Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in the UK legal sector.
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1). Retention and cybercrime the biggest business priorities for law firms in 2019, says research
Retention and cybercrime were viewed as the top business critical risks by city and regional firms in the annual Law Benchmarking report by leading advisory firm Crowe.
The report revealed that more than 70% of firms have a positive outlook for the next 12 to 18 months, despite the impact a possible no-deal Brexit could have on the sector (estimated by the Law Society to cost a possible £3.5 billon).
Despite firms being mindful about the wider economic and political conditions, the focus on managing current operational risks and adapting how teams deliver their work have led firms to be optimistic about their futures.
Retention of key people was considered the highest business critical risk by firms (52%), with retaining key talent not just critical in the completion of work, but also shaping culture, defining client service and providing innovation for future improvement projects. As a result, almost two-thirds of firms plan to increase their level of remote, agile and virtual working in the coming 18 months.
This was followed by the increased threat of cybercrime and fraud (43%), with investment in live, continuous monitoring systems likely to become the norm for law firms in the near future. Visible, robust information and transactional security is now considered a must for the purchasers of legal services, with the impact of a serious fraud or data breach being both financially and reputationally damaging for firms.
On the other hand, despite much commentary on the potential for emerging tech-based and ‘new law’ firms to disrupt the market, the survey revealed that most firms considered this to be a lower priority risk, along with the availability of funding and impact of Brexit.
In terms of finances, one in five participants reported a fall in revenue this year, including 17% of city firms up from 8% in 2017. Whilst a third of firms decreased their profit pool (by an average of 7%), of those who managed to increase their profits, two-thirds did so by over 10%. As with revenue, the biggest improvements generally came from those firms in the sub £20 million revenue band, most of whom are based outside of the City.
Average PEP figures remained a static 8% for city firms, with further analysis showing 40% of the city firms and just under 30% of regional firms experiencing a fall in PEP this year. That said, average City PEP of £413,000 continues to run at a level which is more than double that of the regional firms of £201,000.
2). Movers & Shakers
After a team of UK partners resigned from the firm earlier this week, another group of eight partners are set to leave Clyde & Co and set up their own venture in the US, taking a team of 30 with them. The partners are to leave Clydes’ San Francisco office to set up a legal boutique called Atheria Law focused on insurance coverage and monitoring work
Latham & Watkins has hired Simmons & Simmons’ head of equity capital markets Chris Horton to its London office
George Knighton and Simon Toms will make the move to the US firm after resigning from A&O this week
Clifford Chance has bolstered its London corporate practice with the hire of Richard Crosby, HSBC relationship partner at Norton Rose Fulbright
Chris Pearson now listed as foreign legal consultant in New York office
International arbitration and litigation partner Chiraag Shah becomes fourth partner defection to Morrison & Foerster’s London office this year
Mayer Brown has recruited senior litigation lawyer Emilie Vasseur from French firm Darrois Villey Maillot Brochier as a partner
Five partners in the firm’s global marine group resign to launch shipping boutique Preston Turnbull. This includes partners Andrew Preston, Elizabeth Turnbull, Ed Mills-Webb, Fanos Theophani and Rob Collins. Partner Andrew Bicknell is also believed to have handed in his resignation
Ashurst has strengthened its London dispute resolution bench with the hire of counsel Ruby Hamid from Freshfields Bruckhaus Deringer
Fieldfisher has launched a French public law practice with the hire of four lawyers, including Gowling partner Emmanuel Paillard.
Mergers & Alliances
Office Openings & Closings
Diversity & Inclusion