Fides Weekly Update – 23rd November 2019

Hello and welcome to the Fides Weekly Update. Take a look at this week’s trends, news and developments in legal and compliance. Scroll down to see our regular feature of Movers & Shakers of the week.

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This week:

1. Big news for the big four

Deloitte’s legal arm to launch early next year as KPMG sets sights on doubling headcount.

Since gaining its ABS licence last June, Deloitte has finally confirmed the launch of its UK legal arm with a team of 60 lawyers, as reported by The Lawyer.

The big four accountancy firm currently has a team of 50 practising lawyers and 125 fee-earners, and is led by interim managing partner Mark Tantam with a permanent appointment believed to have been finalised in the last few weeks.

The UK practice will launch with a managed services and consultancy arm, which will offer automated document review and contract management alongside advice on improving operations of in-house legal departments through the use of technology.

It will also extend Deloitte’s existing legal services in employment law, tax litigation, corporate and commercial, and immigration gained through alliances with US immigration law firm Berry Appleman & Leiden and Singapore based legal practice Sabara Law.

Meanwhile KPMG has announced its intention to double its headcount across its global legal services arm to over 3,000 lawyers, as well as to expand its operations in the UK.

The accounting giant’s legal team currently comprises 1,800 lawyers across offices in 75 countries, with the UK’s 130-lawyer team being head by legal services head Nick Roome.

With a number of “senior” hires in the pipeline, KPMG has made a concerted push into the legal market, adding to its legal services practices in London and Manchester with a new base in Birmingham in 2015, and making hires from firms including Eversheds Sutherland and Shoosmiths. Over the past 18 months, the firm has doubled headcount in its partner and director group.

The legal services arm operates four core service lines: business structures and transactions; tax disputes and investigations; employment and immigration; and ‘new law’ and global, which handles filing and regulatory process work for clients.

With all four accountancy firms now active in the UK legal market, this represents a significant challenge to existing players. Increasing client demand for integrated services gives the Big Four a significant advantage over some law firms, as acting in multidisciplinary teams gives clients a wider insight over broader industry trends. Over the last few years, this has allowed them to gradually obtain more market share, and with the addition of KPMG in the legal services market, traditional law firms must continue to diversify their offerings in order to remain competitive.

2. FCA seeks out money launderers using AI

At the Illicit Financial Flows 2018 event this week, the Financial Conduct Authority’s (FCA) head of financial crime Rob Gruppetta delivered a speech declaring the watchdog’s developments using data and machine learning to better supervise the flow of funds through firms.

Due to the improvements made in this form of technology over the years, making it both cheaper and faster to operate, it has become a practical solution that the FCA can now look to use in combating financial crime.

Enough open-source software has been created by experts and made available for the FCA, to which they can apply machine learning algorithms relatively easily to delivers tailored analysis on the issues they face in financial crime.

More specifically, the regulator is targeting specific markets and cross-border business i.e. areas where money laundering is most common, and inputting the risks and features associated with suspicious activity, after which the software can help decipher further trends and predictions of financial crime that the regulator cannot yet pick up through usual supervision methods.

Gruppetta stressed the importance of running these processes alongside the usual supervisory methods, as although AI and machine learning clearly offers benefits, the FCA must ensure that results are in no way misleading and cannot look to transform its practices until they have certainty over the end product. Therefore, the department is currently running these programmes alongside existing methods, and over time will be able to determine the accuracy of the machine’s findings and whether they are indeed in line with the department’s financial crime expertise.

Branding the UK regulator as “technology-agnostic”, Gruppetta explains that they’d like to be viewed as one of the most innovative global regulators, whilst also maintaining awareness around the risks associated with a rapidly evolving marketplace.

Since 2016, the FCA has decided to become more data-driven in its financial crime efforts, which it believes “has allowed us to be more consistent, effective and risk-based in our supervisory approach than ever before.” For example, by applying machine learning algorithms to an area such as MiFID II, which now brings in 30 million transaction reports per day, the UK watchdog is finding suspicious activity through a processing of data that would’ve previously been unmanageable and impractical.

Gruppetta’s conclusion to his speech was fairly reserved: “We remain open-minded, but appropriately sceptical about how we keep pace with innovation… we will remain vigilant and adopt innovation in a targeted, systematic and measured manner: we don’t want to be left behind, but we won’t overdo it either.”


Taylor Wessing’s former chief lands new management role

BT reels in new litigation head from TLT

Clifford Chance Amsterdam head Jeroen Ouwehand wins senior partner election

Former Addleshaws senior partner Monica Burch joins Shoosmiths as non-exec director

Dentons management duo stand unopposed to take reins for next three years


Six-partner Hong Kong team quits Reed Smith over client conflicts

A six-partner disputes team is leaving Reed Smith’s Hong Kong arm to join Australian firm MinterEllison. The group, which specialises in white-collar defense, is led by securities litigation partner David Morrison, and also includes partners William Barber, Nathan Dentice, Alex Kaung, Eddy So and Desmond Yu

Ince Asia aviation finance head leaves ahead of Gordon Dadds merger

Ince & Co Asia aviation finance head Balbir Bindra has left the firm ahead of its proposed merger with Gordon Dadds.

Ten-lawyer real estate team exits CMS over client conflict issues

A 10-strong CMS real estate team led by partners Simon Kanter and Alan Karsberg has left the firm over client conflict issues.

Office Openings & Closings

Deloitte legal arm to launch early next year with a “Big Bang”

Partner Promotions  

Mayer Brown’s global promotions hit seven-year high

Weil makes up for last year’s London omission with three City promotions


More Linklaters Germany associates sign up to 40-hour week on reduced pay

Innovation and Technology

Bakers joins forces with A&O-supported startup Avvoka

read more




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