court followed the recommendations of Prosecutor Sonya Djemni-Wagner, who said in her arguments Dec. 11 that she did not support "the Guantanamo system" and the men's "abnormal detention there."

"None of them should have been held on that base, in defiance of international law, and have had to go through what they went through," she said.

Requesting convictions and one-year sentences for the five, she said they should, however, be convicted because they used phony identity papers and visas to knowingly "integrate terrorist structures" in Afghanistan.

The men — Brahim Yadel, Khaled ben Mustafa, Nizar Sassi, Mourad Benchellali, Imad Kanouni and Ridouane Khalid — all insisted during the trial that they were innocent. Kanouni was acquitted.

The verdict had originally been expected in September 2006 but was postponed. At the time, the court said it needed to seek more information about secret interrogations of the suspects by French intelligence officers at the American base.

The suspects' lawyers had complained that the men were questioned by agents of France's DST counterintelligence service outside the framework of international law. Information about the interrogations did not surface until the trial was already under way, when the newspaper Liberation published a classified document about them.

Seven French citizens were captured in or near Afghanistan by U.S. forces in late 2001, held at Guantanamo, and then handed over to French authorities in 2004 and 2005. One was freed immediately and found to have no ties to terrorism, while the others were released later as investigations continued into their cases.

In court, the men recounted their stays in Afghanistan in 2000 and 2001 before their capture. Five of them said they had stayed in military training camps in Afghanistan, while Kanouni said his journey there was for spiritual reasons.



Nigerian ex-governor on trial for graft: court
International | 2007/12/18 01:32
The impeached former governor of Nigeria's south-west Ekiti state has been arraigned in court on corruption and money laundering charges, court officials said Tuesday.

Fayose, who was arrested last week after turning himself in to the anti-graft agency EFCC, was brought to the Lagos high court on Monday, they said.

"The former governor was charged with embezzling 1.2 billion naira belonging to Ekiti state, among other corruption and money laundering charges," a senior official of the court told AFP.

He said Fayose pleaded not guilty to the charges and the judge, Tijani Abubakar, ordered his remand in Ikoyi prison until a further hearing on January 10, 2008.

Fayose was impeached for corruption by Ekiti lawmakers last year and fled the country shortly after. He was governor for close to three years.

He returned home last week and on Friday reported to the EFCC, which wanted to question him over allegations of corruption. He was arrested on the spot.

The Economic and Financial Crimes Commission said it was probing some 15 of Nigeria's 36 former state governors for corruption.

The former governor of oil rich state of Delta, James Ibori, is also facing corruption charges in the northern city of Kaduna. The court denied him bail on Monday and remanded him in prison until January 11.

Ibori, who ruled the Delta state from 1999 to 2007, has also been under investigation by the British police following the discovery of assets in the country suspected to have been acquired with stolen money.



Thai cabinet lays out plan to transfer PTT pipelines
International | 2007/12/18 01:32
Thailand's government Tuesday laid out its plan for the court-ordered transfer of energy giant PTT's 15-billion-baht (445-million-dollar) pipeline network back to the state.

Under the arrangement, PTT will have to pay the state five percent of its revenue from gas transmission as a rental fee for using the network, the company's president Prasert Bunsumpun told reporters.

The transfer of the pipelines was ordered Friday by the Supreme Administrative Court, in a ruling that challenged the legality of PTT's privatisation in 2001.

The verdict upheld the company's listing on the Stock Exchange of Thailand (SET), but acknowledged concerns brought by consumer groups who argued against leaving vital national infrastructure in private hands.

The judges ordered the Finance Ministry, which already holds a 52 percent stake in the company, to take back control of the pipelines.

"The cabinet today agreed in principle for PTT to transfer our assets back to the Finance Ministry," Prasert said as he left the cabinet meeting.

"Also, PTT will have to pay the state a five-year retroactive pipeline rental charge of at least five percent of the revenue generated from gas transmission," he told reporters.

He declined to say what impact that would have on the company's financial results.

PTT, the kingdom's biggest energy firm, is the largest stock on the Thai bourse with a market capitalisation of 1.01 trillion baht (30 billion US dollars).

Following the cabinet decision, the SET allowed shares of the company to resume trading in the afternoon session. The stock had been suspended since early Friday.

"The status of the company is not affected (by the verdict). The company is still entitled to use such assets but has to pay the rental fee at the rate specified by the ministry of finance," PTT said in its filings to the bourse.

"The company believes that there is no effect on the company's operations and there will be minor effect on its financial status," it added.

Prasert said the cabinet resolution would cost PTT up to 11 billion baht (326 million dollars) to settle the five-year pipeline rental charges and to cover the taxes on transferring the company's assets.

"We have to pay up to nine billion baht for pipeline usage since 2001, including taxes and interest payments," he told reporters.

"Another two billion baht is for taxes for transferring our pipeline assets. The total amount would be paid in the last quarter of 2007," Prasert added.



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Class action or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. This form of collective lawsuit originated in the United States and is still predominantly a U.S. phenomenon, at least the U.S. variant of it. In the United States federal courts, class actions are governed by Federal Rules of Civil Procedure Rule. Since 1938, many states have adopted rules similar to the FRCP. However, some states like California have civil procedure systems which deviate significantly from the federal rules; the California Codes provide for four separate types of class actions. As a result, there are two separate treatises devoted solely to the complex topic of California class actions. Some states, such as Virginia, do not provide for any class actions, while others, such as New York, limit the types of claims that may be brought as class actions. They can construct your law firm a brand new website and help you redesign your existing law firm site to secure your place in the internet.
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