ORANGE COUNTY EMPLOYEES RETIREMENT SYSTEM MEMORANDUM DATE: January 30, 2015 TO: Members of the Board of Retirement FROM: Robert Valer, Chief Legal Officer SUBJECT: Fiduciary Counsel Interviews Recommendation: Take appropriate action. Background: Finalists. In December, OCERS received 4 responses to its RFP for fiduciary counsel. In January, the Board approved staff s recommendation to schedule interview 2 finalists: K&L Gates; and ReedSmith. All references to the finalists in this memorandum (and the documents that follow) are in alphabetical order based on firm names. Interview choreography. The interviews will take place at today s meeting, beginning immediately after completion of the Disability agenda (i.e., around 2:00 PM). Based on discussions with the Chair, Vice Chair, and immediate past Chair, the planned procedure for a 30-minute interview with each firm is as follows: the candidate will be asked to make a general presentation about the firm for about 5 minutes; the Board will ask the same 3 questions to each firm (the candidates do not know what the questions will be, and have been asked to keep their responses to each question to no longer than 5 minutes); time permitting, the Chair may recognize Board members who have additional or follow-up questions; and time permitting, the Chair may ask the candidate to sum up. This procedure already has been explained to the candidates. The firm not being interviewed will be asked to leave the room during the other firm s interview. Four supplemental questions. In addition to the 3 questions to be asked during the interviews, we also asked each firm to respond in writing to 4 additional questions, and we gave them a I-8 Fiduciary Counsel Interviews Page 1 of 3 Regular Board Meeting, February 17, 2015
week to provide their answers. We did not set any limits on the length of their responses, but did tell them that staff thought Board members admired and greatly appreciated brevity. We also told the firms that they were not required to include citations to legal authority in your responses. These are the 4 supplemental questions, and the firms responses are among the documents that follow this memorandum: 1. In your view, what is the single most significant issue that California retirement systems currently face? 2. Describe how you would view the ideal professional relationship between outside fiduciary counsel and in-house counsel. 3. When debating or deciding how to vote on an investment or other matter concerning OCERS, under what circumstances, if any, can or should a Board member take non-economic factors (e.g., social factors) into consideration? 4. Hypothetical: Shortly before a Board meeting starts, the CEO tells you that one of the Trustees has a business interest in an agenda item up for a vote. The Trustee believes that the interest is very remote and therefore does not intend to disclose it to the Board or recuse himself/herself. The CEO thinks that there may be others who would not view the interest as remote. How would you handle that? What should the Board member and/or CEO do? Brief summary of the finalists RFP responses. Finally, staff has been asked to provide a brief summary of some of the key terms of the finalists RFP responses. The summary was prepared by staff, based on staff s review and understanding of the firms RFP responses. To be fair, in preparing the summary, we tried to describe objective factors only. The firms did not review the summary prior to inclusion with the Board materials, but have seen it prior to today s meeting. Hopefully, if anything in the summary is inaccurate, the firms will identify that during their interviews. This is the summary staff prepared based solely on information gleaned from the RFP responses: TOPIC K&L GATES REED SMITH Number of lawyers and offices Lead attorney Other attorneys identified in the response More than 2000 lawyers 25 offices in the U.S., including 4 in California 22 overseas offices Peter Mixon, Partner, Seattle office William Wade, Partner, Los Angeles Sonia Gioseffi, Associate, San Francisco More than 1800 lawyers 14 offices in the U.S., including 4 in California 11 overseas offices Harvey Leiderman, Partner, San Francisco Jeffrey Rieger, Counsel, San Francisco Tiffany Thomas, Partner, San Francisco I-8 Fiduciary Counsel Interviews Page 2 of 3 Regular Board Meeting, February 17, 2015
TOPIC K&L GATES REED SMITH Fees 10% discounted hourly rates: Peter Mixon: Standard: $625/hour OCERS Discount: $562/hour William Wade: Standard: $885/hour OCERS Discount: $796/hour Sonia Gioseffi: Standard: $525/hour OCERS Discount: $472/hour Regular Monthly Board Meetings. Monthly fixed fee of $7,500 per month for legal work (including preparation of agenda items, review in advance of meetings, attendance at meetings) and all travel-related expenses for regular monthly Board meetings. [See last bullet for non-regular meetings.] Day-to-Day Advice. Monthly fixed fee of $2,500 per month to respond to questions and requests for consultation from OCERS Executive Staff, on interpretations of law, strategic planning, plan sponsor relations, legislation, pending litigation, and other administrative matters of interest. In-depth Legal Analysis and Recommendations, Litigation and Other Dispute Resolution, Investigations. Also includes participation in non-regular meetings. Blended rates at 20% discounts will be: Partners: $590/hour Counsel: $475/hour Associates: $395/hour [Rates held for first 3 years] Attachments. In order, the five documents follow this memorandum are as follows: K&L Gates RFP response; K&L Gates written responses to the 4 supplemental interview questions; ReedSmith RFP response; ReedSmith written responses to the 4 supplemental interview questions; and the original OCERS RFP for Fiduciary Counsel. Submitted by: Robert Valer Chief Legal Officer I-8 Fiduciary Counsel Interviews Page 3 of 3 Regular Board Meeting, February 17, 2015
A Proposal to Provide Fiduciary Counsel to Orange County Employees Retirement System (OCERS) December 2014
K&LGATES December 5, 2014 VIA ELECTRONIC MAIL Mr. Robert Valer Chief Legal Officer Orange County Employees Retirement System rvaler@ocers.org and bvazquez@ocers.org Re: Request for Proposal: Fiduciary Counsel Dear Mr. Valer: K&L Gates LLP ("K&L Gates") is pleased to present this proposal to the Orange County Employees Retirement System ("OCERS") for outside fiduciary counsel. We would greatly appreciate the oppmiunity to serve OCERS and are prepared to fulfill all of the scope of services as detailed in your request for proposal. As requested, we are transmitting an electronic, word-searchable PDF file with a directional index. This cover letter includes information in response to Section VI Requirements. Name, address, telephone number, and facsimile number K&L Gates LLP 925 Fomih Avenue, Suite 2900 Seattle, WA 98104-1158 Phone: (206) 3 70-7802 Fax: (206) 370-7022 Federal Employer Tax Identification number and Corporate Identification Number Corporate Id. No.: N/A K&L Gates' Federal Employer Identification Number is 25-0921018. Name, title and phone number of the individual signing the cover letter and the lead attorney for the proposal. Peter H. Mixon Patiner, K&L Gates LLP Phone: (206) 370-7802 Firm Irrevocable Offer K&L Gates makes a firm, inevocable offer to perfonn legal services as fiduciary counsel to the Board oftmstees for OCERS. These services shall include providing advice and recommendations on the meaning and application of Atiicle
K&LGATES XVI, section 17 of the Califomia Constitution, the common law of ttusts, the County Employees Retirement Law of 1937 (CERL), the Califomia Public Employees Pension Reform Act of2013, and other statutes and laws applicable to CERL systems and OCERS. Mr. Mixon is authorized to make this proposal. The Firm Meets All Minimum Requirements For Serving As Fiduciary Counsel K&L Gates meets all the minimum requirements for serving as the extemal fiduciary counsel ofocers as set fmth in the RFP dated October 27, 2014. Representation and Warranty K&L Gates affirms that all information and statements in this RFP response are tme and complete. Having represented public clients for many years, we understand their unique needs and are confident that we can provide quality legal work that offers real value to OCERS. We would be pleased to discuss or negotiate any aspect of our proposal. Please contact me at (206) 370-7802 if you have questions or would like additional information. Thank you for your consideration. Sincerely,
Exhibit A: Our Qualifications About K&L Gates LLP K&L Gates is the largest fully-integrated global law firm, serving clients from 47 offices across five continents. Our practice is a robust full market practice at once regional, national and international in scope. We operate as a single firm with unified technological, operational, and financial systems. In addition to numerous specific recognitions of the firm s partners, practices, offices and markets, our recent recognitions include the following: The firm was identified among the top 10 law firms for client service, ranking eighth out of nearly 650 firms noted by general counsel in the 2015 BTI Client Service 30 survey. This is the third consecutive year that K&L Gates has been included on the Client Service 30. The firm was recognized in the 2015 U.S. News-Best Lawyers survey with 35 national first-tier rankings. For the fourth year in a row, K&L Gates was ranked by Law360 in the publication's Global 20 survey as one of the "20 law firms that had the biggest global presence and handled the most large, significant and groundbreaking international and cross-border matters over the past year. In 2014, the firm was named among the top 10 firms for client service in BTI s Client Relationship Scorecard. This Power Elite ranking recognizes leading law firms for superior client service according to 500 corporate counsel at prominent companies. For more detailed information about our firm, please refer to our firm brochure attached as Exhibit K. About the Team K&L Gates has decades of experience representing public pension plans. The lead partner for this representation, Peter Mixon, spent nearly 20 years representing the California Public Employees Retirement System (CalPERS) as in-house counsel. For 11 years, he served as General Counsel to the system, providing fiduciary counsel to the Board of Administration, its committees, the Chief Executive Officer, and staff. He has a deep understanding of public pension plan governance, operations, funding, and benefits as well as expert knowledge of the laws that apply to public plans in California. Mr. Mixon has made numerous presentations to public pension plan lawyers and trustees on fiduciary law and responsibilities. He served for four years as a director on the Board of the National Association of Public Pension Plan Attorneys, an educational organization
serving public pension lawyers. Mr. Mixon has also testified in state court as an expert on the fiduciary duties of pension plan trustees. Bill Wade, a partner in the Los Angeles office, will support Mr. Mixon. Mr. Wade has provided fiduciary advice to banks, trust companies, fund managers, and other financial institutions in their roles as asset managers, investment advisers, and service providers to employee benefit plans. He has also counseled these institutions in addressing their fiduciary duties under ERISA and other trust laws, as well as applicable banking laws and regulations. Before entering private practice, Mr. Wade was inside counsel for a major bank for more than ten years, where his responsibilities included advising the bank s trust and investment management departments and affiliates. This deep knowledge and wide experience, combined with the resources of the K&L Gates firm, will provide OCERS with the highest quality fiduciary advice and counsel. For more information about the team, please see Exhibit B for additional information and Exhibit L for full biographies. Pension Plan Experience Public pension plans in California are governed by a complex mix of federal, state and local laws. This is the context for all fiduciary advice to public pension plan trustees. Over nearly two decades, Mr. Mixon advised the California Public Employees Retirement System on its fiduciary rights and duties in a wide variety of contexts. Pension Plan Governance. State statutes and constitutional provisions govern the fiduciary authority and responsibility of public pension plan trustees in California. Mr. Mixon advised the CalPERS Board of Administration on the extent of its constitutional and statutory authority over plan assets, operations, and policy. Mr. Mixon advised the Board and the Chief Executive Officer on the following projects: Board of Administration delegations of authority to its committees, to the Chief Executive Officer, the Chief Investment Officer, and other executive staff. As fiduciaries, the Board may delegate many of its responsibilities to the Chief Executive Officer, executive staff, and advisors. Mr. Mixon provided fiduciary and drafting advice to the Board and the Chief Executive Officer on the scope of these delegations, their meaning, and their implementation. Ethics, gifts, insider trading, communications, travel and communications policies. If not prevented, disclosed, or managed, conflicts of interest may impair a board member s fiduciary duty of loyalty and otherwise violate state ethics laws. Over the course of his career at CalPERS, Mr. Mixon advised the Board on the scope of its duties as an institution, drafted or revised Board conflicts and related policies, presented them to the Governance Committee, and supervised their implementation.
Placement agent disclosure and regulation. Mr. Mixon worked with policy personnel in drafting state legislation regulating placement agents (including the ban on contingency fee arrangements) and requiring disclosure as well as system regulations and policies. The legislation, AB 1743, was signed into law in 2011. Board governance project. Mr. Mixon supervised a nine-month comprehensive effort to improve the efficiency and effectiveness of the Board, its committees, and executive staff. A copy of the Summary Results of the project is attached as Exhibit N. Investment reviews. Mr. Mixon supervised several fiduciary reviews of individual investment transactions Each of these projects was designed to enhance the ability of the Board and its staff to meet their fiduciary responsibilities. Employer Contributions. The members of public pension plans in California have a constitutional right to an actuarially sound plan. The California Constitution and state statutes grant the CalPERS Board of Administration the authority to value the assets and liabilities of the system and, using actuarial methods, adopt contribution rates for all employers participating in the system. Employer contributions are important components in ensuring the funding and actuarial soundness of the plan. Thus, the valuation and rate setting processes are guided by the fiduciary responsibilities of the trustees. Mr. Mixon advised the Board on the fiduciary aspects of plan funding, asset and liability valuation, employer contribution rate setting, and enforcement of the collection rights of the system. Pension Benefits. Pension benefit formulas are generally set forth in state statutes and local ordinances. Payment of these benefits is one of the primary fiduciary responsibilities of public pension systems in California. In delineating the fiduciary duties of public pension trustees, the California Constitution expressly provides that public pension boards have the responsibility to administer the system in a manner that will assure prompt delivery of benefits and related services to the participants and their beneficiaries. During his career at CalPERS, Mr. Mixon provided extensive advice on the scope of this duty as well as related benefit issues. These included the vested contract, due process, and equal protection rights of plan members. Investments. The assets of public pension plans are trust funds, held by plan trustees for the purposes of paying benefits and expenses of the system. Along with employer and employee contributions, investment income funds the cost of paying pension benefits. Achieving appropriate risk-adjusted rates of return is, of course, one of the highest priorities for any public pension plan. K&L Gates has extensive experience in representing public pension plans as investors in public and private funds. Mr. Mixon advised his client on all fiduciary aspects of the investment program at CalPERS. These included the following:
the asset allocation process; development of investment beliefs contract negotiations with asset managers and investment advisors; divestment policies and legislation; investment delegations; responsible contracting policies; and legislator inquiries. Tax Qualification. Qualified public pension plans are not required to pay income tax on their investment earnings. Moreover, employer contributions made to these plans on behalf of employees are not taxable until benefits are paid out upon retirement. The Internal Revenue Code sets certain requirements for tax-qualified status. Maintaining this status is obviously important to the integrity, indeed to the entire purpose, of public plans. K&L Gates has extensive experience in advising public and private pension plans on the tax-qualification rules of the Internal Revenue Service. Mr. Mixon is familiar with these requirements and has advised his client on many tax-qualification issues including benefit and contribution limits, in-service and minimum distribution rules, and determination letters. Risk Management. Public pension plans are subject to a wide range of legal, operational, compliance, and policy risks. Anticipating these risks and developing plans for meeting them is an important fiduciary responsibility of plan trustees. These risks can range from cybersecurity to plan sponsor bankruptcy. With the Chief Executive Officer and the Chief Risk and Compliance Officer, Mr. Mixon helped design and implement the strategic risk management system and reporting dashboards at CalPERS. Litigation. As General Counsel, Mr. Mixon directly supervised the representation of CalPERS in many cases (including actions for breach of fiduciary duty). The following is a short summary of representative cases: Cargill v. Metropolitan Water District of Southern California (2004) 32 Cal.4th 491. California Supreme Court decision upholding CalPERS s interpretation of state statutes governing plan membership. Tier Technologies v. CalPERS (mediated settlement 2004). Former information technology contractor sued the system for breach of contract after CalPERS terminated the contract. Settlement achieved without any payment by CalPERS. Lexin v. Superior Court (2010) 47 Cal.4th 1050. Landmark decision of the California Supreme Court holding that financial interests of public officials shared by the official s constituency do not create conflicts of interest under state ethics laws. The California Attorney General filed an amicus brief on behalf of CalPERS.
In re City of Stockton (2012). Largest municipal bankruptcy at the time of filing. Bankruptcy court approved plan of adjustment that did not impair preexisting relationship between the city and CalPERS over the objections of unsecured creditors. Chaidez v. Board of Administration (2014) 223 Cal.App.4th 1425. Member action against CalPERS Board for breach of fiduciary duties. The Court of Appeal rejected claim, holding that fiduciary duties set forth in the California Constitution do not require trustees to pay benefits greater than statutes allow. Additional Firm Experience K&L Gates provides the full range of legal services relating to employee benefits, including fiduciary, tax, labor, securities, investment, and regulatory issues relating to plan administration and the investment of plan assets. With lawyers located throughout the United States, K&L Gates provides its clients with a variety of legal services related to the implementation and administration of retirement plans, health care programs, equity compensation plans, executive compensation programs, employment contracts, welfare benefit plans, and fringe benefit programs. Clients of the firm include plan trustees, state and local governmental entities, and nonprofit organizations. As a result, the firm is experienced in the unique employee benefits needs of these types of organizations and the employee benefit opportunities available to them. This experience includes the design, implementation, and administration of 403(b) plans, defined benefit plans, 401(k) plans, and other retirement and welfare plans, as well as qualified and nonqualified Section 457 plans and other executive compensation and incentive programs. K&L Gates provides advice concerning fiduciary responsibility and prohibited transaction issues; representation and advocacy before federal governmental agencies with jurisdiction over employee benefit plans such as the Internal Revenue Service (IRS), the Department of Labor (DOL), and the Pension Benefit Guaranty Corporation; and litigation with respect to a variety of employee benefit matters. The employee benefits practice includes advising plan trustees, sponsors, investment advisers, third-party administrators, and other parties with respect to the fiduciary and prohibited transaction issues arising under the Employees Retirement Income Security Act (ERISA) involving the investment of assets and the fiduciaries of these plans. Through the combined efforts of the Investment Management and Employee Benefits practices, K&L Gates counsels a number of providers of multiple services to 401(k) and other types of defined contribution plans (including a number of mutual fund complexes and other financial services firms) with respect to the fiduciary duty, prohibited transaction, and securities issues raised by the bundled nature of their services.
K&L Gates lawyers are also experienced in matters related to benefits entitlement, retirement and plan document interpretation, tax disputes, ERISA preemption of state laws, and claims of breach of fiduciary duties under ERISA. The firm has represented plan fiduciaries in suits against service providers for breach of contract or of fiduciary duty and has litigated in various courts, including the U.S. Tax Court, Federal District Court, the Court of Claims, the Circuit Courts of Appeal, and the U.S. Supreme Court. For more information on training and resources provided by K&L Gates, please see Exhibit B.
Exhibit B: Proposed Work Plan The K&L Gates Team As mentioned in the previous section, Peter Mixon will be the lead attorney representing OCERS as fiduciary counsel. As requested, he will provide legal advice and counsel to the OCERS Board and its staff on issues that implicate the fiduciary authority and obligations applicable to the trustees of the system. These services will include advice on Article XVI, section 17 of the California Constitution, the County Employees Retirement Law of 1937, the California Public Employees Pension Reform Act of 2013, and other provisions of local, state, and federal law. Mr. Mixon will provide both written and oral advice to the OCERS Board. He will work directly with the OCERS Chief Executive Officer and Chief Legal Officer on specific assignments. He will be available to attend OCERS board and committee meetings in person or by telephone. He will also be available for conference calls and is able to devote his full attention to OCERS, whether the assignment is ongoing advice or special projects. Providing these services will be a top priority for Mr. Mixon. William Wade, resident in the Los Angeles office will provide support to Mr. Mixon, and he will be the primary backup. Mr. Wade has a long and distinguished career representing financial institutions in the employee benefits arena. Mr. Wade has provided fiduciary advice to banks, trust companies, fund managers, and other financial institutions in their roles as asset managers, investment advisers, and service providers to employee benefit plans. He has also counseled these institutions in addressing their fiduciary duties under ERISA and other trust laws, as well as applicable banking laws and regulations. Before entering private practice, Mr. Wade was inside counsel for a major bank for more than ten years, where his responsibilities included advising the bank s trust and investment management departments and affiliates. Ms. Sonia Gioseffi, an associate in the San Francisco office, will provide research and analytical support. Ms. Gioseffi represents public pension plans in California on a wide range of issues. She often represents public pension plans as an investor in private equity funds. A significant part of her practice focuses on provisions in the California constitution, state law and local ordinances, which are applicable to public pension plans in California. She has experience regarding legal challenges that public pension funds and their boards face in public records requests and open meetings laws. Finally, she also has experience in advising clients on pay-to-play laws at the federal, state, and local level. Future Fiduciary Issues Over the next five years, the most important fiduciary issue facing public pension plan boards will be ensuring adequate funding for their plans. In California, the members of
public pension plans have a vested right to an actuarially sound plan. For demographic and other reasons, the costs of providing pensions and other benefits to plan members the liabilities of public plans are expected to increase. At the same time, the ability of plan sponsors the employers to make higher levels of contributions to fund pension promises is expected to decrease. To maintain the actuarial soundness of a plan in these circumstances, the trustees of a public pension plan will be faced with difficult choices. These will include determining actuarial methodologies and policies, making asset allocations for investments, setting employer and employee contribution rates, making benefit determinations, and many other decisions. Like most other public pension plans, OCERS will make these decisions under intense public and media scrutiny. Process is important to reasoned decision-making as a fiduciary. OCERS should be prepared to make these decisions through a transparent and engaged process. Expert opinion should be consulted when it is appropriate. Public disclosure of information, including risks, relating to a Board decision should be made well in advance. Discussion of the decision should be done at a properly noticed and open board or committee meeting. Finally, members of the Board should be willing to engage with staff, experts, the plan members, other interested stakeholders, and themselves on the merits, risks, and consequences of the decisions that the Board considers. Training The firm is willing to prepare and provide 25 hours of training to OCERS legal staff per calendar year at no charge. In addition, the firm is willing to prepare and provide an annual 4-hour fiduciary training session for the OCERS Board and staff at the reduced rate of $300 per hour. The firm regularly publishes commentary and analysis on emerging issues and other topics of interest in the form of electronic alerts and other publications for our clients. We will include OCERS personnel on the mailing list for these publications. We also regularly provide training/cle opportunities for clients in several formats including in person, videoconference, and webinars. Again, OCERS personnel will be welcome to participate in any available trainings and presentations. All of these efforts will be provided at no cost to OCERS.
Exhibit C: Public and Private Funds Represented as Fiduciary Counsel within Five Years From 2002 through 2013, Mr. Mixon provided fiduciary advice and counsel to CalPERS.
Exhibit D: Fee Proposal The objective of K&L Gates is to ensure that our clients receive high-quality legal services in a predictable and cost-effective manner. We communicate regularly with our clients about ongoing matters, both to develop strategies and to apprise our clients of fees and charges, staffing, and other significant developments. Given our experience with public fund clients, we fully understand that public entities are sensitive to the costs of legal counsel. With that in mind, we are willing to discount our regular hourly rates by 10% as our commitment to developing a long-term working relationship with OCERS. We tailor our bills to the specifications of each individual client, using a variety of e- billing software packages. We format our bills to provide the level of detail desired by the client, and our bill formats include sections for time cards with date, hours, timekeeper, and narrative. Our lawyers also provide the appropriate level of detail to coincide with the time entry, which allows our clients to make as informed an assessment as possible about the value added of each task or service we perform. We can also utilize task code billing and provide an appropriate breakdown of the fees for our services based on the nature of the specific tasks. We look forward to the opportunity to learn more about the proposed engagement and how we may establish a mutually beneficial fee arrangement. The hourly rates of each attorney for this project are set forth in the table below. Attorney Name Hourly Rate Discounted Rate Peter H. Mixon $625 $562 William P. Wade $885 $796 Sonia R. Gioseffi $525 $472 A sample engagement letter is included as Exhibit M.
Exhibit E: References Company Contact Information California Public Employees Retirement System Northern Trust Corporation MUFG Union Bank, N.A. Ken Marzion CEO (Retired) (916) 457-4758 kmarzion@gmail.com Dale Nichols General Counsel (312) 444-3835 dkn1@ntrs.com Paulette Leahy Director, Assistant General Counsel (619) 230-3319 Paulette.leahy@uboc.com
Exhibit F: Insurance K&L Gates purchases the maximum amount of professional liability insurance offered by ALAS, the largest insurer of lawyers in the United States. The policy is renewed annually on January 1. Further information can be provided upon request.
Exhibit G: Malpractice Claims As a firm of approximately 2,000 lawyers servicing tens of thousands of clients over the years, our firm has from time to time been involved as a party in litigation matters. None of the attorneys identified in this response has been the subject of a malpractice claim. We are not aware of any such litigation or other matter that would call into question our ability to service OCERS fully and effectively.
Exhibit H: Terminations No public sector clients have terminated their working relationship with any of the proposed team members in the past three years.
Exhibit I: Discipline No member of the proposed OCERS service team has been disciplined or censured by any regulatory body.
Exhibit K: K&L Gates Firm Brochure
OUR VALUE PROPOSITION
We go to great lengths to know the business of our clients their industries, their strengths, and their challenges enabling them to focus on their daily operations.
OUR VALUE PROPOSITION In today s relentless 24-hour global marketplace, your ability to tackle legal challenges quickly in locations both far and near is crucial. Companies must be able to conduct business worldwide, transferring people, products, and ideas across borders as well as operate efficiently in the face of growing governmental interventions. K&L Gates is uniquely positioned at the critical crossroads of the 21st century, offering legal counsel at the intersection of globalization, regulation, and innovation. From helping clients maintain a competitive edge through the development and protection of new ideas to advising them in the face of an evolving regulatory landscape, we are well-situated to respond to the myriad issues our global clients face. At K&L Gates, we understand that a law firm with the resources to counsel on a variety of issues around the world can help you gain two valued assets: time and peace of mind. With the largest collection of fully integrated law offices of any global law firm, K&L Gates offers unrivaled benefits to clients through our pragmatic approach to solving complex legal challenges, by possessing one of the most transparent business models in the entire legal industry, and by maintaining a relentless focus on providing seamless and extraordinary client service to companies of all sectors from around the world.
GLOBAL PRESENCE Global legal counsel across five continents. One of the largest legal platforms in the United States, with offices coast to coast
Strategic local presence in key capital cities and world commercial and financial centers Global presence enables clients to respond to diverse legal issues and risks around the globe through the services of one law firm, with one communication Largest integrated presence among U.S.-based global law firms in the Asia Pacific region with more than 400 lawyers in 11 markets
OUR APPROACH TO CLIENT RELATIONSHIPS Global Integration With offices spread across five continents, K&L Gates maintains the largest fully integrated network of law offices and law partners of any global law firm. What do we mean by integrated? Simply put, we have a single profit pool, a unitary governance system, a single technology platform, and a globally consistent brand. We are operationally integrated and financially integrated. The concept of integration is paramount to our firm s value proposition, and the reason we work so hard to achieve true firmwide integration is that such efforts allow us to provide seamless client service on a global basis. As a globally integrated firm, K&L Gates can offer efficiencies for clients that other firms cannot. For instance, we spend less time competing internally for work, we can service clients who are looking to work with one firm rather than multiple firms, and we can come up with more creative legal solutions for clients when we operate seamlessly as a team. K&L Gates frequently works with clients on their multijurisdictional or interdisciplinary challenges, and the efficiencies gained by having an integrated approach can be profound. Our Commitment to Client Service We approach client relationships with a one-company, one-team philosophy, consistently seeking proactive ways to add value to our client work. We routinely collaborate across offices and practices, enabling us to efficiently and creatively solve complex client problems while being as responsive as possible to our clients business needs. One example of this team mentality is illustrated through our client service team initiative. We currently maintain 50 formal client teams to serve as a mechanism to manage key clients across the firm. This initiative places a high level of emphasis on understanding the ongoing needs of our clients through the consistent analysis of information about their industries, their business operations, and current geopolitical trends in the marketplace, all at no additional cost. Client teams comprise lawyers in multiple offices and practices across the firm, and are not limited only to those lawyers who currently work for a client. In 2014, for the second consecutive year, the BTI Consulting Group recognized K&L Gates as a leader in client service in its elite BTI Client Service 30, an annual survey based on unbiased client feedback from more than 300 in-depth interviews with corporate counsel who identify, by name, the law firm they view as the best in various client service activities. In addition, in 2014 the firm was named among the top 10 firms for client service in BTI s Client Relationship Scorecard. The Power Elite ranking recognizes leading law firms for superior client service according to 500 corporate counsel at prominent companies. Staffing An example of the value provided by the firm s global platform is the number of offices many of our clients utilize. In 2013, 466 of our 500 largest clients used lawyers from two or more offices, and 15 of our 20 largest clients used lawyers in 10 or more offices. The average number of offices engaged on projects by the firm s 20 largest clients was 16.2. Our ability to match resources to a particular matter s demands, neither over- nor under-staffing any project, is key to successful engagements. As a result, work often is performed, in coordination with inside counsel, by K&L Gates lawyers from across our network of offices. A core cross-disciplinary team, consisting of a relationship manager and supervising partners from each applicable practice area, works closely with in-house counsel to understand business needs and objectives and to provide ongoing performance monitoring.
Large corporate law firms typically publish annual revenues and profits, but the release by K&L Gates is groundbreaking, legal industry experts say. K&L Gates has released what could be one of the most complete pictures of a U.S. legal firm s financial performance, a step it says is a move toward greater transparency in a profession where financial results are often opaque. The Wall Street Journal, Big Law Firm Lifts the Veil, Feb. 22, 2013 Transparency The New York Times, In Push for Transparency, Law Firm Releases Financial Results, Feb. 22, 2013 Open communication is at the core of successful business relationships, and keeping surprises to a minimum is a key tenet of our client relationship approach. Through regular communication, we strive to keep our clients fully informed about matters as they develop, advising them on what will happen and preparing them for what might happen. With economic uncertainty a major concern everywhere, transparency in the firm you are working with is essential. In an effort to achieve greater transparency, we voluntarily disclosed a detailed account of the firm s 2012 financial results, a first among U.S.-based law firms. We repeated this disclosure in 2014, an act we have pledged to do annually. At K&L Gates, we believe that clients should feel confident in the firm they are working with and open communication regarding financials is a key component. The wink-and-nod approach of many leading U.S. firms to their financials is not worthy of the major businesses they are. Peter Kalis of K&L Gates is embracing full transparency and is seen as downright revolutionary in America. Early Cost Assessment K&L Gates has developed a paradigmatic approach for The Lawyer, Five Things Not to Like About U.S. Firms, March 25, 2013 helping clients evaluate, plan, and implement cost-effective litigation resolution strategies. A key component of this approach is our experience with the development and use of Early Case Assessment (ECA) procedures. The ECA approach is a collaborative effort with in-house counsel to build a strategic litigation plan with a corresponding budget and a realistic definition of what constitutes a favorable resolution of the case. K&L Gates uses the ECA process to ensure proactive lawyering, and consideration and evaluation of resolution options, early and often.
CROSS-PRACTICE ADVANTAGE In this fast-moving global marketplace, we understand that clients value seamless legal coverage on a range of services. With our truly integrated platform, K&L Gates is uniquely positioned to provide efficient legal counsel in the face of ever-changing client needs shaped by a globalized economy. Clients benefit from our cross-practice integration, which allows us to provide creative solutions to today s most pressing legal issues. As just one example, our cybersecurity team utilizes a multitude of practice areas to help prevent, respond to, and minimize the impact of electronic attacks, and our global platform allows us to address challenging security issues in nearly any jurisdiction. Our lawyers collaborate across offices and practices to help clients maintain a strategic approach to these threats amid unprecedented and unknown electronic risks that can profoundly damage your company or brand in an instant.
Technology We are focused on providing continuous investment in the use of technology to provide innovative, value-driven solutions to lawyers that enhance workflow efficiency and client communications. Our state-of-the-art systems and processes ensure that our lawyers always have current technology and secure access to the technical resources required to deliver superior service representative of our fully integrated global firm. We have a security program that meets or exceeds the rigorous governance, risk, and compliance requirements of our clients to ensure the confidentiality, integrity, and availability of their information entrusted to us. It is this level of security that enables the use of leading technical innovations at the same speed of adoption as our clients so that our clients can leverage their technological investments. In addition, we have developed partnerships with the same world-class IT providers as our global clients to ensure timely advances in technical innovations, and we have established a roadmap to ensure our systems remain current and well-positioned to meet the future needs of the firm and its clients. At K&L Gates, technology is an asset to delivering successful resolutions to client matters. Our Flexible Approach to Alternative Fee Arrangements We understand that clients not only want to control the overall cost of legal counsel, but also value predictability and accountability. Our flexible approach to alternative fee arrangements (AFAs) means collaborating with our clients so we are both held accountable and rewarded for highquality legal work delivered economically and predictably. We work with clients to create effective AFAs based on the matter/project involved, which we strongly believe to be mutually beneficial for both the firm and the client. K&L Gates has been a pioneer in the legal industry in terms of creating AFAs with clients. We first started using these types of arrangements more than two decades ago with our client DuPont, which was combined with a convergence program that DuPont was leading to reduce the number of total law firms being used and to increase the overall value of legal services provided. K&L Gates subsequently won six prestigious Meeting the Challenge awards from DuPont, where the firm was recognized for creative utilization of value based and alternative fee arrangements and cost effectiveness in the delivery of legal services and savings. OUR COMMITMENT TO DIVERSITY Establishing and maintaining a diverse and fully inclusive workforce is essential to a strong law firm, as it is only with a diverse workforce that the needs of clients with global operations can be truly met. K&L Gates has implemented a number of programs to promote diversity and inclusion, and we believe the firm is an industry leader in this area. Over the years, we have focused on growing our reach and deepening our engagement. In addition to the leadership provided by our firmwide Diversity and Women in the Profession committees and our firmwide affinity groups, a firmwide Director of Diversity and Inclusion who has enlarged, global responsibilities focuses on eliminating barriers to inclusion within the working environment wherever our lawyers reside. Minority, women, disabled, and LGBT lawyers continue to become increasingly engaged at K&L Gates by taking on leadership roles that include service on the Management Committee and its Executive Committee and as Practice Group Coordinators. At K&L Gates, we are committed to fostering diversity to enrich the experience of our lawyers, reflect the communities in which we live and work, and better serve our clients.
By working with a truly integrated global firm, you have a dedicated partner that can offer worldwide resources and seamless service capabilities, regardless of your need or location.
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Anchorage Austin Beijing Berlin Boston Brisbane Brussels Charleston Charlotte Chicago Dallas Doha Dubai Fort Worth Frankfurt Harrisburg Hong Kong Houston London Los Angeles Melbourne Miami Milan Moscow Newark New York Orange County Palo Alto Paris Perth Pittsburgh Portland Raleigh Research Triangle Park San Francisco São Paulo Seattle Seoul Shanghai Singapore Spokane Sydney Taipei Tokyo Warsaw Washington, D.C. Wilmington K&L Gates comprises more than 2,000 lawyers globally who practice in fully integrated offices located on five continents. The firm represents leading multinational corporations, growth and middle-market companies, capital markets participants and entrepreneurs in every major industry group as well as public sector entities, educational institutions, philanthropic organizations and individuals. For more information about K&L Gates or its locations, practices and registrations, visit klgates.com. This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer. 2014 K&L Gates LLP. All Rights Reserved.
Exhibit L: Team Biographies
Peter Mixon Partner Seattle T 206.370.7802 F 206.623.7022 peter.mixon@klgates.com OVERVIEW Mr. Mixon has a broad practice focused on serving the needs of institutional investors (including public pension plans) and public entities. He specializes in formulating and executing risk management and other legal strategy in the context of financial disputes, regulatory investigations, investment strategies, municipal insolvencies, and complex litigation. Mr. Mixon also has extensive experience advising public boards and committees on governance and fiduciary issues. PROFESSIONAL BACKGROUND Mr. Mixon began his career in private practice in 1985, representing public and private entities in business litigation and constitutional challenges. Prior to joining K&L Gates, Mr. Mixon served as General Counsel for the California Public Employees Retirement System for eleven years. PRESENTATIONS Mr. Mixon is a frequent speaker on various topics facing institutional investors and public pension plans. His most recent engagements include: Panelist, Building Bridges: Financing Infrastructure in Emerging Markets, Washington D.C., October 2014 Panelist, California Municipal Bond Institutional Investors Conference, San Francisco, June 2014 Panelist, National Association of Public Pension Plans Annual Legal Education Conference, Nashville, June 2014 Panelist, PLUS Directors and Officers Liability Symposium, New York City, January 2014 PROFESSIONAL/CIVIC ACTIVITIES National Association of Public Pension Plan Attorneys, Member of the Board of Directors (2009-2013) New York Stock Exchange Commission on Corporate Governance, Chair, Investors Subcommittee (2009-2010)
Peter Mixon (continued) ADMISSIONS State Bar of California United States Supreme Court EDUCATION J.D., University of the Pacific, McGeorge School of Law, 1984 B.A., University of California, Berkeley, 1980 REPRESENTATIVE WORK Directed complex business litigation strategy for a large institutional investor Directed legal strategy in several large municipal bankruptcy actions Managed internal governance projects and board committee work for a large institutional investor Oversaw investment legal strategy for a large institutional investor Initiated and monitored comprehensive internal review and investigation of former officers and directors at a large investment institution
William P. Wade Partner Los Angeles T 310.552.5071 F 310.552.5001 william.wade@klgates.com OVERVIEW Mr. Wade concentrates his practice in investment management, ERISA, fiduciary, regulatory, and related securities and tax matters for financial institutions. PROFESSIONAL BACKGROUND Mr. Wade has assisted banks, trust companies, investment advisers, and other financial institutions in planning for, and creating, collective investment funds, proprietary mutual funds, and other investment management vehicles, products, and services for individual and institutional investors, including employee benefit plans subject to ERISA. He has also assisted these institutions in addressing legal problems arising under ERISA and other fiduciary laws and applicable banking regulations. Mr. Wade was a member of the Office of General Counsel of a large banking and financial institution for more than ten years, where his responsibilities included advising the bank's trust and investment management departments and affiliates. Mr. Wade focuses a large portion of his practice on bank-sponsored collective investment funds. He is the author of the Business Lawyer article entitled Bank-Sponsored Collective Investment Funds: An Analysis of Applicable Federal Banking and Securities Laws, one of the first and few comprehensive analyses of the subject, which has been cited by at least one federal Circuit Court of Appeals and by the staff of the Securities and Exchange Commission in its comprehensive Investment Company Act study Protecting Investors: A Half Century of Investment Company Regulation, among other authorities. He also obtained one of the first rulings permitting national banks to maintain closed end collective trust funds. In addition, Mr. Wade obtained one of the first prohibited transaction exemptions under ERISA permitting the conversion of bank collective trust funds into proprietary mutual finds and one of the first exemptions permitting in-kind redemptions of proprietary mutual fund shares by the bank s in-house plan. He also is the author of The Group Trust An Essential Product for Money Managers, appearing in The Investment Lawyer, among other articles on the subject of bank investment management activities. REPRESENTATIVE MATTERS Obtained initial prohibited transaction exemptions from the U.S. Department of Labor for collective trust fund-mutual "conversions" and in-kind redemptions by in-house plans Obtained first OCC ruling authorizing national banks to operate closed-end collective investment funds