#12 The Legal Profession This Week - US Revenues, COVID Loans, and Bitcoin Disputes

#12 The Legal Profession This Week - US Revenues, COVID Loans, and Bitcoin Disputes​

US Firms’ Growth

New data from The Lawyer reveals that US firms are not only closing the gap with the Magic Circle, but have outgrown the latter’s London office revenues aggressively in recent years.

A comparison of Mergermarket’s M&A rankings in 2010 and 2020 clearly displays the change. While ten years ago the Top 10 consisted entirely of UK firms, US firms now hold three of the top five places in the list (The Lawyer). Latham & Watkins ranks first with Weil, Gotshal & Manges and Skadden Arps taking up the other two spots in the top five. Kirkland & Ellis, Cleary Gottlieb and Davis Polk also feature in the list (The Lawyer). With more clients going to US firms for advice on English law, it seems like the ground is shrinking beneath the feet of the Magic Circle. Regaining their competitive edge against US firms is likely to be a critical concern going forwards.

COVID-19 Loans

Norton Rose Fulbright and Travers Smith are the latest firms to repay loans taken out during the pandemic last year. While Norton Rose Fulbright reportedly used slightly more than half of its £111m credit facility in the beginning of the pandemic, Travers Smith never made use of its bank loan, leaving the firm debt free (The Lawyer). Linklaters, Ashurst and Herbert Smith Freehills have also made similar repayments (The Lawyer).

Despite concerns about COVID-19, most law firms demonstrated strong financial performance in 2020 allowing them to repay these loans within the year. Herbert Smith Freehills for example saw an increase in profits across all regions except one. Less cautionary credit facilities in place also signifies that law firms seem to have a positive outlook for the remainder of 2021.

‘Business as usual’ – the notable deals and cases which went ahead this week:

Dispute against Bitcoin’s Alleged Inventor

Bird & Bird is advising cryptocurrency group, Crypto Open Patent Alliance (Copa), in its filing for a declaration from the High Court that Craig Wright, an Australian computer scientist, is not the inventor of Bitcoin (The Lawyer).

The idea for Bitcoin first surfaced in 2008, in a paper authored by Satoshi Nakomoto. In 2016, Wright publicly claimed to be Nakomoto alleging that he had authored the original paper under the pseudonym. Since then, Wright’s company Tulip Trading has brought several claims against various companies operating in the crypto space. It first launched copyright proceedings against Cobra, the US-based operator of the bitcoin.org website, for publishing the 2008 paper online (The Lawyer). Tulip Trading is also embroiled in claims against sixteen developers for refusing to grant it access to over £4bn worth of crypto funds (The Lawyer). These are funds which Tulip Trading claims to have lost access to in a hack.

Copa is a non-profit group that aims to stop companies from securing crypto patents that threaten innovation and the growth of cryptocurrencies. Bird & Bird received its mandate to advise on the matter from Copa’s parent company Square, which is owned by Twitter CEO Jack Dorsey (The Lawyer). Another notable founding member of Copa is Coinbase, the US-based cryptocurrency exchange that recently filed for a direct listing.

WarnerMedia-Discovery Merger

Rival streaming networks WarnerMedia and Discovery are reportedly going ahead with a merger (The Lawyer). Part of the AT&T conglomeration, WarnerMedia owns brands such as HBO, Warner Bros and CNN. Discovery on the other hand focuses more on documentaries and factual content with brands such as Discovery and Animal Planet (The Lawyer). WarnerMedia is being advised by Sullivan & Cromwell while Discovery has instructed Debevoise & Plimpton on the matter (The Lawyer).