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1). Global Regulatory Sandbox Launched
The Financial Conduct Authority (FCA) in collaboration with 11 global regulators, on Tuesday announced the creation of the Global Financial Innovation Network (GFIN), building on a proposal released in February to create a ‘global sandbox’.
Sandboxes allow companies to test innovative products with temporary regulatory authorisation, reducing the time and cost of getting products to market, and making it easier for young companies to raise funding.
The network will seek to provide a more efficient way for companies to interact with regulators, and help them navigate between countries as they look to scale innovative products and new ideas. It will also create a new framework for co-operation between financial services regulators on topics related to innovation, and act as a forum to share different experiences and approaches.
The network, which includes the US Bureau of Consumer Financial Protection, the Monetary Authority of Singapore and the Hong Kong Monetary Authority, also launched a consultation on the role the GFIN should play in delivering its objectives, including the tools it will use.
The objective for the GFIN is to go beyond the concept of the sandbox and for regulators to share policy ideas and make sure they are up-do-date with developments in areas such as artificial intelligence, Big Data and blockchain, the technology that underpins crypto assets.
“Financial services regulators must re-consider existing ways of working and collaborating, in order to balance potential benefits of innovation (for consumers and the financial sector as a whole) with traditional policy objectives, namely financial stability, integrity, financial inclusion, competition and consumer wellbeing and protection,” reads the FCA’s consultation paper.
The consultation closes in October 2018, with feedback reviewed and next steps to be outlined by the autumn.
2). How exactly does Riverview Law fit into EY’s global legal strategy?
This week EY announced its acquisition of leading managed services and technology solutions firm Riverview Law, a ground-breaking move in the market which will no doubt affect the alternative legal services marketplace as we know it.
Providing Riverview with not only the security of EY’s global brand and resources, but also access to its stellar global client base, this acquisition presents a prime opportunity to bring managed legal services further into the mainstream and provide clients with more efficient, faster and better automated services.
EY, although not acquiring much in terms of size and scope, has selected one of the first credible disruptors in the legal market, which launched in 2012 with backing from DLA Piper, who initially owned a 21% stake in Riverview’s parent company LawVest. Riverview has received reasonable praise since its inception, not to mention through the use of its virtual assistants technology from Kim Technologies. Although EY will not also be acquiring Kim, the accountancy giant will retain use of its software, having signed a 10 year, non-exclusive contract with the company.
Chris Price, EY’s global head of alliances (tax) is expected to take over as chief exec of Riverview once the deal has been completed, succeeding current CEO Karl Chapman. Price has already hinted at the growth expectations for its managed services arm, announcing that: “We plan to take the 100 people in Riverview and build that out into two to three thousand people over the next five to seven years.”
Although the fee was undisclosed for the EY’s purchase, Legal Business reports that: “Riverview’s turnover is believed to have risen to more than £10m since it launched in 2012, meaning the acquisition is expected to carry a hefty price tag.”
With such a high level of investment made by the Big Four firm, along with the ambitious growth plans hinted at by Price, it is clear that Riverview poses a lucrative new area of business for the firm. Cornelius Grossmann, global head of legal at EY, has confirmed its strategy for the new investment: “What we want to do with Riverview is enter this as a new business line. We’re not changing what our 2,200 lawyers are doing, and we’re going to invest in more legal advisory capacity.”
“We will hire into Riverview more people to scale up that business and scale up more support in our global delivery centres to support Riverview on the delivery of legal managed services.”
EY are likely the second major deal in terms of M&A in the New Law space. In May 2017, document management system iManage acquired AI specialist RAVN Systems, which marked a key indication of significant growth in the demand for new technology in legal services.
Moreover, the New Law market is beginning to attract external investors as it was also announced this week that UK private equity firm Bowmark Capital has purchased Bryan Cave Leighton Paisner’s stake in the contract lawyers business Lawyers On Demand (LOD).
3). Movers & Shakers
RBS to create first-ever flexible lawyer panel as Barclays reviews current providers
Coca-Cola dramatically reduces panel size with over 70 firms cut
GVC legal head makes post-merger move to Tate & Lyle
Dechert revives corporate life sciences group with Hogan Lovells hire
Partner Robert Darwin joins Dechert in its third strategic lateral hire since April
CMS bulks up in Hong Kong with eight-lawyer team hire
Months after agreeing a new association in Hong Kong, CMS brings in team from RPC, including Partners Andrew Horton and Steven Wise
Mergers & Alliances
EY buys Riverview Law in shock New Law market consolidation bid
Office Openings & Closings
Simmons suspends Japan joint venture as Tokyo head leaves for Jones Day
Stewarts sees revenue and PEP fall by more than 20% as firm falls short of standout 2016-17
CC boosts NQ pay to £91,000 as Freshfields hikes London trainee salaries by up to 6%