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.) Clifford Chance likely to come under SRA investigation after clearing RBS of fraud
Clifford Chance is to face possible questions from the Solicitors Regulation Authority (SRA) for allegedly overlooking allegations of fraud during its investigation into Royal Bank of Scotland’s treatment of small companies in financial difficulties.
The firm was accused by a small business owner of failing to act upon evidence of mistreatment by the bank’s Global Restructuring Group (GSR), which Clifford Chance cleared of fraud allegations four years ago.
In 2014 RBS commissioned Clifford Chance to prepare an independent report on allegations made by Lawrence Tomlinson, entrepreneur in residence at the former department for Business, Innovation & Skills, who claimed that the bank deliberately misinformed viable businesses in order to pick up their assets cheaply.
Although the report concluded that there was no evidence to support these claims, critics argued that CC’s investigation did not go far enough.
In 2015, the Financial Conduct Authority (FCA) undertook its own review which found the bank guilty of ‘systemic mistreatment’ of distressed small businesses, but cleared the lender of the most serious allegation that it forced businesses to default for its own benefit.
The SRA is now reviewing the evidence presented by Clive May, one of the small business owners interviewed by Clifford Chance as part of the 2014 report, to decide whether a formal investigation will be necessary.
2). Movers & Shakers
Panel Watch
BNP Paribas completes global panel review
Bidding opens on UK government’s reshaped £320m public sector legal panel
Appointments
Ex-Slaughters litigation head tipped for Financial Reporting Council role
Taylor Wessing names new managing partner
Moves
Freshfields wades into IP battleground with Arnold & Porter team hire
Patent litigation partner Christopher Stothers is joining A&O with a team of four lawyers made up of counsel Laura Whiting and associates Paul Abbott and Ammina Rao.
White & Case continues litigation push with Addleshaws hire
City partner Chris Brennan to join the regulatory team at White & Case
Ashurst expands UK finance practice with Bakers hire
Global securitisation head Jonathan Walsh to join the firm next week
White & Case relocates City PE partner to Dubai office
Partner Marcus Booth is moving over to lead the firm’s private equity practice in the Middle East with a small team of London associates
Mergers & Alliances
BCLP sells stake in Lawyers on Demand
Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.
Tweet us @Fides_Search to let us know your thoughts.
This week:
1). NEW WHITE PAPER RELEASE: How to make your law firm more inclusive – A ten step guide
This week sees the release of our latest white paper on Inclusion and Wellbeing, published in collaboration with byrne.dean.
‘How to make your law firm more inclusive – A ten step guide’ builds on industry research and expert insight to provide a list of steps that individuals, senior management and HR and D&I professionals can take to increase the inclusion and wellbeing of people within their firm.
We hope you enjoy!
For further information about the Inclusion and Diversity thought leadership initiative at Fides, please contact eclews@fidessearch.com.
2). SFO’s criminal charges against Barclays bank fall at first hurdle
After a five year investigation from the Serious Fraud Office, Barclays announced on Monday that the conspiracy to commit fraud charges against the bank had been dropped by the Crown Court.
This centred around the alleged financial assistance that Barclays gave to Qatar at the height of the financial crisis, more specifically a $3bn loan to directly or indirectly acquire shares in a fundraising which helped the bank avoid state bailout.
This is seen as a victory for Barclays, which recently settled a probe into its handling of a whistleblower as well as a $2bn mortgage selling case in the US.
However, charges against the bank’s former chief executive John Varley, and other top managers Roger Jenkins, Thomas Kalaris and Richard Boath remain in place, with a criminal trial scheduled in January 2019.
The SFO said it was considering its position in the light of the ruling, although many believe it will bring a voluntary bill of indictment against the bank, a rare legal process which means any fresh charges against the bank must be approved by a high court judge.
As the first set of charges in the UK to be brought against a bank for actions taken during the financial crisis, the decision is a major setback for the SFO which has investigated the case for five years and is now without a permanent director following the departure of David Green last month.
With a replacement yet to be named, questions continue about the future of the organisation and whether or not it will be subsumed into the National Crime Agency.
3). Movers & Shakers
Panel Watch
UBS weighs up new formal EMEA litigation panel launch
Appointments
Taylor Wessing picks new managing partner to replace longstanding leader Eyles
Leapfrog takes on new general counsel after Linklaters exit
Clifford Chance searches for diversity head after gender pay gap report
Moves
Linklaters M&A star exits for Paul Hastings
Linklaters heavyweight M&A partner Roger Barron is exiting the firm after 17 years to join Paul Hastings in London.
Norton Rose hit with mass defection as 15-strong team exit to Reed Smith
A team of 15 lawyers across four different US offices of Norton Rose Fulbright offices have moved to join Reed Smith. Two associates, Selina Coleman (Washington DC) and Sara Brinkmann (Houston), will be made up to partner as part of the move.
Freshfields hires KWM “rising star” to join management in China
Freshfields Bruckhaus Deringer has hired King & Wood Mallesons (KWM) Beijing partner Hazel Yin to co-head the competition practice in China.
Office Openings & Closings
Dentons becomes first global firm to enter Hawaii after local tie-up
Linklaters becomes first magic circle firm to secure Chinese law capability
Hogan Lovells pulls out of Venezuela amid political and economic upheaval
Clifford Chance to launch new delivery hubs in global innovation boost
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). Supporting Mental Health Awareness
With this week marking Mental Health Awareness Week, the press has been awash with blogs, stories and articles as to how the legal profession has struggled with issues of mental health.
Lawyers are known to be at higher risk of mental health problems and substance abuse. They’re perfectionists whose job it is to worry, anticipate and act on other people’s problems. This combined with a high-pressure work environment, billable hour’s targets and demands from clients creates a melting pot of potential issues – exacerbated by the stigma attached to admitting you are struggling.
To celebrate this week, and encourage people in the legal profession and beyond to continue the conversation about mental health, we share our most recent survey findings into Inclusion and Wellbeing in City Law firms.
We undertook this research to better understand how lawyers feel at work, the obstacles to greater inclusion and wellbeing in law firms, and the changes that can be made to achieve more inclusive workplace cultures.
For more information on mental health problems in the law, see our guest blog with Richard Martin, former lawyer and Head of Mental Health Training at Byrne Dean HERE.
Enjoy!
P.S. Keep your eyes out for our latest publication ‘How to make your law firm more inclusive – a ten step guide’ due for release in a few weeks.
2). Movers & Shakers
Panel Watch
Seven firms land roles on Co-op new restructured panel
Appointments
Weetabix hires new General Counsel
Moves
Kirkland hires A&O global IP head Nicola Dagg in London
Kirkland halts A&O’s IP expansion with hire of global practice head
Paul Hastings launches dedicated City PE practice with DLA hire
Partner Anu Balasubramanian joins to head up the PE practice
Jones Day London exits mount with Travers set to make rare lateral hire
Real Estate partner Alex Millar makes a move to Travers Smith
DLA Piper confirms Dublin launch plan with corporate partner hire
DLA Piper is set to open an office in Dublin with the hire of corporate partner David Carthy from Irish firm William Fry
CMS Poland hires nine-strong Dentons banking team in Warsaw
The one-partner team includes Michal Mezykowski, who has been appointed as head of the banking and finance practice in Poland
Mergers & Alliances
CMS agrees Hong Kong tie-up with local firm
Office Openings & Closings
HSF follows Clifford Chance and Skadden with Canary Wharf move
Partner Promotions
Travers Smith promotes female trio to partner in largest round since 2012
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). DoJ settlement confirmed – what next for RBS?
As a result of the lengthy investigation into RBS’ selling of toxic loans leading into the financial crisis, the Department of Justice (DoJ) has agreed on a settlement amounting to nearly $5bn that puts to an end a major obstacle for the UK bank.
In a statement released on Thursday, the Royal Bank of Scotland has reached an agreement “in principle” with the DoJ to settle the probe with a payment of $4.9bn (£3.6bn). The penalty relates to the bank’s mis-selling of residential mortgage-backed securities (RMBS) between 2005 and 2007, for which $4.75bn has already been fined by the US Federal Housing Finance Agency.
RBS has been facing repercussions from its mis-selling actions since the financial crisis. Currently 72% government-owned, the bank’s share price has struggled since 2009 and has lost money every year since a £45bn bailout in 2008.
This week’s settlement marks a major turning point for the bank, and signals a stage at which they can realistically target growth.
Primarily, it puts RBS in a promising position to pay dividends to its shareholders for the first time since the crash, extending the confidence which was built after having posted its first annual profit in a decade in February this year.
The second priority will be to start selling government stake in the bank, working towards the largest privatisation efforts to date in the UK.
However, the Wall St Journal estimates that complete privatisation of RBS will take years. Compared to Lloyds’ £20.3bn bailout, which has now been entirely recovered, with the bank returning to full private ownership in May 2017, RBS’ £45bn bailout indicates a longer road to recovery, and it is yet to be seen whether the sell-off will prove profitable for the UK Treasury.
Nevertheless, the news of the DoJ settlement brings optimism to shareholders, with RBS’ share price rising 6 per cent on Thursday morning.
2). Quinn partner dismissed over inappropriate conduct
Baker McKenzie, Clifford Chance, Latham & Watkins, Linklaters, Dentons and now Quinn Emmanuel has joined the list of law firms to be embroiled in a case of inappropriate conduct as it sacked litigation partner Mark Hastings on Tuesday following an internal investigation.
Two allegations of inappropriate behaviour were made against Mr Hastings in February, with Mishcon de Reya partner Alison Levitt QC drafted in to conduct the firm’s internal investigation. Following the presentation of Levitt’s findings, Hastings was dismissed from the partnership without compensation on the 8th May.
Mr Hastings is a well-known figure in the international commercial litigation field, and joined Quinn Emmanuel in 2016 after high profile move from Addleshaw Goddard where he was head of fraud, regulatory and corporate crime.
No further details have been given about the nature of the allegations against Mr Hastings or his departure, although Quinn has not asked the two employees to sign any form of non-disclosure agreement (NDA) in relation to the allegations.
The firm has since referred itself to the Solicitors Regulation Authority (SRA) which will gather evidence into Quinn’s handling of the misconduct allegations before making a decision whether or not to formally investigate them.
Quinn’s actions in this case have marked a change in the way law firms have handled misconduct allegations to date, which has so far been to protect the identity of wrongdoers through non-disclosure agreements and private settlements. Self-disclosure to the SRA demonstrates the firm’s intent to address the issue head on.
Experiences of inappropriate conduct are far too common in the law, as a survey by The Lawyer in March revealed. The findings show that sexual harassment has taken place in 55 of the UK’s top 100 firms in the last year, with respondents from 14 of the UK’s biggest firms said that they had witnessed or experienced harassment in the last month alone.
Law firms have looked to address a number of their people processes in response to misconduct allegations seen over the past few months. Linklaters has launched an external whistleblowing hotline for staff as part of its SpeakUp initiative, whilst Travers Smith have encouraged staff to call out inappropriate behaviour as part of its ‘ThatsNotCool’ campaign.
3). Movers & Shakers
APPOINTMENTS
White & Case overhauls London management for first time in a decade
US-qualified securities lawyer Melissa Butler becomes London head as Oliver Brettle steps aside to focus on implementing the firm’s 2020 strategy
MOVES
Latham’s hires second magic circle partner in a week
Clifford Chance partner Thomas Weitkamp will become a partner in Latham’s Munich banking team
Head of Goldman Sachs Loan Negotiation Group joins Ropes & Gray
Carol Van der Vorst joins the US firm’s city base
Ashurst builds securitisation practice in London
Clifford Chance senior associate Tom Picton joins Ashurst’s securitisation group, focusing on the consumer sector
Evershed Sutherland boosts London corporate claims team
Litigation partner Louise Bland joins from Ellisons Solicitors
DWF hires new head of Financial Services Regulatory practice
Robbie Constance joins as a partner from RPC
Pinsents takes Eversheds Middle East energy and infrastructure head in double partner hire
Tim Armsby and Gurmeet Kaur will join Pinsents’ finance and projects practice in Dubai, with Armsby taking responsibility for leading the firm’s practice in the Middle East
White & Case takes another HSF practice leader in Australia on back of 10-partner defection
Global co-head of construction and infrastructure disputes Hamish Macpherson to join the US firm’s Sydney base
RETIREMENTS
Freshfields corporate head Marchant bows out after 30 years
PARTNER PROMOTIONS
Debevoise promotes London duo to equity as Watson Farley adds nine new partners
Yesterday brought us the 14th ALFI (association of the Luxembourg fund industry) conference in London, which outlined some of the key trends the European asset management industry has seen over the year, and what the future looks like for fund managers. It also provided an opportunity to reinforce the ties between Luxembourg and London, touching on the implications of Brexit for the sector, and focusing on the opportunities that remain for a stronger relationship between the two regions in European financial services.
As the Luxembourg minister for finance Pierre Gramegna kicked off the day’s proceedings, he touched on four themes at the forefront of the industry: European financial growth; Brexit; the digital economy, and green finance.
Promising figures for Europe were reported, citing that last year was the first time since 2008 that every European economy saw growth, whilst the year’s average unemployment rates also fell from 13% to 9%. Luxembourg has experienced similar prosperity, with 2017 marking its first year to hit the $4tn AUM mark.
The minister had a pragmatic yet optimistic outlook on Brexit, focusing on retaining close ties and minimising the impact on asset managers: “We respect the vote that took place in 2016, and now we must find the smartest solution” he says.
Staying on the topic of Brexit, the minister backed the concept of equivalence, claiming that it would be a viable and sensible option for all parties.
Also discussed during the conference was a need to adapt to diversification and become more inclusive an industry. This was not only referring to internal talent, where the gender pay gap is expectedly large, but also in the changing demographics of investors.
It has become more important than ever to consider consumer behaviour and the diversification of investments, particularly due to the influx of the millennial generation taking an interest in the wealth management industry. It was suggested that this generation will present less loyalty to fund managers than their older counterparts, as they possess access to greater sources of information through living in a digital age.
This shift will require fund managers to focus more heavily on customer services and look to target behaviour trends in investor decisions. However it was noted that due to the instant access people now have to investments through smartphones and other devices, the temptation to make short-term decisions is greater, which can skew the findings produced in behavioural studies.
The overarching theme throughout the day was definitely technology. From dealing with the use of machine learning in ETFs and AI-driven portfolio management, to the controversial subject of ICOs and the regulation of tokens, fund managers will undoubtedly experience a shift further towards the digital age over the next three to five years, with innovative products and services already dominating the market.
Specifically referred to was Ant Financial’s Yu’e Bao fund, currently the largest money market fund in the world, and AI powered ETF EquBot, whose CEO Chida Khatua attended as a speaker. Powered by IBM Watson, Khatua’s fund reviews millions of articles and news sources, capitalising on the sheer amount of data to determine new investment opportunities.
Whilst AI and machine learning present clear-cut benefits to funds, blockchain and distributed ledger technology remain in the exploratory phase for most, with several questions surrounding its place in the current regulatory environment.
It was proposed that from an advocacy perspective, tokenisation and crypto assets would essentially fit straight into current regulatory framework, with the exception of a few issues; however, in order for these innovations to enter the mainstream market, it requires large incumbents to lead the charge and make the necessary administrative and custodian changes before they can be viewed as legitimate financial products in the market.
Overall, the conference brought a sense of optimism to the asset management industry, presenting a wealth of opportunity for further growth, and access to new markets through fintech. Its speculated asset managers may witness a surge in B2C business, as well as a journey into the mainstream utilisation of blockchain and robotics, whilst we continue to affect further transparency and open architecture through changing regulations.
Although this implies a lot of disruption to come, it should be an eventful and fruitful period for many in the industry!
For more information about our services in asset management, please contact Consultant Max Alfano at malfano@fidessearch.com
Movers & Shakers of the week
Panel Watch
GFG Alliance appoints first evet legal panel
Metro Bank completes panel review with Eversheds Sutherland and Linklaters among new appointments
Appointments
London infrastructure partner Adrian Walker joins Hogan Lovell’s global board
DLA appoints James Kamau as new Africa head amid strategy relaunch
Former EE Legal head joins Renault-Nissan
Moves
Latham takes Linklaters financial regulatory partner in latest magic circle hire
Carl Fernandes becomes the latest City partner hire for the US firm
Paul Hastings bolsters GDPR capability with Cooley hire
Partner Sarah Pearce, who specialises in tech, privacy and data, to join Cooley’s London office
Simmons & Simmons add two in Dublin
Partners Elaine Keane and Niamh Ryan join from leading Irish firm A&L Goodbody
Office Openings & Closings
Fieldfisher continues global expansion with office launch in Luxembourg
Partner promotions
Ashurst makes progress on women partners target with 58% female promotions round
Irwin Mitchell, Ince, Bird & Bird and Kennedys announce 2018 partner promotions
Norton Rose Fulbright delays partner promotions until year end
Simmons makes up nine partners as firm hits targets for gender balance
Fieldfisher announces largest-ever partner promotions round as DAC Beachcroft makes up eight
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.) Bailey voices concerns over PRIIPS
Head of the FCA Andrew Bailey this week revealed his concerns over recently implemented EU fund legislation PRIPPS.
Under the Packaged Retail and Insurance-based Investment Products (PRIIPS) regulations, introduced in January this year, fund managers must provide details on how they expect funds to perform in various market conditions through a standardised key information document (KID).
This is designed to help investors make more informed decisions by being able to better compare the key features, risks and rewards of products.
However, in a speech delivered at the London Business School Annual Asset Management Conference, Bailey highlighted some of his concerns about the incoming legislation known to be shared by many in the industry.
“I want to be clear that I am concerned about PRIIPS, and I know I am not alone” he said.
Bailey’s concerns centre on the information provided in the KID offering valid performance projections to investors, and the loss of business – especially of US funds – withdrawing from Europe to avoid the burden.
Baillie Gifford’s James Anderson has been one of the most vocal critics of the rules, describing them as misleading.
“We are extremely disturbed by the requirements of the key information document. We do not believe that reliance on past performance data is ever a sufficient guide to the many possible future outcomes in stocks and markets” Anderson said three weeks after the legislation was implemented.
The FCA published a statement clarifying its views on the KID in January, however Bailey conceded more needed to be done for investors to get the full benefit of the regulation in his speech.
2.) How much will AI affect law firm headcount?
Report produced by CBRE suggests that job cuts will take place in junior and support roles as a result of AI – but will it necessarily change total headcount?
Commercial real estate firm CBRE produced a report this week on the real estate trends related to law firm offices based in the City of London. Alongside Agile Working and Brexit, the report cited that Artificial Intelligence (AI) could be a future contributor to reduction in London headcount within City law firms.
From all the firms surveyed, CBRE reports that: “almost half of firms believe there will be a reduction in headcount at junior level (43%) and support level (45%).”
With incoming automation and augmentation processes, manual reviewing and other labour-intensive tasks will likely be taken away from junior and support levels. However, it could also be argued that this allows junior lawyers to spend time working on more complex work, which would not only allow them to develop faster, but also likely lead to improved retention rates.
Furthermore, bringing in this technology would require a law firm to house more non-lawyers with a different skillset i.e. individuals who can develop, build and manage new technology.
As well as AI, low cost hubs and alternative legal services are also employing other automation tools to produce legal services in a faster, more efficient way. As lawyers become more comfortable around document automation and machine learning, more senior non-lawyer roles will become available as they begin to rely on these tools in their everyday practice.
However, hires won’t just take place in support functions, but likely extend to include non-lawyer revenue generating individuals.
We have already begun to see a rise in the number of legal project managers and heads of innovation, with these roles gradually becoming more valued within the ranks of senior management.
As this continues increasing, alongside growth in headcount for technology-focused roles lower down in law firms, it’s possible this could mitigate any fallout that may arise from the introduction of AI and other disruptive technologies.
With this mind, we must view the future of law not as shrinking but rather shifting to a different business model.
3.) Movers & Shakers
Panel Watch
EDF Energy slims down UK panel, with CMS and Bryan Cave Leighton Paisner gaining spots
Appointments
Moves
Skadden makes a significant hire in Germany
Skadden Arps Slate Meagher & Flom has hired Jan Bauer into its Frankfurt office. Bauer joins after 13 years as a partner at Gleiss Lutz, and most recently the firm’s co-head of private equity
Cadwalader looks to strengthen City finance practice
Finance partner Sam Hutchinson is leaving Dentons to join Cadwalader Wickersham & Taft as a partner in London
Barclays hires regulatory partner
White & Case regulatory partner James Greig is joining Barclays as the bank’s head of regulatory relations
Clydes loses office head in China
Patrick Zheng leave his position as Beijing managing partner for Clyde & Co to join local Shanghai firm Llinks Law as the firm’s head of dispute resolution
Mishcon boosts disputes practice with four partner team
Founder of litigation boutique David & Co Mark Davis is joining Mischon de Reya’s London disputes team, along with a three-strong team
Slaughters makes third-ever lateral hire
Slaughter and May has hired director of enforcement Wynne Mok from the Hong Kong Securities and Futures Commission, who joins as a partner in the firm’s litigation and investigations practice
McDermotts builds out real estate offering with a DLA team hire
Having hired 20 partners from DLA Piper’s US offices this month, McDermott Will & Emery has announced a further three DLA real estate partners will be joining the firm’s London office. Laurence Rogers, Neville Wright and Tom Calnan will all join as partners.
Linklaters expands Asia disputes practice with Goldman hire
Goldman Sachs Hong Kong managing director Andrew Chung will join Linklaters’ Hong Kong office as a partner, focusing on disputes and regulatory matters across AsiaPac
Partner Promotions
RPC promotes two female lawyers
Charles Russell Speechlys makes up eight to partnership, four of which are women
TLT confirms six partner promotions, with 50% female lawyers
Stewarts has promoted five lawyers to partner, including three women
Click here for more information
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. Spring promotions: Reactions so Far
This week saw the start of the spring promotions round, with a number of magic circle and international firms announcing the lawyers made up to partner.
Herbert Smith Freehills were the first to announce, with a 17-strong global promotions round comprised of 14 women (80%). This is in-line with their internal diversity targets to achieve 30% female partnership by 2019, after missing their interim target in May 2017. Promotions were evenly split globally, with 10 partners based in the Asia-Pacific region and seven in the UK and US.
Linklaters also announced the promotion of 30 lawyers to counsel across 14 of the firms offices. This complements their annual promotions round in March, which saw 27 lawyers promoted to partner. 10 new partners were made up in London, and the firm outstripped its 30% target for female partner promotions set in 2012, with women making up 37% of the newly promoted cohort. The majority of the promotions were in London, with 10 partners made up, with 9 made up across Asia.
Magic circle rival Allen & Overy struggled to meet gender diversity targets for the second year running as it announced a 20 strong promotion round comprising just two women. This is similar to last year’s promotions, which saw two women made up in a 24-strong round. In response to industry pressure, the firm has set a new target for 30% of partner candidates to be female by 2021, to enable the firm to work towards a 30% female partnership target in the future. Eighty percent of this year’s partner promotions occurred outside of London, including seven in the Asia-Pacific region, with five in Singapore and one each in Perth and Seoul.
Clifford Chance announced a 26-strong promotions round, with 7 promotions in London and 10 female lawyers made up. This is up on last year’s round, and marks a significant improvement in female representation as only four women were made up.
Other firms to announce include Stephenson Harwood, who made up 5 lawyers in London and Clyde and Co, who made up 12 globally, 7 in London.
| Firm | 2018 Promotions | 2017 Promotions | Promotions in London | Prominent Practice | Female Partners | % of Cohort |
| Herbert Smith Freehills | 17 | 21 | 6 | Dispute Resolution | 14 | 80% |
| Linklaters | 27 | 26 | 10 | Finance & Projects | 10 | 37% |
| Allen & Overy | 20 | 24 | 4 | Corporate / Banking | 2 | 10% |
| Clifford Chance | 26 | 24 | 7 | Corporate | 10 | 38% |
2. Jes Staley probe concludes with a slap on the wrist
Staley receives a financial penalty and pay cut for his actions against a whistleblower in June 2016.
An investigation has been underway into Jes Staley’s conduct by the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) for attempting to uncover a whistleblower at Barclays in 2016.
It was announced this morning that the UK regulators have decided not to take enforcement action against the bank, whilst Staley faces an undisclosed fine and a pay cut from the board. He will however remain CEO of Barclays, and has been deemed fit and proper to run the bank.
The probe is in relation to written allegations from an individual inside the bank, raising concerns around past questionable dealings of a senior employee, who has a personal relationship with the Barclays CEO. The allegations were treated as whistleblowing, after which Staley had ordered an internal investigation team to uncover the individual responsible.
Having implemented the Senior Managers & Certification Regime only three months before the incident took place, this scandal would have been a key case for the FCA and PRA in demonstrating the need for senior banking officials to be accountable for misconduct.
Last month, it was reported that the FCA may be reverting to its light-touch regulation approach, as was so familiar with the FSA, as it reveals a drop in the number of fines levied in the industry.
Movers & Shakers of the week
Appointments
Goodwin hires first international operations director from Linklaters
The US firm has announced the appointment of London-based Uli Kleinsteuber, who served as Linklaters’ chief operating officer of emerging Europe, Middle East and Africa since 2016
Clifford Chance appoints its first chief risk officer
Head of international compliance Bahare Heywood is appointed as the magic circle firm’s first chief risk & compliance officer as the firm looks towards the looming deadline of GDPR
Mayer Brown names London heavyweight as global managing partner
Mayer Brown has appointed former London partner Jeremy Clay as its next global managing partner
Ashurst bolsters tech credentials with hire of GE Capital International IT director
In a heavyweight hire from outside of the legal sector, Ashurst has appointed GE Capital International’s IT director Noel Jordan as its new chief technology officer (CTO)
Squire Patton Boggs global managing partner relocates to London to take over leadership of City base
Squire Patton Boggs London managing partner Robert Weekes is stepping down as head of the City base, with the firm’s global managing partner Stephen Mahon relocating to London to take over leadership of the office
Guy Norman wins second term as Clifford Chance corporate head
Clifford Chance global head of corporate Guy Norman has been reappointed to a second term in the role, effective from 1 May.
Moves
Dechert life sciences exits continue as Frankfurt team leaves for McDermott
Corporate life sciences partner Ruediger Herrmann is making the move alongside a team of three lawyers, comprising biotechnology transactions partner Jochen Eimer and two counsel. This follows the departure of London corporate partners Andrew Harrow and Graham Defries to launch a European life sciences practice at Goodwin Procter.
Hogan Lovells launches London trade practice with Squire Patton Boggs hire
Trade partner Aline Doussin joins Hogan Lovell’s London office from Squire Patton Boggs in response to client demand ahead of the UK’s exit from the EU next year.
Herbert Smith Freehills takes four-partner WFW aviation team including practice head
Four Watson Farley & Williams partners, including aviation head Rex Rosales, have left the firm to join Herbert Smith Freehills
Baker McKenzie makes three additions to London banking and structured capital markets practice
White & Case partner Michael Doran joins the firm’s structured capital markets team, whilst of counsel Nick O’Grady and Bevis Metcalfe have joined the banking practice from Ropes & Gray
Simmons hires A&O derivatives partner from Singapore
Partner Matthew Hebburn joins the firm’s City office from the magic circle firm’s Singapore base
Ashurst boosts London disputes team
Squire Patton Boggs partner Alison Hardy joins the firm’s City real estate dispute resolution group after four years as a partner at the US firm
Partner Promotions
Clifford Chance favours Europe with largest promotions round in six years
Stephenson Harwood makes up eight partners in London and Hong Kong
Allen & Overy makes up two women in 20-strong promos round
HSF looks east in 17-strong promotions round
Linklaters announces promotion of 30 new counsel including 14 women
Clydes promotes 12 as partner numbers pass 400 for first time
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. Magic Circle Merger Talks: The Market Reacts
Last week, the story broke that magic circle firm Allen & Overy were in merger discussions with US firm O’Melveny & Myers, sending shockwaves through the UK legal market.
It would be the second US merger for a magic circle firm, following the infamous Clifford Chance tie-up with New York firm Rogers & Wells in 2000, which resulted in a number of departures from the US firm and wasn’t deemed a success. A&O’s opportunity however would be the largest of its kind, and if the merger were to go ahead it would create a business with a combined revenues of £2bn ($2.8bn) and a total lawyer headcount of about 3,000.
This would place it just below Kirkland & Ellis and Latham & Watkins, both of which have passed the $3bn mark this year, and ahead of DLA Piper, which took in $2.63bn (£1.87bn) last year.
Both firms are understood to be exploring growth options in the past few years. A&O were rumoured to have been in discussion with Arnold Porter and Sherman & Sterling, whilst last year O’Melveny & Myers held preliminary merger talks with Willkie Farr & Gallagher.
The two firms have similar profitability, with O’Melveny seeing profit per equity partner (PEP) rise 3% to $2m (£1.4m) in 2017, while A&O posted PEP of £1.51m ($2.1m) for 2016-17. However, this is throughout a period of relative underperformance for the US firm, which has seen its revenue drop from the 19th largest firm in 2007 to the 59th in 2017.
A&O, who have two existing US offices in New York and Washington DC – the latter of which was launched by a team of former O’Melveny lawyers in 2011 – would be complemented by O’Melveny’s West coast bases in Century City, Los Angeles, Newport Beach, San Francisco and Silicon Valley, alongside small Asian outposts in Beijing, Hong Kong, Seoul, Shanghai, Singapore and Tokyo.
If successful, the tie-up would represent a huge step forward for A&O, and likely create a ripple effect at the top end of the legal market as magic circle competitors reconsider their own strategies in response to the news.
To date, the magic circle’s expansion plan in the US has been to hire teams from domestic firms (often breaking lockstep to do so), although this strategy has been criticised for being both slow and ineffective against US bid-backs.
Of the team of finance partners who joined from White & Case and Proskauer Rose in 2016, global leveraged finance co-head Scott Zemser has already left to join Mayer Brown. It remains to be seen whether a similar fate will come to the three-partner finance and securities team A&O acquired for its New York office from Paul Hastings in February last year.
“If they can pull it off, I think it will put the other magic circle firms under a lot of pressure. This kind of event triggers consolidation, but it’s hard to see how it could happen with better US firms” observed one market commentator, with the greatest obstacle for UK firms looking to expand into the US always being this disparity in PEP.
However, the O’ Melveny and A&O talks have been heralded by some as a move in the right direction for the magic circle firm. Their focus on the West Coast, rather than New York, is a very strategic play for the firm to access big tech and IP clients, setting A&O apart from its magic circle counterparts operating in the US.
Ultimately, only time will tell whether Allen & Overy and O’ Melveny & Myers can make this deal work from a financial, reputational and cultural perspective. If so, the real interest lies in what form this merger will take and how the rest of the magic circle reacts in response.
2. SFO yet to appoint director as COO takes interim role
Chief Operating Officer Mark Thompson is set to serve as interim director of the Serious Fraud Office (SFO) after current director David Green QC exits this month.
Having led the SFO since 2012, Green has overseen numerous high-profile investigations, as well as the implementation of Deferred Prosecution Agreements (DPAs). Speaking at a breakfast meeting at Mayer Brown last month, Green declared that, “the most important change I have made as director of the SFO is offering DPAs as an incentive for businesses to self-report.”
DPAs have proven a successful tool for the SFO, as the agreement signed with Rolls Royce, the third DPA to be agreed in English law, was approved in January last year and brought in £497m in settlement fees – speculated to be the largest fine to ever be imposed on a business in the UK. Green is rumoured to be joining a US firm following his departure.
Meanwhile, new interim Thompson will retain a number of ongoing investigations at the agency. Some of the prominent cases include four charges against Unaoil employees and partners in connection to bribery offences, and Barclays’ suspicious capital raising arrangements with Qatar Holdings.
The organisation have reached the final stages in hiring a permanent director, and have claimed the individual cannot take up their post immediately. The SFO said the new chief’s identity will be announced ‘when it is possible to do so’. As this points to an external candidate, the new permanent director is expected to take up his role later in the year.
Movers & Shakers of the week
Appointments
Moves
A&O expands its white collar crime team
White-collar crime partner Eve Giles is set to join Allen & Overy from Kingsley Napley later this year in the firms corporate crime practice
Freshfields Paris head joins Jones Day
Elie Kleiman departs his role as head of the Paris office at Freshfields Bruckhaus Deringer to join Jones Day’s disputes practice in Paris
BCLP loses two office heads post merger
Head of the Dubai office Mohammed Kamal has left the newly created Bryan Cave Leighton Paisner to set up a real estate practice for Watson Farley & Williams in the region.
Meanwhile, Asia head Bob Charlton has also left BCLP to lead Addleshaw Goddard’s Asia Pacific presence
Mayer Brown looks to Freshfields NY office to boost banking practice
Partner Ryan Suda will join Mayer Brown’s banking and finance practice in New York and its structured finance group, as he departs Freshfields Bruckhaus Deringer.
Bakers strengthen London Banking team with US firm hires
Baker McKenzie has hired White & Case partner Michael Doran into its banking practice, alongside Ropes & Gray counsel Nick O’Grady and Bevis Metcalfe who both join as partners in the London office
Office Openings & Closings
Reed Smith launches low-cost hub in Leeds
Partner Promotions
Addleshaw Goddard makes up nine to partner
Welcome back to the Fides Weekly Update. Take a look at the top legal and compliance new stories we’re talking about this week and don’t forget to scroll down to see our regular feature of Movers & Shakers of the week!
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This week:
1. Crunch time for asset managers: FCA puts market study into action
Fund managers received the final rules from the FCA’s consultation paper into its asset management market study on Thursday, all of which centre around the requirement to act in investors’ best interests and provide value for money.
Following the report produced in June last year, Thursday’s announcement cited both a list of finalised rules with set deadlines, and proposed guidelines yet to be confirmed, where the regulator is looking to rectify bad practice impacting the savings of three-quarters of the UK population.
Improvements on governance standards featured in the finalised rules, with asset management firms ordered to appoint a minimum of two independent members to their boards. The appointments must be made by September 2019, and senior officials will be held accountable for this under the Senior Managers & Certification Regime.
Given that ‘value for money’ was a key term throughout the document, firms will need to prove that charges are reasonable in relation to costs and quality of service, and that they are required to switch investors over to cheaper share classes if it’s in their best interests.
Also confirmed was the introduction of the all-in fee and a clampdown on box profits. An all-in price will allow investors to make the best available investment choices (and get best value for money) by including an estimation of trading costs in the final price given to them.
Meanwhile, a ban on box profits will be implemented in April 2019, which could prove a blow to some fund managers. This form of profit is generated through a dual-priced fund structure, whereby the difference between the spread in a fund’s offer price, at which investors buy in, and the bid price, at which the provider buys units back, can be kept as profit by fund managers.
The FCA has announced that box profits should be returned to the fund to be used towards customer investments.
Whilst these rules are set to come into force over the course of 2019, there were proposed new rules that could potentially affect performance fees, the disclosure of fund objectives and closet tracking. ‘Closet tracking’ describe funds that claim to actively purchase investments but wind up with a portfolio not much different from the benchmark. It has entered the scrutiny of the regulator recently, and last year the FCA reported that “there is around £109bn in ‘active’ funds that closely mirror the market which are significantly more expensive than passive funds.”
Commenting on the above measures, Christopher Woolard, executive director of strategy and competition at the FCA, said the “announcements are an important part of a package of measures that, combined, aim to achieve a fair, transparent, open and accountable market.”
This week saw the deadline pass for all large organisations in the UK to report their gender pay gaps. Having followed this issue closely over the past few months, we have prepared a special report detailing all you need to know about law firm results, and how this reflects on the sector.
CLICK HERE to read the report.
Movers & Shakers of the week
Moves
Greenberg Traurig launches London white collar practice
Pinsent Masons global corporate crime head Barry Vitou is set to move to Greenberg Traurig’s London office to set up a white collar defence and special investigations practice
Chief technology officer Ian Storer departs Allen & Overy to join UBS as an architect for legal
McDermott locks down mass 50-lawyer hire from DLA in the US
McDermott Will & Emery has hired a team of 50 lawyers, including 20 partners, from a number of DLA Piper’s US offices. The mass move is expected to add $100m in revenue for McDermott.
Partner Promotions
Taylor Wessing announces three London 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.
Tweet us @Fides_Search to let us know your thoughts.
This week:
1). FCA softens since crisis
The Financial Conduct Authority (FCA) has published papers reviewing its approach to enforcement and supervision, following claims it has become less stringent on banks, with a significant drop in the value of its financial penalties over the last five years.
Whilst the Approach to Supervision report highlights a forward-looking approach and analysis of a firm’s business model and strategy as the key themes, the Approach to Enforcement report cites the regulator’s needs to review its penalties policy and increase transparency.
Having witnessed fines fall from the billion-pound levels in 2014 and 2015, to its record low since the crisis of £22.2m in 2016, the UK regulator has been criticised for failing to remain strict in relation to more recent high-profile investigations.
The mammoth financial penalties being handed out four years ago were largely attributed to the Libor and foreign-exchange rigging scandals, as well as a new policy which allowed the FCA to increase fines at its discretion. The same approach however has not been taken with current scandals, such as RBS’ poor handling of its Global Restructuring Group. It took four years for the regulator to release the report of the GRG investigation and many misled GRG customers are still awaiting compensation.
In response to this, Andrew Bailey has spoken up, arguing that light-touch regulation “was the prevailing philosophy before the crisis and we have learnt some hard lessons.”
Alongside a review of the organisation’s Penalties Policy, which will result in a consultation paper published later this year, there is a clear focus for the FCA going forward to adopt a more holistic approach to financial regulation, and prioritise the mitigation of misconduct as well as the correction of it: “We need to use all of our powers and functions (including authorisation, supervision, competition and enforcement) to fulfil our objectives.”
The FCA also recently released a discussion paper on “Transforming Culture in Financial Services”, which you can read about here.
2). Kirkland & Ellis becomes world’s highest earning law firm
Kirkland & Ellis revealed a $500m revenue hike this week to surpass Latham & Watkins as the world’s highest earning law firm, as revenues grew 19% to $3.165bn.
Profit per equity partner (PEP) also rose nearly 15% to $4.7m, making Kirkland one of the world’s most profitable law firms behind Wachtell Lipton Rosen & Katz and Quinn Emanuel Urquhart & Sullivan. The firm’s headcount rose 13.5% to 1,997 lawyers, while revenues per lawyer increased 5.2% to $1.585m.
Latham on the other hand boosted gross revenue by 8.5% last year to $3.064bn, about $100m shy of Kirkland’s new record. The two firms are the first in history to cross the $3bn threshold.
The firm – which has never engaged in a significant merger – counts its success down to investing in the highest priced geographies and practice groups.
Kirkland’s London office, which has been growing aggressively in recent years, is understood to account for roughly 10% – about $316.5m (£257m) – of global revenue. Since 2013, headcount is also up 42% in New York (503 lawyers) and 36% in San Francisco (126 lawyers), with the Houston office growing to 107 lawyers since opening in 2014.
Regarding the firm’s practice areas, Kirkland’s M&A team ranked fourth by the value of the deals it advised on in 2017, according to data compiled by Mergermarket. Kirkland also advised on more transactions (489), than any other firm, and saw the largest increase in the value of the deals it advised on from the previous year (up 63.5% in 2017 to $432bn). The firm also handled twice the number of private equity deals (304) than its closest competitor, Latham (156), as well as leading on the value of those deals, at $131.6bn – up 12% from the prior year.
The firm’s restructuring and litigation practices had a strong year also, with the firm representing the debtor in three of the four largest Chapter 11 bankruptcies filed in 2017, arguing seven cases in front of the US Supreme Court, and helping clients to 34 victories at trial and 93 appellate wins respectively.
Notable hires over the past year include Freshfields Bruckhaus Deringer private equity heavyweight David Higgins, who quit the magic circle firm to join Kirkland as London co-managing partner and is expected to land in his new role later this year.
Market insiders point to key hires over the last two years – including Sean Lacey and Jonathan Birkes from Freshfields and Stuart Boyd from Linklaters – as factors accelerating Kirkland’s performance in the last year.
3). Movers & Shakers
Panel Watch
Appointments
HSF senior partner election comes to a conclusion
HSF elects Jeremy Walden as upcoming UK & EMEA real estate head
Moves
A&O adds to its regulatory and fintech ranks
Financial services regulatory partner and fintech adviser Ben Regnard-Weinrabe was hired by Allen & Overy as a partner, joining from Paul Hastings’ London office
Eversheds boosts German employment practice with team hire
Eversheds Sutherland has taken on a 10-strong employment team, bringing over partner Marco Ferme along with nine associates, from local firm Beiten Burkhardt.
Dentons targets Dechert for Paris team hire
Former head of IP practice and co-head of life sciences Marianne Schaffner has left Dechert to join Dentons, along with her team of one counsel and associate
Covington expands City project finance capability
Baker Botts partner Robin Mizrahi is set to join Covington & Burling as a partner in London, along with former Baker Botts senior associate Laure Berthelot, who joins as special counsel
Simmons bolsters French disputes practice
Simmons & Simmons has hired partner Guillaume-Denis Faure from Winston & Strawn in Paris into its dispute resolution practice
Sidley Austin sets up a life sciences practice
Partner Maria Isabel Manley departs Bristows to launch a life sciences practice at Sidley Austin in London
M&A partner returns to Gide Paris outfit
Paris headquartered Gide Loyrette Nouel has M&A Olivier Diaz from Skadden in Paris, returning to the French firm after 20 years.
Mergers & Alliances
Fieldfisher partners with legal process outsourcer Integreon to handle Brexit and GDPR issues
Partner Promotions
Pinsent Masons announces 23 partner promotions, six of whom are women
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