Milbank, Tweed, Hadley & McCloy on Monday (4 June) announced that its associates will earn between $190,000 and $330,000 from 1 July.

In a move that will lead to intense pressure among Wall Street peers to raise the established starting salary for new lawyers from $180,000 to match Milbank, the firm’s associate pay bands will rise between $10,000 and $15,000 depending on seniority.

Touted as ensuring the New York shop offers ‘compensation at the top of the market’, the changes will involve all of the firm’s 500 associates, including 100 in London. Associates in their first to third year will see their salary increase by $10,000, while those from the fourth to eighth will take home $15,000 more.

‘We are fortunate to be doing very well,’ London co-managing partner Julian Stait told Legal Business. ‘Our associates are our greatest asset and we want to recognise their incredible contribution.’

Revenue at Milbank grew 7% to hit $916.54m last year, while profit per equity partner rose 11% to $3.46m, underlining its position among the top 15 Manhattan firms.

Stait denied any concern on the impact on profits: ‘Any cost has an impact to some degree, but we have got very strong profitability, so we expect our profits to hold up. In the medium to long run, the fact that we have such a stellar group of associates is a key part of the reason why we are so profitable. It is an investment in the future.’

Milbank’s salary hike follows the firm’s changes in 2016, prompted by Manhattan leader Cravath, Swaine & Moore’s announcement that it was boosting first year associates’ pay by $20,000, to $180,000.

Though there has been some expectations that 2018 would go without further rises at top global firms, Milbank’s move promises to further heat up City salaries, with many leading US firms benchmarking their London teams to domestic pay scales.

Such a move would further widen the gap between leading US firms and City counterparts. For comparison, Allen & Overy and Clifford Chance both increased their bands for junior lawyers 3% with newly-qualified (NQ) solicitors earning £81,000.

Such dynamics are a reminder that while much of the commercial legal industry is wrestling with far more cost-conscious clients, the highest reaches of the profession operate in an increasingly detached orbit.

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Check out how much other Lex 100 firms pay here.

Buyout house Bowmark Capital is acquiring BCLP’s entire stake of 62% in LOD for an undisclosed sum. The sale is expected to carry a multi-million pound price tag and represent a significant windfall for BCLP, which was formed by the merger earlier this year of Berwin Leighton Paisner (BLP) and US law firm Bryan Cave. James Lever at Livingstone Partners advised BCLP and LOD’s shareholders, while Stephenson Harwood advised Bowmark on the deal with a team lead by Jonathan Pittal. Jessica Adams at Macfarlanes advised for LOD and Alex Lewis at Baker McKenzie represented the management.

The contract lawyer business, which launched back in 2007 as part of BLP, two years ago merged with Australia’s AdventBalance, and last year posted global turnover of £35m, up 15% annually. The firm, which has operated as a separate business to BLP for six years, has expanded dramatically over the last decade to become one of the most high profile New Law brands in the UK.

Further weakening its links with BCLP will not only prime the business for further growth but make it easier for LOD to build on the 2015 deal with DLA Piper to widen its services to other major law firms. The business had initially focused largely on providing locum lawyers and services to in-house legal teams. After the sale, LOD will maintain a contractual relationship with BCLP to provide services.

‘We absolutely will be working with other law firms, but it wasn’t the primary driver for [the sale],’ LOD co-founder Simon Harper (pictured) told Legal Business. ‘It’s about a faster growth model with new service lines in new territories. It does feel like an important next step. The level of interest and excitement in the sector made the process very easy.’

LOD managing director Tom Hartley commented: ‘This deal was three to four months in the making. We wanted to make sure we had the right partners to back the growth model we have in place here.’ LOD expects to see double-digit revenue growth this year.

LOD has ten offices including multiple sites in each of Australia and Asia, as well as London, New York, Munich and Dubai. It has more than 650 lawyers and consultants on its books and more than 500 corporate and law firm clients. Bowmark, meanwhile, invests in UK mid-market companies and has £850m under management.

BCLP partner Neville Eisenberg commented: ‘BCLP has committed to remain close to LOD, partnering with the business for its flexible lawyer needs and we look forward to seeing the results of this exciting new chapter in LOD’s development.’

BCLP, meanwhile, has far from turned from legal innovation after earlier this month announcing the launch of legal tech start-up in Swiftagree.

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Baker McKenzie added to its London bench with the hire of Kathy Honeywood to its energy, mining and industrials practice. Honeywood joins from Magic Circle firm Clifford Chance, bringing experience in M&A transactions, corporate finance and joint ventures.

Baker McKenzie London managing partner Alex Chadwick (pictured) commented: ‘With almost 20 years of M&A experience and strong client relationships, Kathy is well placed to enhance our Corporate EMI practice and to capitalise on the huge opportunities in the energy industry. This plays straight into our strategy of bolstering and growing our key transactional practices in London.’

Meanwhile, London independent Wedlake Bell bolstered its corporate and capital markets practice with two senior hires from Watson Farley & Williams in Nigel Taylor and Martin Thomas. Taylor specialises in private equity transactions, M&A and corporate structuring while Thomas works on IPOs and secondary offerings of equity and debt on the London capital markets.

Martin Arnold, managing partner of Wedlake Bell, said: ‘They will add real value and depth to our thriving corporate and capital markets practice. These appointments reflect the firm’s commitment to growth and the further strengthening of our specialist offering in key sectors to meet client demand.’

DWF also made hires in the City, bolstering its real estate arm with the hire of Andrew Edwards from American firm Greenberg Traurig. Edwards will work with DWF’s regional clients and particularly private equity houses, fund managers, property companies and high net worth individuals.

Elsewhere in the UK, Womble Bond Dickinson (WBD) recruited competition partner Andrij Jurkiw from Mishcon de Reya, where he had been since 2013 and served as head of competition. Jurkiw will join WBD in Bristol, and focuses on UK & EU competition law, with particular experience in food, building materials, pharma and real estate.

Meanwhile in the US, Reed Smith made a spate of hires which brought five new partners to its Washington, Austin and New York offices, all from Norton Rose Fulbright.

In Washington, the firm landed Frederick Robinson and Lesley Reynolds in its litigation practice. Further south in Texas, the firm recruited Ben Koplin and Jeff Layne. Layne has experience in government and internal investigations and related litigation, representing health care and life sciences companies. Koplin, meanwhile, focuses on health care compliance and the regulation of health care providers. The pair’s arrival sees Reed Smith add a new office in Austin.

Rounding off the hires, Reed Smith brought in Cori Goldberg in New York. Goldberg has experience handling Food and Drug Administration (FDA) and regulatory compliance issues, as well as government and internal investigations.

Commenting on all the hires, co-chair of the firm’s life sciences group Scot Hasselman said: ‘This is a fantastic group of lawyers. It will bring together two historical health care and life sciences practices with the accompanying relationships and experience.’

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Gleghorn succeeds veteran managing partner Tim Eyles, who announced in December he would be stepping down days before the 1,000-lawyer firm elected Dominic FitzPatrick as its new senior partner, replacing Adam Marks after six years.

Eyles had been managing partner for nine years and was widely seen as effective at raising the top UK law firm’s profile and driving international expansion. Gleghorn’s election is effective from October on a three-year term.

Gleghorn joined the firm in 2006 and sits on its UK board. Eyles took Taylor Wessing’s helm in 2009 in the middle of a recession, and is credited with hugely expanding its international network and improving its brand. In the UK, the business grew 41% under Eyles’ watch, viewed as a credible performance for a top 50 practice, despite lagging the kind of expansion seen as broad peers such as Osborne Clarke and Fieldfisher.

Growth has also slowed lately. In the year to 30 April 2017, Taylor Wessing saw profit available for division among LLP members fall to £46.9m from £49.9m, despite a small 2% increase in turnover to £129.3m. The firm’s international businesses largely operate under separate profit centres.

Gleghorn’s appointment follows FitzPatrick’s election as senior partner, effective from December last year. Fitzpatrick is a private equity specialist and former head of the firm’s energy group, who has been a partner at the firm for 27 years.

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Private equity powerhouse Helen Croke led a team from Ropes & Gray advising Intermediate Capital Group (ICG) on a £1.3bn joint partnership investment. The investment, alongside HG Saturn Fund, is in IRIS, a business-critical software provider for the UK accountancy, education and business market.

Ropes & Gray finance partner Alex Robb advised on the debt aspects of the transaction. The same team of Croke and Robb advised ICG in June last year, when the private equity house acquired Visma in a $5.3bn consortium buyout – Europe’s largest-ever software takeover.

Elsewhere, Eversheds has acted for the shareholders of UK engineering company John Guest Holdings on its £687m sale to Australia-based plumbing supplies group Reliance Worldwide Corporation (RWC).

John Guest Holdings is a family-owned company and ranks as one of Europe’s largest suppliers of plastic fittings for the engineering and plumbing sectors.

Eversheds’ team was led by M&A partner Chris Halliday, while support was provided by employment partner Elizabeth Graves, tax partner Ben Jones and real estate partner Iftkhar Ahmed.

Halliday told Legal Business the firm had known the family-owned business for a while. He commented: ‘The time was right to sell. We are seeing a very busy M&A market at the moment with a number of deals closing and in the pipeline. The wider sector is seeing plenty of activity in goods and services so all the drivers for M&A are in place.’

Wrapping up the week, White & Case advised private equity firm CVC Capital Partners on the €1.01bn loan financing of a consortium buyout of Finnish private healthcare provider Mehiläinen.

White & Case’s team acting consisted of private equity partner Martin Forbes and banking partner Justin Wagstaff.

Forbes said the firm had a ‘proven track record advising on both private equity and healthcare transactions’, and the deal ‘will propel Mehiläinen into its next growth phase.’

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Earlier this month, the government launched the fund as part of a wider drive to address challenges through research funding agency UK Research and Innovation and its Innovate UK arm. It is the latest development in the Industrial Strategy Challenge Fund which focuses on improving UK science and business innovation.

As part of this, AI and the data economy is one of the strategy’s four ‘Grand Challenges’: the AI and data challenge is focused on legal services, accountancy and insurance because they are high-value and data-driven.

The £20m is open to both legal tech companies and law firms, and split into a £4m research programme aimed at solving technological challenges in legal services and a £16m programme designed to support research and development in businesses.

In addition, smaller projects can get up £400,000 in funding for more specific developments within a single business, which could include developing new AI driven products within law firms.

Alex Smith, innovation hub manager at Reed Smith, welcomes the initiative, saying: ‘Research and development is under-funded and under-thought in the legal tech space. If it’s about how AI can fix the legal ecosystem rather than how we can make money out of commercial law, then it’s a good thing.’

Smith believes innovation in the legal industry does not require a close proximity to law, adding: ‘People say “the Government doesn’t understand what lawyers need”, but they can do it. If you have the right people, structures and professionals, it won’t be a problem. Legal doesn’t even know what its needs are.’

As part of the programme, a series of briefing events are being held throughout the UK in June, covering London, Manchester, Cardiff, Edinburgh and Belfast.

The fund is an alternative to some of the accelerator and incubator style models at law firms, such as Mishcon De Reya’s MDR LAB or Allen & Overy’s Fuse.

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1. Google sued by Apple iPhone users for collecting their personal data [via The Week]

2. Smart traffic lights which always turn green to be trialled on Britain’s roads [via The Telegraph]

3. Marks & Spencer to close 100-plus stores by 2022 in ‘radical’ plan [via The Guardian]

4. Mum convicted of tricking daughter, 17, into marrying older man [via Sky News]

5. Sony to pay £1.7bn for control of EMI Music Publishing [via Sky News]

6. Who is to blame for ‘self-driving car’ deaths? [via BBC News]

The Magic Circle firm announced today (21 May) its lawyers will be able to practise local law in the Shanghai Free Trade Zone (FTZ) through a joint operations agreement with local firm Zhao Sheng. FTZ rules allow international players to tie-up with domestic firms and practise local law.

The announcement has been on the cards for some time after the two firms formed a ‘best friends’ alliance in April last year, which saw three partners and 16 lawyers move from Linklaters to Zhao Sheng.

‘Market shifts indicate that outbound work and high-end domestic transactions will become ever more important for our business,’ said Linklaters head of China William Liu. ‘The joint operations will help us to protect our competitive advantage both in China and globally.’

Other firms to have entered the FTZ include Hogan Lovells, through its association with Fidelity Law in October 2016 and Baker McKenzie, which a year earlier became the first international firm to launch a joint office in the area with Beijing firm FenXun Partners. Holman Fenwick Willan, meanwhile, formalised a local partnership with Wintell & Co in April 2016.

The move follows CMS announcing last Friday (18 May) it had formed an alliance with Hong Kong firm Shirley Lau & Co, again with a view to practice local law.

CMS partner Tim Elliott will move across to the newly established firm to become its office managing director alongside three other lawyers. The firm was launched by former Troutman Sanders M&A veteran partner Shirley Lau, who brought a six-strong corporate and litigation team with him from the US firm’s local operations.

CMS Hong Kong managing partner Nicolas Wiegand said: ‘Since our launch in 2016, we have been steadily growing the team and developing our practice in a number of strategic areas including dispute resolution, particularly international arbitration, banking and finance, as well as energy.’

Hong Kong made legal headlines recently as the location of Slaughter and May’s third ever lateral hire. In April, the Magic Circle firm recruited former Hong Kong Securities and Futures Commission director of enforcement Wynne Mok to its investigations and litigation team.

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