Amanda GillHello and welcome back to the Fides Weekly Update. Check in here to find out what’s been happening in your industry this week. Scroll down to read our regular feature Movers & Shakers of the week.
We love to hear from our readers! Feel free to get in touch on LinkedIn or Twitter
This week:
1). FCA dishes out record-breaking fine for decade-long compliance failure
Swiss bank UBS has been hit with the largest fine related to transaction reporting failures imposed by the UK’s Financial Conduct Authority (FCA).
For breaches spanning from November 2007 to May 2017, the UK watchdog has fined UBS £27.6 million. These breaches include the misreporting of information in relation to 87 million transactions, as well as wrongly reporting a further 50 million transactions over the 10 year period.
In breach of legacy MiFID I requirements, the Swiss bank had not put in place adequate systems and controls to report transactions. The FCA’s executive director of enforcement Mark Steward stresses the importance of these tools: “If firms cannot report their transactions accurately, fundamental risks arise, including the risk that market abuse may be hidden.”
Errors were made on the reporting of transactions such as equity derivatives, trades for portfolio managers and prop traders, and credit default swaps.
Thankfully for UBS, their cooperation with the investigation granted the bank a 30 per cent discount on the penalty, which could have ultimately amounted to almost £40 million.
A number of big banks have previously been fined for transaction reporting, although this penalty is by far the largest levied by the FCA for this form of misconduct. Prior to this, the largest and most recent transaction reporting penalty was Merrill Lynch’s £13.2 million fine in April 2015. This was on account of inaccurately reporting 25 million transactions and its failure to entirely report 121,000 transactions.
This fine is the latest in a spate of bad press for UBS. This week the bank posted the weakest revenues in recent history from its investment banking unit. Compared to Q1 last year, figures were down by roughly a third, whilst the bank’s core wealth management business saw revenues fall by 9 per cent, the FT reports.
Furthermore, female bankers at UBS have been making statements on the bank’s poor management of those returning from maternity leave, specifically the unfair cuts made to their bonus packages, sustained even after a number of years of returning to employment.
2). SRA Finalises plan for foreign solicitor qualification in event of a no deal Brexit
The Solicitor’s Regulation Authority (SRA), the UK’s legal regulator, confirmed changing the rules regarding how non-UK solicitors will qualify to practice in England and Wales ahead of a no-deal Brexit.
Under current legislation, EU lawyers are able to apply for exemptions on a topic by topic basis from the Qualified Lawyers Transfer Scheme (QLTS), which all foreign-qualified lawyers must sit to qualify in England and Wales.
This affords them the same rights as individuals in England and Wales who have completed their LPC, and qualified Barristers looking to transition their practice, although currently no such exemptions are offered to lawyers from beyond the EU.
The QLTS is split into two parts: a 5 hour 30 minute multiple choice test (MCT) designed to assess candidate’s knowledge of the law and how it is applied in England and Wales, and an Objective Structured Clinical Examination (OSCE) to test candidates transactional and dispute resolution skills, client relationship skills and professional values, behaviours, attitudes and ethics.
However, in the event of a ‘no-deal’ Brexit, which remains the default legal position unless a withdrawal agreement is secured, this system would have to change as under World Trade Organisation (WTO) rules – which the SRA would now need to adhere to – the regulator cannot offer preferential treatment to some nationalities over others.
The solution implemented will allow all foreign lawyers to apply for exemptions of the QLTS, but these would only be offered on the basis that they cover the entirety of either or both parts of the test (the MCT and/or OSCE). Whether exemptions are granted will continue to depend upon a case-by-case review of that lawyer’s qualifications and experience.
Whatever the outcome of the Brexit negotiations, arrangements for solicitors from Scotland and Northern Ireland will continue unchanged, and EU-based lawyers wishing to apply under the current exemptions regime can still do so providing their application is received before the date any no deal Brexit becomes effective.
3). Movers & Shakers
Panel Watch
Amazon demands firms show “added value” in European review
Appointments
Dechert Ushers In New All-Male City Leadership Line-Up
Locke Lord appoints new London Managing Partner
Moves
Linklaters Dispatches Top Partner to U.K. Financial Watchdog To Bolster Expertise
Linklaters sends top disputes partner Gavin Lewis on six month secondment to Financial Conduct Authority (FCA).
DWF Hits Dentons For First Post-IPO Partner Hire
DWF has made the first hire post-IPO with the recruitment of Dentons real estate finance partner Brendan Slack.
Dechert hires Akin Gump funds partner in London
Akin Gump investment funds partner Thiha Tun has joined Dechert’s London office
Pinsent Masons to Launch Flexi-Lawyer Service Vario in Hong Kong With Former Axiom Asia Head
Kirsty Dougan joins Vario as Asia managing director based in Hong Kong.
Bird & Bird makes Big Four hire in Hamburg
Hartmut Horner joins Bird & Bird as a partner from Deloitte’s Swiss business, where he was general counsel in the firm’s consulting group
Morrison & Foerster Adds Investigations and Corporate Governance Partners in Germany
Roland Steinmeyer and Patrick Späth join from WilmerHale in Berlin
Mergers & Alliances
Addleshaws and U.S. Firm Held Merger Talks Last Year
Big Four’s Deloitte to Expand Its Hong Kong Law Firm
Office Openings & Closings
Milbank Grows London Footprint By 30 Percent With New Office
Partner Promotions
Slaughters Slashes Partner Promotions Round Making Up One Lawyer
Financials
Kirkland poised to keep top spot as highest-grossing law firm as PEP hits $5m and revenue jumps 18%
Weil Gotshal London Revenue Jumps 14% As Firm Hits New Highs
Profits Per Partner Hit $5 Million at Paul Weiss
Diversity & Inclusion
Baker McKenzie Sets Target for London BAME Workforce in Latest Pay Gap Report
65 UK and European GCs Sign Letter Calling For Law Firms to Improve Diversity
Bird & Bird Pays Female Partners More, Latest Gender Pay Report Shows
Innovation and Technology
Italian Law Firm Enters Partnership with Fintech Association
Hello and welcome back to the Fides Weekly Update. Check in here to find out what’s been happening in your industry this week. Scroll down to read our regular feature Movers & Shakers of the week.
We love to hear from our readers! Feel free to get in touch on LinkedIn or Twitter
This week:
1. Brookfield buys majority stake in Oaktree to become one of the world’s largest alternative asset managers
Brookfield Asset Management announced on Wednesday that it was buying a majority stake in Oaktree Capital Management in a $4.7 billion deal, creating one of the world’s largest alternative asset managers.
Brookfield will acquire a 62 per cent stake in Oaktree, with the combined businesses having about $475 billion of assets under management and $2.5 billion of annual fee-related revenue.
Lead competitor Blackstone Group reported $472 billion at year-end, although this did not include debt owed to the firm which would increase AUM to $650 billion a spokesperson said.
The deal will bolster the credit business of Brookfield, which has traditionally focused on real estate, infrastructure and renewable power. It also provides Oaktree, a specialist in distressed debt, exposure to assets that thrive in turbulent economic times.
The decision by Oaktree, led by 72 year old billionaire Howard Marks, comes after a sustained period in which its stock has underperformed the broader market. Shares in the firm, which has $120bn in assets under management, are 13% down over the past 5 years and have performed disappointingly since the firm floated it on the public markets in 2012.
Both companies will continue to operate as independent businesses, while Marks will join Brookfield’s board of directors. However, the terms of the transaction allow Brookfield to take full ownership of Oaktree by 2029.
This could spur further investment industry deals as alternative asset managers face pressure to broaden their offerings as institutional investors seek to make big allocations to fewer firms.
Oaktree is the second U.S. alternative asset manager to sell itself in recent years, since Fortress Investment Group agreed to be acquired by Japan’s SoftBank Group Corp for about $3.3 billion in 2017.
2. Another week, another law firm IPO…
As DWF commences its first day of trading on the London Stock Exchange today, news this week has focused on the outcomes for the firm partners, with various members of senior management expected to fare well as a result of the listing.
Releasing 26% of its share capital to the public, DWF partners will retain majority share, but will have their lock-in period amended to allow for 20% of their capital to be released after the first year of trading. Offer price for the available 26% has been set at 122 pence a share, which values the business at £366 million – the highest law firm listing value in the UK to date.
Some of the key members due to make £1m+ from the IPO include:
DWF Managing partner Andrew Leaitherland expects this deal to allow the firm to achieve a greater scope of international reach and scale, capitalising on its ability to offer tech-driven alternative legal services in response to high client demand for more flexible solutions. The firm’s prospectus also highlights its “high quality client base across variety of sectors” and “an understanding of client needs in an international context” as a further strategic target for growth, delivering repeat client revenue.
Although law firm IPOs are becoming relatively commonplace in today’s marketplace, securing a premium listing on the Main Market is a ground-breaking move in the UK legal sector, with all previous law firm IPOs having executed flotations on the AIM Market.
The first ever law firm listing took place in 2007 by Slater & Gordon, with Gateley floating on London AIM market in June 2015. In 2017, two further firms announced their intentions to go public, as Gordon Dadds and Keystone Law both joined the LSE’s AIM in August and November respectively. The most recent law firm IPO was made by Rosenblatt, whose first day of trading began in May 2018.
Clifford Chance and Allen & Overy advised on the DWF IPO, with Stifel Nicolaus and Jefferies operating as joint bookrunners.
Movers & Shakers of the week
Appointments
Jones Day appoints partner Anna Cartwright to lead London corporate practice
Clifford Chance hires Tiernan Brady as first Global Head of Inclusion
Taylor Wessing hires Martin Lewis as new chief financial and operating officer from CBRE
Paul Hastings Names Olivier Vermeulen as New Chair of Paris Office
Law school supremo Peter Crisp to head up new ULaw Hong Kong venture
Moves
Banking partner joins White & Case after only two years at King & Spalding
Fergus Wheeler makes the move to White & Case from US rival King & Spalding
Latham & Watkins Strikes Again With Magic Circle Hire
Linklaters insurance partner Victoria Sander is set to join Latham’s London base next month
Ince & Co makes team hire in Hong Kong
Ince & Co’s Hong Kong office has hired partners Eric Lui and Ian Lo and a team of more than 10 fee earners from local firm ONC Lawyers, including senior disputes associate Alfred Lau, who will join in April as a partner.
Mergers & Alliances
Allen & Overy and O’Melveny Hone In On Key Merger Terms
Office Openings & Closings
Crowell & Moring Enters Asia, Hires Away Bryan Cave Leighton Paisner’s Shanghai Team
Bakers accelerates efficiency plans with fourth back office launch
Partner Promotions
Linklaters Hits 20 Percent Female Partnership Via Largest Promotion Round Since 2007
Financials
DWF Floats For £95m But Misses Value Target
Baker McKenzie Adopts Black Box System for U.S. Equity Partner Pay
Mayer Brown Revenue Jumps as Firm Boosts New York Practice, International Work
Debevoise posts record financials globally and in the City
Inclusion & Diversity
Orrick Ousts Paris Partner After Investigation Into Inappropriate Conduct
A&O rolls out ‘appraisal app’ to let associates get real-time feedback
Taylor Wessing buys Headspace wellness app subscription for all staff
Innovation and Technology
Norton Rose Fulbright responds to fintech boom with practice launch
Other
Willkie Farr co-chair “placed on leave of absence” in wake of admissions scandal
In celebration of International Women’s Day 2019, we have decided to profile the most inspirational women in our Network. These women are not just exceptional in their own right, but have been role models in furthering the debate for greater gender equality in the legal and financial services sectors.
They have supported, mentored and pulled up female lawyers around them, called out and educated others on unconscious bias and have taken to the stage to publicly advocate for equal opportunity. All whilst building phenomenally successful careers, with many balancing this with also raising a family.
Today we share their stories and celebrate their achievements to raise awareness in creating a more gender balanced world.
Amanda Gill
Amanda Gill is a Managing Director at Deutsche Bank, and head of the Global Credit Trading and Emerging Markets Legal Team.
She is a passionate advocate of gender equality in legal and financial services, encouraging her team members and other women at the bank to play to their strengths, be open-minded and authentic.
Amanda mentors junior female lawyers within Deutsche Bank’s London and Birmingham offices. Having benefitted from a mentor herself, Amanda is keen for others to understand the importance of self-awareness and it’s role in tackling unconscious bias. She has also been a member of Deutsche Bank’s gender diversity network, dbGO.
To increase awareness of D&I within her team, Amanda introduced a ‘D&I moment’ to the end of each of her team meetings last year. These give team members an opportunity to explore and share different aspects of D&I. Examples from recent meetings include a general knowledge D&I quiz, an overview of the most recent research findings into reducing the gender pay gap and thoughts on the impact on communities of failure to accept cultural and social differences.
Amanda is also a member of the Law Society’s in-house division committee, which helps develop, promote and represent the needs of lawyers in house.
Stephanie Pagni
Stephanie Pagni is an inspirational female leader with a stellar in-house legal career. 
Moving from magic circle firm Allen & Overy, Stephanie joined the group litigation function at Barclays in 2005, later taking responsibility for the litigation services at Barclays Capital. She was the architect of the bank’s first class global litigation and regulatory enforcement group, uniting disputes and investigations capability across different business lines into a single global team. This created greater scope for internal progression, and allowed Barclays to coordinate a team of highly skilled lawyers at a time of increased global regulatory scrutiny. The team were credited for tackling some of the highest profile disputes to have hit the financial services sector.
Stephanie joined Barclays Legal Executive Committee in 2014 and has since transitioned to a General Counsel role. As General Counsel for Barclays UK, one of the most recognised UK brands, she is accountable for leading the UK Legal function to support Barclays ring fenced bank in its strategic objectives.
Stephanie supports various diversity initiatives, and acts as a role model for her team in balancing work and family life. She is an active supporter of the BLD Legal Launchpad, which works to provide access to the Legal profession primarily targeted at ethnic minority Law students and non-Law students at university in the UK. She also champions technology and innovation in the legal sector, spearheading the launch of LawTech innovation hub Eagle Lab in 2018.
Sasha Scott
Sasha Scott has become a leading influencer promoting workplace inclusivity in the legal, banking, professional services and financial sectors.
She is the founder and managing director of the Inclusive Group, a consultancy specialising in mindfulness coaching and tackling the complexities of unconscious bias. Sasha educates senior management on the commercial drivers behind reducing bias within an organisation and the critical need to promote and sustain inclusive workplace cultures.
Having spent the first ten years of her career working in a high performance investment banking unit at Credit Lyonnnais, LIFFE and then UBS, Sasha is aware of the issues and challenges for women in such a non-diverse environment. With this experience, Sasha exited the industry to launch the Inclusive Group and in 2016, spent considerable time in the US to expand her knowledge and refine her skills which keeps her at the cutting edge of her field. She is passionate about inclusion and helping embed and measure belonging within business.
Sasha’s insights have earned her a prominent reputation in the market. A regular panel speaker across the globe, Sasha advises on a range of diversity issues. She has also featured in numerous publications, such as The Times, The Guardian, City AM, The Lawyer and Law Gazette, and also made an appearance on the BBC.
Suzanne Szczetnikowicz 
Suzanne Szczetnikowicz is a Senior Associate in the Project, Energy and Infrastructure Finance Group at Milbank in London. Suzanne has extensive experience advising project sponsors and lenders in the development, financing and restructuring of significant, cross-border and strategic projects and joint ventures globally across a broad range of energy and infrastructure sectors. She most recently co-led the team advising Athens International Airport on a landmark concession extension financing, which completed this month.
A passionate advocate for the advancement of women in the legal profession, she was a 2014 co-founder of the Women In Law London Network (WILL), and joined the advisory board of Thomson Reuters Transforming Women’s Leadership in the Law (TWLL) programme when it launched in London in 2017, alongside some of the most influential advocates of gender balance in the sector. In 2017, she was honoured with a ‘Rising Star’ award by WeAreTheCity for her contribution to raising awareness of gender equality, one of only 5 winners in the legal category. She was also a 2017 Finalist in the First 100 Years Inspirational Women in Law awards and was featured as an Inspirational Woman in the City by Brummell magazine. Suzanne continues to be highly involved with the D&I and wellbeing agenda at Milbank.
Suzanne is a regular panel speaker, including featuring at the TWLL programme’s inaugural conference, participating on a panel addressing what law firms need to do to attract and retain women. In September 2018, she also led a plenary session at the Women in Law Summit on how female associates can get their voices heard from early on in their careers.
In March 2017, Suzanne’s long-standing interest in classical music led her to join the Board of Trustees of Aurora Orchestra.
Vicky Wickremeratne
Vicky’s career has provided her with an invaluable awareness of obstacles for gender balance in the legal and finance industries.
She secured a training contract at top flight law firm Linklaters, and practiced employment law in London for 10 years before joining Goldman Sachs in Asia, where she was promoted to managing director. Vicky returned to London in 2013, where she re-joined UK law firm Simmons & Simmons and was quickly promoted to partnership.
Working at a leading global investment bank, at the same time as raising a family, allowed Vicky to advocate for equality by acting as a role model for other women in her industry.
As a partner at Simmons & Simmons, Vicky has worked hard to promote fellow women in the firm, trying to break down perceived barriers amongst her peers, as well as both mentoring and sponsoring up and coming lawyers. Vicky is an LGBT Ally and Chair of the Simmons & Simmons Allies Network.
Her ability to view the diversity debate from both the law firm and client side has made Vicky an excellent contributor to thought leadership around this topic, bringing a unique perspective to the multitude of issues facing a business when seeking to attain a diverse workforce.
Hello and welcome back to the Fides Weekly Update. Here you’ll find a summary of what’s been happening in your industry this week.
For a brief round-up of the key developments, scroll down to take a look our regular ‘Movers & Shakers of the Week’ feature.
We always love to hear from our readers! Feel free to get in touch over LinkedIn or Twitter.
This Week:
1. Regulator efforts to discourage the use of dark pools had ‘limited success’
Following the first anniversary since the launch of MiFID II, Europe’s financial regulator has looked into its success in curbing the amount of dark pool trading as part of its annual ‘Trends, Risks and Vulnerabilities’ (TRV) report.
Under the MiFID II directive, the European Securities and Markets Authority (ESMA) devised and implemented a temporary cap on trading volumes in dark pools, with an aim to guide investors to trade on public exchanges. The report confirms that the cap led to a considerable fall in trading, where volumes in dark pools were only 1 percent of the total traded in August 2018, compared to 7 percent six months earlier.
However, the cap was lifted in September and caused dark pool activity to bounce back to 5 percent, demonstrating continued investor interest.
Dark pools can present disadvantages for public investors as prices are hidden on dark pool trades until after completion, by which point the public investor is in a worse trading position.
In order to remedy this without prohibiting dark pools, which are important tools for institutional investors to carry out sizeable trades, regulators decided to place a temporary cap on the total volumes of trading that can take place per individual stock in a dark pool.
ESMA was given a deadline of 3rd March to submit feedback to the European Parliament on the impact of its volume cap mechanism. It’s now expected that the regulator will have to amend its rules given the cap has proved an ineffective solution in dissuading investors in the long-term.
Also featured in the report were concerns around the risks of individuals investing in risky products, such as virtual currencies and Initial Coin Offerings (ICOs), as well as high level market risk pertaining to uncertainties from ongoing Brexit negotiations.
Access ESMA’s full TRV report here.
2. Law firm research indicates the most effective initiatives to increase gender equality at your firm
Preliminary results released by Thomson Reuters Transforming Women’s Leadership in Law (TWLL) programme and legal research platform Acritas, reveal that not all initiatives to increase gender diversity in law firms are effective.
By correlating female retention rates with the diversity initiatives implemented at participating law firms, the study hopes to identify the most effective practices for driving greater gender equality in law firms.
The initiatives with the greatest positive impact on female retention include: mandatory female representation on pitching teams, publicly declaring gender targets and having a quota for the number of female candidates on partnership promotion rounds.
On the other hand, women-only groups and networks were shown to be the least effective, most likely because such initiatives fail to engage the wider firm and lack the social accountability of the above policies.
Acritas chief executive and TWLL UK Advisory Board member Lisa Hart Shepherd said: “[The project is] about giving leadership and the diversity heads in law firms, and general counsel, some evidence to say, ‘these are the things you have to have in place to enable diversity’.
“We want to help the market as a whole to identify something it can truly embrace to encourage diversity.”
The data so far has been collected from 30 law firms, including three of the five magic circle firms, most of the ‘silver circle’ firms, and some European firms. The project is now calling for more to take part – especially top 100 firms – during the coming weeks.
The complete findings of the joint research between Thomson Reuters and Acritas will be published later this year.
3. Movers & Shakers of the week
Panel Watch
National Grid Set to Overhaul U.K. Legal Panel
Appointments
SFO appoints first female general counsel
Moves
Rare Partner Moves at Macfarlanes as it Loses Two and Hires One
Macfarlanes is set to lose two of its private client lawyers, including its private client property head Tristan Ward, while picking up another partner from Charles Russell Speechlys
Dentons makes Brexit move with trade group launch
Firms secures hire for new group aimed at helping Dentons to win national and cross-border investigation work ahead of Brexit
Schillings’ prized family team departs en masse from firm
Schillings is to lose its seven-strong family team, led by partner Davina Katz, who is launching her own firm
Mayer Brown targets corporate with Hogan Lovells Asia hire
Mayer Brown has hired Hogan Lovells corporate partner Steven Tran as it continues to flesh out its corporate practice in Hong Kong.
Freshfields Recruits Top CFIUS Official as Washington Partner
Aimen Mir joins Freshfields from the Committee on Foreign Investment in the United States (CFIUS) where he was a key official charged with reviewing and approving foreign investment transactions.
Mergers & Alliances
DWF Continues Australia Expansion, Merges With Melbourne Boutique
Office Openings & Closings
Cooley to open Hong Kong office with Skadden partner hire
Capital markets lawyer Will Cai will help the Palo Alto-based firm launch its third Asian office after Shanghai and Beijing.
Shearman delivers on Seoul promise with office launch
Shearman & Sterling is relocating three of its lawyers to South Korea as the firm opens an office in the country’s capital led by recently made up partner, Anna Chung.
Partner Promotions
Macfarlanes Promotes Only One Woman in Nine-Strong Round
Financials
Morgan Lewis U.K. Profits Soar Over 70% Amid London Partnership Changes
Covington’s City turnover soars above $100m
Revenue and Partner Profits Hit New Highs at Paul Hastings
Hogan Lovells posts Revenue and Profit rises
US financials: Paul Hastings joins the $3m PEP club
Inclusion and Diversity
Law firm Research Finds Some Diversity Initiatives Are Counter-Productive
Morgan Lewis and the #MeToo bot: The next stage of the firm’s tech plans
Technology and Innovation
Two Slaughters partners take the lead in new quest for legal tech
Hello and welcome back to the Fides Weekly Update. Here you’ll find a summary of what’s been happening in your industry this week.
For a brief round-up of the key developments, scroll down to take a look our regular ‘Movers & Shakers of the Week’ feature.
We always love to hear from our readers! Feel free to get in touch over LinkedIn or Twitter.
This Week:
1). Axiom proceeds with stock exchange listing
Leading alternative legal services provider Axiom Law is to become the latest in a raft of firms to tap into the public market for investment as it is set to list on the New York Stock Exchange.
The announcement did not reveal the size of the stake being offered, but entry to the New York Stock Exchange would create a significant expansion of the publicly listed legal services sector.
While Axiom is not a regulated law firm, it employs some 2,000 lawyers and other professionals globally, providing services to half the Fortune 100 companies. With the firm’s global figures totalling $360m (£280m), UK revenues neared the £50m mark last year, up from £30m in 2015.
The firm has expanded in recent years via more traditional routes including a series of acquisitions and joint ventures. In 2016 it acquired the general counsel business of Toronto-based law firm Cognition, adding a team of almost 50 lawyers and a client roster that included 60 global corporations. Late last year it also entered into a strategic collaboration with LegalWorks Nordic to service customers in the region.
However, the firm also announced that it has spun off two of its divisions into independent companies in preparation for the move; data analytics arm Knowable and legal solutions platform Axiom Managed Solutions. These businesses will pursue their own separate investment strategies according to a statement released by the firm.
Axiom’s decision to list on the New York Stock Exchange comes after a string of deals in the New Law space, demonstrating the growing power of alternative legal services providers in the sector.
CVC Capital Partners acquired a majority stake in UnitedLex last year, in what is believed to be the largest investment in the legal market ever at $500m. Elevate has also been on acquisition spree, adding Asia-Pacific flexible lawyering service Cognatio Law and UK business Halebury this year
Closer to home, DWF has joined several law firms moving to offer an alternative business proposition by cementing its aim to float on the London Stock Exchange.
2). Standard Chartered sets aside $900m for fines in US and UK
Standard Chartered has set aside $900m to cover potential fines connected to investigations in the US and the UK, the bank said in a filing to the Hong Kong Stock Exchange.
The $900m provision will cover potential penalties related to “historical violations of US sanctions laws” and “previously disclosed investigations relating to [foreign exchange] trading issues”.
This comes ahead of the bank reporting its full-year results, expected next week.
Fines for which the $900m provision have been set aside for include the £102.2m fine by Financial Conduct Authority in relation to historic financial crime controls.
The bank also agreed earlier this month to pay $40m in fines to settle claims from US authorities that bankers were involved in chat rooms that tried to manipulate the price of emerging markets currencies as early as 2007.
The largest regulatory fine however is that from US regulators who are seeking to impose a penalty of about $1.5bn on the bank for alleged sanction breaches involving Iran-based clients of its Dubai branch.
Discussions with the US on a deferred prosecution agreement have been taking place since 2012 and have been extended twice during that time.
US authorities have been probing whether the bank continued to breach sanctions by processing US dollar transactions for Iran-controlled entities even after it signed a deferred prosecution agreement and paid a $667m fine to avoid criminal charges in 2012, with negotiations still continuing.
Shares in Standard Chartered fell about 1.1 per cent in yesterday morning trading in Hong Kong, but largely recovered to HK$63.75 ($8.12) by early afternoon.
While the bank has traded up slightly since the start of the year, it is still more than 60 per cent below its five-year high of HK$164 in May 2014 before it launched a major shift in strategy under former chief executive Peter Sands.
3). Movers & Shakers
Appointments
CMS partner departs for senior post at energy giant
Freshfields names new private equity leaders
Howard Kennedy scraps CEO role as it rejigs top team
Moves
Squire Patton Boggs partner trio quit to join former London head
Three London Squire Patton Boggs partners have left the firm to join US rival Crowell & Moring, reuniting with former City head Robert Weekes.
HSF targets New York expansion with hire of Hogan Lovells’ employment head
Barbara Roth, who has led the Hogan Lovells employment practice for nearly a decade, now plans to build HSF’s US practice in the US.
Charles Russell Speechlys snares partner duo for arts law foray
The new practice is to be spearheaded by partners Tim Maxwell and Rudy Capildeo from Boodle Hatfield
Mergers & Alliances
Three-way merger creates new Spanish law firm
Ashfords and Boyes Turner walk away from £60m merger
Office Openings & Closings
Association of Corporate Counsel opens in Brussels to attract European members
Financials
Cooley targets 40% City growth and office move by 2021
Top management pay at Norton Rose Fulbright drops almost 45%
Akin Gump London revenue leaps by nearly a third as Reed Smith also posts increase
Cadwalader blames restructuring exits as London revenue drops 13%
Shearman’s revenue closes in on $1bn barrier
Akin Gump City revenue soars past $100m mark
Inclusion & Diversity
As chosen by GCs: the best law firms for diversity
Linklaters settles ‘ongoing struggle with women’ claim
Innovation and Technology
AI Platform Luminance Teams with EY Law in Global Deal
Legal tech patent filings rocket fourfold since 2013
CMS’s tech incubator goes global in push for more start-up members
Hello and welcome back to the Fides Weekly Update. Here you’ll find a summary of what’s been happening in your industry this week.
For a brief round-up of the key developments, scroll down to take a look our regular ‘Movers & Shakers of the Week’ feature.
We always love to hear from our readers! Feel free to get in touch over LinkedIn or Twitter.
This Week:
1). Majority of in-house teams to implement AI, research finds
The majority of corporate legal departments will have artificial intelligence systems for analysing and reviewing contracts in a year’s time, a survey of global businesses has found.
Understanding Legal AI from the Inside Out, conducted by US analyst Ari Kaplan Advisors for Seal Software, a supplier of AI-based contract review systems, found that 37% of respondents already review contracts and agreements with the assistance of AI.
Of those who do not, 47% say it is ‘likely or highly likely’ that their organisation will implement software in the coming year.
This finding is likely to encourage a new wave of interest in an industry which is capitalising on new developments in machine learning and natural language processing to scan contracts and other documents in a fraction of the time taken by human experts.
According to the research, the main use case for AI is the need to comply with data privacy legislation, such as the EU’s General Data Protection Regulation (GDPR), with 55% of respondents saying that they had implemented the system for this purpose. This was followed by the need to keep track of NDAs and procurement/vendor contracts.
Respondents also said that AI helped identify inconsistencies in their agreements, automate some elements of their review, and helps the management of mergers and acquisitions more effectively.
However, the survey also warns GCs to beware of claims that AI will work ‘straight out of the box’, or that it’s end product will not need further review by lawyers.
For the technology to work successfully, organisations need to train both their team how to use the systems appropriately, and the AI software itself by monitoring and reviewing outputs so the machine ‘learns’ the correct behaviour.
2). Lloyds plan to hire 700 wealth management advisors following tie up with Schroders
Lloyds Banking Group plans to hire more than 700 financial advisers as part of its push into the UK wealth management sector.
The hiring spree, reported by the Financial Times, comes on the back of a tie-up between the UK’s largest retail bank and listed asset manager Schroders in October 2018, into which Lloyds will transfer approximately £13bn of assets and associated advisers from its existing wealth management offering.
The deal, the highest profile of its kind between a British bank and fund manager, combines Schroders’ investment offering with Lloyds’ 27 million-strong customer base and wide distribution network.
As part of the tie-up, in which Lloyds handed Schroders an £80bn chunk of assets to manage on behalf of its Scottish Widows business, Lloyds is to take a 19.9% stake in Cazenove Capital, Schroders’ wealth management business. Lloyds will also transfer £400m of its wealth management business to Cazenove.
Lloyds has set a target of increasing assets under management from £13bn to £25bn, equivalent to annual growth of about 14 per cent, according to the FT.
To achieve this, Lloyds plans to grow its wealth assets by targeting its own bank customers who currently use other wealth management services. However, it will also be on the lookout for acquisitions, both of full businesses and individual advisers who can bring clients with them.
About 300 Lloyds advisers will join the joint venture at launch later this year, but the number is set to more than triple in the next five years. This would put the venture in direct competition with established UK wealth managers such as St James’s Place and Rathbones.
However, the limited number of quality advisors – many of whom are reluctant to join banks — could complicate Lloyds’ expansion plans.
Although yet to finalise the brand for their joint business, it is likely to feature the Schroders name more prominently than Lloyds to make it more appealing to staff and more affluent investors, according to individuals close to the discussions.
3). Movers & Shakers
Moves
Freshfields competition guru to join Brunswick Group
In what is thought to be the first senior move from law to public affairs, Freshfields competition veteran John Davies is set to join the Brunswick Group as a Senior Adviser in April.
DAC hires Kirkland partner to lead banking practice
DAC Beachcroft has hired Kirkland & Ellis partner Chris Wall to head the firm’s banking practice after 18 months in the US firm’s London partnership.
EY makes key financial services hire from Big Four rival
EY has hired PwC’s head of financial services regulation Martin Sandler
Ashurst expands Asia-Pacific corporate practice with Sidley hire
Ashurst has lured counsel Waltter Kulvik from Sidley Austin as a corporate partner in Singapore.
Jones Day private equity stalwart resigns for Latham
Jones Day City private equity partner Neil Ferguson has resigned from the firm to join US rival Latham & Watkins
Ropes quartet defect to White & Case in Hong Kong
A four-lawyer private equity team led by partner Daniel Yeh has left Ropes & Gray’s Hong Kong office for White & Case.
Reed Smith brings in CMS digital head in effort to boost tech practice
Digital and data head at CMS Elle Todd has made the move to Reed Smith as the firm looks to expand its tech presence
Morgan Lewis pulls off 15-lawyer Squires raid to open Abu Dhabi office
Morgan Lewis & Bockius has completed a multi-office 15-lawyer raid on US rival Squire Patton Boggs, bringing over a seven-lawyer team in Washington DC, and an eight-lawyer team to launch an office in Abu Dhabi.
Simmons hires new banking partner from A&O in Frankfurt
Dr. Jens Gölz joins the Frankfurt office of Simmons & Simmons from Allen & Overy where he was a counsel
Financials
Goodwin London revenue soars 58% to $66.8m
Proskauer nears $1bn revenue mark as it posts new profit highs
Ropes boosts UK associate pay to £120,000
Cooley posts double-digit revenue and profit growth in 2018
White & Case breaks through $2bn mark in global results
Milbank posts 25% London revenue rise after getting serious with recruitment push
Inclusion & Diversity
Elevate reverses the gender pay gap
Hello and welcome back to the Fides Weekly Update. Here you’ll find a summary of what’s been happening in your industry this week.
For a brief round-up of the key developments, scroll down to take a look our regular ‘Movers & Shakers of the Week’ feature.
We always love to hear from our readers! Feel free to get in touch over LinkedIn or Twitter.
This Week:
1). Linklaters granted interim injunction to prevent disclosure of ‘cultural concerns’
Magic circle firm Linklaters has been granted a temporary injunction against a former executive committee member looking to expose the firm’s ‘ongoing struggle with women in the workplace’.
The injunction prevents Frank Mellish, the firm’s former director of business development and marketing, from publishing 11 documents that he had intended to send to ‘unidentified organisations’ which would ‘demonstrate the Linklaters culture’.
The Magic Circle firm sought an injunction on the basis that the disclosures would be a breach of confidence, and Mellish’s contract included an obligation of confidentiality over the information obtained during his work.
According to the judgment, Mellish intended to disclose details around three specific events, called the ‘Munich incident, the NY Settlement and the London Settlement’.
A further hearing on whether to continue with the injunction will take place next week.
Linklaters hired Mellish from Deloitte Australia in March 2017, but he was given six months’ notice that his contract would be terminated in June 2018.The contract termination included a ‘substantial additional sum…ex gratia’, according to the ruling.
After receiving his final payment last month, he emailed Linklaters senior partner Charlie Jacobs and managing partner Gideon Moore to express his concern that given his age, the termination of his employment was effectively the end of his career, despite acknowledging that the terms on which his employment had been ended were lawful.
The email then said he intended to ‘share my impressions of the current culture at Linklaters’ and the firm’s struggle with women in the workplace in interviews during the first two weeks of February.
Linklaters then applied to prevent the disclosure of this information, including the identity of a former partner who was the subject of complaints by another staff member. The decision also refers to an unspecified number of other people against whom complaints were made, and prevents the disclosure of the identity of the female complainant in the Munich incident and a complainant in the NY settlement.
It is unclear whether the Munich incident is connected to the case of Thomas Elser, a tax lawyer based in Germany who was sentenced to three years three months in prison last year for a sexual assault on a junior worker at a Linklaters event during Oktoberfest in 2014. Following the denial of his appeal by the Munich Regional Court this week, his prison sentence is set to start imminently.
In granting the interim injunction, Mr Justice Warby noted that the law firm accepted there was a legitimate public interest in the performance by large firms such as Linklaters of their social and moral duties towards their staff.
“But the existence of such an interest cannot justify indiscriminate disclosure of otherwise sensitive confidential information which others have a legitimate interest in keeping confidential.” the judge said. “A general desire to talk publicly about the ‘culture’ of a large firm is not enough to justify the disclosure of such details.”
This is another development in the wake of the #MeToo movement that we will observe with interest.
2). FCA reveals dissatisfaction with Mifid II implementation
Absence of enforcement regarding the implementation of Mifid II should not be interpreted as the regulator being “totally happy” with how firms are implementing the cost and charges rules, warned Stephen Hanks, Head of Markets Policy at the FCA.
Speaking at a Tax Incentivised Savings Association event on Thursday, he cautioned firms against reasoning that the FCA’s current meant that the regulator was “entirely happy with what is going and are taking no action.”
Rather, the regulator is yet to find anything that meets the requirements for taking an enforcement case, which is complicated and time and resource consuming.
Mifid II, which was introduced at the start of last year, requires fund firms to publish total investments costs to investors in a single percentage fee.
On the plus side, Mr Hanks said the quality of the reporting on the legislation had largely improved over the course of the past 12 months, although some errors in the reports continue to be seen.
“So it’s important for firms to be monitoring the nature of their reports, checking them and send us any errors and omissions – with particular focus on getting the fundamental economics of transactions correctly reported to us” he reiterated.
This comes as news emerged at the start of the week that the FCA is investigating 48 fund firms as to their compliance with the Mifid cost rules, as revealed by a freedom of information request submitted by The Times.
Although in a statement the regulator said ‘no intention of taking enforcement action against firms for not meeting all the requirements straight away’ it echoed the fact that if it finds evidence that firms have been dragging their feet, it will be forced to take action to police the rules more effectively.
Given the scale of the reforms, the FCA has been relatively relaxed in its enforcement of the rules, taking a more supervisory approach in wanting to see that firms having made efforts to deploy resources to rectify issues.
3). Movers & Shakers
Panel Watch
Dyson to increase number of Asian firms on panel as it cuts overall legal advisers by 60%
RBS prepares for “disruptive” shake-up in next panel review
UK government’s panel firms given two-year vote of confidence
Appointments
Fieldfisher and Browne Jacobson elect new senior partners
Fieldfisher has elected corporate partner David Wilkinson as its new senior partner to replace current post-holder Michael Lohn, where Browne Jacobson has elected Caroline Green to be the firm’s first female senior partner.
Pinsents re-elects Cleland as managing partner as top earner takes home £1.2m
Pinsent Masons has re-appointed John Cleland as its managing partner for a second term.
Freshfields appoints London and global dispute heads
Freshfields Bruckhaus Deringer has appointed Andrew Hart as global head of dispute resolution and named Sarah Parkes as London dispute resolution head in a newly created role.
Mishcon hires former Roche GC for new role
Funke Abimbola MBE, former GC of Swiss pharmaceutical company Roche, has joined Mishcon de Reya in a new role as director of operations for dispute resolution.
DLA brings in Susskind for next stage of firm’s “radical change” strategy
Technology guru and professor Richard Susskind brought in to review the second stage of DLA’s ‘radical change’ strategy.
Moves
Latham & Watkins banking co-head Kandel quits for US rival in London
Latham & Watkins banking co-head and heavyweight partner Christopher Kandel has left the firm to join US rival Morrison & Foerster.
White & Case’s hire of Weil banking head falls through
After revealing a delay in the lateral hiring process last month, White & Case have confirmed that their hire of Weil Gotshal & Manges banking head Mark Donald is not to take place. This is understood to be due to an incident involving a Weil Gotshal secondee at JP Morgan, which left the bank threatening not to instruct White & Case if Donald moved there, as reported in The Lawyer.
Freshfields loses insurance regulation head to Mayer Brown
Freshfields Bruckhaus Deringer head of contentious insurance regulation Chris Chapman has joined Mayer Brown as a partner.
London O’Melveny partner exits for White & Case amid merger talks
London partner Sherri Snelson has left the firm after 10 years to join the banking practice of White & Case in New York.
Jones Day project finance partner finds new home
Finance lawyer Myles Mantle is set to join Haynes and Boone.
Half of Osborne Clarke’s Stockholm partners exit firm
The Stockholm office of the UK firm has been hit by a four-partner defection 18 months after the base opened. Bjorn Rustare and Mikael Moreira have left to join DLA Piper, where Bjorn Bjuggren and Nimrod Badur moved to local outfit Morris Law.
Dechert London chairman steps down
Chairman of the London management committee Camille Abousleiman has stepped down to become Minister of Labour in the Lebanese government.
Mergers & Alliances
US firm expands in Dublin with Irish merger
US firm Clark Hill is expanding its presence in Dublin though a merger with Irish firm O’Gradys Solicitors.
Office Openings & Closings
KPMG to launch legal consultancy arm in the UK
Financials
Travers top partner pay jumps by a third to hit £2m
Profits surge as Freshfields reins in staff costs
Eversheds Sutherland boosts global revenue by 10%
KPMG’s legal arm announces ‘record’ growth in 2018
Ashurst top earner takes home £1.4m as profits leap 16%
Inclusion and Diversity
Clydes includes partners in gender pay gap reporting
Innovation and Technology
Slaughter and May adds clout to £10m Luminance fundraise
Slaughters debuts working group to educate lawyers on blockchain
Hello and welcome back to the Fides Weekly Update. Here you’ll find a summary of what’s been happening in your industry this week.
For a brief round-up of the key developments, scroll down to take a look our regular ‘Movers & Shakers of the Week’ feature.
We always love to hear from our readers! Feel free to get in touch over LinkedIn or Twitter.
This week:
1. DWF partners subject to five year capital lock in post IPO
News emerged this week that DWF partners will see their capital locked into the business for five years after the firm’s initial public offering (IPO), expected to take place before the end of March.
In what is set to become the largest law firm IPO to date, upon listing the firm’s partners will become its majority ‘selling’ shareholders.
However, according to a filing setting out the details of the float, partner’s capital in the business will also be subject to a phased lock-up, which limits the amount of capital partners can withdraw from the business to 20% per year for the first five years, half of which will be linked to performance.
DWF CEO and managing partner Andrew Leaitherland cited two principal reasons for the lock-in: to encourage performance, and to prevent the risk of partner departures, with remaining equity if partners were to leave going into a newly established employee benefit trust.
“We’re a people business and we depend on our ability to provide advice,” said Leaitherland. “From an investor perspective, they want to ensure continuity and growth and to prevent risks from occurring. So that’s why we created the lock-in.”
Should the listing go ahead, DWF will undergo a restructure in order to comply with FCA regulations as it seeks to become the first law firm to list on the main market of the London Stock Exchange, rather on the AIM market which has seen several additions in recent years.
DWF will apply for shares to be admitted to the premium listing segment of the FCA’s official list and to trade on the main market for listed securities on the LSE.
Those steps will then be follow by a name change, which would see its official title become DWF Group plc.
In order to fund the public listing, the firm will restructure its partnership and remove the distinction between fixed salary and equity partners. Former equity partners will see a 60% reduction in their current fixed profit share, with salaried partners seeing a 10% reduction.
While partners will be paid on fixed basis, they will also receive dividend income and performance-related bonuses paid out of an annual bonus pool.
The intention-to-float document comes alongside half-year results for 2018-19, which detail the firm’s revenue growth between 30 April and 31 October 2018.
In the six-month period, revenue grew by 18.3% to £133.4m, up from £112.7m last year. The half-year performance comes after the firm saw revenues rise 18.6% to £236.5m during the last financial year.
2. Good news for asset managers as EU consents to a post-Brexit agreement with FCA
First announced by Reuters yesterday, financial regulators in Europe and the UK have confirmed an agreement that will sustain cooperation post-Brexit for cross-border financial services.
The European Securities and Markets Authority (ESMA) and the Financial Conduct Authority (FCA) negotiated and agreed a Memorandum of Understanding (MoU), which safeguards cross-border sharing of information for financial firms. Particularly helpful for the asset management industry, the MoU means firms can continue to ‘delegate’ portfolio management to the UK.
Delegation is a key aspect necessary in asset management. It authorises fund managers in the UK to manage funds that are domiciled and regulated in other jurisdictions, such as Luxembourg and Ireland.
Chair of the Investment Association Chris Cummings expresses his thoughts on the MoU: “This is welcome news for millions of savers across Europe who together have some £1.8 trillion of savings managed by experts in the UK. Asset managers – and critically their clients – will now have the confidence they need that delegation to the UK will continue.”
Whilst this marks a positive step towards cooperation with ESMA, the FCA needs to continue to make gains with other EU27 regulators in signing terms to ensure freedom to operate across Europe.
The agreement between ESMA and the FCA was agreed “in substance” on Wednesday, with more details to be released shortly.
Movers & Shakers of the week
Appointments
Sky names new group GC ahead of long-serving legal chief’s exit
Former RPC partner takes up new legal role at loans provider
Moves
Senior Ashurst corporate duo leave for City rivals
Ashurst London head Simon Beddow and fellow corporate partner Robert Ogilvy-Watson are leaving the firm to join Bryan Cave Leighton Paisner and Macfarlanes respectively
Ashurst reveals new London head after Beddow exit
Real estate finance partner Ruth Harris is taking on the role of London office managing partner amid recent exits
Fried Frank invests in fund finance with Linklaters hire
Fried Frank brings on board its first dedicated funds lawyer from Linklaters Kathryn Cecil
Weil private equity partner leaves to co-found growth fund
Samantha McGonigle is leaving the US’s firm’s City base to become a co-founder of a growth fund.
King & Spalding hires three-lawyer Ashurst team for Paris rebuild
King & Spalding has re-established its Paris real estate practice with the hire of a three-lawyer team from Ashurst led by partner Guillaume Aubatier.
Office Openings & Closings
DWF Continues Expansion in Singapore With Taylor Wessing’s Dubai Corporate Head
McGuireWoods exits Brussels as entire team joins local firm
Deloitte launches Hong Kong law firm led by China general counsel
Financials
DLA Piper revenue grows 5% as firm claims knock-on effects of cyber attack
Bird & Bird posts double-digit H1 growth as LLPs shed light on management shake-up
Final BLP accounts show operating profit fell 21% in last year before US merger
Clyde & Co accounts reveal rising pay for top earner
Dentons’ Scottish merger cost £11.5m, accounts reveal
Addleshaws’ highest earner pay rebounds to £1m
Inclusion & Diversity
170 GCs pen open letter to law firms: improve diversity or lose our business
Hello and welcome back to the Fides Weekly Update. Here you’ll find a summary of what’s been happening in your industry this week.
For a brief round-up of the key developments, scroll down to take a look our regular ‘Movers & Shakers of the Week’ feature.
We always love to hear from our readers! Feel free to get in touch over LinkedIn or Twitter.
This week:
1. FCA kicks off 2019 by tackling regulation the UK’s cryptocurrency market
After roughly two years of fast-paced growth and reams of attention in financial markets, the world of cryptoassets and distributed ledger technology (DLT) is about to receive much stricter guidance as to how it will operate in the UK under the Financial Conduct Authority (FCA).
Consultations opened this week, and the FCA released its report setting out preliminary Guidance on how it sees cryptoassets and underlying DLT technology fitting into the UK regulatory framework.
Consistent with the watchdog’s ethos to ensure financial investing is fair and transparent for consumers, the paper aims to define cryptoassets into clear categories, and highlights how such assets could cause harm to investors and market integrity.
Extending the forum to all cryptocurrency businesses, the consultation period is now open for the next two months, where all stakeholders are able to have their say in the FCA’s assessment of cryptoassets and its plans for future regulation.
The FCA’s plans for regulation are based on the understanding attained as part of the UK Cryptoassets Taskforce, which is made up of the FCA, HM Treasury and the Bank of England. Releasing their report on the industry last year, the taskforce laid out the UK’s policy and regulatory approach to cryptoassets and distributed ledger technology in financial services.
Christopher Woolard, the FCA’s executive director of strategy and competition commented on the need for clarity: “This is a small but growing market and we want both industry and consumers to be clear what is regulated, and what isn’t.”
The FCA is set to release its policy statement on cryptoassets this summer.
2. UK listed law firm makes cash call for global growth plans
Newly merged Ince Gordon Dadds has its sights set on overseas offices, for which the firm is looking to raise £10 million in discounted share placing.
The Aim-listed law firm conducted a ‘successful and oversubscribed’ accelerated bookbuild this week, i.e. an admission of shares to the stock market for a discounted price, with the intention of raising funds in a short space of time.
In what was termed a ‘reverse takeover’, Gordon Dadds acquired the London office of insurance specialist Ince & Co in December last year and has entered into network arrangements with a number of Ince’s international offices.
In a statement posted to the stock exchange, Ince Gordon Dadds has confirmed the targeted areas for growth are: Malta, Gibraltar, South Africa, China, Hong Kong and Bermuda, with certain acquisitions already lined up and expected to be announced in Q1 this year.
On announcement of the fund raising, tehe firm’s share price plummeted by 22%.
Since news of the merger was confirmed, Ince & Co has suffered a number of departures, both in the UK and across continental Europe. Here’s a selection of some key leavers:
Movers and Shakers of the week
Panel Watch
They retain five firms from the old roster and bring in Clifford Chance, Addleshaw Goddard and Eversheds Sutherland as new additions
Monzo confirms Hogan Lovells, Taylor Wessing and Simmons & Simmons as its key legal advisers
Aviva plans to launch panel review in Q1 2019
Appointments
Ashurst appoints two new board directors, raising its female board representation to 40%
Freshfields appoints NY partner Noiana Marigo as new US head of international arbitration practice
Moves
Ashurst banking veteran retires
Mark Vickers retires from Ashurst’s partnership in London after 40 years at the firm
Dorsey & Whitney boosts City offering
Corporate trusts specialist Helena Nathanson departs Bryan Cave Leighton Paisner to join US firm Dorsey Whitney, alongside senior associate Paul Regan
Office Openings & Closings
Inclusion & Diversity
Linklaters makes a rare move in the legal sector by disclosing its ethnicity pay gap figures
Pinsent Masons and BCLP lead Stonewall LGBT rankings
Technology & Innovation
Hello and welcome to the Fides Weekly Update, your one stop shop for all the key legal and financial news of the week! Bankers bonuses alongside Legal and RegTech are the key focuses of this week’s issue, alongside a bumper edition of Movers & Shakers (it has been a busy week for sure!)
We hope you enjoy, or even better get in touch with us on Twitter and LinkedIn for more regular market updates.
This week:
1). Bonus Season: Bigger bonus pools expected all round at US banks
Annual bonus season is upon us with the City offices of the largest US banks announcing staff bonuses this week for their efforts in 2018. Citi, Morgan Stanley and JP Morgan are expected to be delivering envelopes throughout the week, which has been cause for much speculation in financial news as to what staff should be expecting.
We’ve kept our eye on all bonus related stories throughout the first few weeks of the year to provide you with a summarised account of what this year’s bonus season looks like.
Overall, it seems expectations are high. The 6 largest US banks posted over $100 billion in profit for the first time, with JP Morgan and Bank of America announcing record results, and Goldman Sachs and Citi making their largest annual profit since 2008.
Whilst Q4 revenue wasn’t great for the bulge bracket, the first three quarters bodes well for those awaiting their bonus figures.
Business Insider reported that those at JP Morgan should expect bonus percentage gains to come in around mid-single digits compared to last year, furthered by a Reuters article, which suggested that JPMorgan Chase & Co will increase the pool for employee bonuses by 3 percent.
Unfortunately for those in JPM’s fixed income unit, weak trading revenues could see them receiving lesser figures than their counterparts in equity trading and investment banking.
Morgan Stanley appeared to have a particularly challenging fourth quarter, whose institutional securities group (made up of its trading and investment banking teams) suffered a 15% fall in net revenues year-on-year. Although these gloomy figures come so close to bonus season, eFinancial Careers commented that the division performed better overall than it did the year before, for which year the bonus pool increased by 5%. This indicates that there’s a high chance compensation figures will increase for those in MS’ institutional securities group.
Meanwhile, bankers at Deutsche Bank are preparing for more sombre bonus announcements as the FT reports a likely double digit cut in the German bank’s bonus pool after the investment banking unit recorded one of its worst years since 2008. Deutsche Bank’s financials for 2018 will be posted on 1st Feb and bonuses are expected to be announced on 22nd March, according to the FT.
Amongst rising revenue gains and net profits, the widening gap in compensation between US and European banks is becoming more apparent. Speaking with the Telegraph, PwC payment expert Jon Terry believes: “Individual European bank increases will be in the order of 5pc to 15pc below the increases in individual US bank bonus pools.”
2). Technology tops in-house agenda for 2019
Technology is on top of the agenda for legal and compliance teams in 2019, two surveys released this week show.
The first by legal services provider Lexoo asked 90 GC’s and senior legal counsel to identify their team’s top priorities for the coming year as well as outline their personal goals for 2019.
Adopting technology tools such as contract management or legal spend trackers topped the list, with 63% of GC’s surveyed including it as one of their top 3 priorities. Other common objectives included the need to reduce legal spend, cited by 53% of respondents, and to look for ways to outsource legal work more effectively, as noted by 48%.
Upskilling in legal tech and legal operations was also a personal goal for 43% of the GC’s questioned, however this behind developing one’s personal brand within the company (76%) and being more involved in company strategic decision making (69%).
Law firms have been quick to respond to client’s growing demand for legal tech solutions, as seen this week by DWF who has brought on ex-Freshfield’s senior manager of legal technology operations Jamie Whalebone as its new head of legal service delivery and transformation. This follows the hire of Freshfields’ chief of business operations Anup Kollanethu, who left the firm in August to become CEO of the firm’s managed services business line.
Linklaters also has looked into integrating one or two associates into full time non-legal positions within its AI team in attempt to make the development of it’s technology more ‘lawyer friendly’.
Similar trends can be seen across regulatory compliance, with a survey of 500 executives from Intertrust revealing that four-in-ten (38%) had invested in new technology solutions, and that the same proportion had increased their use of external advisors and consultants.
With respondents indicating that technology will play a pivotal role in maintaining compliance with new regulations – with 87% of firms predicting that demand for ‘RegTech’ solutions will increase in the next two years – this presents a number of challenges for corporates across the board who must decide how best to adapt to a changing environment and acquire the necessary technology and skills their business requires.
3). Movers & Shakers
Appointments
National Grid hires Gowling WLG partner as UK general counsel
Linklaters drafts in former HSF CEO Sonya Leydecker
Balfour Beatty hires new general counsel from Tesco
Moves
Mishcon moves to replace Levitt with Kingsley Napley hire
Mishcon de Reya has moved to fill a gap left by its former head of white collar crime and investigation Alison Levitt QC by hiring Kingsley Napley criminal litigation partner Johanna Walsh.
Taylor Wessing raids Bird & Bird for seven-lawyer Paris team
Bird & Bird public sector head Sophie Pignon and banking and finance partner Eric Charvillat join Taylor Wessing with a team of three associates, one of counsel and a consultant.
Kirkland continues London push with Weil Gotshal partner hire
Tax partner David Irvine is set to join Kirkland later this year
Dutch firm hires six-person team from local rival
Dispute resolution team joins Loyens & Loeff from local competitor from Liedekerke Wolters Waelbroeck Kirkpatrick
Fried Frank hires City Milbank partner as firm targets 30% London growth
Milbank finance partner Neil Caddy joins Fried Frank amid London expansion plans
HFW hires Dentons team to launch Australia employment practice
The team is led by national employment and safety head Mark Sant and employment director Brendan Milne, and is to be based across HFW’s Sydney and Melbourne offices
Signature Litigation moves to Paris with Hogan Lovells hires after 35% growth
Former Hogan Lovells partner and Paris disputes head Thomas Rouhette will lead the new office, along with former Hogan Lovells senior associate Sylvie Gallage-Alwis and reinsurance litigation lawyer Emmanuele Lutfalla, who joins from French firm Soulie & Coste-Floret.
MoFo launches first London real estate practice with Reed Smith hire
Reed Smith’s head of private equity real estate, Oliver s’Jacob has left to join US counterpart Morrison & Foerster as its first real estate partner in London
DWF targets Freshfields again in bid to expand legal tech
Freshfields Bruckhaus Deringer’s senior manager of legal technology operations Jamie Whalebone is to join DWF to boost the firm’s growing managed services unit
Office Openings & Closings
KPMG opens Hong Kong law firm and prepares for Shanghai launch
Ex-Freshfields partner launches own firm in Amsterdam after EY stint
CMS announces office launch in Liverpool
Gowling WLG sells Monaco office in shift from private client work
Technology and Innovation
Linklaters begins moving associates into permanent tech roles
Slaughter and May chooses six more startups to receive free legal support
Allen & Overy takes Fuse legal tech incubator to the US
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