Baker McKenzie

Last updated

Baker McKenzie
Baker McKenzie logo (2016).svg
Headquarters Chicago, Illinois
No. of offices68
No. of attorneys4,558
Major practice areas Corporate law
Key peopleMilton W. M. Cheng
Global Chair
RevenueUS$3.3 billion (2023)
Date founded1949
Founder
  • Russell Baker
  • John McKenzie
Company type Swiss association
Website bakermckenzie.com

Baker McKenzie is one of the largest international law firms, headquartered in Chicago. Founded in 1949 under the name Baker & McKenzie, it has 68 offices in 46 countries and employs 4,558 attorneys. [1]

Contents

According to the ICIJ, Baker McKenzie is "an architect of the modern tax avoidance system." [2] [3] [4] [5] The company has helped fraudsters, corrupt officials and elites in authoritarian regimes avoid taxes and hide wealth through the use of shell companies, trusts and complex structures in tax havens. [6] Prior to Russia's invasion of Ukraine, the company described itself as "go-to firm for Russia's largest companies and major foreign investors." [7] [8]

History

Co-founding partner Russell Baker, who had graduated from the University of Chicago Law School, opened his first practice, Baker & Simpson, in Chicago in 1925. The firm provided legal services to the growing Mexican American community in Chicago, which would set a foundation for its global reach. [9]

In 1949 Baker was joined by John McKenzie, a graduate from Loyola University Chicago School of Law, who helped further establish the international practice. [9]

Baker McKenzie became an international firm beginning in 1955, when a lawyer in Venezuela contacted Baker McKenzie about opening a joint venture office in Caracas. Russell Baker's son, Donald, moved to Caracas to launch the satellite office. Within the next three years, offices were opened in Washington, D.C., Amsterdam, Brussels, Zürich, New York and São Paulo. By 1978, Baker McKenzie had 26 offices in 20 countries. By 1990, the firm operated 49 offices on six continents, employing around 1500 attorneys, and generating $400 million in revenues.

In 1999, Christine Lagarde, the Paris managing partner and an antitrust and labor lawyer, was elected chair of the global executive committee, the first woman to lead Baker McKenzie or any major international law firm; [10] she was chair for five years. She later became France's Minister of Finance and managing director of the International Monetary Fund. [11]

In 2001, the firm employed 3,000 attorneys and garnered $1 billion in revenues. [12] In 2005, 70 partners, and other legal staff, from the New York office of disbanding international firm Coudert Brothers joined Baker McKenzie. [13]

In October 2006, Unilever chose the firm to manage its global trademark portfolio, the largest in the world, with over 160,000 registrations, marking the first time a multinational company outsourced its trademark management to a law firm on such a large scale. [14]

In July 2013, co-founding partner Russell Baker was named one of American Lawyer's top 50 innovators for pioneering ideas and initiatives that changed the world of BigLaw. [15]

In August 2014, Baker McKenzie revealed it was the first law firm to break through the $2.5bn revenues barrier since the financial crisis, and that it was also the largest firm in the world by headcount. [16]

The firm's global chair, from 2016, until his death in April 2019, was former London managing partner Paul Rawlinson, who was the 15th chair, and the first British chair of the firm. [17] Rawlinson had succeeded Eduardo C. Leite who was chair of Baker McKenzie from 2010 to 2016. [18] In September 2019 the Firm announced that Milton Cheng had been elected as the global chair for four years, commenced October 2019.

In September 2022, after 40 years of existence in the UAE, Baker McKenzie announced to swiftly separate from its Emirati partner, Habib Al Mulla. The law firm raised a concern regarding the homophobic Twitter posts by Mulla, whose firm merged with Baker McKenzie in 2013. Mulla sparked controversy when he described homosexuality as "ugly" in his tweets. Baker McKenzie's head of investigations Borys Dackiw was temporarily appointed to lead. The law firm said it wanted to "ensure an inclusive work environment for all". [19]

Size and structure

Baker & McKenzie's New York office is located at 452 Fifth Avenue. 452 Fifth Ave.jpeg
Baker & McKenzie's New York office is located at 452 Fifth Avenue.

Baker McKenzie is the largest law firm in the United States by headcount. As of August 2018, it was the second largest law firm by headcount [20] [21] and third by revenue. [22]

For 2015-2022, Reuters ranked the firm first by number of cross-border deals and for the eleventh year in a row the firm was ranked first for deals with emerging market involvement, by both number of announced and completed number of deals. [23]

Baker McKenzie is organized as a Swiss Verein which allows regional profit pools and their related tax, accounting, and partner compensation systems to remain separate while allowing strategy, branding, information technology and other core functions to be shared between the constituent partnerships. [24] Baker McKenzie is the only Verein that used to be a single partnership, while all of the other Vereins were created by firms merging. [25]

Notable matters and transactions

In 2006, Baker McKenzie wrote the amicus brief of the Council of Parent Attorneys & Advocates (COPAA) in support of the petition for a Writ of Certiorari in Winkelman v. Parma City School District , and later, COPAA's amicus brief on the merits. [26] It argued that parents have the right to represent themselves in court to enforce their IDEA rights and protect their children's access to free appropriate public education. This led to a unanimous Supreme Court decision in June 2007 granting parents the right to proceed without counsel on behalf of children with disabilities. [27]

In December 2009, Baker McKenzie won a landmark tax case against the U.S. Internal Revenue Service for Symantec Corporation. The IRS had claimed that the Veritas Software Corporation, which Symantec had subsequently acquired in 2005, owed over $1 billion in back taxes, penalties, and interest as a result of Veritas' non-U.S. operations. Symantec took the case to the U.S. Tax Court where Baker & McKenzie argued that the IRS position was arbitrary, capricious, and unreasonable. In an opinion by Judge Maurice Foley, the court decided in favor of Symantec. [28] [29]

Baker McKenzie represented Microsoft in Microsoft Corporation v. Internal Revenue Service [30]

In 2012, Baker McKenzie helped overturn Paul Chambers' conviction under the Communications Act of 2003 (the Twitter Joke Trial) for tweeting a "message of a menacing character." Chambers, an accountant, had tweeted a "silly joke" [31] about "blowing up the Robin Hood airport in South Yorkshire." The team advising on his appeal was led by Preiskel & Co's David Allen Green, John Cooper QC of 25 Bedford Row, and Sarah Przybylska of 2 Hare Court. The Baker McKenzie team, which acted on the case pro bono from 2010, included partners Harry Small, Tom Cassels and Ben Allgrove. [32]

Baker McKenzie is currently representing Facebook Inc. in its dispute with the IRS over the value of assets the company transferred to its Irish holding company. [33] Lawyers with the U.S. Department of Justice asked for a court order forcing Facebook to provide information to the IRS related to agreements between the company and the holding company, Facebook Ireland Holdings.

Controversies

In 1986, Geoffrey Bowers, then a New York attorney, filed a complaint with the New York State Division of Human Rights, charging that he had been fired from his job at the Manhattan branch of Baker McKenzie law firm after AIDS-related lesions appeared on his face. The firm maintained that he was fired purely for his performance. [34] Two months after testifying at a hearing on the complaint, he died at age 33. The case was resolved in his favor in late December when Baker McKenzie was ordered to pay $500,000 to Bowers' estate. It was one of the first AIDS discrimination cases to go to a public hearing. Baker McKenzie appealed but subsequently withdrew the appeal after they negotiated a confidential settlement in 1995 with Bowers' family forbidding parties from ever discussing the case or the terms of the agreement. These events were one inspiration for the film Philadelphia , starring Tom Hanks and Denzel Washington (the script of which was derived from numerous sources). [35]

In 1994, in a seminal case, a legal secretary, Rena Weeks, successfully sued the law firm for sexual harassment. [36] The trial court ordered the law firm to pay $6.9 million in punitive damages, making it one of the largest damage awards in history for this type of action. [37] On May 4, 1998, the California Court of Appeal for the First District upheld the trial court's judgment in full, and the Supreme Court of California denied review. [38] A subsequent dispute among Weeks' victorious attorneys as to the division of fees among them (she had signed a contingent fee agreement for 40% of her recovery) did reach the Supreme Court of California in 2002; the court held that the later-associated co-counsel could not recover the full amount he sought because Weeks' attorneys had not obtained her consent to an agreement to split fees among co-counsel from different firms as required by California court rules. [39] Martin R. Greenstein, the partner whose actions resulted in Weeks' successful lawsuit, was given a public reproval by the State Bar of California on March 26, 1998, and for obvious reasons, is no longer with Baker McKenzie (the Court of Appeal decision noted that he was terminated by the firm in August 1993). [40]

Tax avoidance

In 2021, the law firm was listed in the Pandora Papers after the law firm conducted offshoring activities for organizations outside of the United States. One of the actions includes setting up shell companies in Cyprus for RJR Nabisco (which has split up), creating a tax shelter for Nike, as well as moving Facebook's tax headquarters to Ireland, allowing these companies to avoid taxes. [6] Baker McKenzie's clients include Malaysian fugitive Jho Low. [6]

Baker McKenzie has boasted about helping to set up tax-free zones in the UAE, which critics say encourage illicit activity. [6] Baker McKenzie has lobbied against legislation to curb offshore tax avoidance by big companies and lobbied against legislation that would increase due diligence for foreign customers of American banks. [6]

According to the ICIJ, Baker McKenzie is "an architect of the modern tax avoidance system." [2] The company has helped fraudsters, corrupt officials and elites in authoritarian regimes avoid taxes and hide wealth through the use of shell companies, trusts and complex structures in tax havens. [6] The Pandora Papers mentioned Baker McKenzie more than any other major U.S. law firm – the leaks alone revealed that Baker McKenzie was involved in setting up more than 440 offshore companies registered in tax havens. [6]

Russia

Baker McKenzie has described itself as the "go-to firm for Russia's largest companies and major foreign investors." [8]

Baker McKenzie has represented Russian state-owned companies Gazprom, Sberbank, VTB Bank, VEB.RF and Sviaz Bank, and the arms-manufacturer Rostec. [8] [7] [6]

In 2016, Baker McKenzie worked for Rostec in selling shares in a Mongolian copper mine. [8] The sale triggered a corruption investigation. [8] In 2021, Baker McKenzie advised the Russian Ministry of Finance on a $1.8 billion bond deal. [8]

In October 2021, the Pandora Papers leaks revealed that company represented at least six sanctioned Russian companies. [8] After Russia invaded Ukraine in February 2022, the company initially did not sever ties with Russian state-owned companies, but said it was "reviewing and adjusting our Russia-related operations and client work" to adjust to sanctions. [7] In late March 2022, the company said it was leaving Russia. [8]

See also

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References

  1. ↑ "law.com". www.law.com. Retrieved October 29, 2024.
  2. 1 2 "How a network of enablers have helped Russia's oligarchs hide their wealth abroad - ICIJ". March 2, 2022. Retrieved March 9, 2022.
  3. ↑ "Pandora Papers Revelations Raise Specter of Reputational Risk for Baker McKenzie". Law.com International. Retrieved November 1, 2024.
  4. ↑ "Baker McKenzie is 'architect and pillar' of offshore system that hides wealth, Pandora Papers report says". ABA Journal. 2017.
  5. ↑ "Here's how Baker McKenzie profits from offshore tax system". Crain's. 2017.
  6. 1 2 3 4 5 6 7 8 "How America's biggest law firm drives global wealth into tax havens - ICIJ". October 4, 2021. Retrieved March 9, 2022.
  7. 1 2 3 Goldstein, Matthew; Vogel, Kenneth P.; Drucker, Jesse; Farrell, Maureen; McIntire, Mike (March 9, 2022). "How Western Firms Quietly Enabled Russian Oligarchs". The New York Times. ISSN   0362-4331 . Retrieved March 10, 2022.
  8. 1 2 3 4 5 6 7 8 "Baker McKenzie, a go-to firm for Kremlin-linked companies, now says it's leaving Russia - ICIJ". March 15, 2022. Retrieved March 19, 2022.
  9. 1 2 "Baker McKenzie by Roger Croft - Issuu". issuu.com. January 23, 2013. Retrieved November 1, 2024.
  10. ↑ Petersen, Melody (October 9, 1999). "Her Partners Can Call Her Ms. Chairman; Baker & McKenzie Takes Small Step for a Law Firm, Giant Leap for Womankind". The New York Times . Retrieved August 17, 2016.
  11. ↑ "Press Release: IMF Executive Board Selects Christine Lagarde as Managing Director". International Monetary Fund. June 28, 2011. Retrieved June 30, 2014.
  12. ↑ "Firm History". Baker & McKenzie. 2014. Archived from the original on June 15, 2014. Retrieved June 30, 2014.
  13. ↑ Glater, Jonathan (September 14, 2005). "Law Firm Set to Absorb Part of Another". The New York Times. Retrieved October 29, 2024.
  14. ↑ "Managing the world's largest trademark portfolio". Baker & McKenzie. 2014. Archived from the original on October 17, 2014. Retrieved June 30, 2014.
  15. ↑ "The Master Strategists". The American Lawyer. August 13, 2013. Retrieved June 30, 2014.
  16. ↑ "Baker & McKenzie becomes world's biggest law firm" . Financial Times .
  17. ↑ "Paul Rawlinson named chair of Baker and McKenzie and other legal moves and grooves for June 13". Financialpost.com. Retrieved May 26, 2017.
  18. ↑ "Baker & McKenzie chooses London partner as new chairman". Crain's Chicago Business. Retrieved May 26, 2017.
  19. ↑ "Baker McKenzie seeks 'swift' split from UAE partner after homophobic tweets". The Financial Times. September 16, 2022. Retrieved September 16, 2022.
  20. ↑ Randazzo, Sara (August 22, 2016). "Baker & McKenzie Rebounds After Down Year". The Wall Street Journal . Retrieved January 27, 2022.
  21. ↑ "Firm Facts". Baker McKenzie. Retrieved January 27, 2022.
  22. ↑ "Baker McKenzie Announces Record Global Revenues of $2.9 Billion | Newsroom | Baker McKenzie". Archived from the original on August 12, 2018.
  23. ↑ "Baker McKenzie Announces Global Revenues of US$2.62 billion | Newsroom | Baker McKenzie". Baker McKenzie. Archived from the original on August 25, 2016. Retrieved September 1, 2016.
  24. ↑ "Enter Swiss Verein 2012" (PDF). Edge.ai.
  25. ↑ "Baker & McKenzie Eyes Africa As Next Great Expansion Opportunity". News.bloomberglaw.com. Retrieved January 27, 2022.
  26. ↑ "Baker McKenzie". COPAA. Archived from the original on June 8, 2008.
  27. ↑ "Pro Bono Supreme Court". Baker & McKenzie. Archived from the original on June 8, 2008.
  28. ↑ Letzing, John (December 10, 2009). "Symantec wins $545 million opinion in tax case". MarketWatch. Retrieved June 30, 2014.
  29. ↑ "U.S. Tax Court Rules in Favor of Symantec". Symantec. December 14, 2009. Archived from the original on October 5, 2012. Retrieved June 30, 2014.
  30. ↑ "Microsoft Corporation v. Internal Revenue Service". Law360.com. Retrieved January 27, 2022.
  31. ↑ Bowcott, Owen (July 27, 2012). "Twitter joke trial: Paul Chambers wins high court appeal against conviction". The Guardian .
  32. ↑ "Robin Hood Airport tweet bomb joke man wins case". BBC News. July 27, 2012.
  33. ↑ "Facebook Turns to Baker & McKenzie to Fight IRS Probe". Law.com.
  34. ↑ "Lawyer With AIDS Charges Job Discrimination". The New York Times . July 15, 1987.
  35. ↑ "Philadelphia' Screenplay Suit To Reach Court". The New York Times. March 11, 1996.
  36. ↑ The Baker & McKenzie Sexual Discrimination Case, Georgia Trial Lawyers Association.
  37. ↑ Sexual Harassment Laws: How a Six Million Dollar Man Became a Six Million Dollar Liability, The Payroll Factory. Archived February 5, 2005, at the Wayback Machine
  38. ↑ Weeks v. Baker & McKenzie, 63 Cal. App. 4th 1128 (1998).
  39. ↑ Chambers v. Kay, 29 Cal. 4th 142 (2002). Online.ceb.com
  40. ↑ State Bar of California public record for Martin Richard Greenstein, State Bar Number 106789. Members.calbar.ca.gov
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