Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.

Tweet us @Fides_Search to let us know your thoughts.

This week:

1) New Data Privacy Bill Announced

On Monday the British government laid out its statement of intent regarding the country’s new Data Protection Bill. This will give individuals more control over their personal data by introducing a ‘right to be forgotten’, and asking social media companies such as Twitter and Facebook to delete their personal data.

The Information Commissioner’s Office (ICO) will also be given more power to defend consumer interests and issue much higher fines for non-compliance, of up to £17 million or four percent of global turnover, in cases of the most serious data breaches.

“It will give people more control over their data, require more consent for its use, and prepare Britain for Brexit” said government Digital minister Matt Hancock.

Replacing the Data Protection Act, the main aim of the bill is to ensure that the UK’s laws are compliant with the EU’s General Data Protection Regulation (GDPR), to be introduced next year, and ensure that data can continue to flow freely between the UK and other EU countries.

Under the proposed Data Protection Bill, companies will have to set out clearly and without a fee what information they hold, how they intend to use it as well as gain a clear and unambiguous indication of consent from the customer for the use of their data. The bill also expands the definition of personal data to include IP addresses, internet cookies, and DNA.

According to the Department for Digital, Culture, Media and Sport, research has shown that “more than 80 per cent of people feel that they do not have complete control over their data online.”

With the introduction of the Data Protection Bill, the government is moving to address the current reality of storing customer data in the age of mass data collection, smartphones and social media.

This is likely to continue the focus and investment on the privacy and security of customer data from financial services and law firms for the foreseeable future.

2) Movers & Shakers

APPOINTMENTS

Pharmaceutical giant Teva appoints new Europe general counsel

Deputy GC Bibianne Bon replaces longstanding GC Galit Gonen

PA Group appoints new general counsel after Guardian exit

Louise Irwin joins the Press Association as its new counsel and company secretary

MOVES

Exits in North England for PwC Legal

PwC’s head of legal for the regions Neal Shepherd has left the firm less than three years after joining from Addleshaw Goddard.

Addleshaws exits to EY continue in Manchester

Real estate partner Colette Withey joins EY’s Manchester legal team

Hill Dickinson in talks to transfer £23m 16-partner insurance business to Keoghs

Partner vote imminent on the move to allow the firm to focus on areas of future strategic growth

Linklaters bolsters US disputes practice with hire of WilmerHale white collar partner

Ex-SEC counsel Doug Davison to join the Washington DC office of Linklaters

OFFICE OPENINGS & CLOSINGS

Pinsents takes four-partner Norton Rose team for Perth launch

Kennedys expansion continues as firm recruits four-strong team for Melbourne launch

Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.

Tweet us @Fides_Search to let us know your thoughts.

This week:

1. Ashurst sees five partner departures in NY amid office restructuring

Ashurst aims to shift the focus of its US structured finance practice as the remaining five CLO partners prepare to move to Chapman and Cutler.

Five finance partners specialising in collateralised loan obligations (CLOs), who initially joined as part of a ten partner team hire from McKee Nelson, are the last of the team to depart the firm’s New York office, highlighting a shift in focus for its US structured finance practice.

Partners Pat Quill, David Nirenberg, Steve Kopp, Doug Bird and Tom Glushko have already left the firm, confirming that Ashurst is scaling back its CLOs offering. The firm’s global head of finance Helen Burton has argued there is “a lack of alignment with the wider global finance business”, particularly given that the firm no longer has a global CLO practice group.

The balance of the firm’s finance practice first began to shift away from CLOs when securitisation heavyweight David Quirolo left the firm’s London office to join Cadwalader, Wickersham & Taft in September 2014.

These departures mark the last of the McKee Nelson team to exit Ashurst. US head of securities Scott Faga and former US managing partner Eugene Ferrer both left for Paul Hastings in 2015, whilst Alice Yurke and Richard Davis joined Jones Day and DLA Piper respectively, and Michael Voldstad retired from the partnership earlier this year.

The restructuring has left Ashurst with three banking and finance partners in New York, strongly focused on banking, energy and infrastructure. As the firm looks to replenish it New York capability, it is expected that upcoming hires will likely be made in the projects and banking space, stepping away from the structured finance work that the firm’s New York practice was previously known for.

As Ashurst begins to make a comeback from the flurry of departures it faced last year, it seems to a fitting time for the firm to reassess its strategic hiring priorities. They have already begun rebuilding the European finance practice, most recently hiring Linklaters leveraged finance senior associate Pierre Roux as a partner in its Paris office in May this year, and appointing banking partner Mario Lisanti to head up the Milan finance practice from Norton Rose Fulbright.

2. Proposals to extend Senior Managers Regime released 

The Senior Manager’s Regime (SMCR) is to be extended to 47,000 firms including dentists, gyms and tool hire companies that offer credit to customers, according to FCA proposals released this week.

The Financial Conduct Authority also estimated that the expansion will cost firms £550m, with up to £190m of ongoing costs for the firms involved. It will apply to all solo-regulated firms and replace the current Approved Persons Regime.

Proportionating the level of requirements to the size of the firm, under the proposals companies have been categorised as limited, core or enhanced in scope. Those identified as limited are expected to face the highest set up and ongoing costs, whilst there will be additional requirements that apply only to the ‘enhanced’ regime (less than 1% of institutions). These include additional Senior Management Functions, additional Prescribed Responsibilities, a Responsibilities Map, Handover Procedures and the requirement that there be a Senior Manager responsible for every area of the firm (Overall Responsibility).

As a result, the FCA have warned that some cost increases on firms will pass through to consumers in the form of higher prices, while senior managers “may demand bigger pay deals”. However, the watchdog believes as a result of the changes, the quality of products and services offered should increase, with the extension of the SMCR being essential to drive culture change forward within the sector.

Entering into force in March 2016, and covering 900 banks and building societies, the SMCR ensures greater accountability for individual actions by more clearly defining the roles and responsibilities of those in senior functions. While it currently applies just to lenders and insurers, the extended rules are expected to come into force by 2018.

The Treasury called for the broadening of the new regime two years ago when it also dropped a plan to “reverse the burden of proof” for managers, which would assume the senior manager in charge was guilty unless proven otherwise if misconduct was discovered.

Part of the changes would also see the scrapping of the FCA register. Whilst senior managers will still be listed, most approved persons will become significant harm functions and will not need to be pre-approved by the FCA or be on the register. It is also a cause for concern as there will be no publically available list of advisers for consumers to review.

The consultation period now runs until 3^rd November for the industry to comment on the proposals released on the FCA’s website. With the FCA likely to pay particularly close attention to areas like training in the conduct rules, risk management and individuals whose jobs impact customers directly, it is clear that many of the expanded firms will need to prepare for some critical milestones and get ready for a step-change in their internal policies and procedures.

Movers & Shakers of the week 

Appointments

Freshfields managing partner Chris Pugh steps down before the end of his term

Moves

London head of regulatory departs Quinn Emanuel after months of joining

Quinn Emanuel Urquhart & Sullivan London financial services and regulatory partner David Berman will be joining Latham & Watkins in August this year, just months after resigning from Macfarlanes to join the firm

Former general counsel for HK regulator joins O’Melveny

Competition expert Philip Monaghan has left his position as general counsel for the Hong Kong Competition Commission to become a partner in the HK office of O’Melveny & Myers.

HSF arbitration partner exits New York office

Arbitration partner Laurence Shore leaves Herbert Smith Freehills in New York to relocate to Italy, joining Italian firm BonelliErede in Milan.

Freshfields bolsters international IP offering

Menachem Kaplan has joined Freshfields Bruckhaus Deringer in the US as its new head of IP for the region. He joins from Paul, Weiss, Rifkind, Wharton & Garrison where he was counsel.

KWM make first European lateral partner hire since UK office shut down

King & Wood Mallseons have hired corporate partner Hui Zhao into the firms Frankfurt office from German-based Noerr.

Owners of Snapchat looks for its next GC

Social media company Snap needs to appoint a new general counsel as head of legal Chris Handman steps down

Linklaters hire PE veteran in Germany

Christopher Kellett has joined Linklaters’ private equity practice in Frankfurt after having retired from Clifford Chance a few months ago

Ashurst loses a team of structured finance partners following US restructuring

Five NY-based finance partners depart Ashurst as the firm drops its collateralised loan obligation (CLO) offering. Pat Quill, David Nirenberg, Steve Kopp, Doug Bird and Tom Glushko will all join Chapman and Cutler

Partner promotions

Two non-lawyers have been promoted to senior non-equity partners at Mischon de Reya

Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.

Tweet us @Fides_Search to let us know your thoughts.

This week:

Latest forex fine goes to BNP Paribas

BNP Paribas has been fined a further $246m this week by the US central bank that relates back to the manipulation of foreign exchange rates that took place between 2007 and 2013.

The Federal Reserve announced the penalty on Monday this week, arguing that the bank executed “unsafe and unsound practices in the foreign exchange markets”. This takes the total amount of fines they’ve delivered for forex manipulation to over $2bn, with the potential of more to come as a number of the central banks cases remain ongoing.

The bank also agreed to pay $350m to the New York Department of Financial Services in May to settle allegations of currency rigging.

The misconduct was carried out by numerous institutions, where traders from multiple global banks used electronic chat rooms to discuss and rig currency rates.

BNP Paribas is just the latest firm to be penalised for this scandal. Bank of America has also received a fine by the Federal Reserve and in May 2015, Barclays, RBS, Citi, JP Morgan and UBS were fined $5.7bn by the Department of Justice in New York. Barclays, RBS, Citigroup and JP Morgan all plead guilty, whilst UBS was granted immunity for being the first to report the rate rigging.

Meanwhile, three former London-based traders appeared in New York federal court on Monday to plead not guilty to charges connected with the manipulation of the foreign exchange market. Chris Ashton was Barclays’ global head of spot currency trading, Rohan Ramchandani was Citigroup’s head of G-10 spot currency trading, and Richard Usher was the chief currency spot trader for JP Morgan. All three face charges which could involve 10 years imprisonment and $1 million fine.

Investigations into rate rigging are still being run by US regulators, whereas the Serious Fraud Office closed its criminal investigation into allegations of price-rigging in March last year.

SRA hands out record-breaking fine  

This week saw the Solicitors Disciplinary Tribunal (SDT) hand down the largest-ever sanction imposed against a law firm, as it fined White & Case £250,000 for failures to identify conflicts of interest and protect confidential client information.

The case in question relates to a $2bn Ukrainian commercial dispute, where the firm represented Ukrainian oligarch Victor Pinchuck in suing Ukrainian tycoons Igor Kolomoisky and Gennadiy Bogolyubov.

In January 2014, Mr Justice Field barred the firm from acting on the case after the failure to identify the conflict of interest was uncovered.

Three years on, the SDT found that the firm had allowed instructions to be accepted to undertake further work for clients without taking adequate steps to ensure that no conflict of interest existed or ensure the confidentiality of information provided to the firm by clients was protected, in such breaching the SRA code of conduct and principals.

It also fined lead partner David Goldberg £50,000 for his role in the case, and providing confidential information concerning the work undertaken to another partner in the firm involved in acting on a conflicting matter.

The SDT, however, did not allege that the firm or Goldberg had acted dishonestly, and did not pursue allegations of lack of integrity against either him or the firm.

White & Case, who assisted the SDT in this matter, agreed that it acted ‘recklessly’ regarding checks for client conflicts and ensuring the confidentiality of client information.

Prior to this, the SRA’s previous highest sanction of a law firm was against Clyde & Co. in March, when the SDT fined the firm and three of its partners £80,000 for breaching accounting and anti-money laundering rules

Movers & Shakers of the Week

Appointments

BLM names new managing partner after surprise exit of former chief

Vivienne Williams succeeds Gary Allison who departs eight months into a three-year term as head of the firm.

Partner Moves

Former Clifford Chance German private equity chief set for Linklaters move

Christopher Kellett is set to join magic circle rival Linklaters after 20 years at CC

Gibson Dunn hires fifth European Ashurst partner since June

German finance partner Sebastian Schoon joins the Munich office of Gibson Dunn.

Clyde & Co boost IP practice with five-strong team in China

Elliot Papageorgiou joins the Shanghai office of Clyde & Co from IP specialist firm Rouse, and is to be joined by four other Chinese-licensed lawyers.

Enyo Law founder leaves for new role at litigation activist group

Michael Green has left Enyo Law to join RGL Management Limited, an entity comprised of lawyers who are pursuing RBS on behalf of shareholders suing the bank over its role in the financial crisis.

Freshfields competition litigation head leaves for pupillage

Jon Lawrence is departing the Magic Circle firm to take up a pupillage at Brick Court Chambers

Office Openings & Closings 

Lawyers on Demand set to enter the Middle East

PwC launches Indonesian legal practice as Jakarta firm joins network

Linklaters launches low cost legal centre in Italy

Mergers & Alliances 

DLA Piper acquires Los Angeles boutique firm Liner, boosting its capability by 60 lawyers

This week we feature a blog by guest commentator Richard Martin, head of mental health awareness training at Byrne Dean. Following a 20 year employment law career, Richard discusses the mental health risks associated with the sector, and how this can be better understood and addressed by individuals and firms.

Please share to further the conversation and tweet us @Fides_Search to let us know your thoughts.

We hope that you enjoy!

Lawyers and Mental Health Problems – are too many heads in the sand?

The increasing attention given to mental health and illness over recent years means we are getting familiar with the statistics around mental illness – 1 in 6 of the adult population at any one time likely to be suffering from a diagnosable mental disorder, 1 in 4 during the course of a year.  They are rightly sobering figures.  But they are for the population at large.  What about lawyers?

Unfortunately we do not have UK specific data.  Research from the US and Australia would indicate that lawyers in those countries suffer problems associated with anxiety, depression and substance abuse at rates much higher than the general population.  There seems no reason to believe that the situation in the UK would be any different.  We really ought to be finding out, and at a time when the biggest law firms are announcing another round of increased PEP figures, there would appear to be the resource there to do it, but is there the will?

Mental illness must surely be the biggest health and safety risk facing law firms.  Anecdotally we know the problem is significant.  Why are we shying away from finding out the scale, what is causing it and how best to address it?  Other industries identify their major safety risks, investigate them, and work to eliminate them.  Why not lawyers?  Risk is, after all, our currency.  Hopefully the reason the work has not been done to date is not about wanting the problem to remain hidden.

There are a number of reasons why lawyers might be at an increased risk of problems.  Some are specific to the profession and some are not.  Some obvious causes for stress include:

• The constant demand for excellence and perfection – perfectionism is a diagnosable condition and yet is almost a pre-requisite for a legal career;
• The knowledge that clients are depending upon you – it is the nature of professional life to have that responsibility for the affairs of other people and is plainly not unique to lawyers but it certainly increases the level of stress and anxiety;
• The ever-shortening timescales within which to provide advice – how those expectations have changed, along with the daily life of a lawyer, since many have entered the profession is extraordinary. How easy is it to reconcile the expectation of providing considered and wise advice, with the need to do so concisely and immediately?;
• The expectation that one puts one’s client first;
• The ever-increasing chargeable hours targets.

There are possibly other factors at play which demand more research and attention.  Professor Martin Seligman of the University of Pennsylvania is a world guru on positive psychology – not trying to make us all superficially happy, but promoting positive mental health as opposed to simply focusing on illness.  His team researched the correlation between optimism and success in one’s career.  Apparently optimism goes hand in hand with success in most professions around the world, apart from lawyers, where a negative outlook on the world is more likely to be an indicator of success.  That does not have to lead to mental illness but would certainly be a risk factor for depression.  And of course it makes sense when you consider that so much of what a lawyer does is looking at risk, at what can go wrong.

There is also a growing awareness of the dangers of emotional burnout or compassion fatigue.  It is a phenomenon more readily associated with health professionals than lawyers.  It is most easily understood in two ways.

We are familiar with the risk of post traumatic stress disorder when we have experienced a personal trauma of some kind.  The same risk can exist when we are exposed to the trauma of other people – their injuries or disease in the case of medics but you do not have to think hard to realise the harrowing cases many lawyers deal with on a regular, daily basis, whether in abuse, crime, relationship breakdown, personal injury and much more.  Problems can develop from just one such instance.

The other common form is where the constant exposure to people’s problems and the professional responsibility for seeking to resolve them, eventually becomes overwhelming, resulting in a form of burnout.  Every issue that every lawyer deals with will have significant emotional importance for the client.  For that client it is a one off event.  Lawyers are dealing with them all the time.

These are just some suggestions as to why lawyers may be at greater risk of mental health problems.  It seems obvious that there are risks.  We might find that in fact the prevalence of illness is no greater than the general public in which case perhaps we are finding ways to address those risks.  But surely we owe it to ourselves, as well as those we employ and encourage in to the profession, to establish whether there is a major problem, what might be causing it and how we can learn what helps reduce the risk, so we can make the profession as safe as possible.

Richard Martin is an advisor at workplace training and consultancy firm Byrne Dean.

Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.

Tweet us @Fides_Search to let us know your thoughts.

This week:

1. London makes a play to attract colossal Aramco listing

With the biggest ever IPO in history preparing to float, the Financial Conduct Authority (FCA) looks to amend regulations for stock market listings in an attempt to lure Saudi Aramco’s listing to London.

On Thursday, the FCA released its proposal to introduce a separate listing category for companies controlled by sovereign countries, which lowers certain requirements necessary to float on the London Stock Exchange (LSE) compared to other premium listings.

Currently, in order to qualify as a premium listing, companies must float a minimum of 25% of its shares on the exchange, and has to gain prior approval from independent shareholders for transactions between the state and the company, i.e. the purchase of other state owned assets, in Aramco’s case. Under the new proposed rules, sovereign-owned companies would forgo these requirements.

FCA chief exec Andrew Bailey has commented that: “Refining the listing regime in this way would make UK markets more accessible whilst ensuring that the protections afforded by our premium listing regime are focused and proportionate.

“Sovereign owners are different from private sector individuals or companies – both in their motivations and in their nature.”

Looser regulation will no doubt make the LSE more attractive for Aramco, but some experts argue that the new rules may cause damage to investor protection.

The changes would reverse some of the advancements made in 2013 on corporate governance and the protection of minority shareholders, where regulations were put in place after various LSE listed, overseas-headquartered companies were engaging in unethical practice. These problems caused investors to lose respect for the exchange as they argued there was an over-liberalisation of the listing regime, with the London Stock Exchange and Financial Services Authority concentrating too heavily on attracting major foreign investors which brought in lower quality companies.

Despite this, the proposed new listing regime offer major benefits for London as it would not only help entice Saudi Aramco to float, but also extend these benefits to other state-controlled companies looking to list, which particularly concerns various Gulf countries who have been considering a flotation for their respective state-owned oil assets.

Saudi Aramco’s IPO is expected to take place in late 2018/early 2019 is valued at approximately $2 trillion.

2. Financials round-up: Analysis of law firm earnings for 2016-17

With the financial results season well underway, we take a look at the results posted so far as law firms reveal their headline figures for 2016-17.

The first round of results to reveal the true extent of last June’s Brexit vote, and slow down of transactional activity, it will be interesting to see the extent to which this has been offset by post-Brexit currency fluctuations.

Allen & Overy emerged as one of the strongest performers in this year’s round of results, posting double-digit growth across all metrics with revenue and profit per equity partner figures (PEP) rising to record levels. Revenue rose to £1.52bn, whilst PEP reached £1.51m, a 26% increase on last year’s results.

Managing partner Andrew Ballheimer cited multijurisdictional work behind the firms growth, with 74% of total revenue derived from matters involving two or more countries, with A&O’s alternative delivery models (Peerpoint, aosphere and MarginMatrix) having their strongest performing year yet.

Not to be outdone, Clifford Chance also posted record-breaking financial results, with turnover climbing 11% to £1.54bn and PEP increasing 12% to £1.38m against a consistent equity partner count.

Buoyed by strong performances in London and Asia, the UK brought in £507m in turnover, an increase of 4%, which equated to 33% of total revenue. Local currency gains in Asia also translated to 18% of total sterling revenue. Despite this turnover in the US remained flat, whilst the firm made losses in Europe and the Middle East.

Linklaters on the other hand made more modest gains, posting a 7.8% hike in PEP alongside a revenue rise of almost 10% to £1.44bn.

Of the Magic Circle, Freshfields posted the most disappointing set of results with a flat turnover and shrinking net profit for 2016-17. The firm posted revenue of £1.33bn, a marginal increase of just 0.3% on last year, while net profit fell by just under 1% to £612m.

Outside of the Magic Circle firms experienced mixed results, with Herbert Smith Freehills, Eversheds Sutherland, Travers Smith and Berwin Leighton Paisner all posting revenue increases in the face of falling PEP.

Pinsent Masons performed well reporting double digit PEP and revenue growth, with Macfarlanes, Ashurst and Simmons & Simmons all rebounding after a challenging 2015-16.

Meanwhile, litigation boutique Stewarts Law entered the UK top 50 for the first time, posting a 25% increase in revenue and 30% jump in PEP.

Firms most heavily impacted by political conditions include RPC and CMS, who experienced a dip in net profit and revenue respectively.

Movers & Shakers of the week 

Panel Watch

Santander’s UK legal roster to include Slaughters and Ashurst after Spanish banking giant increases its host of firms
The Spanish banking giant has increased its legal roster which now includes Ashurst and Slaughter and May.

Appointments

Three new board members for Ashurst after having a mixed year
After a mixed year of increased revenue but the loss of three partners, Ashurst has decided to promote three new board members to stabilise the firm.

Daily Mail’s GC has stepped down
Claire Chapman, the Daily Mail’s general counsel and company secretary has left the company after almost five years.

Leung retires after 26 long years at Slaughter and May
Slaughter and May partner Miranda Leung, has decided to retire from the firm for personal reasons after 26 years.

Moves

Baker McKenzie’s London office to be headed by former Linklaters global COO
Baker McKenzie will be introducing a new COO, Simon Thompson who formally worked as Linklaters global COO, as of August.

GC Cordon exits for new role in venture capital
General counsel Christine Cordon has decided to leave her role at Secret Escapes to try her abilities as the new head of legal at venture capital business Arts Alliance Ventures.

Mishcon boosts fledgling cyber security consultancy service
Mike Owen from PwC has joined Mishcon de Reya as it expands their cyber security consultancy service.

Scott Southgate has taken up a new role at the Hampshire Trust Bank after leaving his job as Former Investec private bank general counsel.
After nine years at the bank, Scott Southgate has decided to make a move to the Hampshire Trust Bank.

Cooley hires team from Wilson Sonsini to boost their American Offices
Cooley hopes to boost offices in New York and Washington after hiring team from Wilson Sonsini.

Office Openings & Closings

Matheson decides to open a third office in the US but this time in San Francisco
Irish firm Matheson has decided to expand its international footprint, after launching a third US office but this time in San Francisco.

Peters & Peters lawyers leave to start up their own business crime firm
Former Peters & Peters lawyers Anand Doobay and Christina Russell have opened a business crime firm to be called Boutique Law.

Welcome back to the Fides Weekly Update. Take a look at some of the key news stories of the week for legal and compliance and don’t forget to scroll down to see the Movers & Shakers of the week!

This week:

1. Lloyds overhauls senior management ahead of new strategy launch 

Some shock departures and appointments were made this week as Lloyds boss Antonio Horta-Osorio announced a management shake-up, preparing the bank for its new slim line strategic plan for 2018 to 2020.

Amongst a number of changes, Lloyds risk officer Juan Colombas will be taking on the new role as COO for the bank, whilst Simon Davies, who only joined two years ago to become chief people, legal and strategy officer, is set to depart, with finance chief George Culmer taking over responsibility for the legal and strategy departments.

With the key objective of privatisation completed, and a new senior management in place, investors and experts are expecting Horta-Osorio to step down as chief and take on a new challenge. Market speculation suggests that he is likely to replace Stuart Gulliver as head of HSBC, who announced his departure will take place next year, but the Lloyds boss has remained adamant of his plans to stick with the bank, and has demonstrated his commitment by purchasing £36,000 of Lloyds shares.

The management changes seem to have been received well within the ranks at Lloyds, and employees and investors alike are backing the overhaul of the lender. Shares remained stable after the news was released, with a steady increase of 0.19%.

The above changes will come into effect in September this year.

2. Hogan Lovells diversifies its offering as competition continues to rise

Global firm Hogan Lovells has hired a former PwC director to launch a new financial services regulatory consulting practice, aimed to assist the firm’s financial institutions clients on a host of regulatory issues, including any upcoming Brexit-related challenges.

Steve Murphy previously led PwC’s regulatory consulting practice since 2008, and has obtained 25 years of experience in the field. He will take the lead at new business Hogan Lovell Financial Services Regulatory Consulting, which will be advising asset managers, banks, building societies, wealth management firms, payment services providers and insurance companies.

Financial services partner Emily Reid has claimed that Brexit will likely bring about “significant upheaval and change for the sector” and the aim of this business will be to help Hogan Lovells’ clients “successfully navigate the challenges ahead”.

This enterprise marks a recent trend in the legal sector in which law firms have been diversifying their offerings and servicing their clients outside of pure legal work. With significant levels of competition entering from all corners of the market, firms are both consolidating and diversifying to remain successful.

Similar to Hogan Lovells’ new venture, Eversheds Sutherland also runs a consulting arm made up of lawyers and non-lawyers. The key components include advisory services, interim resources (through Eversheds Sutherland Agile) and managed services (through Eversheds Sutherland Ignite). Additionally, Addleshaw Goddard and RPC now offer consultancy services that extend beyond core legal advice.

Pinsent Masons has also recently sought to diversify its talents. This year the firm acquired Brook Graham, a diversity consultancy that boasts an expansive client base and international network, as well as New Law start-up Yuzu, which offers an innovative take on legal outsourcing. Meanwhile, Slaughter and May have also taken advantage of the new technology initiatives in the legal market as they acquired a 5% stake in AI provider Luminance.

Movers & Shakers of the week 

Panel Watch

The Co-op Group begins first panel review after seven years, whilst A&O remain its primary legal adviser

Moves

Heathrow hires a head of legal for its third runway

Senior associate Anita Kasseean will leave Stephenson Harwood to accept the new role of head of legal at Heathrow Airport Holdings for planning its third runway

NRF sees Middle East departure swiftly after Chadbourne merger goes live

TMT partner Dino Wilkinson has joined Clyde & Co in Abu Dhabi from Norton Rose Fulbright

Simmons hires US capital markets veteran

Simmons & Simmons has expanded its corporate team with the hire of US capital markets partner Chris Walton from Clifford Chance in London

WFW adds two partners to its London ranks

Asset finance partner Louise Mor and energy specialist Colin Graham both join Watson Farley & Williams from White & Case and Orrick Herrington & Sutcliffe respectively.

Withers makes a 12-strong corporate play in Hong Kong

Withers has hired three corporate partners, along with four associate, three paralegals and two support staff from Winston & Strawn in Asia. The team is headed by former Winston & Strawn Asia corporate head Mabel Lui, with the other two corporate partners Polly Chu and Daniel Tang.

Lloyds’ chief people, legal and strategy officer departs

Simon Davies steps down from his role as chief people, legal and strategy officer at Lloyds Banking Group only two years after his shock departure at Linklaters and appointment with the bank

Office Openings & Closings

Charles Russell Speechlys open in Hong Kong with double partner hire

Jonathan Mok and Richard Grasby exit Mayer Brown JSM in Hong Kong to launch Charles Russell Speechlys’ first office in Hong Kong, to be headed up by Mok

Former Fieldfisher team opens corporate boutique in Manchester

Ex-senior Fieldfisher corporate partners Matt Fleetwood and Jim Truscott, along with several other Fieldfisher Manchester lawyers are set to launch Beyond Professional Services Group, a corporate boutique. They have also acquired Atticus Legal, a fellow Manchester corporate boutique led by Kevin Philbin

Fieldfisher sets up fifth Italian office

Fieldfisher has hired a team of 18 fee earners from boutique Lucchini Gattamorta & Associates (LGA) to launch an office in Bologna. It will be led by LGA founder and corporate partner Gianvincenzo Lucchini

After DLA employees lost access to computer and phone systems in a ransomware attack that affected organisations worldwide, we’ve spoken with cybersecurity experts to take an in-depth look into what this means for the global law firm and how it will affect the sector as a whole.

The latest ransomware outbreak, labelled Petya, comes only a month after the high-profile WannaCry attack let loose on the NHS. Originating in Ukraine, the virus attacked the country’s state power company and Kiev’s main airport, spreading out to numerous multinational companies across the globe, with some of the biggest names including Cadbury owners Mondelez, advertising giant WPP and pharmaceutical company Merck.

As one of the ransomware’s victims, DLA Piper are under serious scrutiny within the legal industry, particularly given that the firm recently published a nine-step cybersecurity guide following the WannaCry attack last month. Managing director at Crossword Cybersecurity Stuart Jubb has told us that: “In the longer term, this could really implicate the firm’s brand. Questions will asked on how secure their networks are and clients will reconsider whether they want their confidential data stored with their law firm advisers.” To make matters worse, DLA is also the first law firm to have made public a ransomware virus within its systems. However, speaking with an FBI Agent, Bloomberg’s Big Law Business discovered that DLA isn’t the only law firm to suffer a ransomware attack, and that “other law firms have avoided such publicity from such attacks by paying a ransom to hackers.”

This isn’t the first major cyber scandal to surface in the legal sector – Panamanian law firm Mossack Fonseca experienced a massive data breach that led to the Panama Papers scandal and a subsequent investigation into the firm. The type of attack however differed to Petya, and as it was likely carried out by insider with knowledge of its systems, this didn’t offer enough concern for firms to revaluate their strategy for data security. “This week’s attack will certainly have more of an impact to law firm attitudes than the Panama Papers did,” says Jubb. “And the more of these incidents that take place can only help firms take notice and realise that changes need to be made.”

This attack brings to a light a major issue that almost all global law firms face today. Peter Wright, the founder and managing director of DigitalLawUK, describes how office mergers and acquisitions have put firms at risk: “DLA were at risk because they operate under an awful lot of legacy systems, and contrasting infrastructure.” These legacy systems exist because firms are rapidly absorbing new offices, without effectively integrating their IT. “Problems arise because individual parts of the network are more vulnerable than others. You could find a whole city’s offices operating in an entirely different way to another”.

“It’s easier for a law firm to grow through acquisition rather than organically. And this issue isn’t just faced by law firms, Mondelez was also attacked, most likely because they also operate under a patchwork of different systems” Wright explains.

So what are the next steps?

It seems in order to remain protected firms must change their attitude towards security measures. Wright states: “You can’t just throw money at it. Firms change and evolve constantly so it needs be an ongoing effort and strategy rather than a quick fix.”

“There needs to be a shift in internal culture and mindset towards cybersecurity,” says Jubb. “And this can only come from the top down. It’s something that needs to feature on a board’s agenda.”

As cyber attacks continue to target and infiltrate global organisations, law firms must place more importance on their cybersecurity measures. An industry that relies so heavily on confidentiality and data, firms need to ensure that not only are senior management up to speed with the threats they face, but that there is a firm-wide understanding of these risks.

Crossword Cybersecurity is a technology commercialisation company focusing exclusively on the cyber security sector.

DigitalLawUK is a UK Law firm specialising in online, data and cyber law.

Hello and welcome to the Fides Weekly Update, your guide to this week’s key trends, moves and developments in legal and compliance.

This week features a special report on the cyber attack effecting law firm DLA Piper, and a look into the key findings and recommendations of the FCA’s Asset Management Market Study.

Don’t forget to follow us on Linkedin and Twitter for regular market updates

Enjoy!

1. Expert Insight: The answers behind DLA’s cyber attack

After DLA employees lost access to computer and phone systems in a ransomware attack that affected organisations worldwide, we’ve spoken with cybersecurity experts to take an in-depth look into what this means for the global law firm and how it will affect the sector as a whole.

The latest ransomware outbreak, labelled Petya, comes only a month after the high-profile WannaCry attack let loose on the NHS. Originating in Ukraine, the virus attacked the country’s state power company and Kiev’s main airport, spreading out to numerous multinational companies across the globe, with some of the biggest names including Cadbury owners Mondelez, advertising giant WPP and pharmaceutical company Merck.

As one of the ransomware’s victims, DLA Piper are under serious scrutiny within the legal industry, particularly given that the firm recently published a nine-step cybersecurity guide following the WannaCry attack last month. Managing director at Crossword Cybersecurity Stuart Jubb has told us that: “In the longer term, this could really implicate the firm’s brand. Questions will asked on how secure their networks are and clients will reconsider whether they want their confidential data stored with their law firm advisers.” To make matters worse, DLA is also the first law firm to have made public a ransomware virus within its systems. However, speaking with an FBI Agent, Bloomberg’s Big Law Business discovered that DLA isn’t the only law firm to suffer a ransomware attack, and that “other law firms have avoided such publicity from such attacks by paying a ransom to hackers.”

This isn’t the first major cyber scandal to surface in the legal sector – Panamanian law firm Mossack Fonseca experienced a massive data breach that led to the Panama Papers scandal and a subsequent investigation into the firm. The type of attack however differed to Petya, and as it was likely carried out by insider with knowledge of its systems, this didn’t offer enough concern for firms to revaluate their strategy for data security. “This week’s attack will certainly have more of an impact to law firm attitudes than the Panama Papers did,” says Jubb. “And the more of these incidents that take place can only help firms take notice and realise that changes need to be made.”

This attack brings to a light a major issue that almost all global law firms face today. Peter Wright, the founder and managing director of DigitalLawUK, describes how office mergers and acquisitions have put firms at risk: “DLA were at risk because they operate under an awful lot of legacy systems, and contrasting infrastructure.” These legacy systems exist because firms are rapidly absorbing new offices, without effectively integrating their IT. “Problems arise because individual parts of the network are more vulnerable than others. You could find a whole city’s offices operating in an entirely different way to another”.

“It’s easier for a law firm to grow through acquisition rather than organically. And this issue isn’t just faced by law firms, Mondelez was also attacked, most likely because they also operate under a patchwork of different systems” Wright explains.

So what are the next steps?

It seems in order to remain protected firms must change their attitude towards security measures. Wright states: “You can’t just throw money at it. Firms change and evolve constantly so it needs be an ongoing effort and strategy rather than a quick fix.”

“There needs to be a shift in internal culture and mindset towards cybersecurity,” says Jubb. “And this can only come from the top down. It’s something that needs to feature on a board’s agenda.”

As cyber attacks continue to target and infiltrate global organisations, law firms must place more importance on their cybersecurity measures. An industry that relies so heavily on confidentiality and data, firms need to ensure that not only are senior management up to speed with the threats they face, but that there is a firm-wide understanding of these risks.

Crossword Cybersecurity is a technology commercialisation company focusing exclusively on the cyber security sector.

DigitalLawUK is a UK Law firm specialising in online, data and cyber law.

2. Findings of the FCA’s Asset Management Study Revealed

Greater transparency on costs, increased competition and greater scrutiny of further investment platforms were the main findings of the Financial Conduct Authority’s final report into the UK asset management sector, released on Wednesday.

The shake-up of the UK’s £7tn investment market was ordered by Britain’s financial regulator in an attempt to stamp out conflicts of interest and restore savers’ trust in the asset management industry, following a two-year investigation into competition issues in asset management.

The set of measures, many of which are yet to be finalised, would make the UK one of the toughest regimes in the world for asset managers to operate as London considers its post-Brexit future

The introduction of an ‘all-in’ fee for retail investors was one of the more controversial reform ideas recommended by the report. This would allow investors to make the best available investment choices (and get best value for money) by including an estimation of trading costs in the final price given to them.

An ‘all-in’ price also addresses concern over weak price competition in the sector, especially amongst active funds who do not necessarily compete on price and can carry hidden costs not always visible.

The FCA are also considering tightening rules around performance fees, which will ensure that portfolio managers are only entitled to additional fees if a fund exceeds its most ambitious performance target. The regulator is also considering penalties for funds that charge performance fees but underperform their benchmarks, better linking fees charged to a fund’s performance.

This sits alongside recommendations to improve governance standards across the sector, with asset management firms ordered to appoint two independent members to their boards. The FCA have also introduced the responsibility for asset managers to consider the value for money that they deliver to investors under the Senior Managers and Certification Regime – due to be applied to investment managers in 2018 – but have stopped short of making this a fiduciary duty.

However, despite concerns about the way the asset management sector operates, the FCA has stopped short of referring the industry to the Competition and Markets Authority, which has the power to enforce business change even without a technical breach of competition law. This has led many commentators to brand the report as ‘too soft’.

Despite this, the regulator is also considering whether any new rules should apply to private equity firms or hedge funds as a result of its investigation. The watchdog has also requested that the government allows it to regulate the powerful investment-consulting industry dominated by Aon Hewitt, Mercer and Willis Towers Watson. These consultants determine how the vast majority of UK pension schemes invest their money, and currently remain largely unregulated.

ICI Global, one of the leading trade bodies for the industry and main lobbying representative in the run up to the final report, responded with overall satisfaction to the final findings encouraging transparency and competition within the fund industry. However, they remain concerned with the analysis and tone of the final report around price clustering and the representation of active funds.

It is needless to say that the findings of the FCA’s asset management study come at a pivotal moment for the investment management industry. Britain quitting the EU has introduced fresh challenges for asset managers, including higher compliance costs, changes to how funds can be sold to non-UK investors and the future rights of foreign workers remaining in the country. At the same time, European countries have stepped up efforts to lure UK-based fund companies to relocate staff to the continent.

ESMA is focused on “Substance” and “Delegation” in a post Brexit European investment market, which will naturally draw fund managers with a large European client base away from the London market. So perhaps it is natural for the FCA to impose changes that will create a more competitive market place but not force Asset Managers to turn their backs on London as their main investment centre just yet.

It will be interesting to see the nature and scope of recommendations, whatever they may be, and the impact this has on the asset management industry through this period of change.

3. Movers & Shakers

Panel watch

SRA announces first ever spots on its new general advisory panel

Appointments

CC appoints German PE head

Co-head of corporate Anselm Raddatz will serve as the new head of private equity in Germany

Baker McKenzie selects new German and Austrian managing partner

Matthias Scholz has been elected the upcoming managing partner for Germany and Austria

Moves

W&C PE restructuring post-Youle departure

A total of six private equity lawyers are set to depart White & Case after co-head of private equity Richard Youle left the firm to Skadden Arps Slate Meagher & Flom.

PwC bolsters Singapore practice

Finance and restructuring partner Carl Dunton and technology partner Henry Goodwin have both joined PwC Legal in Singapore from Ashurst and Taylor Vinters, respectively.

HSF strengthens Middle East corporate offering

Corporate partner Haitham Hawashin exits Simmons & Simmons to join Herbert Smith Freehills in its Dubai office

Office openings & Closings

DLA further expands in Africa

DLA Piper has acquired Tunisian law firm El Ajjeri Laywers and Senegalese law firm GENI & KEBE, which brings its African coverage up to 19 countries.

Ropes & Gray spin-off firm prepares to launch in London

A 100-lawyer patent prosecution practice spun-out off Ropes & Gray in New York is set to launch in August and looks to open in London afterwards

Mergers & Alliances

Kennedy expands Manchester capability through acquisition

Kennedys has acquired Manchester-based Berg & Co, introducing 50 new members to its Manchester office

Partner Promotions

Baker McKenzie announces 85 partner promotions, with 40% female representation

Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.

Follow us on Linkedin and Twitter for regular market updates

This week:

1. SFO’s five year probe catches up with Barclays and it senior execs

Barclays is the first bank to face criminal charges in connection with steps taken during the 2008 financial crisis.

The Serious Fraud Office’s allegations, which are also directed at four former Barclays executives, concern funds raised from Qatari investors whilst the bank was attempting to stave off a government bailout.

In 2008, Barclays carried out two rounds of emergency fundraising in June and October, securing a total of £6.1bn of Qatari investment. The bank also made advisory services agreements (ASA) with Qatar in the same period, for which Barclays paid £322m for assistance in developing its services in the region. Following this, the bank gave out a loan to Qatar’s ministry of finance that amounted to $3bn just before the end of the second cash call.

Firstly, the SFO argues there was a lack of disclosure with some of the above exchanges, which led to charges on the conspiracy to commit fraud. In addition to this, the amount loaned back to Qatar seemed to match the total that the region initially invested into Barclays, which could indicate the bank was dealing in unlawful financial assistance.

The four executives involved in the allegations are: John Varley, former Barclays chief executive; Roger Jenkins, previously executive chairman of MENA investment banking and investment management; Thomas Kalaris, former head of the bank’s wealth and investment management arm, and Richard Boath, ex- European head of financial institutions group.

All four men have been charged with conspiracy to commit fraud by false representation relating to the first cash call in June 2008. Moreover, Varley and Jenkins face a further count involving the second capital raising in October 2008.

These charges are announced following a five year-long probe by the SFO, whilst the Financial Conduct Authority has also been investigating the improper disclosure of the ASAs with Qatar since 2013. Barclays is yet to announce its position in the case as it remains to be seen whether the SFO will also charge the bank’s subsidiary Barclays Bank Plc.

This comes at an interesting time after the conservative manifesto promised the abolition of the SFO and absorption into the National Crime Agency. With such a high profile case being brought by the agency, it can only add to the controversy of this consolidation, as it is labelled as “crazy” and a “backwards step”, and fears it could impede the fight against complex fraud, bribery and corruption.

Movers & Shakers of the week 

Panel Watch

Department for Transport releases two year roster, consisting of two tiers, for panel appointments

QBE reappoint eight firms to UK claims panel

Appointments

Irwin Mitchell seeks new GC following the announced retirement of Kevin Cunningham

Moves

Arsenal Football Club makes an addition to in-house legal team

Former Team Sky lawyer Huss Fahmy has joined Arsenal Football Club, who will specialise in player contracts

Fried Frank makes real estate play in the City

Fried Frank obtains first London real estate offering having hired partners Darren Rogers and Patrick Williams from Ashurst

Latham sees Paris partner departure

Taylor Wessing has hired partner François Mary from Latham & Watkins’ Paris office to join its French corporate practice

Clyde & Co strengthens shipping practice

Five-strong marine team is set to join Clyde & Co from Eversheds Sutherland. The team includes head of shipping Stephen Mackin and shipping litigation partner Jessica Maitra.

CC expands New York office with two senior appointments

Clifford Chance has hired New York corporate veterans Joseph Consentino and Alice Kane from Greenberg Traurig and Duane Morris respectively.

Pinsents boosts FS capability with Maclays practice head

David Young departs his role as head of financial services for Maclay, Murray & Spens to join Pinsent Masons in its Edinburgh and London offices.

Office Openings & Closings

DWF launches first office in Singapore with three partner team including former Eversheds Sutherland managing partner Oommen Matthew

Partner Promotions

Gateley promotes six to partnership

Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.

Follow us on LinkedIn and Twitter for regular market updates.

This week:

1. IBM delivers AI for regulatory compliance 

IBM’s Artificial Intelligence arm has extended its offering to begin servicing regulatory compliance teams in financial institutions.

IBM Watson launched three software solutions on Wednesday to help monitor regulations and assist with financial crime responsibilities. One tool will examine regulatory text to identify a company’s regulatory requirements, the second uses analytics to highlight any suspicious transactions or customers and one tool that harnesses ‘big data’, which can be used in making informed business decisions and managing business risk.

These solutions sit under the new financial services offering at IBM Watson, which was built after the tech company’s acquisition of Promontory Financial Group, a regulatory compliance advisory service.

Gene Ludwig, founder and chief executive officer of Promontory Financial Group, commented: “The speed and volume of information that financial institutions must manage is already daunting and yet still growing rapidly. The answer to this problem is cognitive technology taught by industry experts, like those at Promontory. Essentially, we’re embedding our deep regulatory experience into Watson so that a broader group of professionals can benefit from this knowledge and help their organizations operate more effectively and efficiently.”

Watson has seen success in industries such as healthcare and cybersecurity, and also offers a legal research tool, ROSS Intelligence, one of earlier products to be released in the legal AI market.

Cognitive computing, i.e. the ability for a computer to simulate human thought processes and perform self-learning, could be a serious disruptor to financial services, an industry which is particularly data intensive and fast-paced. Software such as Watson can streamline processes as well as minimise human error and time spent on tasks, whilst also reducing operational spending budgets for regulatory compliance.

As machine learning, data analytics and automation tools become widespread in the regulatory environment, regtech can be considered as a key growth area this year. And with the ever-expanding regulatory challenges faced by financial institutions, these solutions will likely become a vital component to an institutions regulatory framework.

2. Chadbourne-Norton Rose merger on hold 

The US merger between Norton Rose Fulbright and New York firm Chadbourne & Parke, due to be completed this quarter was put on hold this week due to a number of client conflicts. Revealed as part of an in-depth review process between the two firms, client conflicts were found in the project finance and energy groups, as well as between offices in the Middle East region.

If the firms are able to come together this would be NRF’s second transatlantic merger, adding to NRF’s $1.7bn annual revenue and taking the firm up to almost $2bn in total revenue worldwide.

However, a number of Chadbourne lawyers have opted against the merger, with Covington & Burling announcing the additional hire of 15 Chadbourne lawyers this week, including two London international partners, following the four-partner project finance team it recruited from the firm in April.

Meanwhile, on Tuesday partners at NRF and Australian law firm Henry Davis York formally agreed to merge, less than a week after it was confirmed they were in late-stage discussions. The merger will give the combined firm 160 partners in Australia with offices in Brisbane, Canberra, Melbourne, Perth and Sydney. It is expected the merger will go live later this year.

Movers & Shakers of the week 

Moves

Five-lawyer Private Equity team follows ex-co head Youle from White & Case to Skadden

Five London associates are leaving White & Case to join private equity partner Richard Youle at Skadden Arps Slate Meagher & Flom, after the announcement of his move last month.

Ashurst responds to Paris team exits with PwC tax hire

PwC tax specialist Emmanuelle Pontnau-Faure joins Ashurst in the French capital

Herbert Smith Freehills loses second energy co-head

HSF’s co-head of energy Anna Howell joins Gibson Dunn & Crutcher, marking the US firm’s first oil and gas hire in London.

Covington take an additional 15 lawyers from Chadbourne ahead of Norton Rose Fulbright merger

Covington & Burling has added a further team of 15 Chadbourne counsels and associates to the firm’s offices in London, Dubai and Johannesburg.

Office Openings & Closings

Pinsent Masons to launch a new base in Dublin with a trio of Partner hires

Pinsent’s becomes the first international law firm to launch in the Irish capital since last year’s Brexit vote, with partner hires from Walkers, Mathesons and Byrne Morris.

Hogan Lovells launches in Boston with local tie up

Hogan Lovells is set to combine with Boston-based litigation and investigations firm Collora to strengthen the firm’s life sciences offering in the US.

Mergers & Alliances

Norton Rose Fulbright votes through second merger this year with Australian firm Henry Davis York

German firm Luther calls off Addleshaws merger talks