The Irish government’s go-to law firm Arthur Cox has picked up almost half of the legal fees paid out by the state in the last five years.
According to figures published by the Department of Finance in response to a Parliamentary question tabled by Sinn Féin deputy Mary Lou McDonald, over €71.6m has been spent on lawyers’ fees by the Office of the Minister of Finance, the National Asset Management Agency (Nama), the National Treasury Management Agency (NTMA), the National Development Finance Agency (NDFA) and the National Pension Reserves Fund (NPRF) since 2008.
Of that total, just over €33m has gone to Arthur Cox. The firm has established itself as the go-to firm for the state on a number of the complex financial restructuring instructions that have occurred in Ireland since the financial crisis, including most recently the restructuring of bank debt leading to the liquidation of the former Anglo Irish Bank (7 February 2013).
The single biggest fee paid out in the last five years was the €8.4m fee received by Arthur Cox in 2011 for its advice to the NTMA on restructuring the banking system. The firm also received €920,967 on the same instruction in 2010.
The firm has also been advising the Minister of Finance on ongoing banking restructuring issues, earning €16.5m over the course of the five-year period. That figure included €2.8m paid out last year in respect of “ongoing legal advice to the shareholding management unit on the restructuring of the Irish banking system, related litigation, further emerging issues and issues related to development of proposals with Troika,” according to the Department of Finance.
Meanwhile, legal fees paid out by Ireland’s ‘bad bank’ Nama have now reached €39.4m, up nearly €12m from last year’s figure of €27.6m (13 February 2012). Due diligence fees have totalled €14.8m, but have resulted in a reduction in the amount Nama has paid for loans of €477m, according to the agency’s 2011 annual report.
Hogan Lovells has earned the most from Nama, with a total income of €4.1m since the establishment of the agency’s panel in 2010. Most of this has been due diligence fees, which dropped off significantly last year. Allen & Overy (A&O) has also done well from Nama, earning a total of €2.5m in the last three years.
Arthur Cox has earned €3.9m from Nama, with some of the other big Irish firms also among the big earners. A&L Goodbody has brought in €2.5m from the agency, while McCann Fitzgerald was paid fees of €2.4m. Matheson (previously Matheson Ormsby Prentice) has received fees of €2.1m.
The Irish office of offshore giant Maples and Calder is also on the Nama panel, earning €2.5m in the last three years.
A large number of firms from around the world have been involved in Nama-related transactions, with UK, US, offshore and European firms all taking a share of the fees. In 2012 the bulk of fees, €7.8m, are expected to be recoverable from Nama borrowers. Out of €11.5m in ‘borrower recoverable fees’ paid to firms so far, Nama said it had recovered €3.6m.
Allen & Overy, Hogan Lovells, and Irish firms including A&L Goodbody, McCann Fitzgerald and Matheson have also provided advice on a range of issues for the other agencies set up in response to the crisis.
For example, in 2012 A&L Goodbody advised the NTMA on the establishment of asset disposal unit New Economy and Recovery Authority (NewERA), earning €43,000 from the instruction. Meanwhile, McCann Fitzgerald picked up €19,760 for advice on compliance matters.
Several international firms have profited from advice given to the NPRF, notably Proskauer Rose, which has been giving private equity investment advice worth €668,261 between 2008 and 2012.
The Department of Finance said it is currently tendering for a panel of external law firms for Irish advice for the NPRF. However, it said that “because of the specialist nature of the legal services required in foreign jurisdictions, these services have not been tendered”.