Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.
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1. IBM delivers AI for regulatory compliance
IBM’s Artificial Intelligence arm has extended its offering to begin servicing regulatory compliance teams in financial institutions.
IBM Watson launched three software solutions on Wednesday to help monitor regulations and assist with financial crime responsibilities. One tool will examine regulatory text to identify a company’s regulatory requirements, the second uses analytics to highlight any suspicious transactions or customers and one tool that harnesses ‘big data’, which can be used in making informed business decisions and managing business risk.
These solutions sit under the new financial services offering at IBM Watson, which was built after the tech company’s acquisition of Promontory Financial Group, a regulatory compliance advisory service.
Gene Ludwig, founder and chief executive officer of Promontory Financial Group, commented: “The speed and volume of information that financial institutions must manage is already daunting and yet still growing rapidly. The answer to this problem is cognitive technology taught by industry experts, like those at Promontory. Essentially, we’re embedding our deep regulatory experience into Watson so that a broader group of professionals can benefit from this knowledge and help their organizations operate more effectively and efficiently.”
Watson has seen success in industries such as healthcare and cybersecurity, and also offers a legal research tool, ROSS Intelligence, one of earlier products to be released in the legal AI market.
Cognitive computing, i.e. the ability for a computer to simulate human thought processes and perform self-learning, could be a serious disruptor to financial services, an industry which is particularly data intensive and fast-paced. Software such as Watson can streamline processes as well as minimise human error and time spent on tasks, whilst also reducing operational spending budgets for regulatory compliance.
As machine learning, data analytics and automation tools become widespread in the regulatory environment, regtech can be considered as a key growth area this year. And with the ever-expanding regulatory challenges faced by financial institutions, these solutions will likely become a vital component to an institutions regulatory framework.
2. Chadbourne-Norton Rose merger on hold
The US merger between Norton Rose Fulbright and New York firm Chadbourne & Parke, due to be completed this quarter was put on hold this week due to a number of client conflicts. Revealed as part of an in-depth review process between the two firms, client conflicts were found in the project finance and energy groups, as well as between offices in the Middle East region.
If the firms are able to come together this would be NRF’s second transatlantic merger, adding to NRF’s $1.7bn annual revenue and taking the firm up to almost $2bn in total revenue worldwide.
However, a number of Chadbourne lawyers have opted against the merger, with Covington & Burling announcing the additional hire of 15 Chadbourne lawyers this week, including two London international partners, following the four-partner project finance team it recruited from the firm in April.
Meanwhile, on Tuesday partners at NRF and Australian law firm Henry Davis York formally agreed to merge, less than a week after it was confirmed they were in late-stage discussions. The merger will give the combined firm 160 partners in Australia with offices in Brisbane, Canberra, Melbourne, Perth and Sydney. It is expected the merger will go live later this year.
Movers & Shakers of the week
Five-lawyer Private Equity team follows ex-co head Youle from White & Case to Skadden
Five London associates are leaving White & Case to join private equity partner Richard Youle at Skadden Arps Slate Meagher & Flom, after the announcement of his move last month.
Ashurst responds to Paris team exits with PwC tax hire
PwC tax specialist Emmanuelle Pontnau-Faure joins Ashurst in the French capital
Herbert Smith Freehills loses second energy co-head
HSF’s co-head of energy Anna Howell joins Gibson Dunn & Crutcher, marking the US firm’s first oil and gas hire in London.
Covington take an additional 15 lawyers from Chadbourne ahead of Norton Rose Fulbright merger
Covington & Burling has added a further team of 15 Chadbourne counsels and associates to the firm’s offices in London, Dubai and Johannesburg.
Office Openings & Closings
Pinsent Masons to launch a new base in Dublin with a trio of Partner hires
Pinsent’s becomes the first international law firm to launch in the Irish capital since last year’s Brexit vote, with partner hires from Walkers, Mathesons and Byrne Morris.
Hogan Lovells launches in Boston with local tie up
Hogan Lovells is set to combine with Boston-based litigation and investigations firm Collora to strengthen the firm’s life sciences offering in the US.
Mergers & Alliances
Norton Rose Fulbright votes through second merger this year with Australian firm Henry Davis York