The Lawyer’s new China Elite report contains the most detailed research available on the PRC legal market and contains unparalleled insight into the country's leading law firms. They vary in size, practice focus and geographic coverage, but they all share one common quality – ambition... Read more
This year, The Lawyer’s annual ranking of the largest UK law firms by turnover is available as an interactive, digital benchmarking tool. For the first time this will allow you to manipulate each data set against the metrics of your choice.
The £220m sale and leaseback of the Inland Revenue and Customs & Excise property portfolio, known as the Steps deal, used to be a matter of pride for Lovells. The deal with Mapeley, on which it advised the Government, confirmed Lovells’ place at the cutting edge of the property outsourcing market. Three years on, it has turned into a tale of tax havens, misinformation and poor project management.
The very agencies tackling tax avoidance had contracted 600 of their buildings to Mapeley’s sister company, registered in none other than the tax haven of Bermuda. This information was presented by Mapeley’s lawyers, then Nabarro Nathanson, to the Government department. By the time the information filtered through, the contract had already been signed.
When Inland Revenue chairman Sir Nicholas Montagu appeared before the Treasury Select Committee last December, he said that procurement rules prevented him from excluding Mapeley on grounds of its Bermuda base. This view is commonly held within Whitehall, so it’s unlikely that Lovells would have been asked to advise on this point. However, the Treasury admitted last week that “exploring options for an alternative structure would have been legally possible”.
Compared to the Revenue, Lovells has escaped relatively unscathed. There is no question of it having given negligent advice. “This wasn’t so much a legal issue as a policy issue,” says one lawyer in the sector. Lovells is still involved in negotiations between the Revenue and Mapeley, with the latter reportedly wanting as much as £17m a year extra for the next 20 years because of cash problems with the deal.
The scandal – minutely exposed in a long-running Private Eye investigation – will have caused the firm more than a little embarrassment. Private Eye refers to Lovells as the firm that advised “top pension thief Robert Maxwell” and refers to the “usual extortionate rates” of the Government’s lawyers and accountants on the deal. More damning, however, is Lovells’ apparent failure to stand up and shout about the inappropriate nature of the deal. As one industry player says: “There’s a point in every deal where the client looks you in the eye and asks you ‘should I do this?’ That’s not asking for legal advice, but for professional advice. It’s a lawyer’s job to say that something is inappropriate, even if it’s not a legal question. Lawyers are part of the negotiating team. These days they help to create the deal.”