Welcome back to the Fides Weekly Update. Scroll down to see what news stories our Researchers have been talking about this week in the world of legal and compliance – and don’t forget to take a look the Mover & Shakers of the week!
1) Relocation, relocation, relocation
Offshoring topped the headlines this week as Dentons, Norton Rose Fulbright and DLA Piper were the latest of a string of firms to announce the relocation of a number of support roles to lost-cost service centres across the globe.
DLA are making the largest relocation, as it announced last Friday that up to 200 jobs will be shifted from their UK business services team to their low-cost centre in Warsaw. Amounting to 18% of UK support staff, offices in Sheffield and Leeds are most likely to bear the brunt in this latest round of consultations, with 85 jobs at risk in the firm’s Yorkshire offices and 47 jobs at risk in London.
Dentons also announced that they planned to open a business services centre in Warsaw this week, with the relocation of 50 roles that represents 12% of Dentons UK-based business staff. Dentons Business Services EMEA plans to have 90-100 staff by the end of the year, and is to be directed by Piotr Macieja who joined from global professional services provider TMF.
On the other hand, Norton Rose Fulbright have selected Manila as the destination for their low-cost service centre, revealing that they are opening in The Philippines in September. Aiming to relocate 170 roles – 5% of the firm’s support office jobs globally – 59 jobs have been put at risk in the UK, which equates to 10% of the firm’s London support staff.
Other UK firms to create back office support centres include Freshfields Bruckhaus Deringer, which opened a support centre in Manchester and is aiming to launch a second in Vancouver; Herbert Smith Freehills and Allen & Overy, which both opened support centres in Belfast; and Linklaters, who also have business support functions in Warsaw.
Motivation for law firms to relocate back-office functions outside of the UK goes beyond simple cost cutting measures to further consider how support for lawyers can be made as effective and efficient as possible. For example, the current consultation underway at DLA Piper is part of a global review that started two years ago with advice from McKinsey & Company as to how the firm could operate more effectively on a global basis.
These latest offshoring announcements indicate that law firms continue to cut costs in attempt to drive future profitability. However, to ensure that the quality of support for lawyers (and clients) remains paramount, law firms should also look to innovate and automate some of their support functions for the future.
2) Legal team shake-up
The looming reforms on ring-fencing have brought about a significant restructuring of Barclays’ legal team this week. The bank’s new structure will comprise of two core divisions, Barclays Corporate & International and Barclays UK, with the legal team split to be positioned in either of the two banking arms. On account of the restructuring, senior management for the two legal teams will look as follows:
The Prudential Regulation Authority produced its final policy on implementing ring-fencing regulations in March, which demands all UK banks’ retail arms are separated from the rest of the business and, in particular, away from their investment banking activities. This should in turn protect customers by reducing their exposure to the bank’s high-risk investment banking operations.
Barclays are the first of their competitors to report a legal restructuring on the back of ring-fencing, whilst Lloyds Banking Group made a legal appointment, overseeing their ring-fencing process. Former Berwin Leighton Paisner corporate partner Frances McLeman initially joined Lloyds as their interim head of corporate and M&A legal. She was appointed head of ring-fencing legal in January this year, where she leads their group restructuring plans and banking regulatory reform in relation to ring-fencing.
Whilst Barclays restructure their team to cope with the demands of ring-fencing, Freshfields are also restructuring in an attempt to improve collaboration amongst partners. Individual team practices within the firm’s finance practice will be consolidated to form three larger team practices, which should allow them to better service their clients by providing “more flexibility across the spectrum of debt products”.
Asset, project and aviation finance will form one group, capital markets and corporate treasury will also form another practice and their greenfield, brownfield and bond groups will merge into one infrastructure team.
We plan to see a number of further restructurings taking place, especially within the banking sector as many banks are yet to ring-fence operations. HSBC are expected to implement changes to their retail operations in 2018, which could see a large part of their legal team relocate to Birmingham where the new UK retail and commercial banking head office will be based.
Movers & Shakers of the week
Lloyd’s of London lose GC
General counsel Sean McGovern has left Lloyd’s of London to join insurance and reinsurance company XL Group as their chief compliance officer, head of regulatory and government affairs
Bird & Bird hire aviation finance expert
Jim Bell has joined Bird & Bird as a partner in their Aviation & Aerospace group in London. He leaves Allen & Overy, where he served as a senior associate in their Structured and Asset Finance group
White & Case add to growing City corporate practice
Hogan Lovells corporate partner Guy Potel has joined White & Case’s corporate practice in London
Proskauer strengthen their real estate offering in London
Joanne Owen, DLA Piper’s former global co-chair of hospitality and leisure, has moved to Proskauer Rose’s London office, where she serve in their real estate practice
Ashurst expand German corporate capability
Former Linklaters corporate partner Holger Ebersberger has joined Ashurst’s partnership and will sit in their Munich office
Pinsents add to Düsseldorf office
Dr. Anke Empting joins Pinsent Masons from KPMG Law in Düsseldorf as a partner to strengthen their energy and life sciences practices
Dentons boost ETI practice
Clyde & Co’s David Moore has moved to Dentons as a partner and will sit in their London Energy, Transport and Infrastructure (ETI) practice.
Office Openings & Closings
Ince & Co set up in Cologne
Ince & Co has hired CMS Hasche Sigle’s head of insurance Stefan Segger, along with two associates to launch their second German office in Cologne. They have also brought on partner Eva-Maria Goergen who joins from local firm Bach Langheid Dallmayr
Norton Rose move back office support to Manila
Norton Rose Fulbright plans to relocate 170 support jobs worldwide, including 60 in London, to a business services centre in Manila
Dentons also choose to set up shared services centre outside the UK
Dentons has announced a new low-cost business support facility in Warsaw, which will lead to the loss of approximately 50 UK roles