Law = Money + Friction
Whether through or around it, friction is clearly the lifeblood of the legal industry. And that has never been more evident than in the news.
Take for example a $100 million dispute that arose in the Cayman Islands. Involving a handful of top companies as well as some high-profile offshore companies, the politically charged case sees a law firm accuse the Kuwaiti government of acting “maliciously” in launching a lawsuit against a private equity fund- investment which he claims misdirected the funds owed to him.
Kuwait lawyers at Baker McKenzie have criticized the offshore firm for doing nothing more than engaging in a “press exercise” while Crowell & Moring, which is acting for one of the defendants in the case, described the case as “politically motivated”. ‘.
Learn more about the captivating saga in Peter Shaw Smithreport here.
In Europe, meanwhile, friction is playing out with regulators.
In a move welcomed by some, lamented by others, EU antitrust chief Margrethe Vestager demonstrated her willingness to put her foot where other global authorities won’t. This time by stopping the merger of two of the world’s largest shipbuilders: Hyundai Heavy Industries Group and Daewoo Shipbuilding.
Linda A.Thompson writing about how, in this latest show of absolute authority, the EU has underscored its tougher stance on anti-competitive behavior, contradicting the seemingly more laissez-faire competition authorities (on this issue, at least) by China, Singapore and Kazakhstan, which had already agreed to the merger.
Also in Europe, James Carstensen explains how and why German heavyweight Noerr split from its Russian branch. The firm, which has advised major Russian companies including Gazprom, cited “altered market conditions”.
In the UK, one of the clear examples of friction between firms may have arisen last year when a large contingent of Quinn Emanuel Urquhart & Sullivan’s competition litigation team broke away to join Willkie Farr & Gallagher. Since the move, the market has eagerly sought indicators of the general health of Quinn’s London office.
Two stories last week may have provided some clues, albeit inconclusive.
The first came in the form of Quinn London’s financial results for 2021, which showed a significant contraction in growth (from record revenue growth of 27% in 2020 to closer to 1% in 2021) – although the company anticipated 2021 with £127.6 million in revenue. Profits fell by around £5m.
In the second story, we explored one of the key factors that could determine exactly how much annual revenue came out of Quinn’s door: which of his big cases he kept and which followed the big move of the Willkie team.
Monetarily speaking, these tensions are eclipsed by our next.
In Asia, Jessica Seah reported on the latest development in the saga around Evergrande, the world’s most indebted real estate company, with over $300 billion in total liabilities.
The Chinese property developer has announced plans to hire financial and legal advisers to help it deal with massive debt restructuring and meet creditor demands, selecting law firm Zhong Lun, Beijing-based, one of China’s largest and most prominent law firms.
In Chile, the frictions are largely political in nature. Amy Guthrie writes about how lawyers are bracing for possible disruptions in doing business after a former leader of the left-leaning student protest won the presidency on a promise to reorient the economy. But Spanish firm ECIJA is doing its best to throw water on the situation by suggesting that Chile will “stay on track”.
And finally, when was the last time you saw a roundup of legal industry news that didn’t include at least a few words about the “pay war.” Last week, Milbank – those guys again – kicked off this year’s pay race by raising its associates’ pay scale for the second time in seven months. Perhaps the finest example of friction between law firms of our time.
Must-Read: Two In-Depth Reviews from Law.com
In two important deep dives, we explored themes you need to keep on your radar: the incursion of the Big Four (an ever-evolving topic, so don’t ignore it) and the dwindling value of bank customers.
In his fantastic story, Becky Prichard discovered a general lack of awareness of Big Four legal strategy among law firm executives, with many incorrectly suggesting that they pose little threat. Becky explains that traditional legal advice is only part of what professional services giants sell to in-house legal departments, and that organizations have far more resources, reach and connections than even the largest law firms. lawyers, which they are ready to exploit. . All of the Big Four explained their strategies in this landmark article.
And in a fascinating room, Varsha Patel highlights a trend in which the legal spend of large banking clients is shifting away from transactional work towards regulatory matters. This is important because the fees and opportunities offered by these customers have changed. Moreover, as Varsha writes, banks are increasingly unable to choose their own legal advisers for corporate transactions, which means that panel companies can miss out, while bank legal panels are often so large that many partners worry that their business will get “enough incentive” if they get listed on one. The numbers at stake are huge and the implications are huge.
If you really want to know what’s going on on your patch, these are two must-reads.