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. RBS back on track and set for a solid 2018
Royal Bank of Scotland (RBS) made a number of headlines this week, from passing the Bank of England’s (BofE) stress tests through to finally ridding itself of its pile of toxic assets. With 2018 presenting a positive forecast for the Scottish bank, next year could potentially mark its first profit posting since 2007.
On Tuesday this week, the BofE revealed that all seven of the UK’s lenders passed its stress tests for 2017, with RBS significantly improving its capital positions since this time last year. Although RBS emerged as one of the weaker lenders the results were better than expected, and the BofE passed the bank, saying it has “sufficient capital to meet the standard set by the test.”
Meanwhile, RBS also announced this week that its “bad bank” has come to end. The curtain has been drawn on the Capital Resolution division, which was created to manage the bank’s toxic assets, lumping the bank with £50bn worth of cumulative losses. Clearing up these loans has drawn a line under one of the biggest ever financial restructurings, which saw RBS’s balance sheet shrink by two thirds from £2.2 trillion in 2008 to £752bn this year.
Following this, the Edinburgh-based bank is set to close a further 259 branches across the UK, in an attempt reduce costs and shed roughly 680 jobs. This will leave the bank with 744 branches, as it aims to encourage its customers to shift to online banking.
“Since 2014 the number of customers using our branches across the UK has fallen by 40 per cent and mobile transactions have increased by 73 per cent over the same period. Over 5m customers now use our mobile banking app and one in five only bank with us digitally,” said RBS.
RBS has claimed to be reinvesting the capital gained from branch closures into its digital banking offering. Aiming to lead the charge on innovation in the banking industry, RBS is focusing heavily on its online platform and digitalised services. It recently went live with its first investment robo-advisor, and this week, the head of innovation engineering at RBS Richard Crook spoke at the London Blockchain Summit 2017 to discuss the banks advancements in blockchain technology.
There is a rising fear in the retail banking market of falling behind the curve, and incumbents run a risk of losing market share. Many banks, such as RBS however, are planning to take advantage of their more established services, and combine this with collaboration with fintech start-ups, to maintain their status in retail banking and respond to the demand of its customers.
Movers & Shakers of the week
Appointments
ICI Global’s chief counsel Susan Olson has been promoted to general counsel, effective this week
Moves
Bupa legal director Alison Gammon will join Aviva as its general counsel, replacing former legal head Monica Risam
Jeffrey Koppele is set to join Ashurst from Dentons’ New York office, as the firm also promotes tax counsel Sharon Kim to partner in New York.
A&O senior partner joins advisory board of leading Indian law firm
Allen & Overy’s former senior partner David Morley has been appointed to the ‘strategic advisory board’ of Indian law firm Cyril Amarchand Mangaldas
RPC grows insurance practice with Sedgwick partner duo
Naomi Vary and Karen Morrish will both become partners in RPC’s insurance practice. They join from US firm Sedgwick as the firms continues with plans for closure
British Land loses its GC to logistics company
Elaine Williams has left her role as general counsel for British Land and joined UK logistics company Eddie Stobart as its legal director and company secretary
Sidley Austin boosts City PE practice
Sidley Austin has hired two private equity lawyers from Simpson Thacher & Bartlett in London. Counsel Wim De Vlieger and associate Till Lefranc will both become partners in Sidley’s London office
Office Openings & Closings
Slater & Gordon prepares to close four regional offices in the UK
British Virgin Islands firm Harneys has been granted a licence to offer legal services in Shanghai
Lawyers on Demand expands offering to the Middle East
Herbert Smith Freehills launches alternative legal services hub in Sydney
Bird & Bird is opening its second Dutch office in Amsterdam alongside current office in The Hague
Partner Promotions
16-strong promotions round by Shearman & Sterling, with three partners made up in London
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). Paris to become home of the European Banking Regulator after name drawn from hat
Paris has been chosen as the new home of the European Banking Authority (EBA), after three rounds of voting failed to produce a clear winner as where to relocate the regulator post-Brexit.
Eventually, names picked from a hat decided the fate of the authority as diplomats could not decide between Paris and Dublin.
The European Medicines Agency, also currently based in London, will be relocated to Amsterdam after it too tied in previous rounds of votes with Milan.
“You could not make it up if you tried” said one EU diplomat.
Relocating the EBA to Paris is seen as a big victory for French president Emmanuel Macron, who is pushing Paris as the EU’s premier financial centre after Brexit. With the city already playing host to the European Securities and Markets Authority, the French capital will now house both of the EU authorities responsible for setting banking standards.
The decision came as a shock to some who expected Vienna or Frankfurt to become the next home of the EBA. Indeed, Vienna had offered the most generous financial package to secure the EBA, and also topped an internal staff survey according to insiders.
The choices made by the EU27 foreign ministers mark one of the first tangible steps the bloc has taken so far to prepare for Brexit, and will serve to reduce the UK’s influence over the rules governing European finance. However, the impact that this is set to have on London as a financial services centre is considered to be marginal, according to experts.
2). Tougher appraisals introduced at Clifford Chance as Freshfields overhauls lockstep (again)
Today Clifford Chance (CC) announced a revamp of its appraisal policy, set to link partner pay with performance more than ever before.
Tied to the latest changes in the firm’s lockstep, introduced in May, partners will now be assessed on a range of targets including revenue generation, cross-selling, client development and service delivery and innovation. There will also be particular focus on the amount of high value business that partners bring in.
This marks a shift in what the role of a partner – especially senior partners – is seen mean at the firm, with a greater focus on the type of work you bring in and from where. This isn’t necessarily about bringing in new clients, but about working with new groups across different practices.
It also ushers in a more US-style approach to appraisals and remuneration, linking performance more closely with pay, as opposed to a more traditional lockstep system.
It is also possible that CC introduced the system to provide more transparency over the superpoints system in its lockstep, now accessed by 8-9 partners globally.
This mirrors a radical overhaul of Freshfield’s lockstep system, revealed last week. The new single lockstep ladder will run from 12 to 40 points, with a 40 to 60 ‘superpoint’ category applying only to star performers. The firm will also now be able to move partners down the ladder from a number of set gateway positions, something it was previously unable to do.
A deviation from Freshfields more conservative stance on lockstep reform, this provides yet another example of the depths the magic circle are willing to go to both improve profitability and retain their star performers.
3). Movers & Shakers
Appointments
Former KWM global managing partner named legal head at KPMG
Ropes names first-ever female chair
Moves
Brona McKeown has left the bank, to be replaced by Regulatory Risk Director David Bagley.
Deloitte loses tax team to Denton’s in Russia
Dentons has hired Deloitte head of technology, media and telecoms Vasilii Markov as part of an eight-strong tax hire to grow its St Petersburg office.
Clifford Chance strengthens German corporate practice with White & Case partner hire
Markus Stephanblome joins Clifford Chance in Frankfurt
BLM London head quits for Clydes
BLM London head Jennette Newman has resigned from the firm, alongside fellow insurance partner Jonathan Edwards.
Weil London head of corporate set to depart for senior Treasury role
Peter King is set to take up a senior role at the treasury after a ten year tenure at the US firm
Herbert Smith litigation partner joins Cleary Gottleib
London litigation partner James Norris Jones is moving to Cleary’s in a rare hire for the US firm’s City office
Mergers & Alliances
Clydes seals Malaysia association as international expansion continues
Office Openings & Closings
Clyde & Co launches in Bristol office with Kennedys and Womble Bond double partner hire
Eversheds Sutherland launches second office in Saudi Arabia with Jeddah opening
Partner Promotions
Weil London lawyers miss out in US firm’s annual partner promotions
Mayer Brown promotes four in the City in 31-strong round
Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.
Tweet us @Fides_Search to let us know your thoughts.
This week:
1. London Calling: MUFG boosts UK outlook with the hiring of 180 staff
Japan’s biggest bank has chosen the UK as the hub of its EMEA expansion plans by boosting its London headcount by 180.
With the aim of strengthening its position in the region’s corporate and investment banking market, Mitsubishi UFJ Financial Group plans to hire “a few dozen” more following the 180 new staff members already brought on board, says Sebastien Rozes, EMEA head of corporate banking.
In an interview with Reuters, the Japanese bank has mentioned that its expertise in structured finance and lending is a key driver behind its plans to grow, specifically across the TMT and healthcare sectors.
Whilst MUFG is positioning its EMEA operations in London, which is an all-important vote of confidence for the City as a financial district, the bank is also putting in place preparations in the case that Britain loses access to the single market. It has selected Amsterdam as its preferred region on the continent in which to set up a subsidiary, and is contemplating a further investment banking branch in Paris.
While contingencies are being developed for multinationals around Brexit, and decisions being made about ‘where to have presence’ are more thought about than ever, it is good to see significant investment into the UK from a large banking entity.
2. Another law firm set to float on LSE
Keystone Law is set to become the third publicly traded law firm in the UK as it prepares to float on the Alternative Investment Market (AIM). After the rise of Alternative Business Structures (ABS) in the legal sector, and following Gateley’s and Gordon Dadds’ decision to float, becoming a Plc appears to be the latest trend. We’ve looked into the previous law firm listings to understand more about the benefits and risks in delivering legal services this way.
Benefits
Capital raisings
Raising funds is a hugely tempting reason to be traded on a stock exchange. AIM-listed firm Gateley raised £30m when it floated, providing valuable funds that they used to grow through hiring more lawyers and strategic acquisitions. The firm acquired Birmingham-based property consultancy Hamer Associates in September last year, and tax incentives advisory business Capitus in April 2016.
Listing also offers the potential to raise equity capital outside of relying on partners, which can offer greater growth opportunities and peace of mind to those running the business!
Talent retention
It can introduce a more collaborative approach to running a law firm. Stepping away from a traditional lockstep and offering your senior individuals a transparent and potentially highly rewarding method of remuneration is an exciting prospect for many up and coming partners. Additionally, those who are keen to improve and grow the business as a whole could profit well from a shareholder approach, rather than cultivating an atmosphere in which lawyers are expected to thrive as lone wolves.
Growth prospects
Opportunities for expansion and long-term growth can be more attainable for mid-smaller sized outfits. James Knight, chief executive of Keystone Law Group plc has said: “Our decision to list on the London Stock Exchange will provide us with the most resilient and stable platform to support our ambitious growth plans long into the future”.
Investors will expect to see considerable growth year on year, so plans for investment in geographical and practice area expansion could prosper.
Risks
Investment risk
Growing through acquisition can pose numerous risks, and the expectation of capital growth from shareholders implies that this form of expansion would be necessary. Markets, although they can be lucrative, don’t necessarily bring stability to a firm. A less profitable year could mean a cut in dividends, which can then take a toll on share price.
Market perception
Losing ‘rainmakers’, low deal count, practice or sector group restructurings: all could spark weariness in investors and affect share price. Investor relations will play a big part in running the firm, and any weaknesses in investor confidence, whether it’s through poor financial postings or internal management conflicts, can have an adverse effect on the firm.
With ever increasing pressure in the legal services market, law firms are constantly looking at ways in which to ‘consolidate and grow’ to secure their place in the moving landscape. Some do this effectively through domestic or cross-border mergers while others can effectively achieve the same results through constant organic growth. The IPO route albeit relatively new by comparison offers firms another way to secure their futures, ironically through releasing sole control of their direction.
Movers and Shakers of the week
Panel Watch
Appointments
Moves
W&C expands corporate practice with Ashurst hire
Ashurst loses it second partner in three weeks as Dominic Ross exits the firm to join White & Case in London, serving as a partner in its global M&A practice
Real estate duo departs BLP as the firm continue tie-up talks
Head of hotels group Karen Friebe and real estate partner Anthea Bamford are both set to leave Berwin Leighton Paisner, each joining Bird & Bird and Weil, Gotshal & Manges, respectively.
KPMG bolsters its legal offering with a double corporate hire
Richard Lewis has left Eversheds, where he served as an M&A partner, to lead the London corporate legal team at KPMG. Corporate partner Emma Gibson has also joined the Big Four firm in Reading from Shoosmiths.
White collar partner Ed O’Callaghan has left Clifford Chance’s’ New York office to become the principal deputy assistant attorney general for the US Department of Justice
Office Openings & Closings
Dentons launches new consulting business
Dentons kicks off new in-house consulting venture, Nextlaw In-House Solutions, made up of over 50 former GCs, providing consulting services to in-house legal teams
Partner Promotions
Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.
Tweet us @Fides_Search to let us know your thoughts.
This week:
1. Investigations rise as FCA cracks down on fund managers
J O Hambro Capital Management (JOHCM) is the most recent firm to be investigated by the Financial Conduct Authority as the asset management sector comes under greater scrutiny from the regulator.
An investigation is under way relating to the period between 2006 and January 2016, where the FCA are examining “the eligibility of certain services paid by J O Hambro Capital Management Limited”, a statement from the fund manager declared. The amount paid out from dealing commissions during this period had been estimated at AUS$8.6 million (£5 million).
The statement went on to explain: “We are cooperating fully with the FCA in relation to the investigation, which is ongoing.” Whilst no findings have yet been made, the FCA has a history of delivering fines for cases such as this.
In 2014, Invesco received a penalty amounting to £18.6 million for failings to clearly disclose to investors the associated risks of its use of derivatives, alongside failures to comply with certain investment limits. Additionally, Aviva Investors was fined £17.6 million the year after for systems and controls failings that led to its failure to manage conflicts of interest fairly.
This week’s news also featured the FCA’s dealings with Capita Financial Managers (CFM). After the firm’s Connaught Income fund collapsed in 2012, losing investors approximately £118m, the regulator has ordered CFM to pay back investors up to £66m. Although these failing would usually incur a penalty, the FCA are satisfied with the £66m reimbursement agreement it struck with the firm.
Following the Asset Management Market Study carried out by the regulator, with the final report released early this year, the industry is expected to come under much greater scrutiny going forward. As they prepare for a more heavily regulated market, and an increased number of enforcement investigations, firms must get to grips with the new regulatory landscape before it’s too late.
2. Tis the season: US firms kick off 2018 partnership promotion round
The 2018 partner promotions round has kicked off in earnest as Latham & Watkins, DWF and DAC Beachcroft announce the associates who have made it to partnership this year.
This follows announcements from Ropes & Gray, Bryan Cave, Proskauer Rose and Cleary Gottlieb last week, with White & Case revealing their global promotions round in October.
Global powerhouse Latham & Watkins revealed a 31-strong promotions round, with finance associate Charles Armstrong and corporate associate Huw Thomas making it into its City partnership. The US saw the majority of the firm’s promotions, with 24 lawyers being made up predominantly across the corporate and litigation practices. A third of this year’s promotions were also female, a significant increase on last year when the firm only made up 4 women from 27.
This matched the number of lawyers made up at competitor White & Case, who added seven new partners to its London office.
Ropes & Gray saw a steady promotion round of 12, making up two in the City, consistent with the number of partners the firm has made up in London over the past 2 years. Derivatives and structured finance specialist Anna Lawry and leveraged finance lawyer Alex Robb made the cut, replacing the two finance partners the firm lost to King & Spalding this summer. The US again saw the lion’s share of promotions, with two lawyers being made up in Hong Kong, and the promotions being spread evenly across the firms’ practice areas.
Bryan Cave and Proskauer Rose made up similar numbers in their London offices, promoting one and three to partner respectively. Currently in merger talks with BLP, Bryan Cave made its first promotion in London since 2014 with corporate lawyer Andrew Hart amongst a global round of 13. Proskauer Rose also made up three in London with a funds and corporate heavy round that saw Edward Lee and Andrew Shore and Liam Arthur making it to partnership from 14 lawyers promoted globally.
Cleary Gottlieb Steen & Hamilton revealed one of its smallest promotion rounds to date, with three lawyers being made up to partner globally: M&A specialist Nallini Puri in London, and litigation partner Abena Mainoo and regulatory partner Hugh Conroy in New York.
Closer to home DWF announced that it made up 2 insurance partners in London and Liverpool, with the rest of its promotions being made up across its Birmingham, Leeds, Newcastle and Manchester offices. Of the nine associates being made to partner this year, one third are women.
DAC Beachcroft also announced the promotion of four new partners, alongside nine that the firm made in May. This includes Professional risks lawyer Caroline Cherry in Bristol who joined the firm as a legal secretary, and injury lawyer Adrian Cottam and corporate partner Prakash Kerai who were made up in London.
See below for the promotion rounds in full:
Cleary Gottlieb Steen & Hamilton
Movers & Shakers of the week
Panel Watch
SocGen reaches final round of global panel review process
London Boroughs Legal Alliance (LBLA) panel drops two firms and gains seven new ones
Appointments
Deutsche Bank appoints new global legal head
Former EMEA legal chief for Deutsche Bank Florian Drinhausen has been promoted to assume the bank’s chief compliance officer and head of global governance roles, as co-general counsels Christof von Dryander and Simon Dodds will be exiting the bank at the end of 2017 and 31 March 2018 respectively.
Moves
W&C Asia PE head joins City office
Peggy Wang, head of private equity for Asia at White & Case, has relocated from Hong Kong to London after joining the firm from Linklaters two years ago
Gibson Dunn boosts white-collar practice with SFO hire
In London, SFO prosecutor and case controller Sacha Harber-Kelly is set to join Gibson Dunn’s partnership, and will sit in the firm’s anti-corruption and bribery division
Tokyo managing partner Simon Black has left Allen & Overy to join battery storage startup BESS
Partner Promotions
DAC Beachcroft makes up four to partner
Latham & Watkins’ latest promotions round posts 31 global partner promotions, with two in the City
DWF promotes eight to its UK partnership along with first partner promotion in Australia
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.
1. FCA and Asset Managers come under diversity scrutiny
Diversity and inclusion again hit the press this week, with the Financial Conduct Authority revealing that the proportion of women and people from ethnic minorities in senior leadership positions actually fell in the first year since the firm set targets to improve diversity.
The number of women in senior leadership positions dropped from 39 per cent to 36 per cent in the year to March 2017, while the proportion of people identifying themselves as black, Asian or other ethnic minorities (BAME) fell from 3 per cent to 2 per cent.
Last year the FCA set targets to increase the diversity amongst its senior leadership positions, aiming to increase the proportion of women to 45 per cent by 2020, and 50 per cent by 2025, and those from an ethnic minority to 8 per cent by 2020 and 13 per cent by 2025.
This is to be achieved by making diversity and inclusion a strategic imperative amongst senior management, the launch of internal mentoring schemes and the use of balanced shortlists when recruiting.
The organisation also revealed a gender pay gap of 20 percent, citing this due to there being less women in more technical and managerial roles, rather than discrepancies in pay between roles that are similar.
The asset management industry also came under fire this week for failing to address the pay gap between the sexes, this week measured at 27 per cent by benchmarking site Emolument.
With men earning a median £93,000 compared with £68,000 for women, based on data from 10,000 fund company employees, this compares with an 18 per cent gap nationally, according to the Office for National Statistics.
This does not bode well for asset managers, who need to publish their data on the gender pay gap by next April, and is indicative of wider problems hiring and retaining women across the sector.
This comes after the BBC revealed that the majority of companies required to report their gender pay data have yet to do so, with only 85 out of 9,000 companies reporting six months in to the policy.
2. Slaughters advances its fintech initiative
With six more startups joining ‘Fintech Fast Forward’, Slaughter and May has expanded its programme to dish out more legal advice and support some of the most promising fintech businesses emerging from the industry.
A panel of industry experts, including Autonomy co-founder Mike Lynch, and led by financial services partner Ben Kingsley, selected the following businesses to receive £30,000 worth of free legal services: insurance data analytics business Digital Fineprint, insurance technology company Flock, machine-learning company Multiply, data engineering service TAB, financial services innovator TrueLayer and private company valuation business Valsys.
From the previous five companies who joined the scheme in March this year, regulatory compliance company Enforcd and low mileage car insurance provider By Miles have both graduated the programme.
Other law firms have been employing similar methods to keep their finger on the pulse with new technologies. Simmons & Simmons set up a free legal advice service for select startups, whilst Allen & Overy’s Fuse initiative was launched to serve the budding regtech and legaltech products, and Mischon de Reya’s incubator MDR LAB was opened to early stage and growth technology start-ups in the legal space.
Incubators and start-up initiatives have proliferated over the last year in the legal sector. They provide law firms with the opportunity to build out their expertise in technology startups, which allows them to better advise clients in a rapidly growing industry. It can also be viewed as a long-term business strategy, out of which firms may generate valuable future clients in some of the startups they support.
Slaughters partner Ben Kingsley said: “With an uncertain economic environment and challenging headwinds facing many young and growing tech businesses in the UK, we hope the programme will help our new cohort navigate many of the challenges they face, grow their businesses and fulfil their undoubted potential.”
With technology and innovation sitting on top of most company’s strategic agendas, and fintech at the forefront of UK financial services, initiatives such as these will be an invaluable tool to help further advance the technology movement into the next phase of innovation adoption.
Movers & Shakers
Moves
Uber drafts in a new chief legal officer amidst legal appeal
Tony West has joined Uber from PepsiCo, where he served as executive vice president for public policy and government affairs, general counsel and company secretary. West replaces Salle Yoo, who retires her position at the firm after five years.
Paul Hastings attracts W&C restructuring partner
Restructuring partner David Manson joins Paul Hastings in London from White & Case
Brighton football club acquires Everton’s head of legal
Chris Anderson has joined Brighton Hove & Albion FC. Where he previsouly served as head of legal services for Everton FC, Anderson’s new role expands to head of legal and commercial, and will be joining the club’s operating and executive committees
Quinn makes a local team hire in Paris
Former head of litigation for August Debouzy Kami Haeri is set to join Quinn Emanuel Urquhart & Sullivan in Paris, bringing with him counsels Benoit Javaux and Valérie Munozpons, and associates Helen Adler and Noémie Coutrot-Cieslinski
Clearys boosts German competition practice
Cleary Gottlieb Steen & Hamilton has hired senior Linklaters competition partner Wolfgang Deselaers to its competition ranks, splitting his time between Cologne and Brussels.
DLA global co-chair leaves to join US firm
DLA Piper international senior partner and global co-chair Juan Picon is exiting the firm to join Latham & Watkins’ corporate practice in Madrid
Mayer Brown loses two practice heads in London to US rival
Mayer Brown’s London head of tax Sandy Bhogal and global corporate and securities co-head Jeremy Kenley are both leaving the firm to join Gibson Dunn
Office Openings & Closings
DWF opens sixth Italian office in Milan with a three partner team hire
Mergers & Alliances
Bryan Cave partners set to vote for BLP merger next month
Partner Promotions
Ropes & Gray promotes finance duo in London
Bryan Cave makes one partner promotion in London and 12 in the US
Proskauer Rose promotes 14 globally, two in London
Clearys makes up only three partners in recent round of 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!
1.) Regulators reach another settlement in the aftermath of Libor
Deutsche Bank paid a further settlement to US regulators this week for their involvement in rate manipulation from 2005 to 2009.
Announced on Wednesday, this week the German bank will be adding an additional $220 million to their payments towards rate rigging, confirming its spot as the firm with the most settlements in relation to the Libor scandal.
Not dissimilar from Barclays’ $100 million Libor settlement in August last year, Deutsche’s payout is the result of a US investigation discovering that false rates led to inflated borrowing costs and harmed government not-for-profit entities in New York and throughout the country. Attorney General Eric T. Schneiderman declared: “We will not tolerate fraudulent, manipulative or collusive conduct that interferes with or undermines confidence in our financial markets. Large financial institutions, like all other market participants, have to abide by the rules.”
As US regulators continue to probe into the long-term manipulation of benchmark interest rates that affected hundreds of billions of dollars of loans and hundreds of trillions of derivatives, the FCA have begun looking into a reliable alternative to the inter-bank lending rate, Libor. Whilst governance improvements have been made by banks, and no evidence has been cited of further rigging attempts, FCA chief Andrew Bailey believes that Libor in its current form is unsustainable, and will likely be phased out by 2021.
The BBC has reported that the $220 million penalty resolves the final inquiry into Deutsche Bank from US regulators. However, as further inquiries into multiple global banks remain ongoing, we expect to see further settlements on the horizon.
2.) “We are not infallible”: second data breach hits global offshore firm Appleby
Global offshore firm Appleby admitted it suffered a data breach in 2016 following a statement released on Tuesday.
The statement was issued in response to enquiries from the International Consortium of Investigative Journalists (ICIJ), who also exposed the details of tax evasion and fraud in offshore companies in the release of the Panama Papers in May 2016.
As such, media reports have suggested that clients of the Bermuda-based firm, many of which are high-net worth individuals, could see their data leaked to the press in the coming days.
Cyber-attacks are becoming an increasing threat in the legal sector, with law firm’s access to confidential client information highly valuable.
In June, DLA Piper became collateral damage following a cyber-attack on one of its software suppliers in the most high-profile incident involving a law firm to date. This downed the firm’s emails for two days, and landline and computer systems for over a week, as the firm’s IT risk management team dealt with the malware attack.
Lack of investment into IT infrastructure has been a big issue facing the sector for some time. The majority of law firms reported that they suffered a security incident in the past 12 months according to PwC’s Law Firm survey 2017, whilst the SRA reported the number of cyber thefts have doubled in the first half of this year, from 21 cases to 45 cases.
Despite the increasing threat levels, only 16% of firms admit to having business continuity plans and a resilience framework in place, with far fewer of these firms testing these procedures on an annual basis.
It will be interesting to see what if any wrongdoing emerges from the Appleby cyber-attack, and whether this will promote firms to take a more active approach to their information security in the future.
3.) Movers & Shakers
Moves
DWF Banking and Restructuring heads to exit for rival firms
The firm’s head of business restructuring Gavin Jones, and head of corporate banking Jonathan Edwards have both resigned from DWF to join Hill Dickinson and Browne Jacobson respectively.
Funds partner leaves Ropes & Gray for K&L Gates
Michelle Moran is departing Ropes & Gray’s London base, in what is the eighth partner exit for the office this year.
Mergers & Alliances
Merger talks between Clyde & Co and Sedgwick falter
Office Openings & Closings
US litigation boutique Kobre & Kim opens in Shanghai
Herbert Smith Freehills to launch in Milan with Simmons hire
Wiggin acquires four-partner London IP boutique and hires Osborne Clarke partner
Kennedys to launch in Bermuda with Sedgwick office
Partner Promotions
Ropes promotes two in London despite partner exits
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!
1.) British banks caught up in Gupta Scandal
This week saw Chancellor Philip Hammond ask the UK’s enforcement agencies to investigate possible ties between South Africa’s Gupta family and British banking groups HSBC and Standard Chartered.
Part of an ongoing corruption inquiry, the Gupta’s are alleged to have used their friendship with President Jacob Zuma to influence state business, including diverting funds from state-owned companies that benefitted them financially.
The concern was first raised by former Labour cabinet minister and anti-apartheid campaigner Peter Hain, that the UK banks might have handled illicit funds linked to the family via Hong Kong and Dubai.
In a letter to the Chancellor, Mr Hain said that the authorities should review transactions due to evidence, including material from whistleblowers, that hundreds of millions of South African rand were laundered out of the country. The case has since been referred to The Financial Conduct Authority, Serious Fraud Office and National Crime Agency.
Although no allegations of wrongdoing was made against the banks, Hain stated that he expected them to help recoup any funds that left the country by illicit means in addressing the House of Lords on the matter on Thursday.
Whilst unable to comment in detail on the nature of client transactions, Standard Chartered confirmed that it closed accounts linked to the Gupta’s after an internal investigation in 2014.
South Africa’s former finance minister Pravin Gordhan said that 72 transactions over a period of four years involving the Gupta’s were marked as suspicious by South Africa’s anti-money laundering watchdog.
South African banks, including Standard Bank and Nedbank, also terminated all their business with Gupta-owned companies in April 2016, although the reasons remain confidential.
The relationship between the Gupta family and President Zuma has also attracted FBI attention, as US investigators have begun investigating individuals, bank accounts and companies potentially linked to the scandal, according to the Financial Times.
In a statement following Hain’s intervention in the House of Lords, Shadow Chancellor John McDonnell called on the government to consider a wide-ranging review into the role of UK financial institutions in global corruption.
“This is the third high-profile money-laundering scandal to involve major British banks this year, and London has become notorious as a global centre for money laundering,” he said
2). Bryan Cave / BLP Merger: What you need to know
Much has been made of the merger talks between Berwin Leighton Paisner and US firm Bryan Cave that emerged this week. With a lot of industry chatter on the proposed tie up, here are the key things you need to know.
With the final decision on the tie up to be made by partner vote later this year, it will be interesting to see if Bryan Cave BLP becomes the latest in the line of big transatlantic mergers.
3). Movers & Shakers
Appointments
Ince & Co names HR director and former Royal Navy lawyer as first London head
PwC appoints new legal services head
Former SABMiller deputy GC joins JTI as Western Europe GC
Ex-HSF EMEA managing partner joins legal consultancy Co-ordinated Law
Moves
Linklaters hires Latham’s London investment funds co-head
Tom Alabaster, a specialist private equity fund formation lawyer, will join Linklaters investment management group next month.
Goodwin takes Paul Hastings private equity partner duo for Hong Kong office
Goodwin Procter has recruited two Paul Hastings private equity partners in Hong Kong, including former Fried Frank Harris Shriver & Jacobson Asia chief Douglas Freeman.
Linklaters boosts New York office with Mayer Brown team hire
Linklaters has boosted its New York capital markets practice with the hire of a team from Mayer Brown, led by partner Doug Donahue.
Mergers & Alliances
Berwin Leighton Paisner in transatlantic merger talks with Bryan Cave
Office Openings & Closings
KWM seals takeover of Germany boutique led by former SJ Berwin Frankfurt corporate head
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. A new dawn for HSBC: Succeeding leadership team appointed by the bank
After much speculation around who will replace Stuart Gulliver in the top role at HSBC, it was announced yesterday (12 Oct) that Chief Executive of Retail Banking and Wealth Management John Flint will be appointed as CEO.
Various names had been tipped to be contenders for the position, including Lloyd’s boss Antonio Horta-Osorio, and ultimately it was a further HSBC lifer that chairman Mark Tucker selected.
The global bank has a track record of promoting long-standing employees to its senior ranks, and Flint’s background of 14 years with the bank’s Asia business, followed by a further 13 years at HSBC in London, is no different.
Flint began his career in the global markets business and in 2010, shifted over to head up HSBC Global Asset Management. He subsequently led the institution’s retail banking and wealth management arm, after a period as Group Treasuer upon his return to London. This contribution to the bank, and well-rounded exposure to the business, put Flint in good stead for his new role. It will be interesting to see how the new leadership team progresses, as he goes forward alongside new chairman Mark Tucker, who is the result of a rare external hire by HSBC.
Tucker previously ran Asian insurance firm AIA, where he “spearheaded AIA’s record-breaking IPO on 29 October 2010” according to the insurer. He is the first chairman to be appointed externally since HSBC was founded in 1865.
The appointment of John Flint coincides with a period of a rising share price for HSBC since June 2016, and the potential end of the Deferred Prosecution Agreement (DPA), which, if unextended, runs until the end of this year. The bank has also nearly completed its phase of extensive restructuring, which involved over 87,000 job losses and a slimdown of its investment banking division.
The leadership duo have a solid platform on which to build their upcoming strategy, and with their combined experience in Asia, investors are expecting strong growth in the region, as well as a return to overall growth for the bank.
HSBC beat estimates for H1 2017, reporting a pre-tax profit of $10.24 billion, five per cent higher than the previous year, whilst revenues fell 11 per cent to $26.6bn during the period.
2. PwC Launches Flexible Lawyering Arm
PwC becomes the first accountancy firm to foray into the contract lawyering service with the launch of Flexible Legal Resources, a flexible lawyering service for large in-house legal teams.
Competing with the likes of Axiom and Lawyers On Demand, the service will help clients with their staffing needs by providing temporary lawyers for in-house teams during abnormal spikes in workload.
PwC expects the service to be used by clients requiring increased resources for tasks such as large-scale contract review, disclosure exercises during investigations, and other implementation challenges driven by regulatory changes. Initially focussing on the financial services sector, PwC’s pool of contract lawyers will eventually cover clients from all sectors.
“The contingent workforce is an attractive option. It allows clients to ramp their legal teams up and down depending on changing business demand, gives them access to a rich talent pool, but still allows them to drive efficiencies in overheads” PwC Legal services Director Anne-Marie Botha told Legal Week.
The service is part of PwC’s New Law offering, which aims to help large in-house legal teams work more efficiently, with a particular focus on the effective use of technology. This is spearheaded by former Radiant Law partners Andrew Giverin and Jason McQuillen who joined the accountancy firm in April.
Much has been made recently of the expansion of the accountancy firms into the legal sector, and the impact this has had on an already highly competitive marketplace.
The Big Four’s formidable brand strength, client base and ability to offer multidisciplinary services has helped them take market share from traditional law firms. Deloitte, EY, KPMG and PwC have invested heavily in their legal services arms in recent years – particularly in Europe – and now collectively employ about 8,500 lawyers globally.
PwC Legal is the largest legal arm of the Big Four, having 2,500 lawyers, which makes it the world’s sixth-largest legal services provider by that measure – up there with the likes of Clifford Chance and Jones Day. As the legal arm is fully integrated with the accounting firm’s UK business, the firm also has offices in 85 countries – far more than any other law firm. Earlier this year, PwC sealed an innovative five-year deal to take on the in-house tax law department of General Electric, including 600 staff, and last month opened its first office in the states with the launch of ICL Legal.
A report this week by legal market research company Acritas, also named PwC as the legal market’s second-strongest brand of alternative service provider, closely behind Thomson Reuters.
Although the revenue of the accountancy houses is yet to catch up with traditional firms, with the work of the Big Four centered around lower-value work associated with their audit and tax practices, market leaders would be foolish not to consider these firms a threat through their ambition to consider the broader needs of clients, and develop smarter, more flexible and cost-effective legal services.
Indeed, it will be interesting to see the traction PwC’s flexible lawyering service has on the legal market, especially in light of its scale and visibility as a leading professional services organisation.
Movers & Shakers of the week
Panel Watch
Legal & General puts panel review on hold
Appointments
Allen & Overy creates new eDiscovery role with EY hire
Hyundai Heavy Industries appoints new GC
Tunstall Real Estate Management appoints first GC from client Goodwin
Peter Martyr achieves six consecutive term as Global Chief Executive at Norton Rose Fulbright
Co-op interim consumer services GC leaves after double appointment to divide up role
Moves
Linklaters boosts Frankfurt base with Allen & Overy’s former Germany senior partner
Linklaters has hired senior banking partner Neil Weiand from Allen & Overy (A&O) in Frankfurt.
Bakers capital markets head exits for Jefferies Bank in-house role
Baker McKenzie capital markets head Edward Bibko has left the firm to join Jeffries Bank as EMEA head of investment banks legal
Former Linklaters financial regulatory partner joins BLP after Latham move falls through
Daniel Csefalvay joins Berwin Leighton Paisner after a previously announced move to Latham & Watkins in March
Clifford Chance hired Latham’s Asia head of Tech in Singapore
Luke Grubb, head of technology, media and commercial joins CC’s Singapore office
Long-serving Norton Rose Fulbright competition head leaves to join the CMA
Global head of antitrust and competition Martin Coleman leaves the firm to become non-executive director at the Competition and Markets Authority (CMA)
Hogan Lovells further bolsters finance practice
Energy, infrastructure and projects partner Arun Velusami departs Norton Rose
Osborne Clarke further builds Private Equity Team
OC hires UK private equity head Tim Hewens from Squire Patton Boggs
Mergers & Alliances
Linklaters strengthens Middle East offering with Saudi Arabia alliance
DAC Beachcroft’s New Zealand offices join Australian alliance partner
Office Openings & Closings
Squire Patton Boggs closes Kiev office
Charles Russell Speechlys partners break off to launch sports law boutique
Linklaters strengthens Middle East offering with Saudi Arabia alliance
Former Gibson Dunn partner joins with UAE firm for London launch
Hogan Lovells to close Mongolia office as managing partner exits to launch local firm
Partner Promotions
White & Case promotes seven to London partnership including two female lawyers
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). As MiFID II launch date approaches, what’s in store for financial institutions?
As the final countdown to the Markets in Financial Instruments Directive’s (MiFID II) launch date begins, there remains much to clarify for financial institutions, and news outlets are considering some of the outcomes that MiFID II will impose in the near term.
Primary concerns for funds in particular is the rules on costs for third party research. The FT reported last week the assembly of an emergency summit, with the attendance of both banks and asset managers, who met with the Financial Conduct Authority (FCA) to try and resolve some of the outstanding queries around the incoming regulation. Although no answers were given during the meeting, the FCA gave the impression that senior individuals at the FCA, European Commission and Securities and Exchange Commission (SEC) are aware of the gravity of the problem and attempting to resolve it.
On a positive note, the FCA have expressed that they will not commence taking formal action against those who aren’t fully compliant from MiFID II’s start date (3rd January 2018), although all firms must be able to demonstrate best efforts in achieving compliance.
Even without the immediate fear of the eye of the regulator, MiFID II seems to be presenting other problems for some institutions.
According to Bloomberg, UBS recently released a report that indicated Deutsche Bank is likely to be most affected by MiFID II in terms of revenue, with Barclays following the German bank as the second most affected. The report states in the event that European trading revenue slumps by 9 per cent next year, Deutsche Bank could see its growth hit by as much as 4.7 per cent, whilst Barclays should expect a 3.7 per cent drop in revenue. This is due to their level of trading activity within European markets, whereas their U.S. counterparts, namely J.P. Morgan, Morgan Stanley and Goldman Sachs, only generate about a quarter to a third of their trading revenue in Europe.
A further outcome MiFID II could bring is a rise in the level of dark trading, says Bloomberg. The regulation apparently allows flexibility for certain venues in how they share prices. As regulators have attempted to restrict the use of dark pools and flow trading back through the stock exchanges, traders have a found a loophole using alternative platforms that could potentially cause overall dark trading to increase, rather than decrease under MiFID II.
In the run up to the 3rd Jan, as regulatory compliance functions and senior management are under pressure on readying themselves for the incoming regulation, it’s only a matter of time until we see what exact impact MiFID II will have on the industry, and of course on firms’ revenue.
2). Expansion continues in the Irish capital
Simmons & Simmons has become the third international firm to open an office in Dublin, following the hire of Mason Hayes & Curran investment funds and financial regulation head Fionan Breathnach.
The office will service the firm’s asset management clients, and is the first office opening for Simmons since opened in Luxemborg in 2015.
They follow in the steps of Pinsent Masons, who became the first international firm to open in Ireland in June this year, complementing the firms’ pre-existing base in Belfast. The office launched with a trio of partners from local firms: investment funds partner Gayle Bowenfrom from Walkers; outsourcing partner Andreas Carney from Mathesons; and corporate partner Dennis Agnew from firm Byrne Wallace.
US firm Covington & Burling is also planning on launching a life sciences and technology practice in the city, pending regulatory approval from the Irish Law Society.
These sit alongside other UK and Irish firms with bases in the Irish capital, including Eversheds Sutherland, DWF, insurance firms DAC Beachcroft, Kennedys and BLM and US firm Dechert. It is believed that other international firms, such as DLA Piper, are also considering a launch in the city.
The Irish legal market has become increasingly attractive for UK and international businesses since the Brexit vote last year.
Like their major clients in the banking sector, many law firms have been examining their post-Brexit footprints to ensure they continue to have access to the European Union (EU) single market and the EU’s courts and decision-making bodies when the UK leaves the EU.
The number of solicitors qualifying in Ireland has also hit record highs, with 810 English qualified solicitors joining the roll in 2016.
Movers & Shakers of the Week
Panel watch
Homes & Communities Agency puts £30m panel up for tender
Credits Suisse delays global legal panel as it opts to remove UK and EMEA panel arrangements
12 firm-strong legal panel for National Grid has been renewed for a further two years
Appointments
Barclays creates new in-house role for UK retail banking arm
Majestic Wine appoints first GC after group expansion
Moves
New addition to Hogan Lovells’ London finance practice
Partner Arun Velusami has joined Hogan Lovells from Norton Rose Fulbright’ finance practice and will also sit in the firm’s Africa practice, energy and natural resources group and the infrastructure, energy, resources and projects team
Eversheds adds enforcement head to its partner ranks
Head of investigations and enforcement at TLT Jake McQuitty has joined Eversheds Sutherland as a partner in London
DWF brings in Addleshaws heavyweight
Andrew Carpenter joins DWF after missing out on senior partner election
Osborne Clarke hires UK private equity head from Squire Patton Boggs
Tim Hewens joins Osbourne Clarke after 16 years at Squire Patton Boggs
Latham & Watkins hires A&O Corporate veteran in New York
Peter Harwich moves to Latham’s as the latest in a string of high-profile M&A hires from A&O
Withers and Stephenson Harwood hire from US rivals
Tracy Evlogidis, Head of Immigration at Morgan Lewis is set to join Withers, whilst Rubin Weston joins Stephenson Harwood from Baker Botts.
Office Openings & Closings
Linklaters lawyers take over best friend firm ahead of Shanghai JV
Freshfields Tokyo quartet leave to launch new firm in Japanese capital
DWF announces association with Australian firm MVM Legal
Bird & Bird to launch first US office
Kennedys hires DLA Piper partners for Bangkok launch
Mergers & Alliances
Hunton & Williams and Andrews Kurth explore merger
Partner Promotions
Kirkland & Ellis announce bumper partner promotion round of 13
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. Legal Market trends: What are they telling us?
This week saw the release of annual market reports into the sector from Legal Week (The Global 100) and Legal Business (LB 100). Below we break down the trends behind the headlines for what this means for you and your firm.
The Global Picture
Closer to Home
In conclusion, how firms develop and execute their strategies will become critical in what is clearly becoming a more challenging and competitive marketplace. How successfully firms do this will depend on how the market itself will evolve going forward, and if we will continue to see dominance of the sector from across the Atlantic.
Movers & Shakers of the week
Appointments
Bristows appoints Cohen as new joint managing partner
Moves
Dechert hires Kirkland & Ellis duo in London
Dechert has made two hires from Kirkland & Ellis’ London office with corporate partner Christopher Field and tax partner Jane Scobie
Mayer Brown to lose financial regulatory duo in London
The Lawyer reports Guy Wilkes and Mark Compton have been reported to be preparing to move to Mischon de Reya and an in-house role at a financial institution respectively.
Linklaters appoints Moscow disputes head with Herbert Smith Freehills hire
Vladimir Melnikov departs his role as disputes head at HSF to join Linklaters global disputes practice
Pinsent Masons boosts financial services offering in Dubai with key new hire
Mark Bicknell has joined Pinsent Masons as a partner, leading the firm’s insurance and wealth management offering in Dubai. He joins from Clyde & Co, where he served as a legal director in the corporate insurance team.
Mayer Brown DCM duo join Hogan Lovells in Frankfurt
Partners Jochen Seitz and Peter Maier will move to Hogan Lovells’ international debt capital markets practice in Frankfurt.
Mergers & Alliances
Kennedys and Plexus rule out merger as news of talks emerges
Dentons set to combine with Ugandan firm as global expansion continues
Office Openings & Closings
Insurer LV pulls plug on legal services
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