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. HSBC faces fresh forex legal battle 

HSBC is facing a fresh legal battle over allegations that its traders manipulated foreign exchange markets for their own profit at the expense of their clients.

The claim comes from ECU Group, a UK-based currency investment firm, which has filed an application to London’s commercial court asking for HSBC to be required to hand over records relating to three large foreign exchange orders it executed in 2006.The firm’s three “stop-loss” trades — each worth over $100m — were designed to limit its downside by committing to sell one currency and to buy another if the exchange rate passed a pre-determined threshold. However, each time ECU placed an order, the rate quickly dropped after rising high enough for the trade to be executed.

Although the firm suspected it was being defrauded by HSBC traders “front running” its forex orders at the time, it was told that no wrongdoing had been found after a full internal inquiry had taken place.    

ECU are now contesting these findings after the US Department of Justice (DoJ) charged two of HSBC’s top forex traders with “front running” a client’s trade last year, the first people to face U.S. criminal charges arising from an investigation of foreign-exchange rigging at banks. This came after the bank hired US firm Cleary Gottlieb to carry out a review of its forex trades — including the deal the two traders were accused of cheating on — and found no breaches of its code of conduct.

As such, ECU are asking for HSBC’s interbank dealing tickets, deal log entries, any relevant Bloomberg instant messages for the trades as well as all documents relating to the internal inquiry carried out by the bank as part of a pre-action disclosure, which often precedes a full scale law suit. If the court finds evidence that there was concealment by HSBC it can waive the statute of limitations, which would normally prevent a legal action more than six years after an instance of wrongdoing.

This comes after regulators uncovered systematic rigging of the $5tn-a-day foreign exchange market by several global banks, which were fined $4.3bn three years ago. Although HSBC did not plead guilty to conspiring to manipulate currency prices, in 2014 it paid a $618m fine to US, UK and Swiss regulators to resolve related probes, and continues to be investigated by the DoJ.

2. Law firms taking steps to attract and retain star female lawyers

Law firms have been making a further push towards improving diversity & inclusion (D&I) in their organisations, as three firms have released innovative takes on how they plan to improve workplace culture.

Pinsent Masons this week announced its acquisition of diversity consultancy Brook Graham. The consultancy, although wholly owned by Pinsents, will continue to operate as its own brand, whilst bringing in managing partner John Cleland and senior partner Richard Foley as board members.

Brook Graham advises on the creation and implementation of D&I policies, working with all levels and stakeholders of an organisation to bring about culture change. The business has built an impressive client list, including Shell, HSBC and BAE Systems.

Foley has commented that this acquisition is “a chance to turbocharge our diversity offering”, whilst also presenting a further opportunity for Pinsents to extend their brand beyond traditional legal services. The firm recently purchased a 20% stake in New Law startup Yuzu, which offers an alternative business model to managed legal services.

Also in the news this week, it was reported that Travers Smith are considering allowing lawyers to take long-term career breaks after childbirth in an attempt to retain its female lawyers and improve equality and diversity amongst the firm. The proposal would allow lawyers time off during the early years of childcare and provide training and support during this time to keep their expertise relevant and up to date.

Travers are one firm to have recently been making headway in its aims to increase gender balance. The firm released an all-female promotions round this year, with four women joining the partnership. Although its partnership still remains at 20% female, senior partner Chris Hale comments: “We want to ensure that a higher proportion of our good women lawyers who join as trainees or associates stay with us for longer.” “The trend has been one of gradual improvement, and we think that trend will continue.”

Meanwhile, Cleary Gottlieb Steen & Hamilton is also making changes to its maternity leave provisions as part of a broader overhaul to its benefits package in London. The firm carried out an exercise, benchmarking its policies against law firms, banks and auditors, and have decided to increase maternity leave provisions to 30 weeks full pay from the previously given 20 weeks.

There are some interesting developments being made in this space, with numerous firms beginning to take advantage of the opportunities available for retaining and attracting some of the City’s top female talent. If you would like to learn more about gender equality in the legal sector or law firm D&I policies, please get in touch with Researcher Emily Clews at eclews@fidessearch.com or on +44 (0) 20 3642 1870.

Movers & Shakers of the week 

Panel Watch

Thames Water begins panel overhaul as its sole adviser BLP is up for review

SocGen starts global panel review, expected to be finalised by September

Appointments

New appointments made at Norton Rose amidst pre-merger management shake-up

Moves

Channel 4 appoints new GC

Amali de Silva joins Channel 4 as its head of legal and compliance from media litigation firm Wiggin, after long-standing GC Prash Naik left in April

Ropes & Gray loses two finance partners

Finance partners Mark Wesseldine and Fergus Wheeler have left the City office of Ropes & Gray to join King & Spalding

Lewis Silkin appoints COO

Graeme Wood has joined Lewis Silkin as its chief operating officer, having previously worked at CMS Cameron McKenna Nabarro Olswang as director of change

HSF alliance in Singapore adds to its office

Corporate partner Eugene Lee has departed Latham & Watkins to join Herbert Smith Freehills’ formal law alliance firm Prolegis in Singapore

Gibson Dunn makes play for four-partner Ashurst team in Paris

Dispute resolution partners Jean-Pierre Farges, Eric Bouffard and Pierre-Emmanuel Fender leave Ashurst to set up a litigation offering for Gibson Dunn & Crutcher in Paris. Also joining the move to Gibson Dunn Bertrand Delaunay, the former Ashurst managing partner

Litigation boutique hires fraud specialist

Stewarts Law has hired Dechert litigation partner David Hughes to its commercial litigation practice

Office Openings & Closings

Andersen Tax & Legal sets up third German office in Cologne

Six Osborne Clarke lawyers depart the firm and prepare to launch procurement boutique in Cologne

Mergers & Alliances

Pinsent Masons increases diversity offering through acquisition of diversity consultancy Brook Graham

Norton Rose Fulbright prepares to vote on merger with Australian firm Henry Davis York

Hello and welcome to the Fides Weekly Update.  Here we provide analysis on the key news stories in legal and compliance this week. Follow us on Twitter and LinkedIn for more insights!

1) Ireland restructures regulatory landscape

The Central Bank of Ireland Commission (CBI) has approved the restructuring of the bank’s financial-regulation structures to match the twin peaks regulatory model of the UK.

Announced on Tuesday, regulatory functions are to be split under the two headings of prudential regulation and financial conduct, to ensure the CBI is ‘suitably equipped’ to meet its expanding regulatory mandate.

Mirroring the move the Bank of England made in April 2013 to move to a ‘twin peaks’ model of regulation, the prudential regulation pillar will look after credit institutions, insurance and asset-management supervision, while the financial-conduct pillar will regulate consumer protection, securities and markets supervision, and enforcement.

This will also lead to a change in structure to the bank’s senior management team, with prudential regulation being led by a Deputy Governor and the Financial Conduct pillar being led by a newly-created role of Director General, who will also be responsible for the Bank’s representation at European Securities and Markets Authority (ESMA). Both role holders will report to the Governor and will be members of the Central Bank’s most senior management committee, with competition for these roles set to open next week.

Stricter regulation in the wake of the financial crisis, together with the growth of new types of financial business in Ireland, have led to sharp increases in the CBI’s regulation activity in recent years.

In April it told all banks operating in the country to review their reporting standards after an investigation found many breaches of rules. Earlier this month the central bank called for greater scrutiny of the exchange traded fund industry. Ireland is the largest European domicile for ETFs.

This, combined with a higher level of engagement with the European Central Bank through the SSM, and potential influx of new businesses interested in relocating from the UK after Brexit, has piled further pressure on the Central Bank.

This comes amid legitimate concerns that regulatory standards will drop as member states vie to win new business from the UK, with ESMA publishing guidance on Wednesday to prevent entities from setting up ‘letterbox entities’ in an EU country that in reality outsource or delegate significant business to London.

According to Bloomberg, Bank of America Corp., Standard Chartered Plc and Barclays Plc are amongst the biggest banks considering Dublin for their EU base to retain access to the single market.

2) IPO Watch 2017: Which firms come out on top?

Following the announcement this week that Linklaters, Allen & Overy and Herbert Smith Freehills will be advising on the upcoming Allied Irish Bank IPO, we’ve taken a look back to see which firms have gained the most from 2017’s UK initial public offerings (IPOs).

Globally, $34.6bn has been raised in IPOs so far this year, compared to $13.8bn over the same period last year. Q1 2017 in London however has been fairly stagnant, with the volume of listings increasing by only 6 per cent from this time last year. Although London has only seen a small share of the global total listing on its exchange (6.4%), the region has regained its leading position as the most active European exchange, outnumbering the likes of Deutsche Börse and Spanish exchange Bolsa de Madrid.

Here is a list of this year’s main market floats on the LSE as well as the law firms that acted on the deal:

It shows that deals are being won by a number of different firms, ranging from the UK’s top tier through to smaller UK outfits.

The largest IPO this year, Alpha Financial Software, was only one of two deals on which a US firm has been instructed. White & Case’s Jonathan Parry advised the financial software company whilst actuarial business Xafinity was advised by Reed Smith, led by corporate partner Philip Taylor in February this year.

Charles Russell Speechlys is one firm in particular to have taken advantage of market activity, securing instructions on three IPOs already this year. Having acted on the listing of property services company Dukemount Capital, the firm also advised the management teams instructed on the IPOs for Ten Entertainment Group and TOC Property Backed Lending Trust.

Although political uncertainty has yet again caused apprehension for new market entrants, and we aren’t experiencing the mass deluge of tech companies listing as they did last year, many have still indicated that there is a healthy pipeline of deals preparing to enter the UK IPO this summer. As companies such Uber, Airbnb and Lyft become the most anticipated IPOs of 2017, it is expected the IPO could pick up towards the latter part of this year.

3) Movers & Shakers

Moves

Herbert Smith Freehills strengthens corporate crime practice with boutique litigation hire

Corporate crime and investigations partner Brian Spiro makes the move from BCL Solicitors to HSF

Freshfields IP partner exits for WilmerHale

Freshfields Bruckhaus Deringer IP partner Justin Watts is set to leave the firm for WilmerHale, taking a senior associate along with him

Office Openings & Closings

Dentons takes seven-strong team to launch Myanmar office

Mergers & Alliances

Bond Dickinson combines with US alliance partner Womble Carlyle

Merger between HBJ Gately and Addleshaw Goddard goes live

Panel Watch

Insurance giant AIG names UK panel with Clifford Chance and Macfarlanes among winners

Hello and welcome to the Fides Weekly Update.  Here we provide analysis on the key news stories in legal and compliance this week. Follow us on Twitter and LinkedIn for more insights!

This week Consultant Max Alfano brings some of the main themes discussed in Tuesday’s London conference hosted by the Association of the Luxembourg Fund Industry, which focused the landscape of the Asset management industry in a European context.

From UK to Luxembourg: Asset management landscape in the wider European market  

This week we attended the Association of the Luxembourg Fund Industry (ALFI) London Conference. There were a number of topics raised that centred around Luxembourg and wider European market, as well as the regulatory and macro-economic challenges for asset managers at present and in the future.

There was a clear agenda for marketing and drawing investment to Luxemburg, which was highlighted by the Minister of Finance Pierre Gramegna’s initial address, drawing on the special relationship Luxembourg has with the UK and how they are in a prime position to maintain this in a post Brexit EU.

Luxembourg is clearly a desirable destination for the funds and asset management as funds have been domiciled predominately in the region (as well as in Ireland) and utilise passporting rules to ensure management of the funds remains in another larger European hub.

CSSF: A regulators view 

Jean-Marc Goy, counsel for international Affairs at the Commission de Surveillance du Secteur Financier (CSSF), spoke at length around “substance” requirements and perhaps more crucially provided some insight into how the CSSF approaches the question of substance.

He goes on to discuss their focus around Substance requiring a minimum of operations, IT, People, Oversight and Monitoring. There is no one size fits all model, they look on a case by case basis and are able to utilise an Onsite team to act as there market surveillance function.

Goy was interviewed by a compatriot Freddy Brausch (Partner and co-head of the investment management sector at Linklaters), where they discussed ESMA’s views on the UK in a post-Brexit environment, in regards to management of funds from a non-member states.

ESMA’s standpoint lies with a hard Brexit in terms of funds, which would mean significant collateral change for many funds and asset managers, whilst Luxembourg and Jean-Marc’s view is slightly more cautious as to what would actually be feasible in shifting significant “substance” away from the UK.

Distribution landscape

Predictably the Passive vs Active argument arose and we saw Vanguard jostling with Aberdeen over the best ways to draw investors to the most favourable product offering.

Richard Withers (Head of Government Relations at Vanguard) argued that the common perception is that Vanguard are the leaders in the passive investment market; however, they view themselves at cost leaders driving competitiveness within the market.

A clear theme for all firms and for the industry as a whole was the need for the industry to remain at the head of innovation utilising technology as the market sees further consolidation and competition; to remain competitive firms can no longer rely on reputation alone.

Campbell Fleming (Head of Distribution, Aberdeen) commented that it is the most challenging time he has been in the investment management industry however there is still significant investment opportunity for firms willing to move with the times.

Macro trends

Naim Abou-Jaoude (CEO Candriam Investors Group) echoed Campbell’s words, commenting that structural drivers make it the hardest time for the asset management industry, namely low interest rates cost pressures, regulation, client senses, passive management, globalization and concentration on bonuses. However, margins are still high if you can generate the alpha.

In the EU 41% of wealth across the region is currently sitting in 0% or negative interest accounts whereas in the United States that number is 17%, meaning that there is a distinct lack of education or trust, with potential investors in the EU. This is also influenced by trends on a national level, that is Brexit, Le Pen, elections and Populist movements for example.

The future for the EU

Frieden Luc (Partner at Elvinger Hoss, Prussen) commented on the future of the European Union and regulation. He believes that for the EU to come out in a stronger position after Brexit there needs to be further consolidation and consistency of regulation between the major economies. He also iterated the need for harmonizing economies and creating a more centralised model which would lead to greater success.

Although this seems like a logical step, in reality creating centralisation and handing further control to Brussels whilst facilitating 27 member states to agree, might be slightly more challenging. Was it not for this very reason that Brexit campaigners built there argument in the first instance?

To find out more about this topic, contact Consultant Max Alfano at malfano@fidessearch.com or +44 (0) 20 3011 0698

Movers & Shakers of the week 

Panel Watch

AIG confirms the 29 firms on its new UK panel

10 law firms are named providers on the London Universities Purchasing Consortium (LUPC) panel

Appointments

Uber kicks off search for next GC

General counsel Salle Yoo has been promoted to chief legal officer for Uber technologies, with the company awaiting to fill her former position

Moves

Dentons nabs second magic circle practice head this month

Dentons has hired Louis Skyner as a partner from Clifford Chance, where he served as the head of its Russia and CIS energy practice

W&C star PE duo split as one heads to rival US firm

Co-head of private equity at White & Case Richard Youle departs the firm to join Skadden Arps Slate Meagher & Flom with fellow private equity partner Katja Butler

Quinn Emanuel continues to build out Brussels practice

Sherman & Sterling competition partners Stephen Mavroghenis and Miguel Rato quit the firm to join Quinn Emanuel Urquhart & Sullivan in Brussels

Linklaters makes addition to London restructuring team

Restructuring partner James Douglas has exited his current firm Ropes & Gray to join Linklaters in London

Office Openings & Closings

Winston & Strawn is the next US firm to slim down Asia operations as it faces office closures in Beijing and Taipei

Sullivan and Cromwell launch Brussels office after hiring competition partner Michael Rosenthal from Wilson Sonsini Goodrich & Rosati

Mergers & Alliances

Dentons plan to launch Peru offering through local tie-up with Gallo Barrios Pickmann

Partner Promotions

Kennedys promotes four women 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.

We’d like to present the newest feature to the Fides Weekly Update: “The Compliance Bulletin”. Here we offer you a round-up of the week’s top regulatory and compliance news and insight pieces just in case you missed them!

Tweet us @Fides_Search to let us know your thoughts.

This week:

1. London Whale saga continues as ex-JP Morgan trader continues court battle against FCA

There remains only one former JP Morgan trader still involved in court battles surrounding the London Whale scandal of 2012, after a game-changing court ruling staved off several lawsuits two months ago.

In March this year, the UK Supreme Court sided with the Financial Conduct Authority, after allegations were sparked that the regulator didn’t do enough to sufficiently conceal the identities of those involved in misconduct investigations. This judgement led to a number of JP Morgan traders dropping their cases, leaving former JPM employee Julien Grout as the only person not to withdraw his suit.

Grout argues that the FCA’s referral to him as “traders on the SCP” (synthetic credit portfolio desk) fails to conceal his identity as there are only four traders on this desk. Grout’s lawyer reports “Once the group, the collective, is identified, and it is, and once it is established that an individual is a member of the identified collective, anonymity is lost.”

The London Whale scandal was caused by trader Bruno Iskil, whose offsetting bets landed JP Morgan with a substantial trading loss of $6.2 billion. The scandal led to hefty fines, with JP Morgan having to pay out $920 million to four different regulators as well as admitting to a violation of US federal securities laws.

Julien Grout is next scheduled to fight the FCA’s appeal in July.

JP Morgan continued to feature in the news this week as it was reported the US bank has purchased an office building in Dublin, with the ability to house over 1,000 staff, double the size of its current capability in Dublin.

Expected to be completed in the third quarter of 2018, the acquisition is the first concrete action undertaken by a global bank in its efforts to move operations outside of the UK ahead of its departure from the EU. Senior Analyst for Bloomberg Intelligence Jonathan Bryce has commented that this is just the beginning, with various lobbyists from all over Europe as well some from New York trying to win business that will be moving out of London.

2) US Takeover: Firms generate $4.6bn in London last year as Clifford Chance introduce changes to boost remuneration

The impact of US law firms on the London legal market remained an inescapable theme in the legal press this week, following the publication of The Lawyer’s Top 50 US Firms in London report and partners at Clifford Chance voting in another round of remuneration changes to introduce more flexibility to pay top billers.

The extent to which US firms have established themselves at the highest end of the UK market, and made moves to strengthen their position, was highlighted in the report that found the UK operations of the 50 largest US firms in the UK generated $4.6bn last year.

The biggest US law firm in London was White & Case, with a total UK revenue of $290m, followed closely by Latham & Watkins on an estimated $280m. This has followed an aggressive lateral hiring policy by both firms – with recent editions including Patrick Sarch for White & Case and Stephen Kensell for Latham’s – as well as a number of initiatives to secure upcoming talent. Last week, White & Case announced that it was boosting associate pay, where fellow US firm Cadwalader Wickersham & Taft extended paid maternity leave to 26 weeks among a host of other changes to its benefits package.

The impact of significant lateral hiring from US firms, and other situational factors such as Brexit and the weakness of the sterling, cannot be underestimated, with the administration of the European arm of King & Wood Mallesons, the biggest law firm collapse in UK history, resulting in significant team hires for the likes of Goodwin Proctor, Reed Smith and Covington & Burling.

Closing the gap in partner remuneration between London leaders and US firms investing heavily in the City could be the reason why the partnership at Clifford Chance voted in favour of another round of remuneration reforms, which were last updated in 2015.

This would allow the firm’s senior management more flexibility to hike compensation for top earners, with unconfirmed reports stating that CC is prepared to either offer 150-point deals – 50% over its core City plateau – or 130-point deals topped up with additional bonuses, enough to push earnings over £2m.

This comes as two of the big four have also pushed through reforms to boost pay flexibility in attempt to compete with US rivals. Earlier in the year, Allen & Overy confirmed it broke lockstep for a second time for a New York finance team hired in February from Paul Hastings, whist Linklaters partners voted to accept changes to the firm’s lockstep last November.

Such asymmetry in the resources and gravitas of US law firms in London, combined with greater market share, puts pressure on the UK elite to either merge (as seen earlier this year with Eversheds Sutherland) or continue to grow organically, offering increased remuneration and benefits packages. With US law firms here to stay, UK firms must observe and adapt to these shifting market dynamics in order to remain competitive.

3) Movers & Shakers of the week 

Panel Watch

Chubb finalises its UK panel review since ACE acquisition

Standard Chartered completes most recent global panel review since 2015, with many firms reappointed

Appointments

Addleshaws promotes deputy GC

With former general counsel Simon Callander departing to join SuperGroup, Addleshaw Goddard has appointed deputy general counsel Sarah O’Neill into lead role

Channel 5 GC secures regional promotion

General counsel for Channel 5 Marcus Lee will serve as GC for UK, northern and eastern Europe for Viacom International Media Networks (VIMN), under media conglomerate  Viacom

Moves

Former CC managing partner departs new venture

Peter Charlton, ex-managing partner at Clifford Chance has left his role as managing partner at London litigation boutique Joseph Hage Aaronson

Kirkland makes HK hire

Corporate partner Daniel Dusek exits Skadden Arps Slate Meagher & Flom for Kirkland & Ellis in Hong Kong

Charles Russell Speechlys bolsters Middle East offering

King & Wood Mallesons lose further partner with Ghassan El Daye leaving the firm to join Charles Russell Speechlys’ litigation practice. He will sit in the firm’s Bahrain office

Cooley further expands City offering

Cooley has hired Rod Freeman, international product law head at Hogan Lovells, to join its burgeoning London office

Irwin Mitchell gains new product head

Former head of real estate for Pinsent Masons Adrian Barlow is set to join Irwin Mitchell as the firm’s national head of real estate

Pillsbury makes a double finance partner hire

Ex-business and finance head for Morgan Lewis & Bockius Chris Harrison joins Pillsbury Winthrop Shaw Pittman in its London office along with Mayer Brown’s finance partner Trevor Wood

Olswang partners break away to set up European boutique

Munich partner Thomas Lynker departs Olswang to launch Taliens, an IP, tech and media boutique, with Olswang counsel Monika Stoehr also joining. The boutique will have Munich and Paris offices, with Olswang partner Clara Steinitz and Jean-Frederic Gaultier leading the Paris office

Mergers & Alliances

DLA Piper confirms Nigeria alliance through local firm Olajide Oyewole

Ashurst retains Chinese capabilities as it renews strategic alliance with local Beijing firm Guantao

Partner promotions

Taylor Wessing makes 10 partner promotions globally, one based in Londo

Debevoise & Plimpton promotes eight in total, with one in the City

Travers Smith promotes four women to partner

The Compliance Bulletin: Your weekly round-up

MiFID II Best Execution Requirements for Investment Managers [tabbforum]

FCA advice post-NHS cyber-attack [FCA]

SFO probe into Petrofac over Unaoil [The FCPA blog]

Regtech could save banks £2.7bn on AML compliance [Global Trade Review]

“Brexit will have no bearing on MiFID implementation” [Thomson Reuters]

Former JP Morgan trader is the last man standing in battle over “London Whale” with FCA regulator [Bloomberg]

FCA ‘disappointed’ almost half of firms provide unacceptable disclosure [Citywire]

Surge in hiring for those with technology skill set [ComplianceX]

JP Morgan purchases new office building in Dublin to house over 1,000 staff [Business Insider UK]

How US states are approaching bitcoin regulation [Bitcoin Magazine]

Regtech is not about competition, it’s about collaboration [Bobsguide]

FCA to repeat suitability review in 2019 [Citywire]

Lloyds re-privatised as government sells last shares [Citywire]

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. Deutsche bolsters financial crime operations 

Deutsche Bank continues to defend itself from further regulatory fines and settlements as they move to implement a new anti-fraud, bribery and corruption team to its ranks.

As reported in Legal Business this week, the bank is said to be implementing a new team of four anti-fraud, bribery and corruption professionals, with at least one at director level, to sit under regional head of anti-financial crime Thomas Altenbach. The team is expected to sit separately from the legal function and likely to be made up of legal and compliance individuals, given the past composition of AB&C teams at Deutsche.

This news comes after Deutsche announced plans to introduce 400 positions worldwide in anti-financial crime. The German bank has paid over $9 billion in fines and settlements globally since 2008 and most recently agreed to a $7.2bn settlement with the US Department of Justice for the mis-selling of residential mortgage securities, suggesting that Deutsche might be bulking out its anti-financial crime function to protect it from further regulatory scrutiny.

A further statement was released declaring that “Deutsche Bank has significantly strengthened its systems and controls. By the end of the year we will have hired approximately 1,000 additional staff in compliance and anti-financial crime since 2015”.

Whilst Deutsche Bank undergoes changes in back office functions, it was also reported today that it is in the process of housing all electronic trading from across a range of asset classes under one head.  It aims to mirror the operations of its fellow US banks and ensure its electronic trading capabilities remain competitive in the etrading market.

The bank is currently reviewing its global legal panel, led by global chief operating officer of legal and compliance Rose Battaglia, with the final roster expected to be announced soon.

Movers & Shakers of the week

Appointments

KWM names new global managing partner amid European collapse last year

Linklaters appoints London corporate partner to head up firm’s US business

Freshfields appoints first female Asia regional managing partner in over a decade

Partner moves

Co-head of Freshfields alternative capital group joins Kirkland & Ellis

Finance partner Sean Lacey is the latest to make the move to the US firm

Chadbourne Moscow chief joins Reed Smith in London ahead of Norton Rose merger

Chadbourne & Parke Moscow managing partner Andrei Baev has joined Reed Smith’s London office

Paul Hastings loses duo in Paris to K&L Gates

Paul Hastings partner Mounir Letayf and counsel Adeline Roboam have joined K&L Gates in Paris

Office Openings & Closings

Dentons continues expansion into Latin America in Brazil alliance

Clyde & Co continues Americas push with Mexico launch

Mergers & Alliances

US employment law giant Littler Mendelson launches in London via merger with boutique firm GQ Employment Law

Promotions

Osbourne Clarke promotes six to partnership in latest round

Watson Farley promotes six to partnership including London quartet

Hello and welcome to the Fides Weekly Update. Here you can find analysis of the week’s main new stories in legal and compliance. Don’t forget to check out our regular feature of Movers & Shakers of the week.

You can follow us on LinkedIn and Twitter for more regular updates in your industry

This week:

1. FCA confirms push for criminal prosecutions

Having pledged to gear up its enforcement team to serve up more criminal prosecutions, the Financial Conduct Authority has just appointed a criminal law heavyweight to its ranks as chief criminal counsel.

Vincent Coughlin QC will take over from Claire Lipworth in the top position, with Lipworth joining Hogan Lovells as a financial services litigation partner, the FT reports. His background spans a wide range of high-profile prosecutions, from violent crime cases to defending the Sun’s executive editor over allegedly improper payments.

Coughlin’s experience also includes white-collar crime matters better associated with the regulators line of work, where most recently he has been involved in a case brought by the Serious Fraud Office concerning bribery allegations against Rolls-Royce.

Back in 2012, Coughlin also spent a period advising the Financial Services Authority on its first major insider dealing prosecution, Operation Saturn, where they secured six convictions.

The hire is a definitive indicator confirming the FCA’s plans to rev up its enforcement action as they ready themselves to bring more criminal prosecutions for insider dealing and are expected to extend this further to money-laundering offences and wider financial crime claims. In its newly published business plan, the FCA has highlighted the extent to which corruption and money-laundering has permeated into the UK financial system and has committed to start bringing criminal action where necessary.

We saw the number of investigations opened by the FCA into insider trading reach its peak total of 70 last year. With the director of enforcement and market oversight Mark Steward claiming that “insider dealing is ever more detectable and provable”, it seems we should expect further convictions to continue in 2017.

2. Shearman hikes NQ salaries in London 

In the latest turn in the NQ salary race, Shearman & Sterling announced that it was increasing pay for newly qualified (NQ) UK associates by 10.5% this week, taking starting salary from £95,000 to £105,000.

Lawyers in the firm’s mid-level associate band, which starts at 3.5 years post-qualification experience (PQE) will also see a 9.5% pay increase from £126,000 to £138,000. Meanwhile, UK senior associates at 6.5 years PQE and above will see their salaries increase by almost 6% to £165,000.

This follows last year’s rise in NQ pay by £7,000, and a rise of 8% on NQ salaries in 2015. Overall, the firm has seen a 33% increase in NQ pay since the £78,000 starting salary it was handing out in 2013. Mid-level and senior associates also received a salary bump by the firm last year, by £11,000 and £12,000 respectively on 2015 levels.

This comes after a raft of US firm’s hiked associate payscales last summer, following in the example of Cravath Swaine & Moore, which raised base pay for first-year associates by $20,000 (£14,000) to $180,000 (£124,000).

In a move that sent shockwaves through the London legal market, a handful of those firms subsequently decided to pay equivalent salaries to their lawyers in London, with some pegging them to the dollar to address plunging sterling exchange rates. As a result, London NQs at Kirkland & Ellis and Akin Gump are currently on around £125k, where those at Weil are paid £115k.

Despite this, NQ’s at Sherman & Sterling will now be paid £20k more than their equivalents at Freshfields and Clifford Chance, and £26.5k more than those at Allen & Overy, in the battle by London firms to retain top associate talent.

Last year, Shearman’s revenue rose by 6% to $912.5m (£731m), with London revenues increasing by 14% to $169.7m (£136m). Firmwide profits per equity partner shot up 18% to $2.165m (£1.74m). In spite of this, Sherman decided to cut its equity partnership in the second half of 2016 and did not hire any new partners in Europe last year.

Movers & Shakers of the week 

Appointments

Nike appoints new European general counsel

Senior director of global brand protection Bill Berner has accepted the role of European general counsel as current GC Fabrizio Mecozzi is to take on a new US-based position at the company

Moves

Linklaters’ US banking practice faces blow with two partner exits

Linklaters’ former US banking head and US co-managing partner Jeff Norton is set to join Dechert in New York whilst fellow banking partner Sabrena Silver also departs, accepting a partner position with White & Case

PwC makes pensions play

London head of pensions for Ashurst Marcus Fink has joined PwC Legal

Linklaters bolsters Shanghai practice

Corporate partner Simon Meng and project development and finance partner Andrew Ruff both join Linklaters’ Shanghai office from King & Wood Mallesons and Shearman & Sterling, respectively.

HSBC deputy GC joins start-up

Richard Given has left HSBC as deputy general counsel to become GC and company secretary of new fintech start-up 10x Banking

Gowling WLG loses innovation head

Head of innovation and technology for Gowling WLG Derek Southall steps down from his role to launch his own venture Hyperscale Group, but continues to work with the firm on a consultancy basis

Gibson Dunn makes third move for Latham partner in Germany

Dispute resolution and white-collar defence partner Finn Zeidler is the third partner to depart Latham & Watkins for Gibson Dunn in Germany, taking a partner role in the firm’s Frankfurt office

Two further partner departures for CMS ahead of merger

Corporate partner Peter Crichton and construction and energy lawyer both exit CMS to join McDermott Will & Emery and 39 Essex Chambers

Addleshaws builds out in London

Taylor Wessing’s Dubai head Habib Ullah leaves to join Addleshaw Goddard in its London banking practice

Quinn further expands City practice

Clifford Chance’s tax investigations and disputes head Liesl Fichardt has decided to join disputes specialists Quinn Emanuel Urquhart & Sullivan in its London office

Ashurst adds partner to Paris office

Ashurst has added to its shrinking Paris practice with leveraged finance lawyer Pierre Roux who joins from Linklaters as a partner

Office Openings & Closings

Osborne Clarke launches in Shanghai

Norton Rose sets up in Luxembourg marking eleventh European launch

Mergers & Alliances

CMS Cameron Mckenna, Nabarro and Olswang merger goes live under the CMS brand

Kennedys merges with 100-strong US insurance firm Carroll McNulty & Kull

Ashurst launches formal alliance with Singapore firm ADTLaw

Partner promotions

Dentons makes seven UK promotions in 54-stong global round

Weightmans triples promotions as Kingsley Napley makes women majority of partnership

RPC, DAC Beachcroft and Bond Dickinson unveil 2017 partner promotions

DLA halves London round as HFW makes up three

Simmons & Simmons promotes seven in the City in a 12-strong partnership round

Bird & Bird promotes 16 in global promotions round

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 Twitter and LinkedIn for more market updates   to let us know your thoughts.

This week:

1. Spring promotions 2017: The full breakdown 

With May fast approaching, this week saw a number of the UK elite release their spring promotion rounds.

Clifford Chance

Clifford Chance was the first to announce a 24 strong global promotions round, matching the number of partner promotions made last year. The corporate and finance practice areas were the main beneficiaries at the magic circle firm, which saw 9 partner promotions in each, with six partners being made up in London overall.

This year’s round also saw the promotion of four women (16%), with CC’s overall female partnership rising from 15% to 19% over the last five years.

CMS

CMS were the next to announce, making up 48 into partnership in an increased global promotions round. This included 10 UK promotions, split evenly between their offices in London and Scotland, as well as four partner promotions from Nabarro and Olswang ahead of the firm’s three-way merger next week

Of the 48 new partners, 27% are female, down from 39% last year, when the firm made up 31 new partners.

Norton Rose Fulbright

Also on the verge of its merger with Chadbourne & Parke, Norton Rose Fulbright announced an equally sizable promotions round of 45 global partners, with eight lawyers making partnership in the London office. This is up from 2016 where 39 associates were promoted globally, with the Corporate, M&A and securities practice and dispute resolution practice both seeing 13 new partners each.

Eighteen female partners (40%) were also made up in this year’s promotion round, up from 31% in 2016.

Eversheds Sutherland

Eversheds too announced a 20-strong global promotions round, the first since its merger with US firm Sutherland Asbill & Brennan in February. This is slightly down on last year where 26 were made up, and does not include any legacy Sutherland lawyers due to the US and UK sides of the business remaining financially independent.

Of the new partners, half are based in the UK with only one in London, with the firm’s Birmingham, Leeds and Manchester offices seeing the bulk of the promotions. Regarding practice area, 14 of the global promotions are into the firm’s company commercial practice group with four in litigation and dispute management and two in real estate.

This promotion round also included six women (20%), down from 11 (42%) last year.

Ashurst

Finally, in an increased round, Ashurst also promoted 19 to partnership globally with these promotions distributed evenly across London and Australian offices. Banking and Corporate again featured heavily as the most prominent practice areas, both of which have received four new partners.

However, of this year’s cohort only four partners made up were women (21%), compared to the 33% female partnership rate achieved by the firm last year.

2. Top Deutsche compliance exec says 4,000 UK jobs at risk

As Brexit looms, banks are in the midst of deciding on possible plans for relocation, and Deutsche Bank have recently announced up to 4,000 UK jobs at risk as a result.

Sylvie Matherat, chief regulatory officer for Deutsche Bank, said on Wednesday that the potential shift could likely include 2,000 client-facing staff, as well as up to 2,000 additional members of staff supporting those teams, such as those in a risk management capacity, if regulators deem it necessary.

The German bank hasn’t yet stated where these positions will be redistributed, but Frankfurt and Berlin seem to be the two locations most likely to benefit from the move.

Deliberations are being made across the banking sector as to how best to relocate their offerings. HSBC have hinted at 1,000 investment banking jobs moving to Paris, UBS are considering shifting towards Frankfurt and Madrid, whilst J.P. Morgan are apparently in talks to buy office space in Dublin, with room for up to 1,000 employees.

Earlier this month, the Bank of England (BoE) set a deadline of 14 July for financial firms to deliver their contingency plans for the aftermath of Brexit. BoE governor Mark Carney has declared that firms must prepare for “the full range of possible scenarios”, including a hard Brexit.

Meanwhile, banks have released more optimistic news this week, with Barclays and Royal Bank of Scotland (RBS) both posting positive first quarter results for 2017. RBS saw profits of £259m in Q1 2017, compared to a £968m loss a year earlier, and Barclays surpassed analyst expectations with their pre-tax profit for Q1 doubling to £1.682bn. These results demonstrated strong performance from the core bank division, although the investment bank had a poor first quarter, with income falling by 4 per cent.

Movers & Shakers of the week 

Appointments

Network Rail appoints new GC

Stuart Kelly has been promoted from deputy general counsel to group general counsel for Network Rail after former GC Suzanne Wise joined Japan Tobacco International last month

Moves

Fieldfisher strengthens structured finance capability with magic circle hire

Former Freshfields Paris finance head Dougall Molson will be joining Fieldfisher’s London office

Three partner exits for BLP

Joining Mischon de Reya are restructuring and insolvency partner David Leibowitz and property litigator Joanna Lampert from Berwin Leighton Paisner, whilst US securities partner Bobby Schrader also leave the firm to join Barclays

Newly merged Ladbrokes Coral loses GC

Harry Willets has stepped down from his role as general counsel for Ladbrokes Coral, having acted as GC and company secretary for legacy Gala Coral since 2006

Morgan Lewis gains investigations duo

Chris Warren-Smith has left Norton Rose Fulbright as its global investigations head to join Morgan Lewis & Bockius, along with fellow partner Melanie Ryan

W&C continues City expansion

White & Case has hired finance partner Chris McGarry from Ropes & Gray to join their capital markets practice in London

Freshfields makes a three-partner team hire in US

Three restructuring partners from Arnold & Porter Kaye Scholer, including the firm’s US chair of bankruptcy and restructuring, will be joining the New York office of Freshfields Brukhaus Deringer. Mark Liscio, Madlyn Primoff and Scott Talmadge are all legacy Kaye Scholer partners.

Covington opens two new offices with partner hires from Chadbourne

Four partners at Chadbourne & Parke have announced their departure ahead of the upcoming merger with Norton Rose Fulbright. Dubai managing partner Jack Greenwald and project finance partner Richard Keenan will launch Covington & Burling’s Dubai branch, whilst Ben Donovan will lead the new Johannesburg office. Project finance partner Agnieszka Klich will be joining Covington’s London office

Office openings & closings

Clifford Chance closes its Bangkok office and ends Indonesian alliance

Mergers & Alliances

Linklaters set to practice under Chinese law by joining forces with local firm Zhao Sheng

Weightmans and Ward Hadaway call off merger talks

Partner Promotions

Please see above for analysis and a full breakdown of this week’s partner promotions

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 Twitter and LinkedIn to let us know your thoughts.

This week:

1. Linklaters hits refresh

This week has seen Magic Circle firm Linklaters dominate the legal press as details emerge of its ‘Strategy Refresh’, the outcome of a wide-ranging consultation of partners and clients led by global managing partner Gideon Moore.

Most notably, the firm is to phase out individual partner metrics and annual assessments in order to focus on broader measures of team and firm performance. As such, annual partner appraisals will be scrapped in favour of more regular feedback sessions for individual partners and teams.

This is a marked shift from the metric-based performance review system introduced by former managing partner Tony Angel, which focused on individual partner performance and billing targets, adopted widely throughout the legal market in the 2000s.

This new system of performance review aims to ensure assessments give added weight to practice performance as well as client-winning, business development, training and innovation to focus on the combined value that partners bring to the firm and spur entrepreneurialism.

Other new measures include the pilot of a fixed hour working week for associates in Germany, and an increased emphasis on agile working and alternative routes to partnership by management, both aimed to increase the retention of upcoming talent.

2. FCA Business Plan: What you need to know 

This week saw the release of the Financial Conduct Authority’s (FCA) Business Plan for 2017/18, laying out what the UK regulator will be focusing on in the coming year.

Many of the themes come as expected, with PPI mis-selling complaints and firm culture and governance featuring as sector priorities, whilst also touching upon plans for Brexit, identifying it as a further key area of focus for the regulator.

Below we have outlined some of the most relevant aspects of this year’s Business Plan and the possible aftermath of these for financial institutions:

Brexit plans

As much of the current regulation is expected to remain the same post-Brexit, the plan admits to a lack of clarity surrounding Brexit negotiations, which “creates a number of uncertainties with the potential to affect the UK and European financial markets.”

The regulator has raised its fees for FCA authorised firms by 1.5 per cent, which will include an extra £2.5m within the budget for Brexit costs. The document relays hope that the solid relationships forged between UK and EU regulators will bring about smooth cooperation, highlighting that “a robust framework that provides for continued cooperation will be fundamental regardless of the outcomes of the negotiations.”

Consumer experience

Treating customers fairly remains a top priority for the UK watchdog and is being evaluated across all financial services sectors. From improving communications and treatment of legacy customers, to introducing healthier competition and transparency in the asset management industry, firms will have to refocus their efforts on improving services for customers and investors.

Having referenced the interim report of 2016’s Asset Management Market Study, the plan also reinforces a number of remedies expected to be enforced this year, including increased transparency and standardisation of costs and charges for institutional investors. It states that the final report will be published in Q2 2017.

Technology

The FCA has claimed it is taking a forward-looking approach with innovation in the financial services industry when it comes to assessing both potential growth and emerging harm. An existing concern the FCA is hoping to tackle is the lack of investment being made to legacy IT systems, which would obstruct the process of digitalisation and automation to financial markets. Updating current systems will pave the way for the new era of regtech and fintech movements, which will “play a key role in firms moving towards less capital-intensive business models” and render market activities, financial products and services to be faster, cheaper and better.

Cybercrime

Cyber resilience and financial crime controls must be placed under scrutiny as we enter a new age of innovation and see the appearance of greater opportunities for cybercrime. The regulator has committed to building its own expertise in resilience and cyber security to develop and evolve regulatory tools alongside advancements in financial technology.

In order to achieve this, the regulator has set up scenario-testing for operational resilience, which will “assess how well they respond to a range of situations that might cause a major operational disruption.” Using this data, they have constructed, with the help of the PRA and specialist cyber agencies, a cyber resilience toolkit which is expected to be rolled out to a large number of financial institutions over the course of 2017/18.

Movers & Shakers of the week:

Panel watch:

Santander announces plans to launch UK panel review this summer, and is yet to release results of global panel review

SRA culls legal roster as it looks to appoint sole legal provider

Berwin Leighton Paisner awarded three year mandate as lead property adviser for Tesco

Appointments:

CC’s Simon Davis to become the next Law Society President

Cybersecurity partner Simpson named as Hunton & Williams new UK head

Moves:

Gibson Dunn makes play for four-partner HK team

Ropes & Gray has lost Hong Kong managing partner Paul Boltz, along with corporate partners Brian Schwarzwalder and Michael Nicklin and private equity partner Scott Jalowayski, who all join US rival Gibson Dunn & Crutcher

Weil Gotshal brings in Bakers infrastructure specialist

Weil, Gotshal & Manges has hired real estate finance partner Paul Hibbert in London from Baker Mckenzie

Freshfields looks to SFO to bulk up its corporate crime practice

The Serious Fraud Office’s joint-head of bribery and corruption Ben Morgan has joined Freshfields Bruckhaus Deringer as a partner in its corporate crime and global investigations practice in London

Office Openings & Closings:

Pinsent Masons to launch six-partner Madrid office with team hire from Spanish firm Ramon & Cajal

DWF closes Preston office to focus on Liverpool

Partner Promotions:

Allen & Overy makes 24 promotions, with only two women

Berwin Leighton Paisner makes up four in latest promotions round

Charles Russell Speechlys 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.

Check out our new “Panel Watch” feature in Movers & Shakers to stay up to date with the most recent panel shake-ups

Follow us on LinkedIn and Twitter for regular market updates

This week:

1. LITIGATION AGAINST GLOBAL BANKS RISES 37%

Litigation against the largest 50 global banks has increased 37% in 2016, according to research published this week by RPC.

The number of High Court cases in which banks were named as a defendant jumped from 115 to 157 last year, increasing consistently year-on-year since 2011. This was based on an analysis of court hearing lists, and covers allegations relating to Libor and the mis-selling of hedging products.

UK banks made up two thirds of the majority of the 784 High Court cases involving the top 50, with Barclays, HSBC, Lloyds and Royal Bank of Scotland (RBS) accounting for 67%, or 530, cases over the past 5 years. RBS was the defendant in the highest number of cases (118), with Barclays in a close second (106).

There have been several high profile cases involving these banks over the past few years, most notably the ongoing ‘rights issue’ case against RBS. Representing 27,000 shareholders, Signature Litigation have brought a £4bn group action against the bank who have claimed that they were misled into signing up for a £12bn rights issue in 2008. As reported this week, the cost estimate of legal fees paid by RBS to external counsel Herbert Smith Freehills to defend the bank in the dispute has now reached £125m.

The research attributed such a rise in litigation to the long term fallout of the financial crisis, together with a greater willingness of parties to contemplate litigation than was seen before the crash.

As the economy has recovered, many businesses have found themselves in a better financial position to launch a legal claim than they were in the immediate aftermath of the financial crisis. This, alongside the availability of third party litigation funding, where companies offer to foot the expensive legal costs of bringing a claim in return for a share of compensation awarded if the lawsuit is successful, has driven many cases.

Furthermore, claimants typically have six years to launch a claim before their time limit expires, which has meant that the last round of cases relating to the financial crisis were only brought to the High Court last year.

Whilst this shows a greater willingness by individuals and companies to litigate against the banks, the cases the banks have faced in the High Court are likely to be the tip of the iceberg, as many financial disputes are settled by banks before lawsuits are formally lodged.

As Simon Hart, Partner at RPC says: “Whilst the well-publicised systemic problems, like Libor or Forex manipulation may not be repeated in the near future, there is still a large number of disputes that pass across our desks every week relating to the investment banks.”

Nevertheless, this trend poses interesting questions for City law firms, many of whom are conflicted in acting against the UK’s largest banks, whilst further entrenching the dominance of litigation boutiques within this side of the market.

2. THE END OF THE LIBOR SCANDAL: BARCLAYS DUO ACQUITTED IN LIBOR RETRIAL

Two former traders at Barclays were cleared of any wrongdoing in connection with the rigging of benchmark rates by a jury at Southwark Crown Court on Thursday.

Having already stood trial last summer, Barclays traders Stylianos Contogoulas and Ryan Reich returned for a retrial after the jury was unable to reach a verdict on the conspiracy to defraud the Libor rate. The Serious Fraud Office (SFO) appealed for this retrial, claiming that the Barclays duo were plotting with fellow Barclays employees between June 2005 and September 2007 to rig Libor.

The FT reported that Emma Deacon QC, who was representing the SFO, argued that Mr Reich and Mr Contogoulas were “driven by money” to make more profit on their trading and saw “honesty and integrity” as “entirely expendable”.

Meanwhile, Roland Ellis, Senior Associate at criminal litigation and commercial disputes boutique Bivonas Law, was pleased with the verdict, which he believes was the end to a “trying ordeal for the past seven years”.

Mr Reich and Mr Contogoulas are only two of six total Barclays individuals initially prosecuted for rates manipulation. Jay Merchant was served a six-and-a-half year sentence, whilst Peter Johnson and Jonathan Mathew were each jailed for four years, and Alex Pabon was handed two years and nine months.

The re-trial brings to a close all Libor prosecutions brought by the Serious Fraud Office. It also marks the end one of the largest scandals the financial markets has seen in recent times, leading to the mass levels of regulatory change that we’re experiencing today.

Market manipulation, along with further misconduct issues, primarily triggered an overhaul of the Financial Services Authority, now split into the Financial Conduct Authority and the Prudential Regulation Authority, and further sparked the development of a substantial level of new regulation, affecting all areas of financial services. Having redefined the workings of the global banking system, the regulator has now turned its eye onto the asset management industry, conducting an in-depth review into the £7 trillion industry. The interim report from this review was published in November last year, and its findings imply that we should envisage a similar transformation descend upon the sector.

The SFO are currently in the process of bringing a prosecution of six individuals for manipulating Euribor, a global interest rate benchmark. The six are due to stand trial in September.

Movers & Shakers of the Week 

Panel watch

FCA drops three City firms from its supervisory panel of advisers

BT appoints 37 UK and Ireland legal advisers into its legal network

Standard Chartered is finalising a review into its international legal panel, expected to be complete in a few weeks

TransferWise is electing a select group of firms as its preferred legal advisers on a loose roster

Government kicks off a review for a two-year ‘finance and highly complex transactions panel’

Appointments

Slaughters bulks out Brussels competition offering

Slaughter and May appoints six competition lawyers from its London to Brussels office in response to Brexit

Clifford Chance creates Australia managing partner role

Banking partner Richard Gordon is set to lead Clifford Chance’s Australia practice and Sydney office, whilst energy partner Paul Lingard shall become Perth managing partner

Moves

Fieldfisher appoints new head of Manchester office

Former managing partner for Halliwells Ian Austin will replace corporate Matt Fleetwood as Manchester head as Fleetwood exitswill fellow corporate partner Jim Truscott to set up a corporate boutique

Channel 4 GC departs

Channel 4’s Prash Naik steps down after three years as general counsel

VW hires new chief compliance officer

Former associate general counsel for Daimler, Kurt Michels has joined Volkswagen Group in the role of chief compliance officer

Latham boosts London litigation capability

Ian Felstead leaves Olswang ahead of three-way merger to join Latham & Watkins’ litigation practice

Further European real estate hire in Paris

Hogan Lovells hires Michaël Lévy as a real estate partner in its Paris office from Bersay & Associés

Winckworth Sherwood further strengthen real estate offering

Head of real estate for Rosenblatt Solicitors Andrew Kinsey has decided to join Winckworth Sherwood’s 100-strong real estate team

Office Openings & Closings

KWM pulls out of Saudi by closing down Riyadh office

Shakespeare Martineau set to open tenth UK office in Manchester

US securities litigation specialist Pomerantz launches in Paris with in-house lawyer hire

Partner promotions

Burges Salmon makes up trio

Addleshaw Goddard promotes five, with one female promotion

Hello and welcome to the Fides Weekly Update. Here we discuss some of the main new stories in legal and compliance. See below our regular feature of Movers & Shakers of the week.

Don’t forget to follow us on LinkedIn and Twitter to receive daily market updates.

This week:

1. The exodus begins? The EBA, Lloyds of London and JP Morgan launch relocation plans

With Prime Minister Teresa May invoking Article 50 on Wednesday, and formally triggering the process for Britain to leave the EU, attention turned to the impact Brexit will have on the UK now that Britain has officially started the process to leave.

The first of these considerations was the new location of the London-based European Banking Authority (EBA), and future structure of the EU’s financial regulatory framework.

German officials are lobbying to have the EBA relocate to Frankfurt, and have the institution combine with the European Insurance and Occupational Pensions Authority (EIOPA). This model would emulate the ‘twin peaks’ structure seen in the UK, that if went ahead would likely transfer some of the consumer protection powers of the EBA to the Paris-based European Securities and Markets Authority (ESMA).

However, this suggestion has also stirred criticism from other EU nations who are also keen to host the agency and benefit from the jobs and prestige associated with hosting the EBA. Other likely locations for the EBA include Paris and Luxembourg, who on Thursday stated that they had the legal right to host the banking body.

Although a final timeline has yet to be set on the decision, the Commission’s Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) currently involved in discussions as to the new location, with any final decision having to be signed off by other member states in the European Parliament.

The second overarching concern is the location of global financial institutions outside of London once Britain exits the Union.

Yesterday, Lloyds of London announced that it will establish a new European subsidiary office in Brussels, which will likely affect 100 staff. This will allow the institution to continue underwriting insurance policies across all EU states after the UK leaves, with the company’s continental business generating 11% of its premiums.

J.P. Morgan on the other hand are considering a more wholescale move, with news emerging that the bank is in talks to secure an office in Dublin for more than 1,000 workers. Further fuelling concerns over exodus from the City following Brexit, a number of banks have already confirmed they could move staff, with Goldman Sachs looking to move hundreds of bankers to Frankfurt and Paris, while HSBC could switch 1,000 investment banking jobs from London to Paris.

With many things yet to be decided, such as whether the UK will still hold passporting rights, as well as the nature of the free trade agreement between the EU and UK once Britain leaves, for now these institutions are doing the same as any other – acquiring an option to help mitigate the risk Brexit brings to their business.

2. The new wave of modern law firms is here: Legalex 2017 showcases new innovations in the sector

We celebrated all things tech with law firms this week as the Legalex exhibition displayed some of the best tools out there specifically designed for the development of law firms and legal professionals.

Over 28^th and 29^th March, Legalex came to ExCeL London and hosted a floor of legal tech suppliers as well as numerous experts, presenting talks on different technologies and themes affecting law firms today. From gaining efficiencies to implementing an effective cyber security strategy, the event shared insight into all the hot topics we’re currently talking about in the legal sector.

Diversity leader Miranda Brawn kicked off the event, delivering a keynote speech on the benefits and importance of introducing diversity and inclusion into field of legal tech. Brawn claimed that legal tech companies must be more culturally diverse as the demographic of those using technology is more diverse: “Can you effectively serve a demographic not represented at the senior levels of your organisation?”

Brawn went on to explain how a diverse senior workforce can be financially beneficial, enforce a more collaborative culture and improve a company’s ability to attract talent.

Also in attendance at the event was Artificial Intelligence software company Luminance Technologies. CEO Emily Foges spoke at the event, accompanied by Murray Cox, M&A partner at Slaughter and May, whose practice uses the AI tool and helped pilot the software.

Live since September 2016, Luminance is a pattern recognition software that can identify key anomalies and clauses, carrying out the contextual review of thousands of documents in a fraction of time it would take humans.

The talk dealt with some of the mysteries and questions surrounding AI, including how it would affect the need for lawyers. They explained that although technology can review large data sets in place of lawyers, there still needs to be someone to evaluate these findings and sort through the information gathered. Cox argued that it could in fact have a positive impact on the recruitment and retention of junior lawyers as it would enable them to carry out more complex work and spend less time on mundane tasks such as doc review.

“It may be that we see more of a diamond-shaped law firm structure as opposed to triangular”, says Foges. That is to say law firms would not need such a high intake of trainees and could focus more on the development of their lawyers.

To conclude the two-day exhibition, one of the final sessions was delivered by Peter Wright, managing director of data protection and cyber security specialists DigitalLawUK. Titled “Effective Cyber Security for Law Firms”, Wright’s talk touched on the number of different ways a law firm can be targeted and the measures they should take to limit their vulnerability to cyber attacks.

Wright highlighted the types of individuals that can be targeting your firm. Aside from the well-known cyber criminals and fraudsters who are looking for financial gain, threats can include state targets, who may be seeking information about deals and clients; hacktivists, those who want cause chaos and destruction for large organisations; and ex-employees, who might have left the firm unpleasantly and have an understanding of your IT systems and how to access confidential information.

Law firms are a prime target for cyber attacks at the moment. Even the largest law firms don’t have the same level of resourcing for cyber security as global banks do, something which attackers are aware of and have been exploiting, particularly through phishing attacks. Phishing attacks remain commonplace in law firms, with 73% of the UK top 100 being the target of attacks in 2015. With these figures continuing to rise, lawyers must become more attentive to the risks they face and detect possible attacks quickly and manage them effectively.

Part of our aims and objectives at Fides Search are to encourage and promote innovation in law. We understand the importance of driving change in the legal workplace, which in turn plays a great part in how we advise our clients and partner with them to foster innovative solutions. If you would like to discuss this topic further, feel free to get in touch and contact gopi@fidessearch.com

Our latest article on legal technology “Crossing the Chasm: Establishing widespread use of legal technology in law firms” is available to request now. Please contact research@fidessearch.com to find out more.

Movers & Shakers of the week:

Appointments

RSA promotes new legal head
Jonathan Cope has been promoted to Head of Legal, UK and International at insurance company RSA Group, where he was formerly Managing Counsel.

Fried Frank appoints London head
Corporate partner Mark Mifsud will head up Fried Frank Harris Shriver & Jacobson in the City, succeeding current head Graham White who has announced his retirement from the firm.

Moves

Superdry owners takes on new GC
Simon Callander, general counsel at Addleshaw Goddard, is set to leave the firm to head the legal team of fashion retailer SuperGroup, replacing former general counsel Lindsay Beardsell, who joined Ladbrokes Coral in November last year

Freshfields hires ex-European commissioner for the UK
Jonathan Hill, who was former Commissioner for Financial Stability, Financial Services and Capital Markets Union, has accepted a part-time role at Freshfields Bruckhaus Deringer advising on Brexit-related matters

Reed Smith builds out its Munich office
A team of three lawyers from Olswang, including German head of technology and data protection Andreas Splittgerber, are moving to Reed Smith’s Munich office where they will join the firms IP, information and innovation group.

Ashurst expands high yield practice
Ashurst’s London office will be joined by Allen & Overy senior associate Tamer Bahgat, who joins as a partner, along with A&O counsel Natalia Sokolova.

Dechert appoints second finance partner from Kirkland
Four months after hiring Kirkland & Ellis partner John Markland, banking and finance partner Rob Bradshaw will also be joining Dechert in its London office

Office openings

Noerr hires three White & Case partners to launch office in Hamburg, marking its sixth base in Germany

Mergers & Alliances

Peruvian firm Pizarro Botto & Escobar has signed a cooperation agreement with DLA Piper, and will operate under the name DLA Piper Pizarro Botto Escobar.

DLA Piper set to merge with Danish law firm LETT and become the largest firm in the Nordic region

Partner Promotions

Slaughter and May promotes seven to partner, including two rare European promotions

Macfarlanes promotions round makes up three, with one female promotion