White & Case London head Oliver Brettle recently replaced New York partner Dimitrios Drivas on the firm’s executive committee.
He will join Turkish partner Asli Basgoz and New York partner Anthony Kahn on the committee that works under firmwide chairman Hugh Verrier.
November 3, 2010
Kirkland & Ellis effect layoffs in NYC
Kirkland & Ellis finally followed suit and joined the list of US firms to make mass redundancies.
The firm laid off more than 20 associates in New York in September, following its annual performance review period, citing the turbulent economic climate as the cause.
Kirkland had roughly 335 lawyers in the New York office prior to the cuts being made.
The firm laid off more than 20 associates in New York in September, following its annual performance review period, citing the turbulent economic climate as the cause.
Kirkland had roughly 335 lawyers in the New York office prior to the cuts being made.
Skadden slashes summer associate intake
Skadden Arps Slate Meagher & Flom recently decided to reduce the size of its summer associate intake for 2010, following a delay in the start dates of its 2009 group.
The firm advised US law schools it would only be recruiting around 100 associates for its intake as a result of the dismal economic climate. It later informed successful candidates that their start dates would be deferred until 2011.
The new figures are in stark contrast to the numbers the firm recruited for its 2009 program: 225 summer associates were accepted of whom 95% were offered full-time positions.
The firm will also implement a ‘Skadden Offer Day’, where associates from its 2010 intake will receive their offers on the same day (22 September 2009). The firm will continue to give those who receive offers 45 days to evaluate them, in compliance with guidelines set down by the National Association for Law Placement.
The firm advised US law schools it would only be recruiting around 100 associates for its intake as a result of the dismal economic climate. It later informed successful candidates that their start dates would be deferred until 2011.
The new figures are in stark contrast to the numbers the firm recruited for its 2009 program: 225 summer associates were accepted of whom 95% were offered full-time positions.
The firm will also implement a ‘Skadden Offer Day’, where associates from its 2010 intake will receive their offers on the same day (22 September 2009). The firm will continue to give those who receive offers 45 days to evaluate them, in compliance with guidelines set down by the National Association for Law Placement.
White & Case steppes into Kazakhstan
White & Case recently assisted the Kazakhstan government on the creation of new restructuring laws in the country, following the US firm winning a role advising UBS on the restructuring of Kazakhstan’s BTA Bank earlier this year.
The firm also advised Goldman Sachs on the restructuring of Kazakhstan financial institution Alliance Bank. London-based European capital markets co-head Francis Fitzherbert-Brockholes led the advice team.
The firm also advised Goldman Sachs on the restructuring of Kazakhstan financial institution Alliance Bank. London-based European capital markets co-head Francis Fitzherbert-Brockholes led the advice team.
Dewey scores big in M&A
Dewey & LeBoeuf’s corporate group recently secured two high-profile M&A mandates. Dewey M&A head Mort Pierce advised Disney on its US$4bn acquisition of Marvel Entertainment; and Richard Climan and Keith Flaum led a team advising eBay on the US$1.9bn sale of Skype.
The firm won a role in both deals as the result of longstanding relationships, highlighting why Dewey has been among the more successful US firms during the downturn in deal flow.
Mergermarket’s global M&A survey for the first half of 2009 recently revealed that the US firm moved up to 12th place from 25th in the global deals value table.
The firm won a role in both deals as the result of longstanding relationships, highlighting why Dewey has been among the more successful US firms during the downturn in deal flow.
Mergermarket’s global M&A survey for the first half of 2009 recently revealed that the US firm moved up to 12th place from 25th in the global deals value table.
UK firms star in big business rankings
The Hemscott rankings of legal advisers to FTSE 100 companies has revealed Linklaters and Slaughter and May as the firms currently advising the highest number – 25 – of the UK’s biggest companies.
The rest of the top five is rounded out by Herbert Smith (which saw its FTSE 100 client count drop one from 19 to 18, as it is no longer listed as an adviser to Friends Provident), Allen & Overy (A&O) and Freshfields Bruckhaus Deringer. Freshfields recently gained two top-ranked clients – the London Stock Exchange Group and Wolseley – and is now running head to head with A&O, with 17 FTSE 100 clients.
The rest of the top five is rounded out by Herbert Smith (which saw its FTSE 100 client count drop one from 19 to 18, as it is no longer listed as an adviser to Friends Provident), Allen & Overy (A&O) and Freshfields Bruckhaus Deringer. Freshfields recently gained two top-ranked clients – the London Stock Exchange Group and Wolseley – and is now running head to head with A&O, with 17 FTSE 100 clients.
Clifford Chance elections approaching
Clifford Chance will soon embark on a series of senior leadership elections. David Childs is expected to stand for re-election as the firm’s managing partner. If he is successful, his second four-year term at the firm’s helm would begin in May 2010.
Other management positions soon to be up for grabs include London managing partner, general counsel and practice head roles for real estate and tax, pensions and employment.
Clifford Chance is reportedly also reviewing the position of global litigation and dispute resolution head, which became redundant after the May departure of Mark Kirsch to join global player Gibson Dunn & Crutcher.
Other management positions soon to be up for grabs include London managing partner, general counsel and practice head roles for real estate and tax, pensions and employment.
Clifford Chance is reportedly also reviewing the position of global litigation and dispute resolution head, which became redundant after the May departure of Mark Kirsch to join global player Gibson Dunn & Crutcher.
Herbert Smith raises bar on partner performance
Herbert Smith has switched its former ‘make a difference’ initiative for partner appraisals to more formal assessments on their performance, in a bid to place more emphasis on the firm’s international ambition.
The new system will include formal feedback from partners in international offices for the first time and assessments on matters such as cross-selling between offices. Partners will also be assessed annually against four distinct areas: client skills, technical skills, people skills and how their performance fits with the firm’s strategy.
The move to monitor partner performance more closely follows a change in the firm’s associate appraisal process made earlier this year. It is a definite step away from the consensual approach introduced in 2007 by senior partner David Gold, clearly sending the message to partners that the expectations upon them will be rising.
The new system will include formal feedback from partners in international offices for the first time and assessments on matters such as cross-selling between offices. Partners will also be assessed annually against four distinct areas: client skills, technical skills, people skills and how their performance fits with the firm’s strategy.
The move to monitor partner performance more closely follows a change in the firm’s associate appraisal process made earlier this year. It is a definite step away from the consensual approach introduced in 2007 by senior partner David Gold, clearly sending the message to partners that the expectations upon them will be rising.
Lovells tie up with French firm
Lovells recently formed a co-operation agreement with Paris-based insolvency boutique Kuntz & Associés which will allow the two firms (who have a history of working together) to form a closer bond without entering into a full-scale alliance.
The arrangement will also grant Kuntz access to Lovells’ full-service French practice and will permit Lovells to utilise Kuntz’s specialist insolvency expertise.
The arrangement will also grant Kuntz access to Lovells’ full-service French practice and will permit Lovells to utilise Kuntz’s specialist insolvency expertise.
Partners down in UK’s top 50 firms
If Clifford Chance and Simmons & Simmons are anything to go by, new partner promotions across the United Kingdom’s top 50 law firms have decreased somewhat, with 399 promotions made in 2009, compared with 598 in 2008. As a group, Magic Circle firms also experienced a drop across the board, with promotions falling 41% from 120 to 71.
Female partner promotions across the top 50 firms have also plummeted – just 95 women were promoted to partner in 2009, compared with 149 in 2008. However, despite the fall in overall promotions, the number of new partners in London alone has only fluctuated slightly.
Female partner promotions across the top 50 firms have also plummeted – just 95 women were promoted to partner in 2009, compared with 149 in 2008. However, despite the fall in overall promotions, the number of new partners in London alone has only fluctuated slightly.
China infrastructure built up by firms
An increasing number of law firms are reaping good returns from the thriving business relationship developing between China and Australia.
China Everbright Limited (CEL) has ventured Down Under, building two funds with Australia’s Macquarie Bank to leverage China’s infrastructure opportunities. Mallesons and CEL’s ongoing legal advisor, Paul Hastings, both have a hand in the joint venture.
Australian and Hong Kong partners, John Sullivan and Hayden Flinn, are leading Mallesons representation for Macquarie Bank. Paul Hastings’s Hong Kong-based corporate partner Raymond Li, partner Vivian Lam and Jenny Law are acting for CEL. The joint venture will raise US$1.5bn to create two funds for Chinese infrastructure investments.
China Everbright Limited (CEL) has ventured Down Under, building two funds with Australia’s Macquarie Bank to leverage China’s infrastructure opportunities. Mallesons and CEL’s ongoing legal advisor, Paul Hastings, both have a hand in the joint venture.
Australian and Hong Kong partners, John Sullivan and Hayden Flinn, are leading Mallesons representation for Macquarie Bank. Paul Hastings’s Hong Kong-based corporate partner Raymond Li, partner Vivian Lam and Jenny Law are acting for CEL. The joint venture will raise US$1.5bn to create two funds for Chinese infrastructure investments.
Litigation booming in Dubai
Herbert Smith has transferred London partner Stuart Paterson to the Dubai office to strengthen the firm’s litigation and arbitration practice, as the number of construction-related disputes surge in the region.Paterson will work alongside Dubaibased dispute resolution partner, Craig Shepherd, on commercial and banking litigation, ADR and risk management.
While the law firm had always planned to augment their Middle East Practice, this was accelerated to meet recent demand. “The original plan was to have a litigation partner in the second half of 2011,” - said Shepherd.
Law firms across the region have recently cited a massive increase in litigation and dispute work arising from the crisis-addled construction sector. Shepherd agreed that Herbert Smith was dealing with similar volumes. “There are now more disputes related to the suspension or termination of projects, or shareholder disputes in relation to project funding,” he said.
While the law firm had always planned to augment their Middle East Practice, this was accelerated to meet recent demand. “The original plan was to have a litigation partner in the second half of 2011,” - said Shepherd.
Law firms across the region have recently cited a massive increase in litigation and dispute work arising from the crisis-addled construction sector. Shepherd agreed that Herbert Smith was dealing with similar volumes. “There are now more disputes related to the suspension or termination of projects, or shareholder disputes in relation to project funding,” he said.
July 22, 2010
India pressed by UK in liberalisation talks
The United Kingdom says it welcomes more Indian law firms to its legal industry.
As part of broader lobbying efforts towards the liberalisation of the Indian legal market, the British Minister of Justice, Lord Bach, met with Veerappa Moily, the Indian Minister for Law and Justice, in August. As part of the visit, Bach also met with local lawyers in a forum to explain that Indian law firms are allowed to work in Britain. FoxMandal Little and ALMT Legal are among the select few Indian law firms who have now set up there.
Local lawyers, who are largely opposed to liberalisation, have previously raised the lack of reciprocity to allow them to practice in the UK as a major impediment towards the liberalisation process.
“We welcome Indian lawyers,” said Bach, in his speech to the UK trade and investment workshop, held in Chennai. “We allow virtually unrestricted access for foreign firms. It doesn’t mean that the UK lawyers have to compete with them for work. On the contrary, the foreign firms present extra work opportunities for English lawyers.”
In an earlier meeting with the Indian Minister, Bach argued that foreign lawyers should be allowed to advise local clients, but not to stand in court. However, the Minister said any decision on liberalisation would depend on the opinions of local lawyers, which further delays any decisive steps towards this happening soon.
As part of broader lobbying efforts towards the liberalisation of the Indian legal market, the British Minister of Justice, Lord Bach, met with Veerappa Moily, the Indian Minister for Law and Justice, in August. As part of the visit, Bach also met with local lawyers in a forum to explain that Indian law firms are allowed to work in Britain. FoxMandal Little and ALMT Legal are among the select few Indian law firms who have now set up there.
Local lawyers, who are largely opposed to liberalisation, have previously raised the lack of reciprocity to allow them to practice in the UK as a major impediment towards the liberalisation process.
“We welcome Indian lawyers,” said Bach, in his speech to the UK trade and investment workshop, held in Chennai. “We allow virtually unrestricted access for foreign firms. It doesn’t mean that the UK lawyers have to compete with them for work. On the contrary, the foreign firms present extra work opportunities for English lawyers.”
In an earlier meeting with the Indian Minister, Bach argued that foreign lawyers should be allowed to advise local clients, but not to stand in court. However, the Minister said any decision on liberalisation would depend on the opinions of local lawyers, which further delays any decisive steps towards this happening soon.
Arrested Rio Tinto employees find legal representation
Four Rio Tinto employees who stand accused by the government of bribery and industrial espionage have been granted legal representation. While the four will have individual lawyers they will all be tried collectively, and they have all chosen renowned PRC lawyers.
Australian citizen Stern Hu, general manager of the Rio Tinto sales team in Shanghai, is represented by Charles Duan, the managing partner of Shanghai-based Duan & Duan. Three Chinese nationals, Liu Caikui, Ge Minqiang and Wang Yong, have engaged legal representation through Shanghai-based criminal lawyers. Liu, who was the manager of the Rio sales team, will be represented by Tao Wuping from Shenda Partners, who has previously acted for Shanghai property tycoon Zhou Zhengyi in the stock manipulation case in 2003.
Criminal defence lawyer Zhai Jian, who founded Zhai Jian law firm and gained national fame for defending a Beijing resident who killed six police officers last July, will defend Ge, an employee of the company. Zhang Peihong, also from Zhai Jian, will act for Wang, also an employee.
“There is no reason for me to not accept this case. It’s like operating a hospital – you can’t turn away patients,” said Zhai. “[It] has been receiving an overload of media attention, but I am not pressured and will try it as any other litigation case.”
China announced the formal arrest of the Rio employees on 12 August 2009; and their lawyers have filed for permission to see their clients. Chinese law does not require the defendants to have access to their lawyers until after the current stage of investigation.
“At this stage, all lawyers still do not know the detailed facts of the case and [I] am unable to comment further,” Zhai added. Although the four Rio employees were detained weeks ago the allegations against them have now been amended: from stealing state secrets, which is punishable by execution, to bribery and theft of commercial secrets.
The accused face up to seven years imprisonment if found guilty. The matter has affected tensions somewhat between China and Australia, as the “Rio Four” case has been mentioned when Australian firms report their major transaction and investments dealings from China.
The recent arrests have also kept China-based Western companies on their toes. Many companies are seeking legal advice on how to prevent similar accusations happening to their employees. The case also questions the boundaries of acceptable commercial behaviour in China and the cost of overstepping the line.
Australian citizen Stern Hu, general manager of the Rio Tinto sales team in Shanghai, is represented by Charles Duan, the managing partner of Shanghai-based Duan & Duan. Three Chinese nationals, Liu Caikui, Ge Minqiang and Wang Yong, have engaged legal representation through Shanghai-based criminal lawyers. Liu, who was the manager of the Rio sales team, will be represented by Tao Wuping from Shenda Partners, who has previously acted for Shanghai property tycoon Zhou Zhengyi in the stock manipulation case in 2003.
Criminal defence lawyer Zhai Jian, who founded Zhai Jian law firm and gained national fame for defending a Beijing resident who killed six police officers last July, will defend Ge, an employee of the company. Zhang Peihong, also from Zhai Jian, will act for Wang, also an employee.
“There is no reason for me to not accept this case. It’s like operating a hospital – you can’t turn away patients,” said Zhai. “[It] has been receiving an overload of media attention, but I am not pressured and will try it as any other litigation case.”
China announced the formal arrest of the Rio employees on 12 August 2009; and their lawyers have filed for permission to see their clients. Chinese law does not require the defendants to have access to their lawyers until after the current stage of investigation.
“At this stage, all lawyers still do not know the detailed facts of the case and [I] am unable to comment further,” Zhai added. Although the four Rio employees were detained weeks ago the allegations against them have now been amended: from stealing state secrets, which is punishable by execution, to bribery and theft of commercial secrets.
The accused face up to seven years imprisonment if found guilty. The matter has affected tensions somewhat between China and Australia, as the “Rio Four” case has been mentioned when Australian firms report their major transaction and investments dealings from China.
The recent arrests have also kept China-based Western companies on their toes. Many companies are seeking legal advice on how to prevent similar accusations happening to their employees. The case also questions the boundaries of acceptable commercial behaviour in China and the cost of overstepping the line.
Heading south — industry looks to Australia
Australia’s stock exchange can be an attractive place to list – as three Chinese companies have recently discovered.
“There is every reason why Australia should be a regional financial hub, continuing to engage with greater vigour in the global marketplace,” said Senator Nick Sherry, the Australian Minister for Superannuation and Corporate Law, last year. The Australian Securities Exchange hoped to become a financial hub in the Asia-Pacific; a dream which was quickly derailed by the deepening of the global economic downturn.
Yet the delay may have only been temporary, if the recent interest by Chinese companies in the ASX is an indicator. This year alone has seen three manufacturers from the mainland launch IPOs in Australia.
The ASX has been identified as an ideal listing environment for Chinese companies, in comparison to the options available in Hong Kong, Shanghai and New York. “The relatively straightforward ASX listing requirements makes it an attractive proposition for smaller Chinese companies, as in this aspect it represents a lower barrier of entry to listing,” said Pierre Lau, a senior associate at Chambers & Co.
In order to list on the ASX, the threshold for market capitalisation is a mere A$10m. In contrast, the HKSE requires approximately three times that amount (HK$200m). Similarly, the HKSE requires aggregated profits of HK$50m in the three financial years before listing, whereas the ASX only requires A$1m.
The listing rules of the Nasdaq are even more onerous, requiring up to US$11m in aggregated profits over three years.
Track record counts
The reputation of the Australian market is also appealing to Chinese companies, especially those that are not state-owned. “Australia presents a politically stable and relatively lowcost environment in which to base a corporate headquarter for Chinese companies wishing to operate internationally,” says Fai-Peng Chen, a partner at Minter Ellison’s Adelaide office. “Australia is also recognised for its strong corporate governance and has a transparent listing process.”
This compares to the SSE, where a listing halt was in place between September 2008 and July 2009. “Our sources tell us that there are currently more than 300 companies on the waiting list in China, which has created a backlog that could take up to two years or more to clear,” says Lau.
Similarly, the Chinese government has discretion as who is able to list on the SSE. “There is no level playing field since the government decides when you list, whether there has been enough companies from a certain province or a certain industry,” says Brendan Connell, a partner in South Australian firm Tindall Gask Bentley.
The reputation of the ASX market also precedes itself, and has excellent connotations in the Chinese economy. “The ASX has a reputation for honesty and reliability, and so there is significant kudos for a PRC company to say it is ASX listed – the inference is that it must be good,” Connell adds. However, although the opportunities may be ripe, there are still relatively few Chinese companies that have opted for an ASX listing.
“It is hard to say if there is a window of opportunity – everyone is probably waiting on more positive and consistent signals coming from the equities market in general,” says Jonathan Murray, a partner at Steinepreis Paganin.
Existing referral networks have played a role in Australian firms gaining Chinese work. Shenhua were referred to Chambers & Co for their IPO by AllBright Law Firm in Shanghai, as a result of the memorandum of understanding between the firms.
AllBright has also shortlisted another three Chinese enterprises interested in the ASX, which bodes well for the Exchange becoming a regional hub in Asia-Pacific.
“There is every reason why Australia should be a regional financial hub, continuing to engage with greater vigour in the global marketplace,” said Senator Nick Sherry, the Australian Minister for Superannuation and Corporate Law, last year. The Australian Securities Exchange hoped to become a financial hub in the Asia-Pacific; a dream which was quickly derailed by the deepening of the global economic downturn.
Yet the delay may have only been temporary, if the recent interest by Chinese companies in the ASX is an indicator. This year alone has seen three manufacturers from the mainland launch IPOs in Australia.
The ASX has been identified as an ideal listing environment for Chinese companies, in comparison to the options available in Hong Kong, Shanghai and New York. “The relatively straightforward ASX listing requirements makes it an attractive proposition for smaller Chinese companies, as in this aspect it represents a lower barrier of entry to listing,” said Pierre Lau, a senior associate at Chambers & Co.
In order to list on the ASX, the threshold for market capitalisation is a mere A$10m. In contrast, the HKSE requires approximately three times that amount (HK$200m). Similarly, the HKSE requires aggregated profits of HK$50m in the three financial years before listing, whereas the ASX only requires A$1m.
The listing rules of the Nasdaq are even more onerous, requiring up to US$11m in aggregated profits over three years.
Track record counts
The reputation of the Australian market is also appealing to Chinese companies, especially those that are not state-owned. “Australia presents a politically stable and relatively lowcost environment in which to base a corporate headquarter for Chinese companies wishing to operate internationally,” says Fai-Peng Chen, a partner at Minter Ellison’s Adelaide office. “Australia is also recognised for its strong corporate governance and has a transparent listing process.”
This compares to the SSE, where a listing halt was in place between September 2008 and July 2009. “Our sources tell us that there are currently more than 300 companies on the waiting list in China, which has created a backlog that could take up to two years or more to clear,” says Lau.
Similarly, the Chinese government has discretion as who is able to list on the SSE. “There is no level playing field since the government decides when you list, whether there has been enough companies from a certain province or a certain industry,” says Brendan Connell, a partner in South Australian firm Tindall Gask Bentley.
The reputation of the ASX market also precedes itself, and has excellent connotations in the Chinese economy. “The ASX has a reputation for honesty and reliability, and so there is significant kudos for a PRC company to say it is ASX listed – the inference is that it must be good,” Connell adds. However, although the opportunities may be ripe, there are still relatively few Chinese companies that have opted for an ASX listing.
“It is hard to say if there is a window of opportunity – everyone is probably waiting on more positive and consistent signals coming from the equities market in general,” says Jonathan Murray, a partner at Steinepreis Paganin.
Existing referral networks have played a role in Australian firms gaining Chinese work. Shenhua were referred to Chambers & Co for their IPO by AllBright Law Firm in Shanghai, as a result of the memorandum of understanding between the firms.
AllBright has also shortlisted another three Chinese enterprises interested in the ASX, which bodes well for the Exchange becoming a regional hub in Asia-Pacific.
“Australia represents a politically stable and relatively low-cost environment in which to base a corporate headquarters for Chinese companies wishing to operate internationally”Fai-Peng Chen, Minter Ellison (Adelaide)
July 3, 2010
Greener is the future for firms. Go green for business
A number of companies have raised capital through an IPO or private placement, while some have completed M&A deals. Another Chinese-based clean-energy company, Amber Energy, recently completed its public offering and share placement in Hong Kong. The IPO was hugely oversubscribed, being the fourth-most oversubscribed offering in the history of the HKSE.
“The success of this IPO is another stride towards a thriving clean energy market, a priority sector with vast opportunities for many investors in China today,” says head of DLA Piper’s capital markets practice, Liu Wei.
In July, Hong Kong-listed GCL-Poly Energy, a leading integrated green energy company, acquired Jiangsu Zhongneng Polysilicon Technology Development, one of the world’s leading suppliers of polysilicon and wafers to companies operating in the solar industry. Upon completion of the acquisition, valued at US$3.4bn, GCL-Poly will become the first Hong Kong-listed large-scale polysilicon manufacturer and one of the world’s five largest polysilicon suppliers.
Shanghai-based Comtec, a leading solar silicon material manufacturer, is reported to be raising US$150m from its IPO, scheduled for the end of 2009. “There is no question that there will be a consolidation in the Chinese solar power industry generally, “ said partner and head of Milbank’s global securities group, Douglas Tanner. “In addition to M&A, we would expect there will be issues of intellectual property and lots of finance work as the industry expands.” Tanner led the legal team that represented the target company in the GCL-Poly deal.
Leading Chinese domestic firms have also recognised the opportunities in the green energy market, particularly those who have worked closely with investment banks, PE and venture capital funds. Zhong Lun recently teamed up with Baker & McKenzie to advise Zhaoheng Hydropower in its US$57.5m capital raising, led by Olympus Capital Holdings Asia. The firm has gained tremendous exposure by simply following the footprint of its investment bank and PE clients.
“Affected by the global financial crisis, private equity investors are more cautious in doing deals. However, we have seen an increase in investor activities and deal flows in recent months. [The] green energy sector has certainly been gaining lots of attention,” said Zhong Lun partner, Gong Lefan.
He attributes the investment momentum in the sector to recent government policy initiatives and the stimulus package, as well as the rise of Chinese domestic clean-energy and technology companies. “Investment in this sector not only makes [a] positive impact on the environment and economy, but also makes perfect business sense,” Lefan said. “Not surprisingly, PE and venture capitalist investors and investment banks have tremendous interest in it.”
Global Law Office is another Chinese firm that has experienced a sharp increase in the volume of investment in this area. The firm has represented CDH in its investment in LDK Solar, which completed its IPO on the New York Stock Exchange. It also acted for New Horizon in its investment in Gold Wind Technology, completing its IPO on the Shenzhen Stock Exchange.
Global Law Office is currently involved with ET Solar’s IPO plan. “Green energy projects are very popular in the capital markets, and we expect related work to become a more important part of our firm’s practice,” said Beijing-based partner, George Niu.
The Chinese government reaffirmed its commitment to create a green energy path to prosperity. It announced in May that it will invest more than RMB2 trillion in renewable energy sources, as part of its new energy industry stimulus plan. Consequently, the demand for legal expertise in relevant areas will definitely rise.
“The success of this IPO is another stride towards a thriving clean energy market, a priority sector with vast opportunities for many investors in China today,” says head of DLA Piper’s capital markets practice, Liu Wei.
In July, Hong Kong-listed GCL-Poly Energy, a leading integrated green energy company, acquired Jiangsu Zhongneng Polysilicon Technology Development, one of the world’s leading suppliers of polysilicon and wafers to companies operating in the solar industry. Upon completion of the acquisition, valued at US$3.4bn, GCL-Poly will become the first Hong Kong-listed large-scale polysilicon manufacturer and one of the world’s five largest polysilicon suppliers.
Shanghai-based Comtec, a leading solar silicon material manufacturer, is reported to be raising US$150m from its IPO, scheduled for the end of 2009. “There is no question that there will be a consolidation in the Chinese solar power industry generally, “ said partner and head of Milbank’s global securities group, Douglas Tanner. “In addition to M&A, we would expect there will be issues of intellectual property and lots of finance work as the industry expands.” Tanner led the legal team that represented the target company in the GCL-Poly deal.
Leading Chinese domestic firms have also recognised the opportunities in the green energy market, particularly those who have worked closely with investment banks, PE and venture capital funds. Zhong Lun recently teamed up with Baker & McKenzie to advise Zhaoheng Hydropower in its US$57.5m capital raising, led by Olympus Capital Holdings Asia. The firm has gained tremendous exposure by simply following the footprint of its investment bank and PE clients.
“Affected by the global financial crisis, private equity investors are more cautious in doing deals. However, we have seen an increase in investor activities and deal flows in recent months. [The] green energy sector has certainly been gaining lots of attention,” said Zhong Lun partner, Gong Lefan.
“There is definitely an increase in renewable energy investment, mostly driven by the government being very pro-active in this area”Sarah Stokoe, Gide Loyrette Nouel
He attributes the investment momentum in the sector to recent government policy initiatives and the stimulus package, as well as the rise of Chinese domestic clean-energy and technology companies. “Investment in this sector not only makes [a] positive impact on the environment and economy, but also makes perfect business sense,” Lefan said. “Not surprisingly, PE and venture capitalist investors and investment banks have tremendous interest in it.”
Global Law Office is another Chinese firm that has experienced a sharp increase in the volume of investment in this area. The firm has represented CDH in its investment in LDK Solar, which completed its IPO on the New York Stock Exchange. It also acted for New Horizon in its investment in Gold Wind Technology, completing its IPO on the Shenzhen Stock Exchange.
Global Law Office is currently involved with ET Solar’s IPO plan. “Green energy projects are very popular in the capital markets, and we expect related work to become a more important part of our firm’s practice,” said Beijing-based partner, George Niu.
The Chinese government reaffirmed its commitment to create a green energy path to prosperity. It announced in May that it will invest more than RMB2 trillion in renewable energy sources, as part of its new energy industry stimulus plan. Consequently, the demand for legal expertise in relevant areas will definitely rise.
Greener is the future for firms. Develop good practices
Driven by government policies to tackle climate change, the green technology industry is burgeoning, attracting billions of dollars of investments. Law firms have been increasingly busy with projects and transactions in this sector.
They have become part of a driving force in making the green energy revolution happen. Over the past 18 months, a majority of the leading transactional firms have reported a significant increase in instructions related to green energy, ranging from solar power, wind farm and hydroelectric to clean development mechanism (CDM) projects, and nowhere more so than in China.
“There is definitely an increase in renewable energy investment, mostly driven by the government being very pro-active in this area,” said Gide Loyrette Nouel’s Beijing senior associate, Sarah Stokoe. “Part of the US$586bn economic stimulus plan announced last year will be directed at renewable energy projects including wind and solar power, so it’s an exciting time for those involved in the sector.”
Baker’s Schaffrath has acted on many green energy sector projects and transactions, and holds a more measured perspective on development of the practices. “Investor interest in the sector has been high, but those investors are often challenged by the ROI aspects of the green energy projects they are considering,” Schaffrath says.
“In the past we have seen a steady and progressive increase in investor interest, driven in large part by the enhanced financial prospects of a project which is, or has the potential to be, a project certified pursuant to the CDM under the Kyoto Protocol.”
In recent months, China-based cleanenergy companies have been the shining lights in a relatively quieter market, compared to a year ago.
They have become part of a driving force in making the green energy revolution happen. Over the past 18 months, a majority of the leading transactional firms have reported a significant increase in instructions related to green energy, ranging from solar power, wind farm and hydroelectric to clean development mechanism (CDM) projects, and nowhere more so than in China.
“There is definitely an increase in renewable energy investment, mostly driven by the government being very pro-active in this area,” said Gide Loyrette Nouel’s Beijing senior associate, Sarah Stokoe. “Part of the US$586bn economic stimulus plan announced last year will be directed at renewable energy projects including wind and solar power, so it’s an exciting time for those involved in the sector.”
Baker’s Schaffrath has acted on many green energy sector projects and transactions, and holds a more measured perspective on development of the practices. “Investor interest in the sector has been high, but those investors are often challenged by the ROI aspects of the green energy projects they are considering,” Schaffrath says.
“In the past we have seen a steady and progressive increase in investor interest, driven in large part by the enhanced financial prospects of a project which is, or has the potential to be, a project certified pursuant to the CDM under the Kyoto Protocol.”
In recent months, China-based cleanenergy companies have been the shining lights in a relatively quieter market, compared to a year ago.
Greener is the future for firms
Pioneering the way to a low-carbon economy, environmental lawyers and climate-change practices are the latest “must have” for any future-facing, self-respecting modern law firm.
In a world that has never been more aware of climate change, law firms are taking steps to reduce their carbon footprint and minimise environmental impacts, as part of their corporate social responsibility initiatives.
“There has been a sharp increase in public awareness and interest in the green energy sector,” said Baker & McKenzie partner, Beatrice Schaffrath, co-head of the firm’s environmental and climate change practice. “Law firms are increasingly aware of climate-change issues, both from a business perspective as well as from a day-to-day operational perspective.”
Baker & McKenzie’s offices have undertaken a number of environmentally focused initiatives, including recycling measures like the increased use and collection of recycled materials. There is also an energy-efficiency program in operation, with a focus on energy conservation and smarter use of electricity and equipment; and participation in environmental conservation activities like a tree-planting day.
“Another substantive impact that law firms can have is in using their legal skills to assist with the development of best practices globally, in policy formation, in the establishment and framing of regulatory responses, and in establishing market mechanisms,” Schaffrath said.
In a world that has never been more aware of climate change, law firms are taking steps to reduce their carbon footprint and minimise environmental impacts, as part of their corporate social responsibility initiatives.
“There has been a sharp increase in public awareness and interest in the green energy sector,” said Baker & McKenzie partner, Beatrice Schaffrath, co-head of the firm’s environmental and climate change practice. “Law firms are increasingly aware of climate-change issues, both from a business perspective as well as from a day-to-day operational perspective.”
Baker & McKenzie’s offices have undertaken a number of environmentally focused initiatives, including recycling measures like the increased use and collection of recycled materials. There is also an energy-efficiency program in operation, with a focus on energy conservation and smarter use of electricity and equipment; and participation in environmental conservation activities like a tree-planting day.
“Another substantive impact that law firms can have is in using their legal skills to assist with the development of best practices globally, in policy formation, in the establishment and framing of regulatory responses, and in establishing market mechanisms,” Schaffrath said.
June 21, 2010
Principles before profit. Distinguishing factors
The concept of a Shariah-compliant law firm is still in its infancy. Agha & Shamsi is filling a gap in the market, and for law firms around the world struggling with competitors popping up around them, it’s clear that the firm has been able to distinguish itself.
It may also demonstrate that although firms with clients in the conventional banking and financial sectors have seen steady growth rates, their larger exposure to the economic downturn can also lead to their demise – as was the case with Heller Ehrman.
Agha says that the financial crisis has led to a positive outlook for work. “A lot of the problems in leverage, collateral debt obligations, hedge funds and the issues that have plagued the conventional banking system are largely not tolerated in the Islamic system,” he said. “I think that’s resulted in the implicit endorsement of the Islamic system, as it hasn’t been as affected.”
There’s also much benefit in being surrounded by a large base of the right clientele and resources in the Middle East. As the understanding of Islamic finance practices grows, it will become more accepted as an important and alternative method of financing.
Successful or not, it’s clear that Agha remains steadfast in his pursuit, with the concept of the wholly profit-driven law firm having to take a backseat. “We are confident that the firm will be successful; however it matters more to us that our success is rooted in doing this correctly,” he said.
“We don’t compromise on our principles or integrity.”
“I was very interested in setting up a law firm with an express ethical mandate, which serves the law ... and a higher spiritual purpose”Oliver Ahga, Agha & Shamsi
It may also demonstrate that although firms with clients in the conventional banking and financial sectors have seen steady growth rates, their larger exposure to the economic downturn can also lead to their demise – as was the case with Heller Ehrman.
Agha says that the financial crisis has led to a positive outlook for work. “A lot of the problems in leverage, collateral debt obligations, hedge funds and the issues that have plagued the conventional banking system are largely not tolerated in the Islamic system,” he said. “I think that’s resulted in the implicit endorsement of the Islamic system, as it hasn’t been as affected.”
There’s also much benefit in being surrounded by a large base of the right clientele and resources in the Middle East. As the understanding of Islamic finance practices grows, it will become more accepted as an important and alternative method of financing.
Successful or not, it’s clear that Agha remains steadfast in his pursuit, with the concept of the wholly profit-driven law firm having to take a backseat. “We are confident that the firm will be successful; however it matters more to us that our success is rooted in doing this correctly,” he said.
“We don’t compromise on our principles or integrity.”
Principles before profit. International links
Having spearheaded DLA Piper’s global Islamic finance practice and its Saudi office, Agha left that firm in October 2008 [with colleague Peter Hodgins, following management differences within the Saudi office] with a view to establishing his firm alongside noted Emirati figurehead Dr Saeed Mohammed Al-Shamsi. In only a few months the firm secured an affiliation with Pillsbury Winthrop, putting to rest any thoughts that a Shariah law firm is less appealing for international clientele.
Although Pillsbury is unlike Agha & Shamsi’s offering, using a conventional business model, Agha says there is no conflict of interest in aligning with a non-Shariah compliant firm. “This is simply an arrangement between two law firms who have affiliated on a non-exclusive basis, and when it makes sense we co-operate on matters,” Agha explained. “We don’t share systems, client bases, staff or resources.”
Inevitably, questions arise on how the firms work together – how Agha & Shamsi maintains its Shariah compliance working alongside its affiliate on a contentious and potentially ribawi (interest-bearing) matter?
“While the firm could not work on an interest-bearing transaction – for example the documentation of a conventional loan – if we’re working on a large project in the UAE or the Kingdom of Saudi Arabia that had a conventional finance tranche, then subject to review and approval of our board we may be able to work on the permissible parts of the project. We would have to be mindful, of course, not to share in any fees from the impermissible representation – this would need to be clearly marked and delineated so there’s no issue,” Agha said.
“The whole reason we’ve set up the firm is to take a position and endeavour to develop a genuine Islamic finance practice. It would be hypocritical if we were to set up an ownership structure with an international firm and have that kind of financial backing from them where we’d be able to enjoy the revenues that effectively came from interest-bearing transactions.”
Although Pillsbury is unlike Agha & Shamsi’s offering, using a conventional business model, Agha says there is no conflict of interest in aligning with a non-Shariah compliant firm. “This is simply an arrangement between two law firms who have affiliated on a non-exclusive basis, and when it makes sense we co-operate on matters,” Agha explained. “We don’t share systems, client bases, staff or resources.”
Inevitably, questions arise on how the firms work together – how Agha & Shamsi maintains its Shariah compliance working alongside its affiliate on a contentious and potentially ribawi (interest-bearing) matter?
“While the firm could not work on an interest-bearing transaction – for example the documentation of a conventional loan – if we’re working on a large project in the UAE or the Kingdom of Saudi Arabia that had a conventional finance tranche, then subject to review and approval of our board we may be able to work on the permissible parts of the project. We would have to be mindful, of course, not to share in any fees from the impermissible representation – this would need to be clearly marked and delineated so there’s no issue,” Agha said.
“The whole reason we’ve set up the firm is to take a position and endeavour to develop a genuine Islamic finance practice. It would be hypocritical if we were to set up an ownership structure with an international firm and have that kind of financial backing from them where we’d be able to enjoy the revenues that effectively came from interest-bearing transactions.”
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