NOVEMBER212013 FT US INNOVATIVE LAWYERS 2013 · US INNOVATIVE LAWYERS 2013 US INNOVATIVE LAWYERS...

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www.ft.com/innovative-lawyers-us NOVEMBER 21 2013 SUPPORTED BY RESEARCH PARTNER FT US INNOVATIVE LAWYERS 2013

Transcript of NOVEMBER212013 FT US INNOVATIVE LAWYERS 2013 · US INNOVATIVE LAWYERS 2013 US INNOVATIVE LAWYERS...

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www.ft.com/innovative­lawyers­us

NOVEMBER 21 2013

SUPPORTED BYRESEARCH PARTNER

FTUS INNOVATIVE

LAWYERS2013

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Welcome to the Financial Times USInnovative Lawyers report for 2013. This isthe fourth year we have produced this specialreport, which incorporates our uniquerankings of law firms that have broughtoriginal thinking and practices to businessissues in the US.

This year the report has been enlarged torank the top 40 US law firms and include anew table highlighting some of the mostinnovative work being carried out by USfirms in Latin America in the field of finance.

A great deal of research goes into producingour rankings. Law firms first submit entrieshighlighting their most innovative workduring the past year. The submissions arethen assessed by our partner, RSGConsulting, which carries out the research forthe project.

REVOLUTIONARY TIMESUS INNOVATIVE LAWYERS 2013

INTRODUCTION AND FT 404 The shift to lawyers becoming anintrinsic part of the creative process iseven more pronounced this year

CORPORATE6 Political pitfalls and unexpected legalsnags can hold up a smooth takeover

LITIGATION8 With some notable victories overfederal agencies, law firms are helpingto shape regulation in the wake of thefinancial crisis

BUSINESS OF LAW10 By streamlining their own processesfirms have been creating value for clients

TRAINING11 The need for firms to develop andrefresh the skills of junior and seniorassociates is increasing, but so hasits cost

INDIVIDUALS14 The top 10 agents for change

ANALYSIS ANDRANKINGS

RSG conducts a series of intensiveinterviews with clients, partners and expertsand uses a bespoke methodology to producerankings in various areas of expertise –ranging from litigation to intellectualproperty.

The main focus is on the big US lawpractices, but we also take a look at the bestin-house corporate counsel.

This year we received a record 355submissions from 59 law firms. RSG alsoassessed 50 corporate legal teams. The reportcovers work led from law firms’ US offices,which includes transactions carried outwithin the US as well as Canada, LatinAmerica and other regions.

A significant theme of this year’s report isthe speed of change facing companies as theinformation technology revolution puts new

IN­HOUSE16 In-house lawyers can be essential inenabling innovation in business, but withthat come some potential difficulties

LAWYERS TO THE INNOVATORS18 Fresh legal ideas can give newbusiness concepts room to thrive

FINANCE20 Firms sometimes have to come upwith new and unusual ways to save com-panies from collapse

LATIN AMERICA – FINANCE22 Several imaginative corporate financedeals in Latin America have been achance for law firms to showcase theirrange of skills

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All the ranking tables from this andprevious years can be found online atwww.ft.com/innovative-lawyers-us

FT Innovative Lawyers 2013 is a rank-ing for US-based lawyers.The FT and its research partner RSGConsulting have devised a uniquemethodology to rank lawyers on inno-vation. Law firms and in-house legalteams are invited to submit innova-tions that are researched through cli-ent and third-party interviews. Entriesare selected to appear in the FT reportbased on a comparative analysis andthe strength of client or independentreviews. Market experts are also con-sulted on selected submissions.This year we received 355 submissionsfrom 59 law firms and researched anadditional 40 company in-house legalteams. RSG Consulting conducted 530interviews with senior lawyers andbusiness executives between Augustand November 2013 to arrive at thefinal rankings.Each entry is scored out of 10 pointsfor originality, rationale and impact togive a maximum score of 30. Theassessment is comparative within eachcategory and designed to identify law-yers who have delivered exceptionalvalue to their clients.The in-house legal team ranking isdrawn from nominations as well assubmissions. The research processincludes internal commercial referencesfor each company’s legal team.FT 40 – 2013The FT 40 ranking is a pure aggregateof each law firm’s performance acrossthe private practice categories of thereport. The firm’s total score forentries ranked in each of the Businessof Law, Corporate, Finance, Litigationand Lawyers to the Innovators catego-ries is also shown.Research PartnerThe RSG Consulting research team hasmore than 20 years’ experience analys-ing the legal profession. It has a trackrecord of devising ranking methodolo-gies for professional services firms.Chief executive Reena SenGupta helpedto launch the FT’s Law & Businesspage in 2001, and has been a regularwriter on the legal profession for theFT for the past 13 years.

Contributors

pressures on their operations, and the knock-on effect this is having on law firms and in-house counsel to adapt quickly and flexibly.

The management of legal talent is, forexample, undergoing extensive change ascorporate clients demand broader skills fromtheir advisers, and practices are requiredto give extra training in management,accounting and financial issues to their staff.

I would like to thank Reena SenGupta, thehead of RSG Consulting and the inspirationbehind our Innovative Lawyers rankings, formaking this report so comprehensive; and FTcolleagues who have ensured the report issuch a keenly anticipated annual landmark.

Martin DicksonUS Managing Editor,Financial Times

TRACY ALLOWAYUS financial correspondentCAROLINE BINHAMLegal correspondentED HAMMONDUS mergers & acquisitionscorrespondentSARAH MURRAYUS-based FT contributorVIVIANNE RODRIGUESUS capital markets reporterREENA SENGUPTAChief executive of RSG ConsultingRICHARD WATERSWest Coast editorJUDE WEBBERMexico and Central Americacorrespondent

SPECIAL REPORTS EDITORMichael SkapinkerHEAD OF EDITORIAL CONTENTHugo GreenhalghLEAD EDITORRohit JaggiPRODUCTION EDITORGeorge KyriakosSUB­EDITORSPhilip Parrish, David ScholefieldART DIRECTORDerek WestwoodPICTURE EDITORMichael CrabtreeILLUSTRATORMartin O’NeillPUBLISHER, EMEADominic GoodHEAD OF STRATEGIC SALESPatrick CollinsHEAD OF B2B & WORLD REPORTSRobert Grange

RSG RESEARCH TEAMReena SenGupta, Yasmin Lambert,Dominic Williams, James Wood,Richard Pinto, Imogen Holden,Lucy Pearson, Marcus Twitchin

Methodology

________________

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The FT’s innovation rankingsfor law firms in the US have shifted up agear this year. With 100 extra submissionsand most of the top firms in the Am Law100 putting their best work forward, to beincluded has meant more than doingsomething original and delivering a differ-ent order of service. It has also meantbeing able to inspire eulogies from clients.The FT 40 reflects those firms that havebeen able to do that consistently and effec-tively across their businesses.

So what does it take to inspire clienteulogy, when quality is a given and thestakes are so high that a positive commer-cial and legal outcome for any lawyer willresult in immense gratitude?

Jamie O’Connell, managing director atBlackstone Group, calls White & Case’swork for Roust Trading on its acquisitionof CEDC, the spirits manufacturer, “off-the-charts”. In creating the world’s sec-ond-largest vodka company, the firm hadto work closely with the financier but tooka leadership role throughout, coming upwith ideas, creating consensus and deliv-ering a complex but creative solution. Keyto success was its global footprint, inter-nal collaborations and the ability to showwhat the client considered unusual behav-iour. Tom Lauria, the White & Case part-ner on the deal, was described as an “atyp-ical” lawyer.

on adding value to their services. As thebusiness of law ranking reveals, some USlaw firms are beginning to make some oftheir services into standardised products,a process that has been common in theUK legal market for some years.

The majority of US firms, though, areresponding by increasing focus on talentmanagement, in an attempt to make theirlawyers more relevant to business.

Eric Friedman, chairman of Skadden,the top-scoring firm in the FT 40 this year,says the firm is focused on the develop-ment of its attorneys worldwide. He says,“One of the most rewarding changes Ihave seen this year is the increased inter-connectivity of our offices coming to life.”

That underlines how important a multi-faceted outlook has become to innovation.

‘The stakes arehigher, the problemsmore intractable butthe opportunities aremore transformative’

Rank Firm Total score

Business of law

Corporate Finance Litigation Lawyers to the innovators

1 Skadden, Arps, Slate, Meagher & Flom

250 19 71 72 44 44

2 Paul Hastings 192 61 24 46 43 18

3= Cravath, Swaine & Moore 176 0 43 69 46 18

3= Latham & Watkins 176 21 66 47 0 42

5 White & Case 159 19 47 46 22 25

6 Morrison & Foerster 144 21 22 45 0 56

7 Weil, Gotshal & Manges 132 44 23 23 21 21

8 Simpson Thacher & Bartlett

109 21 44 23 0 21

9 Orrick, Herrington & Sutcliff e

105 19 0 23 22 41

10 Cleary Gottlieb Steen & Hamilton

91 0 0 46 45 0

11 Kirkland & Ellis 86 0 64 0 22 0

12 Ropes & Gray 82 23 22 0 0 37

13 Debevoise & Plimpton 80 18 22 0 22 18

14 Paul, Weiss, Rifkind, Wharton & Garrison

78 0 0 0 22 56

15 Davis Polk & Wardwell 69 0 21 48 0 0

16= Jones Day 67 0 24 0 23 20

16= Mayer Brown 67 0 0 46 21 0

16= Seyfarth Shaw 67 46 0 0 21 0

19 Crowell & Moring 59 20 0 0 21 18

20 DLA Piper 54 35 0 0 0 19

21 Chadbourne & Parke 45 0 0 45 0 0

22 O’Melveny & Myers 44 0 44 0 0 0

23= Akin Gump Strauss Hauer & Feld

42 20 22 0 0 0

23= Dechert 42 19 0 0 23 0

23= Gibson, Dunn & Crutcher

42 0 0 0 42 0

26= Shearman & Sterling 23 0 23 0 0 0

26= WilmerHale 23 0 0 0 23 0

28= Fried, Frank, Harris, Shriver & Jacobson

22 0 22 0 0 0

28= McDermott Will & Emery

22 0 22 0 0 0

28= Pillsbury Winthrop Shaw Pittman

22 0 0 22 0 0

28= Sullivan & Cromwell 22 0 0 0 22 0

28= Vinson & Elkins 22 0 22 0 0 0

28= Wachtell, Lipton, Rosen & Katz

22 0 0 0 22 0

34= Allen & Overy 21 0 0 21 0 0

34= Axiom 21 21 0 0 0 0

34= Covington & Burling 21 0 0 0 21 0

34= Freshfi elds Bruckhaus Deringer

21 0 21 0 0 0

34= Hogan Lovells 21 0 0 0 21 0

34= K&L Gates 21 21 0 0 0 0

34= Perkins Coie 21 21 0 0 0 0

● FT 40: US LAW FIRM INNOVATORS 2013

Collaboration and creativity help definethe best work of the profession,

says Reena SenGupta

FIRMS TAKETHE LEADON IDEAS

Throughout the FT report, in privatepractice or in-house, lawyers are noted fortheir innovation when they display skillsor behaviours beyond the ordinary. Inearly FT Innovative Lawyer reports, atypi-cal behaviour meant anticipating instruc-tions as well as being commercial andintensely committed; in effect, being inthe driving seat of the car. But as the barto entry rises, it has begun to mean hav-ing a key role in designing that car.

For in-house lawyers, this shift tobecoming an intrinsic part of the creativeprocess is even more pronounced thisyear. Eric Schmidt, executive chairman ofGoogle, says his lawyers can articulate thedetail of their products like engineers.“Every lawyer wants to be a business ena-bler. The difference in our case is that weare inventing this stuff. So the lawyershave to be doing it, too.”

The 10 lawyers profiled in the innova-tive individuals section personify thetraits of legal innovators. They show crea-tivity, leadership and a restless mindset.In many cases, they started their profes-sional lives from a non-legal background.Max Grant, the intellectual property part-ner at Latham & Watkins, was a NavySEAL; Erika Rottenberg, the general coun-sel at LinkedIn, used to be a school-teacher. Both say their early experienceshelped them make a wider interpretationof what it means to be a lawyer.

Mike Goodman at Nike shows a differ-ent type of innovation. His approach hasbeen to rethink the commercial contract-ing process, taking it back to basics andre-engineering it. His innovations arebearing fruit for Nike but could also havebroader applications. Brett Miller, directorof sourcing execution, says, “Mike has theprocess mindset that sets him apart but heis bumping his head against the culturalnorms of the legal profession.”

These norms, however, are changing.While in-house lawyers are leading theshift, those in private practice are notimmune. Professor Jeffrey E. Garten from

INTRODUCTION

US INNOVATIVE LAWYERS 2013 SUPPORTED BY

the Yale School of Management said in arecent address to 150 law firm managingpartners at an International Bar Associa-tion meeting that he believes the US isgoing through a third industrial revolu-tion. He pointed to levels of industrialcollaboration in the US unparalleled any-where else in the world.

These collaborations underpin many ofthe examples of innovative lawyering inthe 2013 FT report. They represent anopportunity for lawyers but also a chal-lenge as both the law and lawyers have tokeep up with the pace of change.

Ninety per cent of ranked entries in thecorporate law ranking involved some formof collaboration not only internally amongpractice groups but externally with cli-ents, opposing law firms and other stake-

holders. More than 50 per cent of entriesin corporate and finance law involvedcross-border work and the standoutentries in corporate are all international.

It is difficult for lawyers working inthese multidisciplinary teams for differentclient combinations and in new jurisdic-tions to hang on to old silo mindsets ortraditional approaches to risk.

The other key driver of change in theprofession continues to be the environ-ment. Despite the uptick in the US econ-omy and several firms in the FT 40 report-ing 10 per cent growth this year, the USlegal market remains challenging. BradKarp, chairman of Paul Weiss, says, “Wehad another record-breaking year but weunderstand that we cannot be complacentin this market. The stakes are higher, the

problems more intractable but the oppor-tunities are more transformative.”

Most law firm leaders in the FT 40 agreethat the changes in the market since thecredit crisis are here to stay. Greg Nitz-kowski, managing partner of Paul Hast-ings, says: “Until 2008, we had uninter-rupted upward ramping in a statisticalsense for 60 years. We saw failures butpeople tended to attribute them to leader-ship and management rather than failuresof change and innovation.”

Being able to innovate, he believes, willbe the only way premium law firms canprotect their franchises and garner thoseall-important client eulogies.

Rather than innovate around pricing,which would be what most clients wouldwelcome, top firms have chosen to focus

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US INNOVATIVE LAWYERS 2013 US INNOVATIVE LAWYERS 2013

Even those well used tothe idiosyncrasies of US corporateregulation would have struggled to foreseethe decision that, last summer, almostfoiled the takeover of the country’s largestpig farmer.

Shuanghui International, the Chinesefood producer, had agreed to pay $4.7bn(plus taking on debt) to buy US pork colos-sus Smithfield Foods.

The deal – the largest takeover of a UScompany by a Chinese rival – had beenmonths in the making; legions of bankers,lawyers and advisers had confected termsthat both parties could swallow.

Confident of completing the deal at the

time – and with a nod to constraints ondeals involving sensitive military andtechnological information – Larry Pope,Smithfield chief executive, quipped:“We’re not exporting tanks and guns andcyber security – these are pork chops.”

The US Treasury disagreed and calledfor a review of the deal. Sausages, itseemed, were an issue of national security.

The Smithfield acquisition, which waseventually given government approval inSeptember, serves as a useful if somewhatcomical reminder of the difficulties facingforeign companies trying to buy marketshare in the US.

From tighter antitrust regulation, to

ENSURING ADONE DEAL

Political pitfalls and unexpected legalsnags can hold up a smooth takeover,

writes Ed Hammond

Score

Skadden, Arps, Slate, Meagher & Flom

25 Advised a consortium of private equity fi rms on a carve-out transaction to acquire 38 rigs and create the $1bn Shelf Drilling.

Jones Day 24 Created new standards in the use of computer-assisted review of antitrust investigations to allow Goodrich to merge with United Technologies Corporation.

Paul Hastings 24 Employed innovative deal structures and achieved regulatory approval for Shuanghui’s $7.1bn acquisition of Smithfi eld Foods, the largest ever Chinese takeover of a US company.

White & Case 24 Advised Roust Trading Ltd, a holding company of Russian Standard, on a pre-packaged US bankruptcy to assume 100 per cent control of spirits producer Central European Distribution Corporation.

Latham & Watkins 23 Created a novel interloper-friendly tool during Quest’s auction giving rival bidders a 19.9 per cent top-up option to help neutralise the chief executive's holding.

O’Melveny & Myers 23 Guided Chinese company BGI-Shenzhen through the fi nancing and regulatory clearance for its acquisition of Complete Genomics.

Shearman & Sterling

23 Advised Liberty Global on its acquisition of Virgin Media, and the re-domestication of the new entity to the UK while maintaining its US stock listing.

Simpson Thacher Bartlett

23 Helped Smithfi eld Foods to negotiate enforceability and regulatory concerns during its sale to Chinese company Shuanghui.

Skadden, Arps, Slate, Meagher & Flom

23 Oversaw Sprint’s sale to SoftBank while simultaneously helping the company acquire Clearwire and fend off rival bids.

Skadden, Arps, Slate, Meagher & Flom

23 Built consensus to guide AMR’s creditors committee towards a rare strategy to help the company exit Chapter 11 bankruptcy through its merger with US Airways.

Weil, Gotshal & Manges

23 In a highly unusual deal, advised AMR on a merger agreement with US Airways while still under Chapter 11 bankruptcy protection.

White & Case 23 On behalf of Toyota Industries Corporation, the fi rm successfully challenged the Department of Justice's new economic modelling for antitrust in vertical mergers.

Akin Gump Strauss Hauer & Feld

22 Advised Vision Capital on a fi rst-of-its-kind transaction allowing a bidder group to acquire a valuable fund at the end of its term, creating a model for future deals.

Cravath, Swaine & Moore

22 Advised AmerisourceBergen during its entry into a three-way strategic relationship with Walgreen Co and Alliance Boots.

Debevoise & Plimpton

22 Helped Dell's special committee explore options ahead of its $24.9bn go-private transaction using an extended go-shop to encourage rival bids and fi ght a shareholder challenge.

Fried, Frank, Harris, Shriver & Jacobson

22 Orchestrated a complex, tax-free split-off of Mosaic from Cargill, allowing the parent company to remain private.

Kirkland & Ellis 22 Structured two recent deals that breathe life into the go-shop provision, turning an obligation into a deal technology.

Latham & Watkins

22 Advised Blackstone Energy Partners on its $1.5bn investment into Cheniere Energy Partners to develop the fi rst liquefi ed natural gas export facility in continental US.

McDermott Will & Emery

22 Represented Constellation Brands during antitrust investigations, creating a framework with the Department of Justice to allow the use of computer-assisted review.

Morrison & Foerster

22 Advised SoftBank on the largest ever Japanese buyout when purchasing Sprint while fi ghting off a competing bid.

Ropes & Gray 22 Worked with Behrman Capital to develop creative options for the sale of its ‘Fund III’ portfolio in a deal that increased liquidity and opened up a new market of potential purchasers.

Vinson Elkins 22 Played a critical role in Pioneer’s combined sale and agreement with Sinochem Petroleum USA to form a long-term horizontal drilling development partnership.

Cravath, Swaine & Moore

21 Assisted Crown Castle with its lease and leaseback acquisition of the rights to over 7,000 T-Mobile towers marking an important expansion of the company's US mobile telecoms infrastructure holdings.

Davis Polk & Wardwell

21 Advised Bertelsmann on its combination with a Pearson division to form the world's largest consumer publishing company, Penguin Random House.

Freshfi elds Bruckhaus Deringer

21 Guided private equity fi rm EQT through its public tender off er for Westway, requiring a pre-sale carve-out of one of its businesses.

Kirkland & Ellis 21 Represented 3G partners in its joint acquisition of Heinz in a $28bn all-cash transaction that utilised an innovative deal structure, dubbed 'the ketchup clause'.

Kirkland & Ellis 21 Advised the Clearwire board on a strategy to increase value to its shareholders by encouraging a rival bid into a majority owned company.

Latham & Watkins 21 Helped structure and launch Goldman Sachs's accelerated bookbuilt off ering with put options for Hemen Holdings' $1bn SeaDrill share sale.

O’Melveny & Myers 21 Advised US Airways on a unique agreement between labour unions before the announcement of the American Airlines merger.

Simpson Thacher & Bartlett

21 Represented the Special Committee of the board of directors in the sale of Clearwire to Sprint, achieving a larger-than-expected sale price after using competing bids.

● CORPORATE & COMMERCIAL

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harsher political scrutiny and a wholehost of legal hurdles unique to the US, thechallenges for those businesses wanting tobuy a piece of corporate America haverarely been greater. And yet the numberof so-called inbound cross-border deals isrising steadily.

In 2003, just 9 per cent of all US-basedmergers and acquisitions involved foreignbuyers, according to data from ThomsonReuters. Last year, that figure had risen to17 per cent of the total.

And, as the share of corporate transac-tions involving an element of cross-borderinvestment has grown, so too has the legalscaffolding upon which all deals must bebuilt become ever more complex.

Robert Spatt, a partner at SimpsonThacher & Bartlett, advised Smithfieldduring its acquisition by Shuanghui.“When you have a Chinese company com-ing into the US, there’s often potentialpolitical and regulatory issues and height-ened sensitivity,” he says.

The deal’s success, though, may pavethe way for future investors. “To have aChinese company buy a $7bn company ina small town in Virginia is culturallyimpactful,” says Mr Spatt. “There will beChinese flags displayed in Smithfield, asmall town very much part of rural Amer-ica. China and the US as nations obvi-ously evolve their global political relation-ship, but with this paradigm successfullycompleted on a business and human level,

it gives you a new way of looking at a dealand gives Chinese companies a base towork from.”

Even at a more procedural level, manycompanies attempting to take over a USrival struggle with nuances of the coun-try’s fragmented legal system.

One of the issues most often broughtbefore the court system in Delaware, thestate in which more than half of US publiccompanies are incorporated, is the termsof a deal being disputed by shareholders ofthe target company. This type of lawsuithas become commonplace in dealmakingand can prove a costly and time-consum-ing nuisance to acquiring companies.

Some law firms have practices dedicatedto finding shareholders in a target companywho are willing to file a lawsuit. The proc-ess usually, although not always, results inthe acquiring company paying a settlement.

The shifting legal landscape in US deal-making means overseas investors trying tobuy market position in the country nowneed to be better prepared.

Robert Townsend, co-chairman of Morri-son & Foerster’s global M&A practice, says:“On a public deal of any size, you have tobe aware that there will almost certainlybe plaintiff’s security litigation. From theoutset, you need to be very sensitive to thelikely litigation that will happen afterannouncement and manage the transactionprocess in accordance with applicable law.

“There is a heightened regulatory scru-tiny going on in both the antitrust area andother regulatory areas. You have to under-stand the risk going in and understand thedisclosure requirements and be prepared todeal with the time and cost of what isgoing to be a much more challenging regu-latory review. It can have significanteffects on the costs and terms of financingand on the certainty of closing the deal.”

Thomas Kennedy, a partner at Skadden,advised Sprint in its acquisition by theJapanese bank Softbank. He says the dealcame up against an “unprecedented level ofscrutiny and political opposition.

“There was no road map for this. We hadto integrate the corporate transaction, thelitigation and the regulatory process.”

CORPORATE

Some law firms havepractices dedicated tofinding shareholdersin a target willing to

file a lawsuit

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Score

Cravath, Swaine & Moore

25 Acting for Vivendi, the fi rm rebutted a fraud-on-the-market presumption in a securities fraud case, creating an important precedent.

Cleary Gottlieb Steen & Hamilton

23 Defended HSBC bank against $6.6bn of Madoff claims by helping to establish that the trustees lacked standing.

Dechert 23 Acted for the noteholders of Mexican manufacturer Vitro to obtain an important fi fth-circuit ruling that suggests how foreign insolvencies might be handled by US courts.

Jones Day 23 Developed a novel strategy to prove a big business-to-business website was knowingly participating in the sale of counterfeit goods, allowing trademark owners more protection against infringement.

Skadden, Arps, Slate, Meagher & Flom

23 Secured the dismissal of $60bn in damages for UniCredit in common law claims arising from the Madoff case.

WilmerHale 23 Represented Monsanto in the Supreme Court defence of its intellectual property for genetically modifi ed soybeans, clarifying IP law in the sector.

Cleary Gottlieb Steen & Hamilton

22 In a judgment against the US Securities and Exchange Commission in the Supreme Court, the fi rm clarifi ed the time period that government agencies have to complete investigations.

Debevoise & Plimpton

22 Acting for Occidental Petroleum Corporation, the fi rm secured the largest ever arbitration award by applying a new damages calculation that can be replicated in the future.

Kirkland & Ellis 22 Reinterpreted ancient statute to appeal an infringement decision in a patent dispute before calculating damages in the lower courts.

Orrick, Herrington & Sutcliff e

22 Worked with lawyer Sam Israel to bring the Kirtsaeng case to the Supreme Court, winning an important ruling on whether the principle of fi rst sale should apply to foreign manufactured goods.

Paul Hastings 22 Protected Align Technology's intellectual property from infringement by ClearCorrect by proving digital fi les fall under the jurisdiction of the International Trade Commission.

Paul, Weiss, Rifkind, Wharton & Garrison

22 Represented MasterCard in a class action settlement with US merchants, that could end decades of litigation in the payments industry.

Sullivan & Cromwell

22 Used a novel interpretation of the Morrison case to move a securities fraud litigation case to a German court for its client, Porsche SE.

Wachtell, Lipton, Rosen & Katz

22 Representing Bank of America, the fi rm negotiated the national mortgage settlement, the largest joint state-federal settlement in history.

White & Case 22 Used a novel interpretation of environmental law to argue for the removal of lights containing a harmful chemical from New York schools.

Covington & Burling

21 Helped former chief executive of IndyMac settle SEC and FDIC cases resulting from the bank's collapse without admitting wrongdoing.

Cravath, Swaine & Moore

21 Defended JPMorgan from class action proceedings relating to residential mortgage-backed securities claims where the plaintiff s are not the original purchasers of the securities at issue.

Crowell & Moring 21 Challenged an environmental settlement agreement in the Marcellus Shale drilling dispute by establishing “irreparable harm” on behalf of the Pennsylvanian Oil and Gas Association.

Gibson, Dunn & Crutcher

21 Achieved two Supreme Court decisions that help companies to challenge class action strategies of plaintiff s, including a win for Standard Fire Insurance Company alongside Robinson & Cole.

Gibson, Dunn & Crutcher

21 Continued the impressive record of Gibson lawyer Eugene Scalia in challenging the SEC’s responsibilities and authorities, through recent arguments against Dodd-Frank reform.

Hogan Lovells 21 Successfully challenged the “good cause” exemption granted by the US Environmental Protection Agency to one of Daimler's competitors.

Mayer Brown 21 Acted for the government of Indonesia in its clove cigarette trade dispute with the US, establishing important principles for World Trade Organisation cases.

Paul Hastings 21 Negotiated an unprecedented pre-merger labour agreement to move forward American Airlines’ merger with US Airways.

Seyfarth Shaw 21 Using economic experts and a new government estoppel argument, the fi rm protected Kaplan’s right to continue to use credit history as part of its hiring criteria.

Skadden, Arps, Slate, Meagher & Flom

21 Created a unique hybrid settlement agreement and M&A deal to allow PokerStars to simultaneously end Department of Justice investigations and acquire the assets of a close rival.

Weil, Gotshal & Manges

21 Successfully defended the board of directors of Satyam from litigation after its chief executive had admitted major fraud.

● LITIGATION & DISPUTE RESOLUTION

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US INNOVATIVE LAWYERS 2013

In the five years since the depthsof the financial crisis, two things havecharacterised the corporate environmentin the US: securities lawsuits against bigbanks and other financial institutions, andever increasing regulation aimed at curb-ing what regulators saw as the excesses ofthe pre-2008 financial world.

As reams of new financial regulation,including the sweeping reforms containedin the Dodd-Frank Act, come into effect,the most innovative litigation lawyers aretaking the lead in advising financial insti-tutions on how to navigate the red tape.

Where regulations break new ground,lawyers have the opportunity to influencethe implementation of new regulatoryregimes and the development of financialsector reform.

“Both sides of the table will be writingon a cleaner slate than you have withother issues,” says Jim Meyers, partnerand securities litigation and regulatoryenforcement specialist at Orrick. “There ismore of an opportunity to make policy-style arguments about why an enforce-ment action should not be enacted.”

In the meantime, fresh approaches fromlegal teams have set new precedents forgovernment agencies looking to imposepenalties and bring legal proceedingsagainst financial institutions. The com-plexity of such securities fraud actionshas necessitated, and rewarded, an inno-vative approach from law firms.

Lawyers at Cleary Gottlieb Steen &Hamilton, for instance, struck a decisivevictory against the US Securities andExchange Commission when they success-fully argued that the securities watchdoghad missed its window to pursue a civilpenalty case against former executives ofa Gabelli mutual fund.

The issue before the courts was whetherthe SEC could seek to impose penaltiesfive years from the time of the occurrenceof the alleged fraud by the Gabelli execu-tives or, as the SEC argued, from the timethe commission became aware of thewrongdoing. In a unanimous ruling, theUS Supreme Court sided with Cleary,effectively narrowing the timeframe forfuture SEC investigations.

The ruling has far-reaching implicationsfor the way the government pursues civilcases in areas from securities fraud totrade regulation and consumer safety.

“Part of the way I think about it is whatthe consequences would have been had wenot won,” says Cleary partner LewisLiman, who led the Gabelli defence team.

“It would have permitted the govern-ment to reach back tens and scores ofyears to investigate people for long-forgot-ten conduct, and then to use that conductto bring claims or extract settlements.”

Robert Anello, partner at MorvilloAbramowitz Grand Iason & Anello andpresident of the Federal Bar Council inNew York, says “challenging the SEC andtaking it all the way is innovative in itsown right. Too many people settle.”

Lawyers at Covington & Burling scoredanother unusual victory against federalagencies when they defended MichaelPerry, former chairman and chief executiveof failed bank IndyMac. The SEC allegedMr Perry had engaged in securities fraud,

while the Federal Deposit Insurance Corpo-ration claimed he allowed the bank tomake risky loans that led to its downfall.

Mr Perry’s lawyers were able to knockthe FDIC’s lawsuit down to a $12m claim,of which $11m could be collected on Indy-Mac’s insurance policy. The SEC’s oncewide-ranging enforcement action waswhittled down to a single claim.

Lawyers have also been overturning ele-ments of fraud actions that have stood fordecades. Cravath, Swaine & Moore thisyear overturned a fraud theory that haddominated class action cases since 1987.

This “fraud-on-the-market” presumptionallows shareholders to win class action sta-tus without having to prove plaintiffs madeinvestment decisions based on the defend-ants’ alleged misstatements. Cravath’steam was able to apply – and then overturn– the theory to a lawsuit by Gamco Inves-tors, that alleged Vivendi had lied about itsfinancial health in the early 2000s.

Cravath lawyers cross-examined Gamcoexecutives to prove the investment com-pany had not relied on Vivendi’s stockprice to make its investment in Vivendi.Instead, they argued, Gamco had used astrategy that relied more on “private mar-ket value”, or how much a private inves-tor might pay for the company’s assets.

“As the court recognised, sophisticatedvalue investors such as Gamco do not relyon stock market price as reflecting theintrinsic value of a stock,” says Tim Cam-eron, partner at Cravath.

The win could have a significant impacton other investors that rely on value trad-ing strategies. Cravath lawyers say itcould have application to other claimantsin the class action suit against Vivendithat is going through the courts.

With the statute of limitations being aconstant concern for enforcement officials,the SEC and other regulators may have tofocus on cases resulting from new regula-tion, says Mr Meyers. SEC leaders “havetalked about how one of the next bigwaves of enforcement actions is going tobe on Dodd-Frank”, he says.

The interplay between regulators seek-ing to enforce new rules and the lawyerswho take them on is set to play an enor-mously important role in shaping theeffect of the regulation and the broaderlandscape of US finance.

HEAVYWEIGHT CHAMPIONSWith some notable victories over federal agencies, law firms are helping toshape reforms in the wake of the financial crisis, writes Tracy Alloway

LITIGATION

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Dewey & LeBoeuf contin-ues to cast a shadow, nearly 18 monthsafter its demise. The biggest law firm fail-ure in history had many causes; perhapsone was its opaqueness over its financialposition, not only with the outside worldbut also with its own partners.

That it misstated its financial health toclosely watched annual rankings compiledby the American Lawyer magazine wasone shocking detail of the tragedy, but one

By streamlining their own processes, firms have beencreating value for clients, reports Caroline Binham

Score

Seyfarth Shaw 25 The Transaction Solutions Center manages workfl ow, resourcing and the disaggregation of legal services while providing transparency and real-time analytics to in-house counsel.

Weil, Gotshal & Manges

24 Proactively monitoring shareholder activism to provide assessments of company structural defences and strategic vulnerabilities.

Ropes & Gray 23 Its interactive Risk Matrix tool allows companies to map and evaluate real-time corruption risks across international operations.

Paul Hastings 22 Conducting a scientifi c experiment to provide evidence for the speed and accuracy of predictive coding over standard technology-assisted document review.

Axiom 21 Managing the full contract lifecycle for clients by treating contracts as a single discipline cutting across multiple legal practice areas.

K&L Gates 21 Moving towards greater fi nancial transparency, the fi rm disclosed a rare level of detail in its year-end fi nancial report.

Morrison& Foerster

21 A unique partnership with California Institute of Technology develops the fi rm’s associates while attracting new business and talent.

Perkins Coie 21 Created a Patent Analysis tool to provide clients with a strategic analysis and valuation of their patent portfolios.

Seyfarth Shaw 21 Developed a Portfolio Tracker for Prudential to manage a litigation portfolio and analyse and report on case metrics.

Simpson Thacher & Bartlett

21 A new technology service marries legal informatics and advice to help clients make strategic intellectual property decisions.

Akin Gump Strauss Hauer & Feld

20 Developed agfundinformation.com, a website that formalises and standardises forming hedge funds.

Cadwalader, Wickersham & Taft

20 Its Cadwalader Cabinet is an extensive online resource combining fi nancial regulation know-how, references and tools.

Crowell & Moring

20 Designed and implemented the gross margin tool to compensate partner effi ciency and incentivise a fundamental change in behaviour.

Weil, Gotshal & Manges

20 Expanding services to private equity clients with analysis, toolkits and risk assessment for sponsors and their portfolio companies.

Littler Mendelson

19 Expanding client service platform, Littler CaseSmart, to new service areas and creating Littler GPS, an online tool for employment law.

Skadden, Arps, Slate, Meagher & Flom

19 Developed legal project management tools to facilitate accurate scoping and pricing of transactions in response to changing client demand.

White & Case 19 Forming the Innovation and Effi ciency Council to implement new ideas and engage lawyers and staff from across the fi rm.

Womble Carlyle Sandridge & Rice

19 Its Case Management Facility uses predictive analytics in its legal knowledge management to forecast and improve outcomes in complex litigation.

● BUSINESS OF LAW

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that revealed a wider truth about howunaccountable firms’ financial reportingis, particularly in the US, where if figuresare released at all they can consist solelyof revenue and profit per partner.

In that context, K&L Gates’ decision topublish detailed annual reports of itsfinances to a US Securities and ExchangeCommission reporting standard – frombank debt to overheads and partner capi-tal – was groundbreaking among its peers.

While it is true that UK-headquarteredfirms have long published their resultswith a similar level of detail, particularlythose that are structured as limited liabil-ity partnerships with certain reportingobligations, this culture has not perme-ated the US. Perhaps the bold move byK&L Gates will help change that.

The paper trail, meanwhile, has been akey theme for US law firms over the pastyear for other reasons. Contracts are thebread and butter of commercial lawyerseverywhere. They also form the bulk of anin-house legal department’s costs, accord-ing to Axiom, which calculated that gen-eral counsel around the world are spend-ing about $200bn on creating and adminis-tering contracts.

Axiom’s mission has been to make thecontract process more efficient: a dayshaved off could result in massive savingsfor the company in question.

For example, banks’ InternationalSwaps and Derivatives Association con-tracts – the master agreements that under-pin derivatives contracts with investmentbanks’ counterparties – sometimes takemore than 100 days to enter into.

Axiom is trying to reduce that by asmuch as 30 per cent – the savings of theprofit being booked earlier far outweighthe cost of administering the contract inthe first place.

Like Axiom, Seyfarth Shaw – which isno stranger to streamlining its own proc-esses and costs – has attempted to makecontracts, procurement and transactionsmore manageable for its clients by central-ising routine legal work on a web portal:Seyfarth can then select one of its attor-neys for work that may carry a higherrisk, or outsource less risky work to law-yers in lower-cost centres of the US oroverseas who are vetted by the firm.

Contracts can also be the repository ofthe “smoking gun” in big-ticket litigation.Finding that smoking gun among millionsof documents that can be disclosed insuch lawsuits, however, is another matter.

Document-review technology has beendeployed by the legal market for severalyears to assist in such searches. Somesystems work better than others. PaulHastings decided to challenge the suprem-acy of technology by instituting a “man

versus machine” test, pitting a team ofyoung attorneys in a traditional linearreview against the more modern system ofusing algorithms to spot key words indocuments. An interesting conclusion wasdrawn: that for optimal efficiency, it iswhen man and machine are combined thatthe best value can be extracted.

It is not only commercial litigators whoare keen to find the smoking gun. Thefinancial crisis has awakened public andpolitical interest in business crime asnever before. This scrutiny, coupled withever more aggressive enforcement actionby authorities around the world, isincreasing companies’ risk.

Sweeping overseas anti-graft legislation,such as the US Foreign Corrupt PracticesAct and the UK Bribery Act, means thelaw extends to far-flung parts of the world.Ropes & Gray attempted to map that lia-bility for clients in its Risk Matrix, flag-ging sectors and jurisdictions to whichcompanies should pay particular heed, asa way of helping them understand wherethey need to invest in compliance.

A similar concept of using the web tocompare and contrast varying legislationwas devised by Littler Mendelson, thistime in the area of employment law. Thefirm designed a tool that enables clients toscan state law at the click of a mouse.

Another area of increasing costs for busi-ness in the information age is patents. Theso-called monetisation of patents – generat-ing revenue by selling or licensing patents– has been rapid, with the industry’s valuespiking to $450bn in 2012 from $19bn theprevious year. That arguably has had neg-ative consequences, with “patent trolls” –who aggressively enforce patents often astheir main line of business, rather thaninventing and making goods that underpina patent in the first place – an increasingfeature of the US courts.

Perkins Coie devised a patent-analysistool, deployed by its patent paralegals andattorneys, that can quickly cut throughvast amounts of information to target thetruly valuable patent hiding in a particu-lar portfolio – invaluable information inthe context of a merger, sale or litigation.

Given the rising monetisation of pat-ents, such innovations are likely to provetheir worth time and time again.

BUSINESS OF LAW

‘For every hour apartner spends onthat, that’s an hourthat could have beenbilled out or used todevelop business’

Score

Paul Hastings 22 Developed a fi rm-specifi c partner profi le competency framework to manage performance and evaluate partner promotions and lateral hires.

Latham & Watkins

21 The intellectual property litigation practice employs military decision-making frameworks, empowering junior lawyers to take greater responsibility during trials.

Dechert 19 Exceptional Teacher Awards recognise top teachers and mentors, while delivering an insight into eff ective training methods.

Orrick, Herrington & Sutcliff e

19 The fi rm has made a substantial commitment to training senior associates to become eff ective partners.

Debevoise & Plimpton

18 A fi nancial training programme designed for investment bankers is given to incoming lawyers in addition to a mini MBA.

DLA Piper 18 Supported and expanded a course developed by Prof Daniel Bradlow that focuses on the practical skills needed to become a transactional lawyer and is now taught at nine top-level schools.

DLA Piper 17 Created Break Into Law, an initiative bringing existing programmes under one umbrella to improve equality, diversity and inclusion in the legal profession.

Paul Hastings 17 Designed a scorecard to track performance and cultivate a culture of action and accountability within the fi rm.

● TALENT

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TRAINING

With the market forlegal services shrinking and clientsdemanding more from their lawyers, USfirms are under increasing pressure todevelop individuals who have a broaderrange of skills than in the past, withabilities ranging from accounting andfinancial analysis to project management.

First, with companies increasinglyreluctant to pay high fees for inexperi-enced lawyers, the need to develop theskills of junior associates is particularlyintense.

“The challenge is to make them client-ready as soon as you can,” says MarySullivan, chief human resources officer atPaul Hastings. “And that’s about havingwell-rounded, business-savvy associatesand people who have knowledge and skillsthat aren’t taught in law school.”

To fill these gaps in law school teaching,since 2003 DLA Piper has been workingwith a number of US universities – includ-ing the American University WashingtonCollege of Law, University of Virginia,Stanford and Berkeley – to promote trans-actional law training.

Meanwhile, firms are developing theirown business-focused training pro-grammes, many of which cover topics thatonce would only have been found on anMBA.

When designing the curriculum for itsbusiness training programme, for exam-ple, Debevoise worked with faculty fromTraining the Street (used by Wall Streetinstitutions) and Columbia BusinessSchool.

The three-week programme coverseverything from basic accounting princi-ples to financial analysis, modelling andvaluation. And the fact that Debevoiseturned to organisations that train bankersand corporate executives reflects the driveamong firms to develop deeper knowledgeof their clients’ business.

“Fully understanding what your clients

actually do, as opposed to merely beingfamiliar with the matter directly in frontof you, is critical to being an effectivelawyer,” says Steven Slutzky, a corporatepartner at Debevoise who led the develop-ment of the programme.

Nor are firms restricting this kind oftraining to their junior lawyers. Theseven-day programme Orrick runs withthe Fullbridge Program, a business bootcamp, is targeted at senior associates.

For the firm, seven days of seniorassociate time represents a significantopportunity cost in terms of lost billablehours. Yet, with a changing marketcalling for senior lawyers to gain a bettergrasp of their clients’ businessenvironment, Orrick believes it is aninvestment that will pay off.

“We want to ensure that our up-and-coming junior partners have a deep under-standing of our clients’ commercial issuesso that they can be not only trusted legaladvisers, but also commercial and strate-gic advisers,” says Siobhan Handley, man-aging partner for talent at Orrick.

But while sending staff on training pro-grammes is one way of equipping themwith skills, much of what lawyers need toknow can only be learned on the job, withguidance from more senior colleagues.

This is something Dechert has recog-nised. To reward its best teachers andidentify the most effective training tech-niques and mentoring styles, the firm hasestablished an Exceptional TeachersAwards programme. Winners receive acommemorative plaque as well as $10,000.

Of course, the cost of in-house traininggoes beyond cash prizes.

“Mentoring takes a fair amount of part-ner involvement because complex legalwork draws a lot on experience,” says MittRegan, co-director of the Center for theStudy of the Legal Profession atGeorgetown Law.

“And for every hour a partner spends onthat, that’s an hour that could have beenbilled out or used to develop business.”

Moreover, the organisational structureof the legal industry means making thiskind of investment can be difficult.

With law firms operating as collectionsof practices run by individual partners,incentives to invest in the success of theenterprise have traditionally been weakerthan in other industries.

“Firms are only going to do that if theycan create a culture in which there is asense of commitment to the firm as awhole,” says Prof Regan.

To address this, Paul Hastings hasdeveloped a talent management strategytargeting senior lawyers.

The Partner Profile defines the charac-teristics of what the firm sees as superior

performance and outlines expectations forpartners.

It is now being used to evaluate bothpotential incoming partners and the per-formance of existing partners.

Ms Sullivan believes that this kind ofinitiative helps create a coherentcorporate culture.

“We all know it’s more powerful to havea team working together,” she says. “Butthere was no mandate for change before.”

Today, with clients demanding more

from their lawyers, this mandate forchange has pushed training up the agenda– and not only as a way for firms todistinguish themselves from competitorsbut also to increase their ability to attractand retain high-performing lawyers.

“We’re in a moment where it makes alot of sense for firms to move in thisdirection,” says Prof Regan.

“But it will depend on the extent towhich they can wean themselves frombeing focused on short-term profits.”

LEARN FROMEXPERIENCE

The need for firms to develop and refresh the skillsof junior and senior associates is becoming intense,

but has its costs, writes Sarah Murray

ON THEPAPER TRAIL

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Partner, corporate department,head of the Latin Americapractice group, Paul Hastings

Michael Fitzgerald, an innovatorfrom his early days as under-writer to Merrill Lynch, decidedto pursue a career in LatinAmerican emerging markets at atime when few firms had exper-tise in the field. As part of thecorporate, securities and LatinAmerica practice group that leftDewey LeBoeuf following its col-lapse in 2011, Mr Fitzgeraldhelped a Mexican client completea hostile tender offer as the cof-fee machines were being repos-sessed from the Dewey offices.

In 2004, he worked with theMexican tortilla manufacturerGruma to issue the first perpet-ual bond sold by a corporation.In 2011, Mr Fitzgerald wasinstrumental in the creation ofMexico’s Fibra, the first invest-ment vehicle on the Latin Amer-ican market comparable to a USreal estate investment trust.

While he identified the poten-tial of Mexico before it became“the place to invest”, he hasretained a commitment to inno-vation. Clients praise his deepunderstanding of Mexican lawand ability to offer advice.

Michael Fitzgerald Maximilian Grant Randall Guynn

Kenneth Gallo

Douglas Meal

Michael Aiello

Trevor Nagel

Robert Reynolds Jr

Erika RottenbergSenior counsel, commercial,Nike

Michael Goodman’s focus hasbeen on the process design andre-engineering that are changingthe way legal work is done.

Over the past four years, MrGoodman has designed andimplemented technological andcreative solutions to restructurethe way Nike manages contractsand assigns work to law firmsand legal providers.

He has piloted technologies toautomate the creation of supplyand non-disclosure agreementsso they can be created with a fewclicks of the mouse.

The Transaction SolutionsCenter that features in the Busi-ness of Law category this year isthe result of a collaboration withlaw firm Seyfarth Shaw. A rede-signed process allows routinetransactional work to beassigned and managed more effi-ciently, halving completion time.

Most recently, Mr Goodmandeveloped a conceptual model fora “design sandbox” to help glo-bal companies organise and sim-plify the implementation of con-tract management systems. He isdeveloping the concept to beused as a training tool for Nike.

He is quick to point out thatimplementing change is onlypart of the battle. Equally impor-tant is guiding the cultural shiftand acceptance of new tools.

Michael Goodman

CREATIVE ANDPROACTIVE

The top 10 agents for change

An innovatorfrom hisearly days

Implementingchange is onlyhalf the battle

Mr Meal isconsidereda leader inthe field

He saw a gap inthe market forcombining legaladvice withbusinesssolutions

INDIVIDUALS

Partner and global co­chair ofthe intellectual propertylitigation practice, Latham& Watkins

Maximilian Grant drew on hisexperience as a Navy SEAL teamleader when tasked with rebuild-ing Latham & Watkins’ intellec-tual property litigation team.Hiring in technically trainedlawyers and applying militarydecision-making frameworks, MrGrant created a “special opera-tions” team that involves juniormembers and decentralises deci-sion-making.

Mr Grant joined the firm in2002, after serving as deputyassistant secretary of defenseand before that as an aide toSenator John McCain.

In 2008, following the depar-ture of a number of patent litiga-tion partners, he went toLatham’s leadership with a planto rebuild the practice. The IPLitigation group has sincerecruited 15 lateral partners and60 technically trained associatesand technical analysts, doubledrevenue and increased profitabil-ity significantly.

“There is much talk about lawfirm management, but almostnone about leadership, which isdistinct,” says Mr Grant.

His own leadership style hasbeen to train and authorise jun-ior lawyers to make decisions atan earlier stage in their careers,encouraging the sort of initiativethat Mr Grant says gives a legalteam the edge in a trial.

Partner and head of thefinancial institutions group,Davis Polk & Wardwell

Few lawyers have the opportu-nity to effect change at a globalsystemic level in the way Ran-dall Guynn has. Widely recog-nised as a leader on financialregulatory reform, Mr Guynnrecently played a central role indeveloping the single-point-of-en-try method for solving the too-big-to-fail problem for leadingfinancial institutions. The solu-tion is an important steptowards a safer and more effi-cient global financial system.

In 1987, he developed a legalargument that allowed Congressto give retroactive effect to theTrust Indenture Reform Act1990. And, in 1993, Mr Guynnmade proposals for modernisinglaws governing cross-border col-lateral arrangements that werelater reflected in US and EU law.

When it became clear the USbanking system was heading fora crisis in 2007, he says, “I knewabsolutely nothing about bankfailures and felt horribly unpre-pared.” He researched exten-sively and, by 2008, was able totake a leading role advising onthe failures that followed.

Partner and co­chair,antitrust practice group, Paul,Weiss, Rifkind, Wharton& Garrison

Kenneth Gallo, as managingpartner of Paul Weiss’s Washing-ton DC office, has built a team oflawyers to position the firm com-petitively against much largerfirms and offices.

His plan to create a “non-tradi-tional DC office” has seen lead-ing partners added in the fieldsof securities, product liabilityand appellate litigation, comple-menting Mr Gallo’s ownstrengths in the two areas ofpractice that have dominated hiscareer: antitrust and patent law.

Mr Gallo’s innovative patentwork was demonstrated in hisrepresentation of biotechnologycompany Genentech. He has suc-cessfully defended the companyagainst a $1bn misappropriationof intellectual property claimrelated to its development ofLucentis, a leading treatment forage-related blindness, and isinvolved in a number of otherpatent cases that sit at the fore-front of scientific innovation.

In antitrust matters, Mr Gallois involved in MasterCard’s bat-tle with merchant plaintiffgroups, in one of the largestclass settlements in history. Hespeaks on behalf of a diversegroup of co-defendants.

Partner, Ropes & Gray

Douglas Meal, a seasoned triallawyer, fell into his role as aprivacy and data security spe-cialist “by accident” when long-standing client The TJX Compa-nies, a retailer, experienced adata security breach in 2007.

With little established law inthe field of data security and pri-vacy, Mr Meal was in the unu-sual position of defending thevictim of criminal activityagainst a class-action suitbrought by card issuers. He hassince represented Sony, Heart-land Payment Systems, Wynd-ham Hotels and others withhighly publicised data breaches.

Mr Meal plays a leading role inRopes & Gray’s privacy and datasecurity practice and is consid-ered a pioneer in the field. He iscurrently engaged in a first-of-its-kind litigation in which his cli-ent, the retail company Genesco,is challenging non-compliancepenalties imposed on it by a lead-ing payment card brand.

Genesco’s case goes to theheart of his work in this area byquestioning the enforceability ofPayment Card Industry DataSecurity Standards (PCI DSS),the rules governing responsibil-ity for financial loss resultingfrom breaches in data security.

Partner and chairman ofglobal corporate department,Weil, Gotshal & Manges

Michael Aiello has built a repu-tation as one of the top dealmak-ers in the industry, and has beenat the forefront of developing anunusually proactive and strate-gic corporate legal practice. Hisdepartment responded to the risein shareholder activism with aprogramme to anticipate movesby activist hedge funds anddefend hostile takeovers. Thisrecasts the mergers and acquisi-tion lawyer from a reactiveadviser to a more strategic role.

The firm monitors stock move-ments and public filings, allow-ing it to warn companies if thereis likely to be an activist event.

Lawyers provide analysis of acompany’s defences and vulnera-bilities before creating strategicplans to prepare for specificactivists and proxy contests.

Since Mr Aiello, 44, took overthe practice at the start of 2012,the firm has risen in the globalleague tables for private equityand M&A deals. He has advisedon some high-profile deals, repre-senting Sanofi in its largest-evertransaction – the $20.1bn hostileacquisition of Genzyme in 2011.

Partner, chair of the globalsourcing and technologytransactions Group,White & Case

In big business sourcing transac-tions, the lawyer’s role has tradi-tionally been limited to draftingand negotiating terms and condi-tions. Trevor Nagel has helped tochange that and says his maincontribution has been “instillingin businesses the recognitionthat lawyers must be engagedthroughout the life cycle of stra-tegic sourcing initiatives”.

Before studying law, Mr Nagelwas a social psychology aca-demic. Understanding organisa-tional behaviour has helped himto think differently about theinterrelationships and incentivesthat underpin complex strategicsourcing arrangements.

Mr Nagel’s focus has shifted tothe governance structures thatunderpin long-term vendor rela-tionships. This led to integratingsuppliers and transactions inmulti-vendor environments usingstandardised relationships andsophisticated panel governanceregimes. The result is the uniqueInfrastructure CooperationAgreement created for Best Buy.

Partner and chief executiveof SeyfarthLean Consulting,Seyfarth Shaw

The common thread runningthrough the career of Robert Rey-nolds is revising the model forlegal services delivery. He hasembraced a move towards stand-ardised legal solutions and ishelping his firm redefine its mar-ket and how it serves its clients.

As a transactional lawyerworking on restructuring, out-sourcing and technology deals,Mr Reynolds saw a gap in themarket for combining legaladvice with a broader range ofbusiness solutions. He says theglobal recession pushed clientsto demand much more creativityand innovation from their firms:“They needed more than matter-by-matter solutions. Theywanted changes in thinking andbetter strategies.”

Mr Reynolds helped to launchSeyfarthLean Consulting, whichprovides integrated legal, man-agement and technology solu-tions. He now focuses on strate-gic advisory services and pro-gramme management tech-niques. With Michael Goodmanat Nike, he led the developmentof the Transaction SolutionsCenter featured in this report.

Vice­president, general counseland secretary, LinkedIn

Erika Rottenberg began her legalcareer at Silicon Valley law firmCooley before moving in-houseat a series of technology compa-nies. She served as general coun-sel at Creative Labs and SumTo-tal Systems before joining Linke-dIn as its first full-time lawyer.In five years she has overseen anew level of engagement withglobal privacy regulators, and aninitial public offering.

Ms Rottenberg’s first job aftergraduation was as a teacher inAlaska, but even then she washoning her skills. She acted aschief negotiator for the 2,400-member local teachers’ union ona contract valued at $250m.

She is an active contributor tosocial causes through pro bonoprogrammes, creating opportuni-ties for LinkedIn’s legal teamand outside law firms, includinga programme to provide legalcounsel to immigrants.

Jeff Weiner, chief executive,praises the leadership she hasshown in government relation-ships, privacy issues and navi-gating new regulatory environ-ments, as well as her personal“dedication and passion for ourmission, culture and values”.

INNOVATIVE INDIVIDUALS SUPPORTED BY

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Is it a foregone conclusion thatcorporate counsel working for an innova-tive company will be innovative? That is aquestion that exercised the research teamthis year in compiling the FT’s in-houselawyer rankings.

It is widely accepted that lawyers work-ing inside a company will reflect that com-

carmaker’s bid to put wireless technologyin its vehicles via its Uconnect project sawthe legal team shift out of its usual risk-fo-cused stance to being central to the devel-opment of its “connected vehicles”.

“Marjorie [Loeb, Chrysler’s general coun-sel] was an instrumental team member increating the strategy in the first place,”says Marios Zenios, vice-president atChrysler’s Uconnect System and Services.

However, while legal innovation and

leadership enable entrepreneurship,equally important to business success isthe operational innovation of the otherteams in the ranking.

Legal teams at Verizon, Microsoft, BTand Nike, for example, are transformingtheir commercial contracting processes invarying ways. Their initiatives arebusiness critical.

According to research by the Interna-tional Association of Contract & Commer-cial Management (IACCM), the averagebusiness loses the equivalent of 9 per centof its revenue each year from weaknessesin contracting.

“In-house counsel frequently act aschange agents who transform the perform-ance and economic contribution from thecontracting process. But, if they operate inthe traditional mode of control and riskavoidance, they become a barrier tocompetitiveness,” says Tim Cummins,IACCM chief executive.

Both Microsoft and BT have scaled uptheir outsourcing arrangements and devel-oped contract management tools.

Microsoft is now taking its relationshipwith Integreon, the legal process out-sourcer, to 150 countries while BT is build-ing a contract management tool that willeventually be used by the business. In thecase of Verizon, a dramatic overhaul of

CENTRAL TOENTERPRISEIn-house lawyers can be essential in enabling

innovation in business, writes Reena SenGupta

Organisation Total Size of legal team (inc. support staff )

Description

Google 36 600+ Google requires its lawyers to innovate, often by seeking to extend or change rules, regulations and laws. They play an essential role in enabling the company to expand into new areas.

Monsanto 36 160 The team helps the business to create and protect its products in a very competitive industry, while also playing a leading role in substantive legal victories.

Prologis 33 47 Lawyers have moved to become a business-generation function with the chief legal offi cer sitting on the investment and executive committees. The team has created a standardised approach to leasing arrangements.

Chrysler Group 32 66 A change of general counsel marked a new way of working for the lawyers that was demonstrated in the collaboration with Sprint on connected vehicles.

Verizon Enterprise Solutions

32 265 A radical transformation of the company's business has been enabled by the legal team. Standardised contracts and process management have sped up the time to market and ways of working.

GlaxoSmithKline30 611 Bespoke tools and training have improved dispute management. The team also measures the value the approach delivers to the business.

Honeywell 30 587 A multi-faceted legal function has controlled litigation through analysing underlying causal behaviours. It has also played a fundamental role in the company's growth.

Mondelēz International

29 301 Lawyers deftly handled the spin-off of Kraft and forming the new team at Mondelēz.

Nike 29 213 A process of function transformation has seen the legal team innovating with e-auctions for external advisers and designing new processes to automate contract management.

LinkedIn 28 25 Developed “TeachIn” sessions to educate outside counsel about the business, created new pro bono initiatives and led greater engagement with regulators on privacy and data security issues.

Microsoft 28 1090 Having scaled up the use of legal process outsourcing in more than 150 countries to standardise and streamline procurement contracts, the team is moving this out to other parts of Microsoft.

BT (US and Canada)

27 24 Structured legal process outsourcing relationships and a new contract lifecycle management tool are delivering savings and improving value management.

Atmel Corporation

26 20 Created a value measurement tool for outside counsel using data and algorithms to improve performance. The team has also started to correlate fees with value delivered.

Pfi zer (Litigation)

26 42 Taking a balanced-outcomes approach to litigation has seen better alignment of the lawyers with the company’s overall business objectives

Yahoo (IP transactions)

25 2 The team has led on a series of intellectual property transactions as the company goes through a reinvigoration after the appointment of its new chief executive.

Prudential 24 450 Co-founded the “Inclusion Initiative” with DuPont and National Association of Minority and Women Owned Law Firms, which encourages corporate legal departments to focus a portion of their external spending on “diverse” law fi rms.

● IN-HOUSE LEGAL TEAMS

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pany’s culture and way of doing business.But it is less well established that thoselawyers will then automatically reflect theinnovation of their business colleagues.The default perception of the industry hasbeen of the in-house lawyer as gatekeeperor, at the very best, an occasionally usefulbusiness enabler.

IN­HOUSE

RESEARCH FOR IN-HOUSE TEAMS SUPPORTED BY

But an examination of the featured 2013legal teams shows how this perception isfar off the mark. These teams reveal howessential in-house lawyers can be in ena-bling innovation in their businesses andhow their own operational innovationsimpact the bottom line.

Legal teams such as those at Google andMonsanto operate in environments thatare all about innovation. Both haverecently had substantive successes, suchas Google’s copyright victory againstViacom and Monsanto’s win in the Bow-man case, which ensured its right to pro-tect the intellectual property in its geneti-cally engineered seeds. “Law is an enablerand integral to our strategy,” says DavidSnively, general counsel at Monsanto.

Their value is also easily recognised bytheir commercial colleagues. EricSchmidt, executive chairman of Google,says that, with systems now being socomplex, lawyers have become moreimportant in running the business. “Inareas that are sensitive, they have to behalf product designers and half lawyers.”

These companies tend to attract lawyerswho are less defined by the traditionalparameters of the legal profession.

In effect, they are less risk averse andthemselves more willing to innovate. Theaverage age of Google’s lawyers is 30,

paralegals in the department have codingskills and there are no lines drawnbetween lawyers and non-lawyers.

At Monsanto, the lawyers are involvedin the creation, development and commer-cialisation of new products. As withGoogle, the lines between lawyers and thebusiness are not rigid. Hugh Grant, Mon-santo chief executive, says: “If you cameinto a Monday morning meeting, youwould be hard pushed to tell who thelawyer was because they are in the pushand pull of what we need to get done.”

The downside of working in entrepre-neurial organisations is that the lawyerssometimes find themselves at the centreof controversial debate.

For example, in Europe and the US,Google finds itself dealing with awkwardprivacy issues and sometimes at odds withregulators. For Monsanto, the team has todeal with adverse public perception.

Are these teams templates for the 21st-century legal department? Certainly thebusiness leadership and value creation oftheir corporate counsel are essential traitsof legal teams at entrepreneurial compa-nies. But even teams in more traditionalindustries such as real estate and automo-tive find themselves at new frontiers.

Take for example Chrysler’s venturewith Sprint, the telecoms company. The

how the enterprise business sells to cus-tomers has seen the legal team streamlineand automate its contracting process toenable the new approach.

Sales times are approximately five timesfaster for the business and require lessinput from the lawyers.

The necessity for speed and efficiencyhas become a commercial imperative forall the companies featured in the ranking.

This is not necessarily new but the scaleand sophistication of the corporate coun-sel response to these demands is.

Combine this with innovations indispute resolution put forward by Glaxo-SmithKline and Pfizer, and a differentpicture emerges. Outsourcing to low-costproviders, automation, a change in theway that commercial contracts are negoti-

ated, and an emphasis on dispute avoid-ance and settlement would appear tomake lawyers redundant.

However, when Martin Burvill,executive lead on the Verizon project, wasasked whether the new system wouldreplace his lawyers, he laughed. “Do Ineed my talent doing this work when Icould use them elsewhere?”

The answer for him and the othercommercial referees in the research isclearly no. Redeployment and gainingadditional skills are the order of the day.

The downside ofworking in

entrepreneurialorganisations is that

the lawyerssometimes f indthemselves at the

centre ofcontroversial debate

Rich harvest: lawyers are involved in the creation, development and commercialisation of new products at Monsanto

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With rapid technologi-cal advances and the new demands of achanging commercial landscape, businessas usual is no longer enough. It takescreative thinking to fit new opportunitiesinto old legal, regulatory and businessnorms. That is the common thread run-ning through the most commended entriesin the Lawyers to the Innovators categorythis year. Fresh legal ideas can give newbusiness concepts room to thrive.

Problems that demand a different

lenge, says Trevor Nagel, a partner atWhite & Case, and Robert Hasty, a coun-sel at the firm. “We found that they some-times worked at the commencement butthen remained static and unable to adaptto market changes.”

The problem stems from the adversarialrelationship between the different suppli-ers. Each contracted to solve a particularpiece of the puzzle, they have little incen-tive to work together to find commonsolutions, forcing the customer to act as“traffic cop” in co-ordinating the work.

The solution, says White & Case, was anew governance structure that gave sup-pliers more reason to work together.Along with individual contracts, suppliersalso signed what the company termed its“infrastructure co-operation agreement”.

This handed bonuses or other credits tosuppliers based on service levels that wereassessed across all of them. Also, it gavethem the opportunity to bid for extrawork as Best Buy’s needs changed – lead-ing to an “oligopoly” among the technol-ogy companies with all having the chanceto benefit from more work in the future.

Patents have been another source ofnew legal thinking as the perceived valueof intellectual property has ballooned.

“You couldn’t walk into a boardroom inSilicon Valley without them saying, ‘If[another company] is worth X because oftheir patents, we should be worth 2X’,”says Kenton King, a partner at SkaddenArps in Palo Alto. Perceiving the value ofa company’s IP and turning it into hardcash, however, are very different things.

For MIPS Technologies, a strugglingmicroprocessor company, the problem was

exacerbated by the need to protect thevalue of a declining business while realis-ing the value of the patent portfolio.

The patents, says Mr King, were like“loose nukes”. In the wrong hands, theycould cause untold damage – either beingturned against MIPS or its customers aftersale to another entity, or against thebuyer if MIPS retained some of the rights.To complicate matters, the MIPS boarddecided to sell the patents and the busi-ness to separate buyers to maximise theproceeds. That created an extra problemfor lawyers: working out which patentswould need to stay with the business toprotect its new owner, when they had noway of knowing how strong a patent port-folio the buyer would have already.

In the event, some 500 patents werecarved out and sold to a consortium for$350m, with the remaining 80 patents stay-ing with the operating company, whichwas sold for $100m. Licences were devisedto protect the consortium and its custom-ers from claims under the patents MIPSretained, while MIPS itself received agrant-back licence for patents it had sold.

A second notable patent case involvedwork by Orrick to defend data storagecompany EMC against a claim from a non-practising entity, or patent “troll”. Thelaw firm first succeeded in having theEMC case separated from similar claimsagainst unrelated companies.

But the case was notable mainly for anexhaustive investigation into the originsof the patents, which were based on workcarried out some 20 years before. Whileonly one inventor was named, Orrick wasable to establish that a second person

CRACKINGTHE CASE

Fresh legal ideas can give new business conceptsroom to thrive, writes Richard Waters

Score

White & Case 25 Created a new infrastructure co-operation agreement for Best Buy to govern the relationship between suppliers in a multi-sourcing arrangement, promoting co-operation and co-ordination.

Skadden, Arps, Slate, Meagher & Flom

24 Played a pivotal role in a unique patent carve-out plus mergers and acquisitions deal to monetise MIPS Technologies' intellectual property portfolio.

Latham & Watkins

23 Helped ViaSat overcome regulatory hurdles with an original argument to prove that in-fl ight internet broadband connections met the defi nition of “fi xed” connections.

Orrick Herrington & Sutcliff e

22 Defended EMC against Oasis in a high-stakes patent infringement case that has far-reaching implications for patent troll defences.

Paul, Weiss, Rifkind, Wharton & Garrison

21 Helped Emmis Communications monetise its local programming and marketing agreement with ESPN, allowing ESPN access to the FM band and Emmis to refi nance.

Simpson Thacher & Bartlett

21 Developed new payment mechanisms to allow Tesla Motors to repay its $465m Department of Energy loan nine years early.

Weil, Gotshal & Manges

21 Successfully appealed a court ruling against online ticket sales agent StubHub, protecting internet businesses' immunity under the Communications Decency Act.

Jones Day 20 Played a leading role in social entrepreneurship and impact investing, including on the development of fl exible purpose corporations in California.

Katten Muchin Rosenman

20 Worked with Winklevoss Capital Management to create the fi rst exchange traded fund for a digital asset, which will allow wider investment in Bitcoins.

Morrison & Foerster

20 Co-chaired the group that defi ned the fl exible purpose corporation, a new model allowing companies to include social and environmental goals as a purpose.

Skadden, Arps, Slate, Meagher & Flom

20 Advised SurveyMonkey in a combined transaction that allowed the company to stay private longer through an $800m debt and equity recapitalisation.

DLA Piper 19 A formal collaboration with a range of professional services fi rms to support client innovation through corporate ventures.

Latham & Watkins

19 Helped NET Power secure fi nance and support for a pilot plant project for a new energy technology that has zero carbon emissions.

Orrick Herrington & Sutcliff e

19 Successfully obtained a court order allowing Microsoft to take over cybercriminal Citadel Botnet's control infrastructure and remove malware from more than 2m computers.

Ropes & Gray 19 Successfully defended ProShares in a class action brought against the company's exchange trade funds and in a patent troll attack.

Cravath, Swaine & Moore

18 Represented Barnes & Noble in several strategic investment deals, ensuring the client maintained fl exibility to form new partnerships and adapt to changing market conditions.

Crowell & Moring

18 Formed a practice group to service companies expecting to capture new opportunities created by the introduction of new top-level domain names.

Debevoise & Plimpton

18 Represented Kate Spade in trademark litigation against Saturdays Surf NYC, obtaining complete victory in a highly expedited trial.

Morrison & Foerster

18 A plant IP group that works to protect companies through patenting new seed varieties and providing strategic IP and litigation advice.

Morrison & Foerster

18 Helped numerous biopharmaceutical companies navigate the process of obtaining patents, enabling the development of “blockbuster” drugs.

Paul Hastings 18 Represented PayPal in its strategic partnership with Discover that allowed for a new development in payment methods.

Paul, Weiss, Rifkind, Wharton & Garrison

18 Continues to defend Genetech and Biogen against numerous attacks on patent rights for high-profi le therapies, ensuring the companies' ability to continue to innovate.

Ropes & Gray 18 Representing Genesco in litigation challenging payment card company fi nes after a data breach.

Cooley 17 The fi rm defers 100 per cent of legal fees until capital is raised to support start-up companies to establish in the industry.

Paul, Weiss, Rifkind, Wharton & Garrison

17 Represented Ericsson in several strategic acquisitions and licensing deals, helping the company to become a leading internet protocol TV middleware provider.

● LAWYERS TO THE INNOVATORS

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should have shared in the credit – whichautomatically invalidated the patents.

Meanwhile a case involving the US Fed-eral Communications Commission high-lighted the challenges of fitting new busi-ness objectives into old regulatory frame-works. Satellite company ViaSat wanted tolaunch an in-flight broadband service forairline passengers. Under its licence fromthe FCC, however, it was limited to sellinga service to “fixed” users. Pursuing therule change could take five years as other

interested parties came out of the wood-work to complicate the process, accordingto Latham & Watkins, which advised Via-Sat. The solution the lawyers alighted onwas to argue that the in-flight service metthe FCC’s definition of a fixed service, asthe terminals inside aircraft would remainfixed in relation to the satellite. Armedwith that, they were able to seek waiversunder the existing rule to move, thoughthe work, originally targeted for comple-tion in six months, still took a year.

approach are often far from unique. Forinstance, when US electronics retailerBest Buy decided to replace its single-sup-plier technology outsourcing deal withAccenture with an arrangement involvingmultiple technology vendors, it reflectedsomething common in big companies: thedesire to bring fresh thinking and morecompetition into their IT arrangements.

Building the right incentives into multi-vendor deals at the outset to drive desired,co-operative behaviours has been a chal-

LAWYERS TO THE INNOVATORS

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US INNOVATIVE LAYWERS 2013 US INNOVATIVE LAYWERS 2013

NOVEL SOLUTIONSLaw firms sometimes have to come up with new and

unusual ways to save companies from collapse or refinancethem, writes Vivianne Rodrigues

When the US creditmarkets dried up and many debtors foundit impossible to meet their obligations atthe height of the financial crisis, it wasthe lawyers who found novel solutions tocircumvent the squeeze in financing.

Five years later, these experts who honedtheir skills in the crisis are still coming upwith creative ways to keep their clients outof court, get creditors paid, avoid the liqui-dation of companies and save jobs.

One of the most dramatic examples wasDavis Polk’s work to help the Mashan-tucket Pequot Native American tribe in a

While deals exploring companies’ intel-lectual property or brands are not com-pletely new, the securitisation of assets ofall kinds is increasingly being used as analternative for companies seeking to raisefunds at lower borrowing costs.

Financing was also at the centre of acase involving Navistar, in which Cra-vath, Swaine & Moore represented Gold-man Sachs and JPMorgan as joint leadarrangers of a $1bn secured term loanfacility for the truck and engine maker.

In 2012, Navistar brought production to ahalt, so as to be able to transition to a newtechnology that would permit its heavy-duty diesel engines to meet the standards ofthe US Environmental Protection Agency.

Time was of the essence. But a tradi-tional approach would not work. Thetruckmaker’s charter restricted it frompledging “all or substantially all” itsassets without consent of some 66 per centof stockholders. Any solution needed toavoid triggering the stockholder vote.

Cravath’s approach was to distinguishbetween sales and pledges. The firm devel-oped a collateral package that protectedlenders and permitted the syndication ofthe financing, while remaining clear ofcharter and contractual restrictions.

Cravath employed a “collateral exclu-sion waterfall” that would exclude certainasset categories from the collateral pack-age in ascending order of importance tothe lenders if required, to ensure compli-ance with the “all or substantially all”charter restriction.

The collateral structure and “collateralexclusion waterfall” mechanism devisedby Cravath permitted the syndication ofthe financing. Navistar was then able totransition its engines to the new technol-ogy and resume normal operations.

“Sometimes, when there’s no clear prec-edent to draw from, the very endgame of acase becomes your ‘guiding light’,” saysTatiana Lapushchik, a partner at Cravath.“The endgame is for the financing to besuccessful, especially where the financingis critical to allow a company to remain inbusiness.”

The securitisationof assets of all

kinds is increasinglybeing used asan alternative

$2.2bn out-of-court restructuring for debtrelated to the Foxwoods Resort Casino.The Mashentucket Pequot had overlever-aged themselves in expansion and, becausethe casino was on sovereign tribal land,standard bankruptcy laws did not apply.

Davis Polk engineered a restructuringthat honoured senior creditors andallowed junior debtholders to exchangebonds for ones with longer maturities.

“Foxwoods was a particularly challeng-ing case as it involved the restructuring offive tranches of debt with different levelsof seniority, for a sovereign nation and in

FINANCE

tunity to test restructuring tools andfinancing structures involving a multitudeof assets, creditors and investors.

“Cross-border cases are not only becom-ing more frequent, but they are alsobecoming deeper and more complex,” saysMr Huebner. The depth and size of UScapital markets has meant investors aremore receptive to finding ways to workthrough these atypical cases.

David Thatch, a partner at White &Case, says: “Capital markets here are veryefficient and organised. At the same time,we have sophisticated investors seekingand willing to buy new products that havethe potential for higher yields. That’s anadvantage.”

White & Case worked with brand man-agement company Iconix through arestructuring and securitisation that ena-bled the company to use its intellectualproperty as security for debt and a sourceof cash flow to service those obligations.

Iconix is now well placed to grow thenumber of brands it manages by leverag-ing its intellectual property to issue debt.It uses cash flows generated from licens-ing agreements to service principal andinterest repayments on its borrowings.

“Many companies have unique assetsthat can be used to create valuablesources of financing,” says Mr Thatch.“But they are not always that easy to spotas they are not immediately convertible tocash like traditional securitisation assets.”

the absence of governing law,” saysMarshall Huebner, co-head of the restruc-turing group at Davis Polk.

Off the reservation, the bankruptcy ofBrazil’s oil company OGX, involving$3.6bn worth of bonds, assets and inves-tors throughout the globe, is shaping upas a particularly challenging Chapter 15.

But the case is also indicative of thegrowing number of high-profile, cross-bor-der, large-scale projects springing upacross the globe. These call for largeinvestment sums and greater liquidity.For lawyers they also represent an oppor-

Score

Davis Polk & Wardwell

25 Advising Bank of America in the Foxwoods restructuring, the fi rm introduced a novel legal structure to keep proceedings from going to the bankruptcy court.

Cravath, Swaine & Moore

24 Helped Cincinnati Bell convert its data centre into a fi rst-of-its-kind real estate investment trust, followed by a carve-out initial public off ering, reducing massive debt.

Latham & Watkins

24 Advised Barclays and Bank of America Merrill Lynch to minimise uncertainty risk in a Reverse Morris Trust, creating a new tax-free spin-off .

Mayer Brown 24 Helped create a new bond that uses storm surge as a trigger to help New York Metropolitan Transportation Authority meet catastrophe insurance needs.

Skadden, Arps, Slate, Meagher & Flom

24 In a four-year restructuring saga, the fi rm deleveraged Realogy's multibillion dollar debt, culminating in one of the largest initial public off erings of 2012.

White & Case 24 Restructured the debt burden for Iconix by the fi rst securitisation of an intellectual property portfolio.

Chadbourne & Parke

23 Advised Société Générale on fi nancing for the fi rst liquefi ed natural gas project without completion guarantee in the US.

Cravath, Swaine & Moore

23 Worked with Credit Suisse on the fi nancing of Reynolds Group Holdings’ high-yield debt off ering, utilising a fungible tack-on structure to increase liquidity.

Davis Polk & Wardwell

23 Introduced Chapter 15 bankruptcy to Japanese client Elpida, allowing greater bankruptcy protection for its US intellectual property.

Latham & Watkins

23 Created an original strategy to build consensus and enable an unusual merger agreement between client US Airways and AMR.

Morrison & Foerster

23 Guided Residential Capital in bankruptcy proceedings, allowing it to operate during restructuring – a fi rst for a fi nancial company.

Orrick, Herrington & Sutcliff e

23 Advised Rialto Water Services on takeover of the Californian city's water utility, the fi rst public-private partnership using water and wastewater assets as a partnership vehicle.

Simpson Thacher & Bartlett

23 Created a unique fund structure with Blackstone Group, making institutional investors the sole limited partners of their respective funds.

Skadden, Arps, Slate, Meagher & Flom

23 Devised, with Credit Suisse, a $5bn covenant-light secured fi nancing for the Australian mining company Fortescue, helping to transform the company’s fortunes.

Weil, Gotshal & Manges

23 Represented Mashantucket Pequot tribe on Foxwoods Casino out-of-court restructuring.

Cravath, Swaine & Moore

22 Represented Goldman Sachs and JPMorgan in a $1bn secured term loan facility for Navistar, overcoming unique restrictions.

Morrison & Foerster

22 Skilfully negotiated insolvency proceedings for MF Global’s trustee, obtaining an unusual global settlement from the UK administrator and SIPC trustee.

● FINANCE

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Structuring deals in LatinAmerica has never been so complex. Someof the region’s recent standout operations– including a $6bn capital increase, thelargest ever in Chile; Colombia’s first for-eign initial public offering; and an $11bndebt offering in Brazil, the biggest by anemerging markets company – required

PIONEER SPIRITACROSS BORDERS

Several imaginative corporate finance deals in Latin America have been achance for law firms to showcase their range of skills, reports Jude Webber

White & Casemobilised 45 lawyersfrom seven offices for30 months for theEtileno XXI project

solutions that were remarkable, even fromseasoned cross-border lawyers.

Hurdles have included incorporating aUS Chapter 11 bankruptcy into a Mexicantelecoms restructuring; winning over con-servative private-sector lenders in a Brazil-ian polyolefin project in Mexico; and over-coming a cap on revenues in the first priva-tisation of a big US airport, in Puerto Rico.

Trailblazing operations like these haveseen the novel application of US projectfinancing techniques and New York securi-ties expertise to sophisticated operations ina region where New York law dominates.

Take the Maxcom telecoms deal in Mex-ico, which involved a simultaneous debtrestructuring and equity tender offer, plusthe Chapter 11 filing, in order for VenturaCapital Privado to be able to take over acompany otherwise headed for default.

“Here you have a Mexican venture capi-tal fund using tools from the US to takeover a Mexican company,” says Mike Fitz-gerald, chair of the Latin America practiceat Paul Hastings, which designed the for-mula. The clincher proved to be incorporat-ing the US bankruptcy filing into the mix.

White & Case had to draw on US, Eng-lish and Mexican law, and mobilise 45lawyers from seven offices for 30 months,for what it calls “the most complex andinnovative project development andfinancing ever undertaken in Latin Amer-ica” – the $4.5bn Brazilian-financedEtileno XXI polyolefin project in Mexico.National development banks, interna-tional export credit agencies, multilaterallending agencies and 10 commercial banksalso had to be kept onside.

“Taking eight governmental lenders,which tend to be the most conservativelenders in the market, and making themcomfortable writing cheques for between$300m and $800m to sponsors and a state-owned feedstock provider doing a jointtrue limited-recourse international projectfinancing – that was the most significantchallenge,” says Carlos Viana, White &Case partner.

An IPO of the Spanish holding companythrough which Mexico’s Cemex holds partof its Latin American operations was alifeline for the indebted cement company –but only after Skadden, Arps, Slate,Meagher & Flom essentially wrote the rulebook for a foreign company seeking to listin Colombia. Cemex also needed to win

over creditors to participate in its seconddebt restructuring in three years, so thelawyers incorporated an “early bird” prior-ity allocation plan rarely used for bankdebt restructurings. One party involved inthat transaction also notes: “Colombia is a‘hot’ market and this will open the door forforeign issuers to do something similar.”

Petrobras’s $11bn debt issue in May isunlikely to be replicated in terms of size,but showing the market it is possible totailor a six-tranche offering spanning bothfixed and floating-rate notes and maturi-ties from three to 30 years, and to openthe deal on a Friday and close the follow-ing Monday, teaches valuable lessons.

“One limitation in emerging marketsused to be the inability to access the capi-tal markets quickly. Now that large issu-ers can overcome that, accessing the capi-tal markets can be a very useful tool forfinancing energy and infrastructureprojects, as well as development more gen-erally,” says Francesca Odell, partner atCleary Gottlieb Steen & Hamilton, whichstructured the operation.

The $6bn capital increase by Chile’sEnersis, represented by Chadbourne &Parke, was unprecedented in that themajority shareholder was contributingassets while minority shareholders paidcash. In another novel touch, the companytapped the American Depositary Sharemarket by allowing ADS holders to traderights on the New York Stock Exchange.

The Puerto Rico airport sale to AerostarAirport Holdings, advised by Cleary Gott-lieb Steen & Hamilton and Pillsbury Win-throp Shaw Pitman, could be a test casefor other US airport sales. As well assecuring $410m financing, Aerostar had tofind a way to maximise profits other thanby increasing airline fees, which arecapped. Cleary structured the deal not astypical project financing but so Aerostar’srevenues would go into a pledged account,giving it flexibility and discretion to fundits operations.

Debt financing was another area of inno-vation. Paul Hastings represented CreditSuisse and Citigroup on the first interna-tional issue of Mexican peso-denominatedsecured dollar-indexed notes in Axtel, thetelecoms company, allowing it to refinancewithin weeks, rather than the months usu-ally needed, and avoid bankruptcy.

But cross-border legal teams, fluent inSpanish and Portuguese, with the imagina-tion to apply US tools to Latin Americandeals are only part of the new environ-ment. One person who asked not to benamed says: “If you have a lawyer work-ing with a client that is plain vanilla, theywon’t develop innovative skills. Law firmsneed to aim for those complicated clientsso that they can develop . . . their skills.There is also a cost involved with innova-tion, but that is something clients are will-ing to pay.”

LATIN AMERICA FINANCE

Score

Skadden, Arps, Slate, Meagher & Flom

25 Took Cemex through restructuring and helped create laws and regulations to allow the fi rst listing of a foreign company on the Colombian stock exchange.

Cleary Gottlieb Steen & Hamilton

23 Helped Petrobras launch a $11bn fl oating-fi xed rate notes off ering with six tranches in one weekend.

Cleary Gottlieb Steen & Hamilton

23 Acted for Puerto Rico airport operator Aerostar on the lease agreement and a unique fi nancing, leading to the fi rst privatisation of a major US airport.

Paul Hastings 23 Represented Citigroup and Credit Suisse in the fi rst capital markets restructuring of Mexican company debt, including innovative peso-denominated, secured dollar-indexed notes.

Paul Hastings 23 Achieved simultaneous US Securities and Exchange Commission-registered tender off er, Chapter 11 fi ling and Mexican equity and bond tenders to allow Venture Capital to takeover Maxcom.

Chadbourne & Parke

22 Raised $6bn for Enersis, the largest capital increase in Chile, through a global rights off ering and registration of ADSs in the US.

Mayer Brown 22 Represented BNP Paribas as lender to the Vía Parque Rímac toll road project, the largest ever Peruvian currency fi nancing for a non-sovereign issuer.

Pillsbury Winthrop Shaw Pittman

22 Advised Aerostar on the public-private partnership of a Puerto Rican airport, setting an example for future US airport PPP deals.

White & Case 22 Advised Braskem from development through project fi nancing of the fi rst Mexican-Brazilian cross-national greenfi elds plastics project.

Allen & Overy 21 Advised the Royal Bank of Canada on private placements for the pioneering Puerto Rico airport privatisation.

● FINANCE – LATIN AMERICA

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24 FINANCIAL TIMES THURSDAY NOVEMBER 21 2013