Hello and welcome back to the Fides Weekly Update. Here we aim to provide you with regular insights on what’s happening in your sector. Read on to see the key news stories in legal and compliance and don’t forget to check out the Movers & Shakers of the week.
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1). “This commitment to innovation is one we’re making for the long term” – FCA’s Exec Director of Strategy and Competition details the regulator’s plans to ramp up use of technology
Machine learning, digital regulatory reporting and technology-focused graduate recruitment are all key objectives in this year’s FCA Business plan, says Woolard.
Speaking at the Deloitte conduct risk roadshow on Wednesday, Christopher Woolard, Executive Director of Strategy and Competition at the FCA discussed some of the priorities for the regulator over the course of this year, focusing particularly on technology and the future of regulation.
Where the introduction of fintech into mainstream financial services poses a number of ethical challenges, such as biased algorithms and the collection of personal customer data, Woolard argues the importance of being at forefront of this technological change in order to effectively regulate the sector.
“For example, we’re increasingly employing machine learning techniques to identify firms or individuals who could pose a risk to our objectives,” says Woolard. The FCA is also exploring ways to digitise the regulatory reporting process that has the potential to massively reduce the burden of regulatory reporting requirements for firms.
Keeping abreast of the ever-changing financial regulations can be cumbersome for financial institutions and demands a lot of resource to monitor, interpret and implement such changes. The FCA’s mission to modernise this will allow firms to automate most of these process from their end. By converting the lengthy FCA handbook and updates into machine readable text, it would no longer require someone to spend time reading through the information, pulling out what’s relevant to their business and then manually implementing it. Instead, a machine could decipher the relevant next steps, automatically implement any changes and produce the reports that need to be submitted to the FCA.
In order to successfully adopt such revolutionary processes, however, the regulator now has a much greater need to attract individuals with the correct skill sets: “To make sure we have the skills to take on the challenges of the future, we’re strengthening our focus on science, technology, engineering and maths graduates to increase our capability in areas like cyber security, data science and technology.”
Dubbed the most technologically advanced financial regulator globally, the FCA seems adamant on bringing these proofs of concept into fruition, ensuring that their purpose to uphold a fair and well-governed market doesn’t hinder the UK’s journey to becoming the hub for technological revolution in financial services.
Click here to read Christopher Woolard’s full speech
2). Big Four Banned from Practicing Law in India
The Bar Council of Delhi has barred the Big Four accountancy firms from practicing law in India until further notice.
The order was passed after the president of The Society of Indian Law Firms, Lalit Bhasin, filed a complaint against accountants KPMG, EY, PwC and Deloitte in 2015. The complaint was later taken up in a council meeting on 12th April 2019, after which letters were sent to each of the Big Four.
The complaint centers on the fact that the Big Four are accountancy firms offering legal services, where only advocates who are enrolled with the Bar Council can practice law in India.
Ernst & Young and KPMG have responded to the statement, denying allegations made by the Law Society’s president which they consider “completely baseless” and “incorrect”.
KPMG’s statement adds: “We maintain our response provided to BCD for the same complaint raised in 2015 by the complainant. In our response, we specifically stated that the firm does not represent or hold itself out to be a legal firm or a firm of lawyers or legal experts, nor is it engaged in the practice of law.
The firms have been asked to be present for a hearing on the issue on July 12.
In 2018, the Supreme Court of India ruled that foreign law firms are not permitted to establish permanent offices in the country, but that they are allowed to advise on non-Indian law matters on a temporary basis. This is despite much discussion of the potential liberalisation of the Indian legal market (See our Blog Special here.)
The developments in India come amid a period of rapid expansion for the Big Four’s legal arms across the world. This week saw Deloitte seal an alliance with a US law firm Epstein Becker Green, where PwC is plotting a major expansion of its financial services legal practice in the UK and has just launched a legal tech incubator. EY has also been bulked up its legal arms across Asia in the last 12 months, and earlier this year KPMG France hired 144 lawyers in a mass raid on local firm Fidal.
3). Movers & Shakers
Slaughter and May Senior Partner Secures Further Three Year Term
Former Taylor Wessing chief resurfaces in new leadership role
DLA Piper brings appoints new restructuring group heads after double loss
PwC Legal Hits Big Four Rival With Financial Services Hire
Director Kevin King joins PwC after building KPMG’s financial services legal team in London
McDermott Sees Third Partner Exit in a Week
U.S. firm McDermott Will & Emery has seen another partner leave its London office, with leveraged finance partner Peter Crichton exiting to join Addleshaw Goddard.
Kirkland Sees Rare London Exits As Heavyweight PE Duo Quit for Willkie
Kirkland & Ellis private equity partners Gavin Gordon and David Arnold have quit the firm’s London base for rival Willkie Farr & Gallagher
Addleshaws Takes 10-Lawyer BCLP Team For German Launch
Addleshaw Goddard has hired a 10-lawyer Bryan Cave Leighton Paisner team, including partners Michael Leue and Eckart Budelmann, to launch an office in Hambur, the firm’s first in continental Europe.
Signature Litigation hires Soc Gen’s General Counsel to its recently launched Paris office
Nicolas Brooke will be the fourth partner at the firm’s Paris base
Jones Day boosts Dusseldorf office with hire from US rival
Head of labour and employment practice at McDermott Will & Emery Paul deBeauregard joins Jones Day
RPC’s Asia Exodus Continues With Nine-Lawyer Disputes Departure in Singapore
Siraj Omar, a partner and disputes head of RPC’s Singapore joint law venture, is joining Singaporean firm Drew & Napier, taking an eight-lawyer disputes team with him.
Goodwin Launches Paris Real Estate Practice
U.S. firm Goodwin has launched a real estate practice in Paris with the hire of rival Orrick Herrington & Sutcliffe’s French real estate head Sarah Fleury.
Mergers & Alliances
Deloitte Seals New US Legal Alliance
Office Openings & Closings
A&O closes shop in Qatar after a decade
DLA announces 2019 partner promotions
Keystone Revenues Jump 35% in First Full Post-IPO Financials
Inclusion and Diversity
Freshfields, HSF among nine new Mindful Business Charter signatories
Innovation and Technology
Clifford Chance Selects First Company For Global Innovation Lab
Eversheds debuts litigation tech offering
Hogan Lovells launches AI solution to prepare for Libor overhaul
Second magic circle firm signs up for Eigen Tech
Linklaters pilots new AI technology designed to support mental health
Freshfields Boosts NQ Pay To £100K
Inns of Court applies to launch ‘not-for-profit’ BPTC that’s cheaper than all UK law schools