Welcome to the Fides Weekly Update. Here we provide you with the key new stories of the week in legal and compliance. Don’t forget to scroll down to take a look our regular feature of Movers & Shakers of the week.
1. The rise and rise of Kirkland & Ellis
Kirkland & Ellis has a solid start to the year as it’s been reported one of the market’s leading rainmakers Eric Schiele has left Cravath and will be joining its partnership ranks in New York.
As the firm maintains the hiring spree following on from last year in a number of its global offices, it seems Kirkland will once again feature heavily in 2018’s lateral hiring market.
As announced on Thursday, after almost 18 years at the firm, M&A partner Eric Schiele has left Cravath Swaine & Moore to join the New York office of Kirkland & Ellis. Having worked on some of the biggest recent M&A transactions, such as Disney’s pending acquisition of assets from 21st Century Fox worth $52.4bn, and AB InBev’s $123 billion acquisition of SABMiller, he will be a game-changing addition to Kirkland’s already highly-ranked M&A practice.
Schiele is the third Cravath partner to have joined the Chicago-headquartered firm, with fellow M&A partners Jonathan Davis and Sarkis Jebejian joining the firm in 2016 and 2012, respectively.
This level of lateral hiring is commonplace for Kirkland & Ellis, and the activity of its London office is no different. Towards the end of last year, the firm made a high profile private equity hire with Freshfields’ PE partner David Higgins, who joins Kirkland as London co-managing partner. Government enforcement partner Marcus Thompson joined the firm’s partnership in London in August as part of a five partner-strong enforcement team hire made from Ropes & Gray, whilst fellow Ropes associate James Board joined Kirkland as a funds partner two months later. Other key hires in the City for Kirkland involve Linklaters’ real estate M&A rainmaker Matthew Elliott and Freshfields finance partner Michael Steele in 2015.
Not only has the firm bolstered its partnership numbers through lateral joiners, but Kirkland also recorded its largest ever promotions round in 2017. A total of 97 lawyers were appointed to its partnership, and 13 in the City. Naturally, given the firms specialisms, most new London partners were posted in its M&A and private equity practice, whilst the firm chose make a number of additions in tax and investment funds also.
This significant investment comes in the wake of a turbulent few years at Kirkland with multiple partner defections across their network resulting in changes to their partnership and questions about their standing amongst the global elite. It remains to be seen whether the sizeable sums being offered, that have been reported to entice a number of market leading partners, will prove well spent.
Finding the balance between leaders and rainmakers in the firm being committed to the firm, above and beyond remuneration, is something Kirkland will need to discover.
2. Senior adviser at the Investment Association calls out FCA for an “absolute dereliction of the duty of care” to consumers
A piece of regulation key to the retail investment market has been labelled “the worst piece of financial regulation ever in Europe”, with a senior member of the funds industry demanding that “heads should roll” at the regulator in response.
In a letter to FCA chief exec Andrew Bailey, Philip Warland wrote that this year’s new European legislation for Packaged Retail and Insurance-based Investment Products (Priips) fails in its duty to consumers by skewing performance projections and offering investors misleading data.
Seasoned funds figure Philip Warland is the former senior public policy adviser at Fidelity International, and previously served as director general of the Investment Management Association (now the Investment Association (IA)). Having stepped down from his post at Fidelity early last year, Warland is now in an advisory role at the IA, and has written this letter in response to an attempt by the FCA to introduce new guidance on managing the Priips legislation.
“Heads should roll in the FCA, in [the European Securities and Markets Authority] and in the [European] Commission,” wrote Mr Warland. “This is by far the worst piece of financial regulation ever in Europe and the FCA is complicit.”
The aim of the PRIIPs is to encourage efficient EU markets by helping investors to better understand and compare the key features, risk, rewards and costs of products.
However, as James Anderson from the Henderson Smaller Companies trust explains: “some firms are concerned that…the ‘performance scenario’ information required in the [Priips documentation] may appear too optimistic and so has the potential to mislead consumers.”
A spokesperson for the IA has also commented on the new regulation: “Performance scenarios and the way charges and transaction costs are presented are exceptionally difficult for customers to understand. What is needed is an urgent, early review in order to fix these problems.”
The FCA has yet to comment on the above criticisms.
Movers & Shakers of the week
Allen & Overy partner Kayal Sachi and counsel Ian Roebuck have left the firm to join Mayer Brown JSM in its Singapore office. Both will join as partners.
European head of capital markets Apostolos Gkoutzinis leaves Shearman & Sterling to join Milbank Tweed Hadley & McCloy as a partner in London.
Partner Georgia Quenby and of counsel Victoria Thompson move to Morgan Lewis & Bockius from Reed Smith
Reed Smith construction disputes partner Paul Taylor joins the Dubai office of Eversheds Sutherland. Fellow team member Roberta Wertman joins as a legal director and another associate.
Holman Fenwick Willan has made three partner hires in Singapore, with former managing partner and finance partner Siri Wennevik joining from Wikborg Rein, energy partner and former Southeast Asia head Alistair Duffield from Berwin Leighton Paisner and corporate partner Ivan Chia from Watson Farley & Williams.
Office Openings & Closings
Mergers & Alliances