1. NOVEMBER 29 2012 FT US INNOVATIVE LAWYERS 2012www.ft.com/innovative-lawyers-usRESEARCH PARTNER SUPPORTED BY
2. 2 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 3US INNOVATIVE LAWYERS 2012LEADING AND LAGGINGThis is the third year that the Finan- the report show that some four years moving into the 21st century in howcial Times has produced the US Inno- after the start of the financial crisis, it communicates with clients, thevative Lawyers special report. The lawyers are helping to bring resolu- report suggests that, in terms of proc-report includes our unique rankings tion to some of the bitter disputes ess innovation, US firms lag behindof law firms that are bringing fresh arising from the credit crunch and the those in the UK. While there are thethinking and practices to solving busi- finalising of significant restructurings beginnings of change, relatively fewness problems in America. – though a few battles are still being top firms have tackled seriously their This year we have had a particularly fought. hourly fee models, despite the increas-strong set of submissions to the rank- The increased burden of regulation ingly vociferous demands of clients.ings, from more than 60 law firms and on US business, notably in the anti- But as the in-house corporate counselnearly half that number of in-house trust area and the Dodd-Frank Wall section of the report reveals, lawyerslegal teams across the US. The sub- Street reform act, has kept lawyers at top US companies are changing themissions give an insight into some of busy trying to lighten the load for cli- rules of engagement.the main business, regulatory and eco- ents in an innovative manner. I would like to pay particular thanksnomic issues preoccupying America. And while Asian and South Ameri- to Reena SenGupta, the inspiration Some of the most dynamic areas of can economies present great opportu- for the rankings, whose RSG Consult-the economy are showing themselves nities for US businesses, they can also ing does the research; and to FT col-by the way they are pushing and pose threats – from copycat manufac- leagues who have helped make thechanging the law to keep up with their turers and from alleged theft of intel- report such an annual landmark.innovations. These sectors include lectual property. Lawyers have beentechnology, social media, telecommuni- heavily involved in these controver- Martin Dicksoncations, pharmaceuticals and energy. sies, such as in the smartphone wars. US Managing Editor The litigation and finance sections of But, while the US legal profession is Financial TimesTHIS YEAR... Contributors TRACY ALLOWAY is the FT’s US Financial Correspondent SPECIAL REPORTS EDITOR Michael Skapinker CAROLINE BINHAM EDITOR is the FT’s Legal Correspondent Hugo GreenhalghINTRODUCTION INDIVIDUALS ED CROOKS LEAD EDITOR4 The top legal businesses have plotted 14 The top 10 agents for change is the FT’s US Industry and Energy Rohit Jaggimoves that recognise the increased Editor PRODUCTION EDITORpower – and demands – of clients BUSINESS OF LAW DAVID GELLES George Kyriakos 16 Training and secondment are is the FT’s US M&A Correspondent SUB EDITORCORPORATE helping to keep lawyers off the SARAH MURRAY Diana Hargreaves6 Law firms have skilfully identified rocks of uncertainty is a freelance journalist ART DIRECTORways to make sure that corporate REENA SENGUPTA Derek Westwoodmergers get the regulatory green light IN-HOUSE is chief executive of RSG Consulting PICTURE EDITORdespite opposition 18 Cross-functional groups and cost PAUL SOLMAN Michael Crabtree efficiencies are transforming legal teams is a freelance journalist ILLUSTRATORINTELLECTUAL PROPERTY RICHARD WATERS Martin O’Neill8 Pharmaceutical groups are foremost LITIGATION is the FT’s US West Coast Editor RESEARCHamong those that have needed help from 20 Creative work is reversing a sharp Lulu Rumseylaw firms rise in the scope of joint cases PUBLISHER, EMEA Dominic GoodLAWYERS TO THE INNOVATORS ENERGY HEAD OF STRATEGIC SALES9 Law firms are increasingly helpingclients to shape their businesses in areas 22 Novice global powers and the shale revolution are changing the energy Research methodology Patrick Collins HEAD OF PROJECT DELIVERYsuch as digital strategy and networking landscape Rachel Harris The FT and its research partner RSG HEAD OF B2B & WORLD REPORTSFINANCE Consulting use a bespoke methodology Robert Grange10 From embattled firms to ailing to rank lawyers on innovation. ADVERTISING PRODUCTIONeconomies, lawyers have played a critical For the FT US Innovative Lawyers 2012 Daniel Lesarrole in restructuring report, 320 submissions were received and more than 400 telephone inter- RSG RESEARCH TEAM views with senior lawyers and C-suite Reena SenGupta, Yasmin Lambert, executives conducted to arrive at the Caroline Davies, Dominic Williams, final rankings. The entries were scored Alex Mole, Maria Kyriacou out of 10 points on originality, ration- ale and impact, and benchmarked against each other to arrive at the final rankings. The research was con- ducted by a team of six RSG research- ers between September and November 2012. A more comprehensive version of the tables can be found at www.ft.com/innovative-lawyers-us
3. 4 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 5US INNOVATIVE LAWYERS 2012 US INNOVATIVE LAWYERS 2012INTRODUCTION FIRMS GROW ● FT LAW 25 SMARTER ON Rank 2012 1 Rank 2011 5 Firm Latham & Watkins Legal expertise1 133 Business of law2 41 Total3 174 STRATEGY 2 3 2 7 Skadden, Arps, Slate, Meagher & Flom Paul Hastings 162 104 0 42 162 146 4 1 Davis Polk & Wardwell 98 38 136 The top legal businesses have plotted moves 5 3 Cleary Gottlieb Steen & Hamilton 106 19 125 that recognise the increased power – and 6 22 84 0 84 demands – of clients, says Reena SenGupta Weil, Gotshal & Manges 7 9 Seyfarth Shaw 60 22 82 7 14 White & Case 62 20 82 9 11 Kirkland & Ellis 81 0 81 9 10 Paul, Weiss, Rifkind, Wharton & Garrison 81 0 81 11 22 Jones Day 75 0 75 12 12 Mayer Brown 64 0 64 12 4 Orrick, Herrington & Sutcliffe 40 24 64 14 - Cooley 61 0 61N 14 8 Sullivan & Cromwell 61 0 61 16 - Crowell & Moring 40 20 60 16 - Ropes & Gray 60 0 60 18 - DLA Piper 36 23 59 early all the leaders of changing their behaviours and assuming tres. In terms of changing the value propo- Paul Hastings has put behaviour change of legal work for the lawyers. Work com- changing market conditions and a com-the firms in the 2012 FT Law 25 had the different roles. sition of lawyers, the trends have been at the centre of its Superior Performance ing from the collapse of Lehman Brothers, mitment to innovation that marks themsame observation this year: the market is The submission from Morrison Foerster, subtle but more interesting. and Coaching programme, designed to the US investment bank, from the big out to their clients. 19 6 Cravath, Swaine & Moore 58 0 58flat so the only way to grow is to win a firm that started on the west coast, Brad Malt, chairman of Ropes & Gray, place the competencies most valued by financial institutions and from litigation Another firm that has done significantlybusiness from competitors or to create exemplifies these trends. Its commitment says: “Buggy whip manufacturers went clients at the core of its associate career relating to residential mortgage-backed better in the rankings is Weil, Gotshal & 20 - Debevoise & Plimpton 43 0 43new markets. to the US covered bond market in the out of business as they did not adapt to development. securities still creates situations where Manges – up 16 places – which has Most of the top US law firms have simi- mid-2000s broke new ground to allow insti- the car. We are faced with a buggy whip The firm analysed the behaviours of role lawyers can craft the innovative solutions appointed younger partners to head thelar strategies – to focus on retaining pre- tutions access to additional capital. And moment. Firms can pretend that old mar- model lawyers in the firm before building that dominate the FT rankings. litigation and corporate departments. Exec- 20 18 Dechert 24 19 43mium work and to avoid commoditisation. its ability to marry its technology exper- ket dynamics exist – but they don’t.” For a proprietary framework around them. The nature of the financial crisis has utive partner Barry Wolf says: “Our law-To achieve this, they need continually to tise with its capital markets practice the firms who agree with this, changing Although this is not new in the corporate also driven unexpected opportunity. While yers are adapting to the moving cheese. 20 21 Simpson Thacher & Bartlett 23 20 43prove that they are ideal for handling recently gave birth to FrankNDodd, named the behaviours of their lawyers to align world, the systematic and comprehensive the image of the bankers is tarnished, the We preach the wow factor – the idea thatcomplex, high-value matters. This is not after the Dodd-Frank Wall Street Reform more with clients’ demands is imperative. way that the firm has sought to replicate legal profession retains its reputation for you have to continually impress clients.”easy in the $240bn US legal market, which and Consumer Protection Act. This tool desired lawyer behaviour is unusual for integrity and independence. Several law Most of the top US law firms are well- 23 - Holland & Knight 19 23 42is both broad and deep. In 2010, the vast allows institutions to navigate the regula- the legal profession. firm leaders felt that clients were increas- managed businesses. But managementmajority (78) of the top 100 most-profitable tory tangle of new legislation. Both inno- Crowell & Moring realised that to get ingly looking to their lawyers instead of writer Clayton Christensen, author of Thelaw firms globally were American. vations are ranked in the 2012 FT report. the whole firm to use professional project the bankers for more all-encompassing Innovator’s Dilemma: When New Technolo- 24 19 Morrison & Foerster 22 19 41 The only way these firms can maintain Four years into the downturn with no management techniques required behav- business advice. gies Cause Great Firms to Fail, points outtheir position on the value curve is to sign of a boom means clients have the iour change. “We started with the notion Chris White, chairman of Cadwalader, that even the best-managed businesses 25 16 Cadwalader, Wickersham & Taft 40 0 40prove to clients that they are unique. This upper hand. Nearly all the 200 clients that we, not an outside consultant, had to Wickersham & Taft, says: “There is a void can fall from industry leadership.onus on differentiation may be one reason interviewed to compile the report wanted change behaviour before an online tool as to who the CEO can turn to. They are The question for the US legal professionwhy they have been keener than ever to better fee arrangements and efficiencies would be effective,” says the firm. After relying more on the lawyers and not so is whether the financial crisis is a turning 1) Legal expertise score is the total score for all ranked entries in the Corporate, Finance, Litigation, IP, Energy and Lawyers to theshow the Financial Times their innova- from their law firms. While a few firms ‘We preach the wow putting more than 400 lawyers through much on the bankers. This gives the pro- point similar to that facing Sears, the innovators categories. The maximum possible score is 360.tions. A flat, paralysed market has taken still feel they can sidestep client demands, the training, the firm’s project manage- fession an opportunity to innovate.” department store, in the 1980s when it 2) Business of law score is the total score for all ranked entries in the Business of law category. The maximum possible score is 90.innovation from something that is nice to most have sought to improve their process factor – the idea that ment approach is now becoming a differ- This year’s FT Law 25 shows west coast failed to read the implications of discount 3) Total is the score for all ranked entries in all categories of the report. The maximum possible total is 450.have, to being a “must-have”. innovations and, in particular, the value entiator for it in winning pitches. firms Latham & Watkins and Paul Hast- retailing for its core business. The competition in the FT report proposition of their younger lawyers. you have to However, the pace at which the US ings rising through the tables to challenge All the chairmen of the top firms talk US INNOVATIVE LAWYERS 2012 SUPPORTED BYreflects the struggle for market differenti- On the process innovation side, the sig- firms are adopting process innovations is previous incumbents Davis Polk & Ward- about change and the need to “not fightation. The rankings reveal lawyers nificant trends have been a more wide- continually impress much slower than in the UK. Part of the well and Skadden, Arps, Slate, Meagher & the last war”. And yet at the same timeworking at the intersection of different spread adoption of fixed and predictable reason for this is because the financial Flom. With strong submissions across the they cannot, they say, see their firmspractice areas and technologies, actively fees, project managers and low-cost cen- clients’ crisis has continued to deliver a rich seam board, these firms display resilience to being all that different in five years’ time.
4. 6 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 7US INNOVATIVE LAWYERS 2012 US INNOVATIVE LAWYERS 2012CORPORATE ● CORPORATE Score Dechert 24 Developed a clever agreement and “air cover” strategy to pull off client Medco’s $29bn merger with Express Scripts. Mayer Brown 24 Used an innovative method of valuing contract terms to enable Standout Cemex to identify IBM as the most suitable strategic partner. Skadden, Arps, 23 Acting for Express Scripts, used a new approach to merger Slate, Meagher guidelines and a “double dummy” structure to complete its $29bn & Flom deal with Medco. Davis Polk 22 Advised Dalian Wanda in its $2.6bn purchase of AMC, the largest & Wardwell ever takeover of a US company by a Chinese group. Cleary Gottlieb 21 Used a “poison pill” and an unusual board agreement to defend Steen & retailer Family Dollar against a hostile takeover bid from Trian. Hamilton Kirkland & Ellis 21 Developed a complex merger and ﬁnancing arrangement to enable three buyers to acquire shoe company Collective Brands, then split the business between them. Kirkland & Ellis 21 Highly commended Crafted a novel indemniﬁcation structure to ensure American brewer Molson Coors’ €2.65bn ($3.37bn) acquisition of StarBev was acceptable on both sides of the Atlantic. Paul Hastings 21 Secured EU competition approval for $1.375bn sale of Samsung hard disk drive business to Seagate Technologies, paving the way for clearance in other key jurisdictions. Davis Polk 20 Employed mergers and acquisitions principles to create a ﬂexible & Wardwell mechanism and bring about Delphi Automotive’s initial public offering. Skadden, Arps, 20 Devised a novel agreement to separate Amilyn from Eli Lilly, Slate, Meagher preserving Amilyn’s value before acquisition by Bristol-Myers Sqibb & Flom and AstraZeneca. White & Case 20 Overcame signiﬁcant hurdles to enable Industrial and Commercial Bank of China to acquire controlling stake in Bank of East Asia of the US. Cravath, Swaine 19 Developed a highly complex transaction to allow Pentair to merge & Moore into Tyco Flow and redomesticate the new business to Switzerland. Latham & 19 Created a way to assure National Football League players’ incomes Watkins during a dispute with owners, helping to prevent cancellation of the even though it filed with the commission a Express Scripts and Medco could were not 2011 season. SWEETENING day later, its deal was reviewed after the actually close competitors. The FTC Samsung one. subsequently found at least 10 significant Mayer Brown 19 Balanced the interests of airlines, government agencies and lenders “That 24-hour difference in the filing others. to secure the privatisation of Luis Munoz Marin Airport in Puerto Rico. turned out to be decisive,” says Mr Hata- “There has been a revolution in anti- way. “The other group was viewed to be the trust in the last 10 years. Historically mar- Skadden, Arps, 19 Took an unusual approach to Delaware law to successfully ‘three to two’ instead of the ‘four to three.’” ket shares ruled. Now more weight is THE PILL Slate, Meagher defend Cephalon against a hostile takeover bid from Valeant As a result, the Samsung/Seagate deal placed on competitive effects analysis,” & Flom Pharmaceuticals. was cleared without conditions, while says Dechert partner Mike Cowie. Sullivan & 19 Provided multi-faceted advice on Frank McCourt’s divorce, the Commended Western Digital and Hitachi had to agree After an eight-month review, the work Cromwell bankruptcy and sale of the LA Dodgers and a settlement with Major to substantial divestitures. of Dechert and Express Scripts counsel League Baseball. “Samsung latched on to this in a way Skadden, Arps, Slate, Meagher & Flom that most clients would not,” says Mr Hat- was successful and the merger was Akin Gump 18 Devised a legal structure combining non-proﬁt services and away. “Doing all this work before the deal approved. Strauss Hauer for-proﬁt management approaches to provide affordable healthcare Law firms have skilfully identified ways to make & Feld in Texas. is negotiated was a bit unusual.” In other deals, finding the right solution An even more dramatic bout of consoli- was not so much about overcoming oppo- Kirkland & Ellis 18 Created an unusual agreement between Bristol-Myers Squibb and sure that corporate mergers get the regulatory dation was also going on in the US phar- macy benefits-managers (PBM) market at sition as about hedging risk. When an auction for Amylin Pharmaceuticals, a AstraZeneca, providing a template for collaboration in the pharmaceuticals sector. green light despite opposition, finds David Gelles about the same time. In July 2011, Express Scripts, the third-largest player in the biotechnology company specialising in diabetes drugs, began this year, most of Sullivan & Cromwell 18 Developed a complex holding company structure to enable Chile’s LAN Airlines to merge with Brazil’s TAM, creating the leading Latin industry, said it would buy Medco Health the big pharmaceutical companies took American carrier Solutions, the second-largest, for $29.1bn. note. The industry already had only three big Kirkland & Ellis client Bristol-Myers Jones Day 17 Used an exchange offer to help tempt S1 shareholders away from an A existing offer and accept a bid from ACI Worldwide. rivals, and this deal would reduce that Squibb, the pharmaceutical group, was number to two. As is the case with most among those interested. But the Amylin McDermott Will 17 Provided critical advice on Chinese law to enable the Fila/Mirae-led “three to two” mergers, opposition came price tag, of around $7bn, was rather too & Emery consortium to win South Korea’s largest ever outbound consumer from all sides. The pharmaceuticals indus- much for Bristol to tackle alone. So Kirk- products deal. try lobbied hard, and the Federal land helped Bristol to partner with Astra- Trade Commission, 32 state attorneys-gen- Zeneca, another drug company with which eral and both houses of Congress held it already collaborated on diabetes drugs. hearings. Though so-called “club deals” are com- To win over regulators, attorneys from monplace among private equity firms, it ny significant transac- two. The law firm Paul Hastings knew Dechert realised they would have to make was unprecedented for two public compa- a structure under which Bristol assumed partner, who represented Wanda. These tion has challenges – which may be that its client Samsung would face an the case that market share was no proxy nies to team up to buy another public full ownership of Amylin. But through a sensitivities led Mr Mills to exercise unu- related to regulation, competition or price. uphill battle if it were viewed as the fol- for market power. With a new interpreta- company with the intention of jointly new contract, AstraZeneca assumed 50 per sual caution while working with AMC’s And while it is up to bankers to orches- lower. So New York partners, including tion of the recently revised merger guide- owning and operating it. cent ownership of the company. The unique private equity owners. In a move trate the deal and the companies to reap Scott Hataway, looked for ways to regain lines in the US, Dechert demonstrated that But because Amylin was being sold in structure protected the companies from to ease the sellers’ nerves, Wanda depos- the rewards, it is often the corporate law- first-mover advantage. The team identified a fast-moving auction, Kirkland had to substantial tax liabilities. ited a large sum of money in a Hong Kong yers who are left to do the dirty work of a precedent in European law that would work with Bristol and AstraZeneca to Another risky deal earlier this year came account that AMC would be entitled to figuring out just how, exactly, to get a allow the Samsung deal to be reviewed by establish rules for the bidding, and a max- in the form of the biggest-ever acquisition collect even if the deal were to fall apart. deal done. the European Commission before the imum price the companies were willing to of a US corporation by a Chinese company, Such reverse termination fees are not When Samsung Electronics began the Western Digital deal, even though Sam- pay. A stipulation was included that if Dalian Wanda Group. The conglomerate uncommon in deals in which private process of selling its hard disk drive oper- sung’s was announced later. If either company either company wanted to continue bid- said in May this year that it would buy the equity firms are the buyers. ations to Seagate Technology, the compu- Standard practice is to announce the ding without the other, it could do so only cinema chain AMC Entertainment Holdings “It was a sign that we had meaningful ter storage manufacturer, for $1.375bn, it deal, then file for review with the wanted to continue on its own and not with a new partner, for $2.6bn. skin in the game and did not want to walk knew obstacles lay ahead, with the market commission. Simply putting together the and that the company that did not con- Chinese acquisitions of North American away,” says Mr Mills. already consolidating. Then, as it was pre- filing can take months, and by the time bidding without the tinue would not then be able to re-emerge companies are viewed warily these days, Ultimately the fee was not needed. paring the deal, rivals Western Digital and Samsung was set to announce its deal, as a buyer. “This was particularly chal- and almost all such deals come under scru- Davis Polk was able to get the deal Hitachi said they wanted to Western Digital still had not filed. other, it could do so lenging given that we were in a competi- tiny from the Committee on Foreign Invest- cleared by the regulators. Nonetheless the cut a deal on their hard disk drive busi- So Samsung worked with the commis- tive auction process,” says Kirkland part- ment. “From a purely rational point of view reverse termination fee was an innovative nesses as well. Taken together, the two sion beforehand, then filed for review only on its own, not ner Daniel Wolf. it seemed benign, but the fact that it was a solution to an unusual problem – some- transactions would reduce the number of within an hour of announcing the deal. Once Bristol and AstraZeneca won the Chinese buyer made the sellers nervous,” thing that is so often needed to push com- big players in the market from four to Western Digital was caught off guard. And with a new partner bid, Kirkland helped the companies devise says Philip Mills, a Davis Polk & Wardwell plex deals through.
5. 8 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 9US INNOVATIVE LAWYERS 2012 US INNOVATIVE LAWYERS 2012INTELLECTUAL PROPERTY LAWYERS TO THE INNOVATORSPATENT LORE SPECIALIST NEEDS Pharmaceutical groups are foremost among those Law firms are increasingly helping clients shape their businesses in that have needed help from law firms, areas such as digital strategy and networking, says Sarah MurrayD W says Richard Waters efences of essential the brink of breaking into a market worth hen is a law firm not a Jersey-based pharmaceutical company, AdWords (sponsored search results)intellectual property that featured near $240m a year when, in 2010, the Food and law firm? When it is a corporate innova- hinged on the success of trials for a new campaigns.the top of the list of highly rated legal Drug Administration approved its generic tion consultant. In the US, which many hepatitis C drug. Law firm Skadden, Arps, A settlement was reached in November,campaigns fought in IP cases this year version of Galderma’s market-leading Ora- see as the world’s cradle of innovation, Slate, Meagher & Flom created a custom- after Skadden lawyers had argued thatsometimes involved the companies con- cea, an oral treatment for the facial skin law firms have long been key collabora- ised closing condition that enabled the longstanding principles of trademark lawcerned themselves going on the attack. Or disease rosacea. The potential damage to tors with their clients – but now some are deal to go ahead. could be applied online as well as offline.they combined a take-no-prisoners legal the European company was immense. doing that by going much further than The ability of law firms to develop com- Lawyers are also helping bring compa-strategy with a business negotiation to “The worst-case scenario is that a offering legal services to help their clients plex mechanisms for valuing pharmaceu- nies to market, enabling them to grow.reach the desired outcome. branded company of a blockbuster [drug] become more innovative. tical assets is particularly valuable to cli- In the case of Angie’s List, the online con- One thread in these defensive actions could lose 80 per cent of profits as soon as Of course, not all lawyers are working ents in the sector. sumer review business, the challenge waswas the challenges in overcoming hurdles the generic comes on market,” says Ger- in this way. The traditional role for a When it comes to digital media, rapidly to demonstrate that a company that hadthat got in the way of countering foreign ald Flattmann, a partner at Paul Hastings, corporate lawyer is to follow, rather than changing business models have licensing invested heavily in growth couldcompanies accused of trade secrets theft which was brought in by Galderma. lead – facilitating rather than creating and rights implications for companies in turn a profit. For law firm Davis Polk &or patent infringement. The case was brought about a patent new corporate structures or strengthening the sector. Here, too, lawyers have been Wardwell, an understanding of the digital A cross-border case that tops the list of that was awarded on Oracea only after existing ones. challenging old models and contributing media market helped the firm connectmost innovative legal strategies is that of Mylan received its FDA approval. To carry However, the world of lawyering is to the transformation of digital media the company with potential investors dur-European dermatology company Gal- the day, Paul Hastings had to build a new changing. First, competition to offer serv- markets. ing the launch of the Angie’s List initialderma. It was forced to come up with a legal argument with no direct precedent. ices is intensifying, particularly with the In a series of recent cases that have public offering.novel approach in the US courts to block In the wake of the eBay v MercEx- segmentation of legal work, whereby proc- resulted in wins for their clients, lawyers Davis Polk also helped Yelp, the onlineUS generic drugmaker Mylan. change case – which cast grave doubt on ess-driven transactions are increasingly have changed the way that digital music peer-reviewed guide, in going public. After According to one analyst, Mylan was on whether injunctive relief should be outsourced or executed by offshore or by is licensed, helping create a more competi- lawyers worked with Goldman Sachs non-traditional firms. This puts pressure tive marketplace. underwriters to create novel investment ● INTELLECTUAL PROPERTY on firms to keep developing the services This was the case at Weil, Gotshal & metrics to demonstrate the value inherent they offer. Manges, which won a number of antitrust in Yelp’s business model and its potential Score At the same time, as companies embark rulings for companies such as DMX Tele- for growth, the IPO was priced above its on fast growth – particularly in rapidly vision and Sirius XM Satellite Radio. projected range. Paul Hastings 23 Represented Galderma Laboratories in a suit that sets a precedent for the way patent infringement cases will be argued in the evolving markets such as digital media – “So much of what we’re doing is extend- For switched-on law firms, a grasp of new pharmaceutical industry. they often need to speed through the tra- ing, developing and extrapolating copy- business models and an ability to carve out ditional stages of corporate evolution. And right law in new areas around digital deeper relationships with companies helps Cooley 22 Helped Facebook see off a claim from Yahoo through the purchase this is something to which lawyers can media and technology,” says Bruce Rich, them do more than please individual cli- of patents and a countersuit. The action ended in strategic apply their particular set of skills. a partner at the firm. ents – it means firms can become increas- Standout partnership. As external lawyers work ever more In another digital media case, lawyers ingly and in some cases inextricably linked Cooley 21 Used a dual strategy of litigation and settlement talks to closely with clients, their familiarity with at Skadden, Arps, Slate, Meagher & Flom to their clients’ successes by facilitating successfully represent Onyx Pharmaceuticals in a dispute with the businesses is deepening, giving them brought a claim against Google, the inter- innovation. Bayer. intimate knowledge of the workings of dif- net company, for allowing the use of the And, of course, if innovation is good for a Perkins Coie 21 Successfully defended HTC against Flashpoint Technology, an ferent business models – and a greater name Rosetta Stone, the language soft- client’s business, it is also good for law firm Apple subsidiary, in a dispute over smartphone patent infringement. granted as a matter of course – it has In Cross Match’s patent infringement positive [result]”, says Marty Schenker, a opportunity to make a contribution to ware provider, without permission in its profits. become harder to win injunctions in situa- case, lawyers Latham & Watkins suc- partner at Cooley. growth, change and innovation. Seyfarth Shaw 21 Helped Wolverine cut the cost of maintaining its trademark portfolio tions like this in the US, Mr Flattmann ceeded in serving papers on the chief exec- Pharmaceuticals cases figured promi- This is the case at Cooley, which has by developing existing tools and a new client-ﬁrm mobile app. says. As a result, “branded [drugs] compa- utive of South Korean company Suprema nently among innovative actions this year offices across the US and in Shanghai. The ● LAWYERS TO THE INNOVATORS nies will increasingly pursue the statutory while he was at a trade show in the US. but the information technology industry firm has played an active role in helping Crowell 20 Forensic discovery techniques helped the ﬁrm win $919.9m for remedy and can now use our case as a Cross Match eventually prevailed in its also had its fair share of interesting dis- new companies expand their businesses & Moring client DuPont in a case against Kolon Industries of South Korea. Score precedent under similar circumstances”, case before the US International Trade putes. In part that reflected the continuing and secure investment as they evolve he adds. Commission – a venue that is becoming patent war in the smartphone industry – from inception to a sale or public listing. Ropes & Gray 21 Successfully defended Nova Biomedical in four patent infringement 20 Standout Debevoise Acted for Bayer in a patent and trademark infringement case cases on test strips for diabetics. Ensured Nova’s survival when & Plimpton against Cipla, recovering all illegal proﬁts made by the overseas Other cross-border IP cases have pre- increasingly popular among companies defences mounted by handset makers HTC For the technology start-ups among its facing a larger company. Highly commended group. sented bigger logistical challenges for looking for a quick way to block offending and Apple and legal work on the sale of clients, the firm’s ability to create connec- companies trying to protect their rights. products from entering the US. Motorola Mobility and Nortel’s patents all tions with others in its networks has been Weil, Gotshal 21 In a series of cases on intellectual property in digital media, lawyers Orrick, 20 Secured a change of trial venue to Washington to gain a victory for DuPont, the chemicals group, last year In another prominent defensive move in drew recognition. as important as its knowledge of the law. & Manges are challenging business models and helping to create more Herrington Nintendo in a case concerning the patent behind Wii technology. won an eye-catching $920m judgment the drugs industry, Onyx Pharmaceuticals One notable case was Facebook’s “We partner with business people. We competitive markets. & Sutcliffe against Kolon Industries, a South Korean went on the attack to protect its main defence against a patent lawsuit from understand the paradigm of the model and Highly commended Davis Polk & 20 Advising Solazyme on its intial public offering, the ﬁrm created new Orrick, 20 Successfully defended Apple against HTC, setting a new precedent company, for breach of trade secrets sur- source of revenue: its share of profits from Yahoo, filed in the run-up to its initial the businesses they are building,” says Wardwell metrics to demonstrate the biofuels companys value to investors. Herrington & that patent infringement occurs at the point of importation. rounding Kevlar, which is used in bullet- a drug jointly developed with bigger part- public offering this year. Facebook at the Cooley partner Bo Yaghmaie. Sutcliffe and proof vests. Crowell & Moring, acting for ner Bayer. Bayer had developed its own time lacked the sort of strong defensive IP The work of Ropes & Gray for Nova Latham & 19 Devised a novel structure to allow Coherus BioSciences to make the OMelveny & DuPont, had to obtain evidence from key alternative drug, almost identical to the portfolio enjoyed by its older rivals. Biomedical, a biotechnology company, Watkins transition from a virtual company to a fully operational business. Meyers witnesses in South Korea and prove evi- earlier joint product, which threatened to “We assumed that it would happen also demonstrates the way in which law- Skadden, Arps, 19 Lawyers developed new closing conditions for Gilead Sciences Paul, Weiss, 20 Acting for Ericsson, the ﬁrm structured Rockstar, a special purpose dence tampering by the defendant, which cut off Onyx’s revenue. eventually,” says Sam O’Rourke, Face- yers can help companies shape their busi- Slate, Meagher $11bn acquisition of Pharmasset, creating a new model for Rifkind, Wharton vehicle, to buy Nortels patent portfolio, one of the most lucrative in was found by a US court to have Suing the company’s most significant book’s deputy general counsel. “We fig- nesses. By successfully defending four sep- & Flom biotechnology deals. & Garrison history. destroyed documents in the case. Despite partner presented its challenges: “We ured a large company would make a stra- arate patent infringement cases on the the victory, DuPont has struggled to col- needed to fight and keep collaboration tegic play to hamper our business; we just company’s test strips for diabetics brought Cooley 18 Helping technology and life sciences companies grow and seek Global IP Law 19 Secured the largest patent sale in history on behalf of client Nortel, Group ultimately beneﬁting creditors and pension holders in the bankrupt lect damages. going at the same time,” says Suzanne weren’t sure when.” by Abbott Laboratories, the law firm investment through all stages of their lifecycle, from inception to Other companies that have found new Shema, general counsel at Onyx. “It was a The social networking company had saved Nova’s business, giving the com- sale or going public. company. ways to overcome hurdles represented by tightrope to walk.” been buying patents for some time but pany the confidence to take on similar Skadden, Arps, 18 Brought a claim against Google for allowing use of Rosetta Stones Latham & 19 An original approach to analysing witness evidence helped the ﬁrm foreign defendants are Bayer, the pharma- The case was a week into trial when cranked this up after the Yahoo attack. battles in the future. Slate, Meagher name without permission, arguing that existing trademark Commended Commended Watkins successfully defend Cross Match, the identity solutions company. ceutical group, and Cross Match Technolo- Bayer agreed to a settlement giving Onyx Facebook, which was represented by “Even though there are giants out there, & Flom principles apply on the internet. Cleary Gottlieb 18 gies, a US biometric scanning company. a significant share in the new drug, Cooley, came out with all guns blazing, we can enter into markets and compete Completed the $12.5bn acquisition of Motorola Mobility on behalf of WilmerHale 18 The ﬁrms Quickstart programme helps start-up companies by Steen & client Google, navigating a large patent portfolio acquisition. Bayer, in challenging an anti-flea treat- including 20 per cent of future net sales. firing back with a lawsuit of its own that with them,” says Frank Manganaro, offering specialised legal advice with deferred, ﬁxed, reduced and Hamilton ment for pets from Indian pharmaceutical Cooley, which represented Onyx, used two took just 20 days to prepare. Its uncompro- Nova’s president and chief executive. no-fee arrangements. company Cipla, convinced a US court that teams of lawyers: one to lead the court mising defence came at a time when many In the biotech sector, lawyers have been Jones Day 18 Successfully defended Myriad Genetics in an action by the it should be allowed to serve its complaint battle and one to handle simultaneous set- observers had expected the company to able to take different approaches to high- Davis Polk 17 Used expertise in the digital media market to promote Angies Lists American Civil Liberties Union, which claimed the companys & Wardwell initial public offering among investors. by email and by delivering it to a US law tlement discussions. Onyx could not let seek a quick settlement rather than jeop- risk, high-value transactions. And, in human genome patents were invalid. firm that had represented Cipla in an the legal battle threaten an essential busi- ardise its IPO. some cases, they have been able to create Latham & 17 Advised on the formation of the REBBL Tea social enterprise and Weil, Gotshal 18 Helped Yahoo sell $7.1bn of equity it held in Alibaba back to the unrelated case. The moves saved Bayer ness partnership. The aim was “to take a “I think the public perception was that new models for future deals. Watkins beverage company, which helps combat child slavery and human & Manges Chinese company, also negotiating the continuing IP terms. (represented by Debevoise & Plimpton) a lawsuit – where most are zero sum games we were not prepared to defend our- For Gilead Sciences, for example, the trafficking in the Peruvian Amazon. six-month delay. – and craft a creative solution to form a selves,” says Mr O’Rourke. $11bn acquisition of Pharmasset, a New
6. 10 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 11US INNOVATIVE LAWYERS 2012FINANCE GLOBAL JIGSAW From embattled firms to ailing economies, lawyers have played a critical role in restructuring, writes Paul Solman A ny doubts about theessential part that US lawyers play in thefinancial sector must surely have beenlaid to rest by the events of the past 12months. Four years on from the creditcrisis, lawyers are still carrying out criti- In spite of the bond restructuring’s suc- cess, subsequent events have shown that Greece’s problems are far from over. But what Cleary Gottlieb’s efforts offered the country’s faltering finances was some stability – a theme echoed ● FINANCE Weil, Gotshal & Manges Score 24 Guided Lehman Brothers and Washington Mutual out of bankruptcy, resolving two of the largest and most complex insolvency cases in history.cal work not only on troubled financial across the work that American law firms Cleary Gottlieb 23 Employed retroactive collective-action clauses to enable Greece toinstitutions but also on ailing economies. have undertaken in the past year, as they Steen & carry out its €206bn private sector debt restructuring. A case in point is Greece. The country’s have devised structures to put companies Standout Hamiltonlingering problems have occupied the on a firmer footing and bring liquidity to Simpson 23 Advising Carlyle, the private equity group, the ﬁrm helped devise aminds of politicians, economists and busi- weak markets. Thacher programme to match investors with secondary buyers for Carlylesness leaders across the globe, but it was a Examples of innovative lawyering & Bartlett buy-out funds.US law firm that was asked to undertake include Morrison Foerster’s work forthe country’s €206bn bond exchange, the Royal Bank of Canada in bringing about Morrison 22 Secured regulatory approvals to allow Royal Bank of Canada toworld’s largest-ever sovereign debt the first-ever public offering of covered & Foerster make the ﬁrst public offer of covered bonds in the US.restructuring. bonds in the US; and Simpson Thacher & White & Case 22 Advised Anchorage Capital on the Zais restructuring, the ﬁrst use of The Greek government turned to Cleary Bartlett’s activities for Carlyle to create a Chapter 11 to unwind a collateralised debt obligation.Gottlieb Steen & Hamilton in July 2011, system to improve liquidity for the privatethough it was a year earlier that Cleary equity group’s investors. Jones Day 21 Developed a new model for pension de-risking transactions toGottlieb partner Lee Buchheit had spelt Among the most significant restructur- complete General Motors transfer agreement with Prudentialout how it could be done, in a paper writ- ing at corporate level was the work by Insurance.ten with Mitu Gulati, a professor at Duke Weil, Gotshal & Manges to bring two of Paul, Weiss, 21 Acting for Barclays Bank, achieved new benchmarks in the non-University. the biggest US casualties of the credit cri- Rifkind, Wharton traditional asset-backed securitisations of a global business and a At the time of writing the paper – which sis out of bankruptcy. Highly commended & Garrison ﬁlm library.detailed the innovative use of retroactive The collapses of Lehman Brothers andcollective action clauses – Mr Buchheit Washington Mutual were an indication of Cadwalader, 20 Used legal challenges and a motion to appoint an independentsaw no sign that Greece, the European the extent of the damage that the credit Wickersham examiner to force power company Dynegy to abandon its & Taft aggressive restructuring plan.Union or the International Monetary Fund crisis had wrought on the global financialwere about to take up his suggestion. system, and their insolvency cases turned Cleary Gottlieb 20 Advising a group of eight lenders, the ﬁrm designed a structure to “The paper was simply a contribution to out to be some of the largest and most Steen & reﬁnance $7bn debt held in Cemex, the Mexican cement company.the public debate,” Mr Buchheit says. “My complex in history. Hamiltonown view was that some form of debt It is startling, then, that lawyers were Paul Hastings 20 Worked with government and tax authorities to enable Fibra Uno torestructuring was inevitable. The question able to bring the two banks out of bank- secure the ﬁrst successful offering of a real estate investment trustwas when and what form it would take.” ruptcy in little more than three years. in Latin America. Nevertheless, when political opinion “Most people, including myself, believedchanged, Greece contacted Cleary Gott- that had there been significant litigation Paul, Weiss, 20 Avoiding litigation, the ﬁrm negotiated terms that gave bondholders Rifkind, Wharton a 99 per cent recovery in Dynegy’s bankruptcy restructuring.lieb. Having drawn the road map, Mr the case would have gone on for a year, & GarrisonBuchheit was faced with the challenge of two years more, perhaps even longer,”navigating it for real. says Lori Fife, the Weil, Gotshal partner Arnold & Porter 19 Secured ﬁrst-of-a-kind regulatory approvals to enable client Banco “Starting in May 2010, the [EU and IMF] who led the team that worked on Lehman. do Brasil to buy a distressed US-based bank.took the view that they would give Greece Explaining the timetable, she says: “Theall the money it needed to repay all of its fact that we were able to forge a settle- Davis Polk & 19 Won approval for Green Dot’s purchase of Bonneville Bancorp, the Wardwell ﬁrst ever acquisition of a bank by a prepaid debit card company.bondholders in full and on time,” he says. ment among all the various diverse credi-“It was in the summer of 2011 when they tor groups was really very important, and 19 Commended Freshﬁelds Representing FINCA International on a pro bono basis, the ﬁrmbecame fatigued with that... and began to led to the companies being able to confirm Bruckhaus devised a new model for microﬁnance entities to raise equitycountenance the possibility of a debt the plans and emerge from Chapter 11 Deringer US capital.restructuring.” [bankruptcy protection] as quickly as they DLA Piper 18 Helped modernise healthcare in Peru by engineering the ﬁrst public Even without Mr Buchheit’s paper, did.” health infrastructure project ﬁnanced through capital markets.Cleary Gottlieb was an obvious choice for Ms Fife believes Weil, Gotshal’s successthe task. The firm had extensive interna- in reaching agreement with foreign affili- Hogan Lovells 18 Representing the underwriters, the ﬁrm advised on a $750m notestional experience and had advised Iraq ates was crucial to the restructuring. issuance to fund new drill ships for Petrobras in Brazil.and Argentina on sovereign debt restruc- “The claims when they were originallyturings. filed by the foreign affiliates were approxi- Skadden, Arps, 18 Devised a secure debtor-in-possession facility for Barclays Bank, How closely did the final restructuring mately $320bn, and so they were certainly Slate, Meagher enabling mortgage group Residential Capital to continue operationsprocess stick to the original Buchheit/ a group of creditors that we needed to & Flom and avoid a costly ﬁre sale.Gulati plan? “It pretty much went as I take seriously,” she says.expected in the sense that it was a some- “And through these efforts, and ulti-what unique sovereign debt restructuring mately through bilateral settlements, we development of Latin America’s emerging and practical hurdles to introduce thebecause it wasn’t just the debtor and the were able to reduce those claims to economies and markets. investment trust in Mexico.creditors at the table,” Mr Buchheit says. approximately $60bn.” Mexico played host to the region’s first Further south, in Peru, DLA Piper acted“You had on the side the official sector – Away from the direct effects of the successful launch of a real estate invest- for Bank of America Merrill Lynch tothe EU and the IMF – and they were... pro- credit crisis, a growing number of US law ment trust. Paul Hastings worked on bring about the country’s first publicviding all the money so their voice was firms have been looking southwards for behalf of Credit Suisse and Santander, the health infrastructure project to becritically important. some of their most significant work. Europe-based banks, to structure the Reit, financed through capital markets. The “I was pretty confident from the begin- As well as company restructurings such Fibra Uno. The offering was worth $700m bond issue provides financing to threening that it would inevitably get there. as Cemex, the Mexican cement group, US and was several times subscribed. While operators that have signed private-publicBut it didn’t surprise me that it got there firms have executed several firsts that Reits are common in the US, Paul Hast- partnership agreements with EsSalud, theonly at the last moment.” could prove important milestones in the ings had to negotiate numerous regulatory state health organisation.
7. 12 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 13
8. 14 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 15US INNOVATIVE LAWYERS 2012 US INNOVATIVE LAWYERS 2012INDIVIDUALS LEADING FROM THE FRONT The top 10 agents for change Brad Peterson Partner, Mayer Brown Lisa Damon Before attending law school at Partner, Seyfarth Shaw Eileen Nugent Harvard, Brad Peterson studied computer science at Northwest- Partner, Skadden, Arps, Slate, ern University, picked up an Tom Brown Among US law firms’ attempts Meagher & Flom MBA from the University of Partner, Paul Hastings to improve and streamline serv- ices to clients, Seyfarth Shaw’s Mark Harris Eileen Nugent’s role as leader of Chicago and worked at IBM. This multidisciplinary back- SeyfarthLean model stands out. Chief executive, Axiom the New York office of Skadden, ground has enabled him to have In the mobile payments revolu- tion, there are few lawyers with Lee Buchheit Lisa Damon is the partner responsible for championing the Despite an entrepreneurial back- Arps, Slate, Meagher & Flom and co-head of the firm’s private a significantly different approach to his legal work on as much experience and credi- programme, which combines ground (his father founded the equity group sees her acting for business process and informa- bility as Tom Brown. A degree Partner, Cleary Gottlieb Steen the principles of the Lean Six Red Roof Inns hotel chain), on numerous clients, including tion technology outsourcing. Joseph ShenkerMark Boling in economics and mathematics from Columbia and a record at & Hamilton Sigma management technique with technology, knowledge graduation from the University of Texas law school Mark Har- Brad Karp buyers, sellers, controlling stakeholders, boards of direc- This approach showed in the Cemex-IBM outsourcing agree- Chairman, Sullivan & CromwellGeneral counsel,Southwestern Energy Visa give him the background to help innovative payment In more than 30 years as a law- yer, Lee Buchheit has taken on management, process manage- ment techniques, alternative fee ris began a career in “big law” in the late 1990s. Chairman, Paul, Weiss, Rifkind, Wharton & Garrison tors, leveraged buyout organis- ers and investment bankers. Kathy Patrick ment, where he looked at con- tractual terms through the per- Joseph Shenker has been companies such as PayPal get many complex and challenging structures and practical tools. At the age of 29, frustrated Her work has included Partner, Gibbs & Bruns spective of value to the parties, described as the archetypal WallMark Boling’s position at South- over the regulatory hurdles pre- transactions but it is likely that Ms Damon has been the day- with the constraints of a tradi- In a career peppered with inno- Cephalon’s $6.8bn acquisition by rather than risk. Street lawyer: he presides overwestern Energy, the Houston- venting their development. his name will always be con- to-day leader of the Seyfarth- tional law firm and inspired by vations, Brad Karp considers his Teva Pharmaceutical Industries, Kathy Patrick is Wall Street’s Mr Peterson has developed a one of the most respected firmsbased group, encompasses con- Government agencies also uti- nected with one in particular: Lean programme since helping the internet revolution unfold- most innovative achievement to and her innovative approach to new nightmare, Forbes maga- theory and language to describe in the US.siderably more than the work of lise his insight into this rapidly Greece’s bond restructuring. to launch it in 2006. ing around him, Mr Harris went be the creation of the firm’s Burger King’s acquisition by 3G zine claimed, after she secured value in long-term strategic He has advised many of thea top in-house lawyer. As presi- developing field. Mr Brown’s Mr Buchheit led the Cleary Part of the difficulty of get- into partnership with Alec financial regulatory practice Capital Management was ranked an $8.5bn settlement with Bank arrangements which has world’s most influential busi-dent of V+ Development Solu- testimony was a key part in the Gottlieb Steen & Hamilton team ting lawyers to adopt a Six Guettel, a Stanford MBA, to cre- from a standing start 12 years as “Standout” in last year’s US of America last year on behalf changed the nature of commer- ness leaders across a widetions, Mr Boling heads a new hearing on safe and efficient that successfully negotiated the Sigma approach lies in chang- ate a new model for legal serv- ago. With a results-focused Innovative Lawyers report. of residential mortgage-backed cial negotiations for his clients. range of sectors and has exten-corporate division charged with mobile payments before the US €206bn ($266.6bn) bond ing their behaviours. As an ice provision. mindset, the team quickly accu- During the financial crisis, securities (RMBS) investors. The Cemex-IBM agreement is sive experience in commercialachieving balance between the Senate committee on banking, exchange last year. His role in experienced teacher, with four- Mr Harris wanted Axiom to mulated clients such as JPMor- she represented the board of The litigation, in which Ms set to deliver savings of $1bn real estate, mergers and acquisi-economic, environmental and housing and urban affairs in the world’s biggest sovereign year stints at a high school in provide clients with a third way gan, Citigroup and Bank of directors of Avaya, the world’s Patrick and her team repre- over its 10-year term. The rami- tions, joint ventures, represent-social impacts of the energy the summer. debt restructuring has given Wisconsin and a middle school – an alternative to “mahogany- America. And, more impor- largest manufacturer of corpo- sented 22 institutional investors, fications of this economic evalu- ing private equity investors,company’s activities. He also teaches a course on him a high profile in the finan- in Harlem, Ms Damon’s ability panelled offices and the partner tantly, it went on to win billion- rate phone equipment, in its including Pimco, BlackRock, ation of legal clauses for com- securities offerings, financing, He says his new role is essen- law and policy of modern con- cial sector, with some of the to persuade and create follow- pyramid” of private practice dollar cases for them. $8.2bn sale to two private equity MetLife and Federal Reserve mercial contracts could be tax and estate planning.tially one of proactive risk man- sumer payments at Berkeley world’s media lavishing praise ings has helped her to lead dra- and the expense and investment His work for Citigroup, most firms. Bank of New York, resulted in game-changing. Recent transactions includeagement – identifying areas and School of Law at California uni- on the “swashbuckling Robin matic change for clients. “Lisa of ever-expanding in-house legal recently in the Court of Appeals Ms Nugent joined Skadden in one of the largest settlements in Mr Peterson says: “Clients representing Frank McCourt,processes that could be done versity. Hood of sovereign debt” (New has proven time and again how departments. to uphold the settlement with 1986 but her path to become a Wall Street’s struggle with the want to pay for value. We’re no the owner of the Los Angelesmore efficiently and satisfying According to academic peers, York Magazine). Lean Six Sigma techniques and Axiom’s offering has grown to the Securities and Exchange leading mergers and acquisition fallout from the credit crisis. longer able to just say what we Dodgers, in the $2bn sale of thethe public demand for responsi- Mr Brown’s innovation lies in Mr Buchheit’s other achieve- tools can be applied to nearly encompass business analysis, Commission, along with billion- and restructuring lawyer was For Ms Patrick, a partner at do is essential. We have to baseball team to a consortiumble business practices. He navigating the uncharted space ments are similarly impressive. every practice area of law, as technology expertise, process dollar jury trial wins against unconventional. On leaving law Houston-based firm Gibbs & articulate the value of what led by Earvin “Magic” Johnson,believes this approach adds in the future of mobile pay- He served as counsel during the well as in-house legal process,” engineering and management Terra Firma and the Abu Dhabi school she went into an in- Bruns, the RMBS litigation we do.” the basketball star. The pricevalue to the company. ments. He is not afraid to “put Latin American debt crisis of Seyfarth says. modelling while retaining Investment Authority, has given house counsel role, holding added to an impressive portfolio was a record for a sports team. Mr Boling trained as a geolo- his head in the lion’s mouth” the 1980s, and represented After her teaching career, Ms “super-talented” lawyers. Paul Weiss annual rankings in numerous positions culminating of successes on behalf of inves- Mr Shenker is also one of thegist before becoming a lawyer, when it comes to balancing the Iceland in its dispute with the Damon became an employment The business model continues the US Innovative Lawyers in senior corporate counsel for tors, though her work has also Developing a rare lawyers who can turn hisopening a private law practice need for guidelines with the UK and the Netherlands over law litigator, specialising in dis- to develop thanks to the firm’s report. M&A and finance. included acting for former out- hand to many legal disciplines.specialising in the oil and gas demands of a rapidly evolving Icesave, the online banking crimination and harassment investment in its recruitment His success as a practitioner side directors of Enron, the language to He handled Mr McCourt’sindustry in 1993. industry. arm of failed Icelandic lender claims. process. Mr Harris says that has been replicated in his stew- failed energy group, in more divorce as well. He joined Southwestern Landsbanki. taking on innovative leaders at ardship of the firm. Taking the Her path to a than 100 securities, investigative describe value Mr Shenker joined S&C inEnergy in 2002 as senior vice- Buchheit joined Cleary Gott- every level is key both to “insu- helm in the worst financial cri- and regulatory actions pending 1980 and co-ordinated the firm’spresident, general counsel and Government lieb in 1976. He is the author of Her ability to lating against stasis” and to the sis in generations, he has leading M&A against them from 2001 to 2007. has changed the global commercial real estatesecretary of the board of direc- two books and many articles in firm’s 62 per cent growth in steered the firm to profitability Before joining Gibbs & Bruns, practice for more than 20 years.tors and added the role of presi- agencies utilise the field of international law persuade led to 2011, which brought revenues to and growth through new part- career was Ms Patrick was a law clerk to nature of He was named vice-chairman indent of V+ on the launch of the and has lectured at Harvard, over $130m 11 years after it was ners and an office in Toronto, Judge John R. Brown, US Court 2006, becoming chairman ininitiative in April 2012. his insight Yale and London universities. dramatic change founded. opened in 2011. unconventional of Appeals. negotiations 2010.
9. 16 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 17US INNOVATIVE LAWYERS 2012 US INNOVATIVE LAWYERS 2012BUSINESS OF LAW The days of the billable hour may be as numbered as those of the green associate FIRMS FILL ● BUSINESS OF LAW lawyers as long as two years to settle on a The days of the billable hour may be as Law 100 law firm had abandoned the use of thousands, or even hundreds of thou- practice area. numbered as those of the green associate. billable hours for an entire category of sands, of documents in any matter. Score Secondments can be a valuable way to Holland & Knight’s public policy and regu- work, as Holland & Knight was contem- The firm has deployed 70 of its attorneys win client loyalty, particularly in these lation group previously moved to a hybrid plating,” the firm claims, referring to the in Ohio (a lower-cost centre than its east Axiom 24 The Managed Services business draws on teams of different professionals to enable corporate counsel to outsource functions straitened times, and for junior lawyers to model where the team charged clients a top 100 US firms ranked by revenue by the coast offices) and is using a sophisticated GAP IN and increase its value to business. better understand business – the classic monthly fixed fee but continued to calcu- American Lawyer magazine. form of document-review technology that lament of general counsel everywhere. But late hours worked on a project to reconcile As a result of the billing change, the goes beyond the word-recognition soft- Orrick, 24 From its Global Corporate Solutions initiative to its M&A integration Paul Hastings understood that it is not just at the end of the year. This method still team was able to improve recruitment ware frequently used in legal-process out- Herrington & service, the ﬁrm continues to create innovative support for its at the junior level where improvements can incurred an administrative burden if not because Holland & Knight became known sourcing. The technology it employs, Sutcliffe clients. be made, and won plaudits for overhauling much end benefit to the client. as “the law firm where you did not have to designed by Recommind, uses conceptStandout DLA Piper 23 The Venture Pipeline initiative provides a free, value-added service its secondment programme to include more Instead, the team devised a more effi- do hours”, the firm reports. searches to group documents together into KNOWLEDGE to companies in need of funding if they sign up as clients. senior lawyers, including counsel and part- cient system that simply measures output WilmerHale was able to save one client bundles that are then reviewed by experts ners; its first seconded partner went to UBS. rather than time. Clients are still billed on more than 50 per cent of its typical litiga- in a particular area before being filtered to Holland & 23 A system that replaces the billable hour in ﬁxed-fee matters as the While improving lawyers’ commercial a fixed monthly fee, and receive monthly tion fee, and reduce the documents it the client. Knight unit by which to measure the value of the fee, through allocating instinct makes for better-quality service, or quarterly progress reports on what tasks received by 87 per cent, through a tactical A general counsel who is saved both percentages of the fee to tasks. attorneys must still come at a discount in have been fulfilled. The team, meanwhile, attack on the familiar bugbear of disclo- money and time, especially in these days Littler 23 The CaseSmart service re-engineers defence and management of order for them to be palatable to today’s cut $500,000 in administrative costs alone. sure in litigation. Disclosure in the era of of austerity, must surely be satisfied with Mendelson administrative agency charges to make cost savings for clients in employment work. Training and secondment are helping to general counsel. “No significant practice group in any Am email can potentially run into the many the service. Latham & Watkins 22 A national centre that centralises knowhow and expertise on securities law. keep lawyers off the rocks of uncertainty, Paul Hastings 22 Reinvented its secondment programme to include partner- says Caroline Binham level secondees, resulting in better relationships and broader I instructions. Seyfarth Shaw 22 The SeyfarthLean Consulting business helps in-house legal teams become more efficient through a holistic approach to workﬂow management and resourcing.Highly commended Bracewell 20 The Policy Resolution Group combines legal, government relations & Giuliani and communications advice for clients with ﬂexible billing arrangements. Crowell 20 Used an original approach to project management to change & Moring behaviour ﬁrst, then introduced new technologies and institute n the year that the world experi- Cleary Gottlieb Steen & Hamilton training. enced the biggest collapse of a law firm on designed its own $2m in-house “mini Paul Hastings 20 A talent management programme that focuses associates on the any measure, how firms run themselves MBA”, which will be mandatory for its career goals and skills that are valued by clients, through analysing has taken on new significance and greater first-year associates. Clients, including role model behaviours. scrutiny. Wall Street banks, were tapped for input The scandal of New York-headquartered on what to teach in order to plug commer- Simpson 20 The ﬁrms Public Company Advisory Practice focuses on issues Thacher & such as executive compensation, succession and corporate Dewey & LeBoeuf, which entered Chapter cial deficiencies in areas such as account- Bartlett governance. 11 bankruptcy protection in May with ancy and economics. $315m of liabilities after a fatal partner White & Case rolled out a development White & Case 20 An associate development curriculum encompasses competency exodus and a criminal investigation into programme for all levels of associate, models for business skills, delivered online across the ﬁrms global its former chairman, brought several salu- including two types of MBA. offices. tary lessons trailing in its wake. Their erstwhile rival, Davis Polk & Arent Fox 19 New products designed to create value by providing a meaningful Key among them is that it is no longer Wardwell, has been pushing for its and measurable approach to selling and providing legal services. acceptable to run a multinational, multi- youngest lawyers to be more useful to million dollar business as a fiefdom, clients – and more profitable for the firm – Cleary Gottlieb 19 Invested $2m in giving ﬁrst-year lawyers business training that where a small and unaccountable cabal by choosing a specialist practice area Steen & amounts to a two-week MBA. The course is both practical and decides the financial fate of thousands. much sooner than is traditionally the Hamilton theoretical. If the continuing economic gloom and case. A training and outreach programme Davis Polk & 19 First to market with interactive tools that explain the Volcker Rule, its dearth of deals contributed to the has enabled 20 per cent of associates to Wardwell the ﬁrm won a favourable response from ﬁnancial institutions. undoing of Dewey – whose forebear firm join a particular practice area immedi- survived the Great Depression of the 1930s ately; big US law firms tend to allow new Davis Polk & 19 A comprehensive career development programme for summer – then it is also the catalyst for greater Wardwell interns and associates has pushed up productivity and client efficiency and corporate professionalismCommended satisfaction levels. among law firms more widely, as general Dechert 19 Client collaboration on project management has led to a replicable counsel demand more for less. matter-value prediction model. The old practice of “leveraging” client matters – commonplace during the merg- Latham 19 A centralised strategy has enhanced the working environment for ers and acquisitions mania, and while & Watkins attorneys and streamlined the ﬁrms real estate portfolio. appetite for new exotic financial instru- Morrison 19 The FrankNDodd™ resource – free for clients – is essentially ments remained insatiable – whereby one & Foerster a regulatory tool that revolves around a comprehensive and partner may supervise a small army of interactive database. inexperienced junior associates, is being re-examined as general counsel have made Rimon 19 Used cloud technology to create a virtual law ﬁrm that carries out it clear they will not pay for on-the-job top-tier work and has grown to 32 attorney across 10 offices. training for fledgling lawyers. WilmerHale 19 WilmerHale Discovery Solutions provides efficient and cost- But the fact remains that even the effective electronic document discovery and review. Includes a team brightest graduates of US law schools may of 70 specialist attorneys. not be fully prepared for Big Law. Firms will have to fill the knowledge gap.
10. 18 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 19US INNOVATIVE LAWYERS 2012 US INNOVATIVE LAWYERS 2012IN-HOUSEOVERLAPPING ● IN-HOUSE Company General Total size Title Description counsel of legal name department SPHERES Qualcomm Don Rosenberg 450 Strategic IP A multidisciplinary Winner Department approach to intellectual property has seen the legal team play a critical role in the companys success. Cross-functional groups and cost efficiencies Cisco Steve Harmon 300 Driving internal legal efficiency Big cost efficiencies have been gained through the are transforming legal teams, reports through creation of internal legal inventions process outsourcing and a fully digitised contract Reena SenGupta management system. GlaxoSmithKline Dan Troy 600 Electronic Dramatically reducing reverse auction external legal spend system through AFAs andW the development and implementation of an electronic reverse auction system. Standout United Steven 300 Comprehensive Process management Technologies Greenspan AFA adoption and a comprehensive Corporation approach to alternative fee (Litigation) arrangements has created large cost savings. ithin four years Facebook, and those legal challenges Facebook Ted Ullyot 65 An aggressive Strategic litigation defence of a approaches, smart feeof being set up in 2004, Facebook realised became even more complex. Ted Ullyot, young business arrangements and helpingthat, although it was a young company, it Facebook’s general counsel, says: “We to create new laws aroundneeded a grown-up legal team. With more have one site that has a lot of languages privacy and freedomthan its fair share of litigation, contro- on it but freedom of speech is different of speech have helpedversy and the largest initial public offer- around the world. For example, if some- Facebook thrive.ing in internet history, the challenges fac- one says something in Sweden, we may Zynga Reggie Davis 31 An inventive, A strongly aligned team ating its legal team are broad and diverse. get complaints from Pakistan or Ger- aligned team the online games company When the social media site notched up many, claiming legal violations.” that invented the gamemore than 1bn users in October, a sixth of Besides defending the company, the Privacyville to educatethe world’s population was officially on Facebook legal team has to be active in users about privacy issues. Bank of America Isvara Wilson 15 Embracing Helping the bank navigate Corporation ﬁnancial new regulations so as to regulation remain commercial and viable. IBM Robert Weber 550 Internal talent Developing internal talent development rotation across businesses Highly commended and geographies, facilitated by training and global support teams. Rockwell Collins Gary Chadick 25 Driving Driving efficiencies and efficiency cost savings. Nearly half of the work is done under alternative fee arrangements. developing the law, from setting interna- strategic focus,” Mr Rosenberg says. tional standards of free speech to dealing He created the strategic intellectual Southwestern Mark Boling 10 Shaping Proactively forming with regulators on privacy issues. property department with a mix of law- Energy - V+ regulation for regulations around well Mr Ullyot realised that he needed a new yers, engineers and business profession- Division the energy integrity, water efficiency approach. On joining Facebook in 2008, he als. This cross-functional group under- sector and air emissions that change the way in which asked his external law firms to deal on the stands the way Qualcomm innovates and the energy sector is basis of annual fixed fees. For a company nurtures the high-value intellectual prop- perceived. with no money, fighting the various litiga- erty critical to its success. tions it faced at the time required an Important facets of the group’s multiple Altria Denise Keane 47 Diversity Creating comprehensive extraordinary fee deal. roles are following industry and technol- requirements for diversity initiatives that There is an argument that a legal team ogy trends and supporting research and outside counsel monitor outside counsel statistics and allow internal naturally reflects the cultural DNA of its development teams across the company. talent to develop further company. An innovative company begets The group has innovated in its own right. into the business. an innovative legal department. This Steven Johnson, author of Where Good could be assumed from this year’s corpo- Ideas Come From: The Natural History of Bristol-Myers Sandra Leung 115 Developing Developing internal rate counsel ranking. Companies such as Innovation, says that this process of “exa- Squibb internal experts expertise through smart Commended Zynga, the social gaming developer, and ptation”, the borrowing and confluence of training schemes that enable the team to deal Cisco, the telecoms giant, have teams that ideas from different disciplines and per- with complex transactions. constantly innovate. spectives, is critical to innovation. The team at Zynga, for example, Mr Rosenberg has created exaptation in Caterpillar - Michael 90 Lane strategy Creation of a contract invented PrivacyVille, a game that con- his legal function. “There are ideas that Commercial Sposato for cost management process that veys the company’s privacy practices and flow out of the team all the time,” he says. Section management allows the team to handle clarifies issues around online privacy to “They have implemented things beyond an increased workload while delivering signiﬁcant users and staff. my initial vision.” cost savings. The legal team at Cisco has a record of The Qualcomm legal function has also innovation – it was a pioneer of dramatic introduced efficiencies around in-house Monsanto David F. Snively 153 Virtual litigation A track record of dealing process innovations that have driven effi- document management and revamped the teams with high-stake litigation ciencies and cost savings. Since November working of the patent department. through creation of virtual 2010, the department calculates it has All the teams in the ranking have put law ﬁrms. saved 54,877 attorney hours – equating to efficiency and value at the core of their not hiring 18.7 lawyers. functions. While some are ranked for their But an innovative legal team is not a particular value-creating legal expertise, alternative fee arrangements made up 3 future, even Am Law 20 firms will need to given for innovative companies. When Don such as David Snively’s team at Monsanto per cent of the company’s legal spend. adopt widespread use of alternative billing Rosenberg joined Qualcomm in 2007, the or Isvara Wilson’s at Bank of America, Now they comprise two-thirds. arrangements.” wireless chipmaker company was mired in most have been included for their creation Steve Greenspan at United Technologies, legal disputes involving its intellectual of cost-effective, efficient departments. the defence and technology company, runs property portfolio, its semiconductor prod- The most significant change this year is 70 per cent of all his litigation on an alter- RESEARCH FOR IN-HOUSE TEAMS SUPPORTED BY ucts and scrutiny from competition the greater number of corporate counsel native fee arrangement. “I completely disa- authorities. “When I came into the depart- refusing to use the billable hour. When gree that bet-the-company work has to be ment, we had good lawyers but needed Dan Troy joined GlaxoSmithKline in 2008, done on an hourly rate,” he says. “In
11. 20 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 21US INNOVATIVE LAWYERS 2012 US INNOVATIVE LAWYERS 2012LITIGATION TRIMMING BACK THE CLASS ACTION The Supreme Court decision will be closely watched by litigation lawyers and bankers, as it has the potential to reduce investment banks’ mortgage litigation lia- ● LITIGATION Score MONOLITH Gibbs & Bruns 25 Played a key role in resolving claims relating to residential bilities by billions of dollars as it filters mortgage-backed securities arising from the 2008 credit crisis. down to the lower courts. Another Supreme Court decision related Cleary Gottlieb 24 Devised an effective strategy to challenge claims and defend to class action suits has already been cited Steen & ﬁnancial institutions in the fall-out from the Madoff fraud. by the lower courts hundreds of times. Hamilton Standout Creative work is reversing a sharp rise in the Seyfarth Shaw became the first law firm to file a successful motion to dismiss Debevoise & Plimpton 23 Led negotiations between federal and state attorneys and banks over housing foreclosure errors, helping to bring about a settlement scope of joint cases, finds Tracy Alloway a class action based on a Supreme Court ruling in Dukes vs Walmart in 49 states. Skadden, Arps, 23 Brought a private challenge on behalf of client Sprint to stop the Stores. Here the court’s decision to dis- Slate, Meagher $39bn merger of AT&T and T-Mobile, reshaping the telecoms miss the biggest gender bias class action & Flom industry. lawsuit in US history paved the way for Seyfarth lawyers to apply similar Wachtell, Lipton, 23 Acting for Vulcan Materials, the ﬁrm used a contract to stop a principles to a wage-and-hours case Rosen & Katz hostile bid, the ﬁrst time this had been done in the US.F involving Farmers Insurance. Kirkland & Ellis 21 Secured a Supreme Court ruling for generic drug manufacturers In that case, a trio of property claims that will effectively limit their product liability in the future. adjusters alleged that they and thousands of their counterparts nationwide had not Mayer Brown 21 In pro bono work for National Day Laborer Organising Network, been paid for overtime work. Seyfarth secured an order that will extend boundaries of the Freedom of used the decision in Dukes to highlight Information Act. the role of Farmers’ individual supervisors Cravath, Swaine 20 Acting for JP Morgan, devised and implemented a strategy to – successfully arguing that the insurance & Moore restrict claims under residential mortgage-backed securities company did not have a uniform overtime litigation. our years on from the Exchange Commission – effectively standard and therefore could not be heldnadir of the financial crisis, the effects of encompassing all the mortgage securities responsible for unpaid work. Crowell 20 Created an original pricing model for complex litigation that marries & Moring attorneys judgments with data and analytics tools.the downturn, and its legal ramifications, issued under a “shelf”, rather than sin- “We hope our decision will start a trend Highly commendedcontinue to play out in the US courts. gling out particular securities or tranches. among the lower courts to push back and Paul Hastings 20 Successfully defended client GlaxoSmithKline in an action over As high-profile claims slowly make their “We were the first to have ever actually create a bulkhead against the incoming overtime pay in the pharmaceuticals sector, redeﬁning a key aspectway through the judicial system, lawyers asked for judgment on this tranche-based tide of cases,” says Andrew Paley, partner of administrative law.for financial institutions are trialling ever- argument and won,” says Daniel Slifkin, a at Seyfarth Shaw.more innovative arguments in their sub- partner in Cravath’s litigation depart- Elsewhere in the litigation sphere, how- Paul Hastings 20 Protected its client in the Homestore.com federal securities class action case that established new standards for how juries shouldmissions. With many billions of dollars in ment. “We encouraged all the lawyers ever, class action suits have been increas- assess individual liability.liabilities at stake, the battle lines between we’re working with to pursue these same ing. “In my corner of the world it’s notdefendants and plaintiffs are deepening. arguments.” overstating to call what’s happened over Paul, Weiss, 20 Successfully defended Citigroups settlement with the Securities Nowhere is this more apparent than in That tranche-based argument is likely to the past few years an explosion of share- Rifkind, Wharton and Exchange Commission against a challenge from the court ofthe sphere of class actions – lawsuits receive another high-profile airing after holder litigation,” says Bill Savitt, a part- & Garrison Judge Rakoff.brought on behalf of a group of similarly Goldman Sachs asked the Supreme Court ner at Wachtell, Lipton, Rosen & Katz who Ropes & Gray 20 Defended Heartland Payment Systems against legal claims arisingsituated plaintiffs. The stakes are high, to dismiss a class action suit from an specialises in litigation related to mergers from an attack on its systems, devising a unique settlement methodparticularly when it comes to class action electricians’ fund that bought mortgage and acquisitions. and fending off further litigation.disputes over the multitude of mortgage- certificates from the investment bank just Some 96 per cent of announced M&A Seyfarth Shaw 20 Developed specialised tools for United Technologies, capturing andbacked securities sold by the banks before before the financial crisis. Goldman is deals worth more than $500m were chal- analysing employment law data to help mitigate risk, avoid litigationthe crisis. arguing that a New York appeals court lenged in court last year, according and cut costs. Rather than simply restricting the pool decision to allow the suit to go ahead to Cornerstone Research. That is upof claimants – a common procedural conflicts with the earlier judgment made from just over half in 2007. Filing such White & Case 20 Defending Toshiba in antitrust litigation, the ﬁrms strategymethod that the courts employ to restrict in the WaMu case. suits can be lucrative for shareholders and addresses uncertainty about how far US law applies to overseasthe scope of class action lawsuits – judges “The Supreme Court, in particular, has their lawyers – more than two-thirds of conduct.have recently thrown out a number of tried to restrict the scope of class actions. the M&A-related suits filed last year set- Cravath, Swaine 19 Devised a way to relieve its client of more than $100m of liability inhigh-profile cases, suggesting they are less They also started to put limits on the tled out of court. & Moore an important case concerning river pollution.willing to accommodate the sweeping scope of securities fraud claims,” says Mr The explosion in M&A litigation hasclass action claims that have become a Slifkin. “The message has started coming triggered an evolution in the plaintiffs Edwards 19 Successfully defended Mark Philip, former president of Strykerhallmark of post-crisis litigation. down from the Supreme Court that we bar – with some litigation lawyers Wildman Palmer Biotech, against Federal Drug Administration charges that included Here, the work of one creative team of need some limits to these unfettered and likening the development of a group of wire fraud.lawyers can cut a company’s potential massive potential liabilities.” highly specialised and experienced plain- Gibson, Dunn 19 Secured an important ruling that its client could not be heldexposure to class action suits by billions tiff-side legal firms to the evolution of & Crutcher responsible for the contents of its mutual funds prospectuses.of dollars. the “Magic Circle”; the small group of Lawyers at Cravath, Swaine & Moore, London-based leading global law firms. Holland 19 Used a project management approach to re-engineer Deutschefor instance, scored a significant victory They point to San Diego-based Robbins & Knight Banks legal process, increasing efficiency and cutting costs. Commendedwhen they successfully argued, on behalf Geller Rudman as an example of anof JPMorgan Chase, that a judge should ‘In my corner of emerging plaintiff-side powerhouse. Grant Jones Day 19 Successfully defended a client charged with falsely claiming payments from the US government. The decision could change thebreak up the classes in one mortgage secu- & Eisenhofer, headquartered in Delaware,rities action. The decision removed as the world it’s not historically a hotbed for class action suits 19 way similar cases are handled.much as $8bn worth of securities from the against the many companies incorporated Latham & Achieved a notable victory in "say-on-pay" litigation, obtaining ascope of a single class action suit. overstating to call there, is another. Watkins dismissal of claims against client BioMed Realty Trust. As co-ordinating counsel to the US Gibbs & Burns, the top-ranked firm inbank, which bought much of the collapsed what’s happened the FT list, manages to straddle both the McDermott Will 19 & Emery Settled insurance claims relating to those injured cleaning up the aftermath of the 2001 attacks on the World Trade Center in Newmortgage giant Washington Mutual plaintiff and defendant bar.in 2008, Cravath argued that would-be over the past few “It’s interesting to think of them as like 19 York.plaintiffs should be limited to those that the ‘Magic Circle’,” says one litigation Ropes & Gray Successfully defended TPG Capital against litigation arising fromactually bought specific tranches of the years an explosion lawyer. “I think you’re going to see the companys $3bn acquisition of retailer J. Crew.sliced-and-diced securities sold by WaMu. firms that aren’t centred around just one Previous MBS law suits had created of shareholder or two guys, and in that way they are Seyfarth Shaw 19 Acting for Farmers Insurance in a wage and hour case, the ﬁrm successfully applied a new Supreme Court ruling on labourclasses based on the so-called shelf regis- resembling defence firms rather than justtrations filed with the US Securities and litigation’ plaintiff firms.” standards.
12. 22 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 FINANCIAL TIMES THURSDAY NOVEMBER 29 2012 23US INNOVATIVE LAWYERS 2012 US INNOVATIVE LAWYERS 2012ENERGY THE NEXT Governments in most developed countries back BIG IDEA investment in renewable energy sources Novice global powers and the shale revolution are changing the energy landscape, says Ed CrooksE ntries for the energy sec-tion of this year’s US Innovative Lawyersranking speak volumes about the way theindustry is changing. The countries involved in the dealsentered include Brazil, China, India and formed. Mature oilfields in places such as Alaska and the North Sea are in decline, and the large western groups that tradi- tionally dominated those areas are strug- gling to find growth. Now, these groups are looking to new alignment of two companies from very different cultures and systems was the greatest challenge. TNK-BP has in the past concentrated almost exclusively on its Russian home territory and is having to build its understanding of international dealmaking. Inside the US, the issues are different. One key factor in many deals is the exist- ence of the master limited partnership: a tax-privileged structure, protected under AmeriGas, helped to come up with a rarely used structure, in which ETP pro- vided a contingent residual guarantee for the $1.5bn cash component of the deal paid by AmeriGas, enabling it to defer the capital gains tax liability from the sale. Vinson & Elkins, ETP’s legal adviser on that deal, also worked on the creation of a new variety of MLP – one with a stated intention of paying variable dividends over time, depending on its performance.Venezuela – rising or potential powers in frontiers in Africa, Latin America and 1987 legislation that allows its use for (The standard MLP aims to have steadilyglobal energy. Asia, and investing in “unconventional” companies in a handful of industries, rising distributions, if all goes well.) Deals in the US reflect the way the shale resources not previously accessible on including natural resources. The importance of the innovation is thatrevolution is transforming oil and gas pro- commercially attractive terms, which The MLP has been a favoured model in it allows companies in cyclical industriesduction, leaving other emerging energy have been opened up by improvements in the “midstream” pipeline business, where to benefit from the tax advantages of thetechnologies fighting for space. The land- production techniques. relatively stable revenues allow for high MLP structure. It was used for a companyscape of 20 years ago has been trans- They face challenges from rising compa- rates of dividend distribution, but it is that focuses mainly on making fertiliser, also increasingly used for oil and gas pro- which had an initial public offering in duction. The restrictions attached to these April 2011. structures mean that deals are often more As the US frets about the approach of nies in the emerging economies. Such com- complex than transactions involving regis- the fiscal cliff, there has been speculation Legal structures panies are appearing as significant forces tered corporations. For example, in the that MLPs’ tax-favoured status could be in world markets, often helped by cheap $2.9bn sale of the propane operations of under threat. Changes in tax and regula- move with evolving capital or large domestic resource bases, or Energy Transfer Partners to AmeriGas tion are an ever-present hazard in the both. Partners, two MLPs, the two parties energy business, as are upheavals in tech- markets and At the same time, governments in most wanted a deal structure that would deliver nology and markets. Right now, the indus- developed countries, as well as in some ETP a significant amount of cash upfront try is evolving particularly rapidly. technologies emerging economies, are backing invest- but also allow it to defer the tax. Lawyers will need to continue to inno- ment in renewable energy sources, such as Shearman & Sterling, working for vate in order to keep up. solar and wind power, in a bid to strengthen energy security and cut pollu- tion, including greenhouse gas emissions that contribute to climate change. ● ENERGY As markets and technologies evolve, legal and financing structures are moving Score with them. New participants and new Sullivan & 24 Created a $8.5bn ﬁnancing structure for Asia Paciﬁc Liqueﬁed Standout types of business are creating new chal- Cromwell Natural Gas in Queensland, Australia, in a model for unconventional lenges. LNG projects. One striking example among this year’s Skadden, Arps, 22 Used a ﬂexible but standardised blueprint to help SolarCity, the entries is a “south-south” deal between Slate, Meagher energy services provider, achieve private market ﬁnancing. PDVSA, the Venezuelan state oil company, & Flom and Industrial and Commercial Bank of Latham & 21 Completed the ﬁrst master limited partnership purchase of an China. PDVSA, advised by Hogan Lovells Watkins unaffiliated public C-corp with Energy Transfer Equitys $9bn lawyers from its Beijing, Caracas, Wash- Highly commended acquisition of Southern Union. ington, London and Amsterdam offices, wanted to borrow against future revenues. Weil, Gotshal & 21 Devised a complex deal to allow Kinder Morgan’s $38bn acquisition ICBC was willing to lend but there was Manges of El Paso, creating the fourth largest energy company in the US. little precedent for the transaction: a Chi- Cadwalader, 20 Created an innovative long-term power purchase agreement nese bank had completed an oil pre-pay- Wickersham & to secure Advised American Renewables $500m ﬁnancing of ment financing only once before, and never Taft Gainesville Renewable Energy Center in Florida. in Latin America. The solution involved setting up a spe- Winston & 20 Devised a legal structure that helps create a new approach to the cial purpose company in the Netherlands, Strawn development and operation of combined-heat-and-power facilities in California. owned by an orphan trust, as the route for the oil sales, giving ICBC the security it Hogan Lovells 19 Used a three-tiered ﬁnancing structure to enable Industrial and required. Meeting the particular require- Commercial Bank of China to lend to PDVSA, the Venezuelan oil ments of the Venezuelan and Chinese par- company. ties required what the firm describes as a Latham & 19 Developed a new type of deal, including four separate tranches of “complex three-tiered structure”. Watkins debt ﬁnancing, for the Arlington Valley Solar Energy II project. In another transaction involving two Commended companies from emerging economies, Shearman & 19 Employed a leveraged partnership structure to defer gain to help Michael Bolton of DLA Piper led a team Sterling AmeriGas Partners in its $2.9bn acquisition of Heritage Propane. working for TNK-BP, the Russian joint venture 50-per-cent-owned at the time by Vinson & Elkins 19 Advised Reliance on its sale of oil and gas exploration plots to BP, in one of the largest foreign direct investments into India. BP of the UK. The $1bn deal with HRT Oil and Gas, a Brazilian independent company, DLA Piper 18 Structured a deal to allow TNK-BP of Russia to buy a stake in 21 oil gave TNK-BP a 45 per cent interest in 21 and gas exploration blocks in the Amazon basin. oil and gas exploration blocks covering 48,500 square kilometres in Amazon’s Vinson & Elkins 18 Worked with a master limited partnership to complete an initial Solimões Basin in northern Brazil. public offering with a stated variable distribution structure. As with the PDVSA/ICBC financing, the