Property lawyers in post-Budget frenzy
The tenth UK Budget delivered by Chancellor Gordon Brown on Wednesday 22 March gave in-house lawyers across numerous sectors plenty to think about, not least the typically small teams operating within the property sector.
Land Securities head of legal Clive Ashcroft and British Land company secretary Anthony Braine will be among those pouring over Brown’s budget speech and anxiously awaiting the full detail of the legislation for the implementation of real estate investment trusts (Reits). Other companies, such as Hammerson, which do not have a dedicated in-house legal function, will be relying on their external advisers before making a decision on whether to switch to a Reit.
The tax-effective property trusts will come into effect from 1 January 2007; and following the jump in share prices (Land Securities shares shot up 12 per cent) conversions have an air of inevitability about them. The race is on for property companies and their lawyers to be the first.
The announcement of the green light for Reits has had private practice lawyers – from commercial and tax practices to commercial property lawyers – scrambling to get their bulletins and updates out to clients.
For residential property developers and home-building companies, the Chancellor’s amendments to the planning gain supplement and stamp duty land tax have given in-house lawyers there plenty to think about.
Locog looks for in-house winner
THE LONDON Organising Committee of the Olympic Games (Locog) is on the hunt for a new head of legal, offering one of the most high-profile in-house jobs going. In March, Locog commercial and legal director Charlie Wijeratna relinquished his legal role to focus on a new role as Locog’s commercial director.
The move was part of a wider change to the management team during the final phase of the organisation’s conversion from bid company to staging company.
Locog is on the hunt for a new legal director to lead its seven-lawyer team. Wijeratna will be involved in the commercial department, trying to raise £2bn in revenue through corporate sponsorship, tickets and local sponsorship.
FSA lures talent with legal training
has launched its first dedicated legal training programme in a bid to attract young lawyers who will remain at the regulator for the long term.
The first intake of trainees will be in September, with two training contracts on offer per year. The trainees will spend one year in the general counsel’s division, six months in the enforcement division and the final six months seconded in private practice. The programme has attracted huge demand, with more than 200 applications received for the two positions.
Firms prepare to woo Tyco
Revelations in The Lawyer last week (27 March) that Tyco B> is to overhaul its legal department as the company splits will have caused shockwaves throughout the industry. Splitting a $40bn (£23.03bn) monster into three is never going to pass without a ripple.
Europe, Middle East and Africa (Emea) general counsel Trevor Faure plans to whittle down the 250-odd firms he uses and aims to kick off a major recruitment drive for the three new entities.
Tyco Emea currently has 53 lawyers in 35 countries looking after a business model with 66,000 employees across 900 legal entities. In perhaps the understatement of the year, Faure said: “Scale and complexity is an issue.”
With the panel format yet to be determined, but following a commitment from Faure to reduce the seven-figure legal spend, law firms will be keen to butter up Faure and secure their places on the panel.
MoD rejection costs Simmons £15m
The full extent of Simmons & Simmons ‘ embarrassing exit from the Ministry of Defence (MoD) panel was revealed by the defence department’s director of commercial law Robert Miller after a Freedom of Information Act request was lodged by The Lawyer (13 March).
The MoD had spent more than £73m on external lawyers between 1 May 2002 and 30 September 2005. Of that figure, Simmons had been the main beneficiary, collecting £15.5m (or 21 per cent of the total).
Freshfields Bruckhaus Deringer was the next biggest biller, having received £10.3m. But Simmons’ panel departure will not reap the immediate big dividends the magic circle firm might have been hoping for: Simmons retains historic instructions on the MoD’s three largest projects going forward.
Constellation finds European legal stars
US-based energy giant Constellation Energy signalled its long-term intentions in the European market by appointing its first in-house lawyers this month, with a very strong Enron flavour to the team.
Former Enron Europe general counsel Mark Evans brings his expertise in energy trading to Constellation subsidiary Constellation Energy Commodities Group (CCG). Evans joined from Hammonds, which he fled to as Enron collapsed late in 2001.
Joining Evans as a permanent employee from today (3 April) is Australian Barry Saraullo. Saraullo was formerly seconded to Enron Europe from the London office of Vinson & Elkins , which acted as Enron’s worldwide chief corporate counsel.
Saraullo was technically CCG’s first in-house lawyer, having been appointed on a temporary contract to help oversee the group’s entry into the UK market.
Baltimore-based Const-ellation was recently part of a consortium that made an unsuccessful £2.2bn bid for Drax, Europe’s largest coal-fired power station, although the UK in-house team had no involvement on that deal. Constellation’s external firms include Allen & Overy, Freshfields, Hunton & Williams, Norton Rose and Vinson & Elkins.
And the surveys say…
A glut of surveys by recruitment agencies has been released in the past month.
Michael Page Legal‘s Trendwatch survey suggested in-house departments may struggle going forward, with increased competition for quality candidates keeping lawyers in private practice.
A separate survey of legal heads by Badenoch & Clark provided an interesting insight into the internal and external issues in-house lawyers have to deal with.
Visibility (“we are well outnumbered by accountants and the procurement department”), staff retention and “proving the value” of the legal department to the company were key internal issues highlighted.
Externally, the issues were a lot more clear-cut – managing cost was the main issue highlighted, while keeping pace with changing regulations and legislation was a close second.
In a third survey by recruiter BCL Legal of 130 companies in the North West, it found top in-house lawyers can now command salaries of up to £150,000 in the region. The average salary for senior counsels was £86,000 in 2005 – around £4,000 up on the previous year.