Hello and welcome to the Fides Weekly Update. Here you can find analysis of the week’s main new stories in legal and compliance. Don’t forget to check out our regular feature of Movers & Shakers of the week.
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1. FCA confirms push for criminal prosecutions
Having pledged to gear up its enforcement team to serve up more criminal prosecutions, the Financial Conduct Authority has just appointed a criminal law heavyweight to its ranks as chief criminal counsel.
Vincent Coughlin QC will take over from Claire Lipworth in the top position, with Lipworth joining Hogan Lovells as a financial services litigation partner, the FT reports. His background spans a wide range of high-profile prosecutions, from violent crime cases to defending the Sun’s executive editor over allegedly improper payments.
Coughlin’s experience also includes white-collar crime matters better associated with the regulators line of work, where most recently he has been involved in a case brought by the Serious Fraud Office concerning bribery allegations against Rolls-Royce.
Back in 2012, Coughlin also spent a period advising the Financial Services Authority on its first major insider dealing prosecution, Operation Saturn, where they secured six convictions.
The hire is a definitive indicator confirming the FCA’s plans to rev up its enforcement action as they ready themselves to bring more criminal prosecutions for insider dealing and are expected to extend this further to money-laundering offences and wider financial crime claims. In its newly published business plan, the FCA has highlighted the extent to which corruption and money-laundering has permeated into the UK financial system and has committed to start bringing criminal action where necessary.
We saw the number of investigations opened by the FCA into insider trading reach its peak total of 70 last year. With the director of enforcement and market oversight Mark Steward claiming that “insider dealing is ever more detectable and provable”, it seems we should expect further convictions to continue in 2017.
2. Shearman hikes NQ salaries in London
In the latest turn in the NQ salary race, Shearman & Sterling announced that it was increasing pay for newly qualified (NQ) UK associates by 10.5% this week, taking starting salary from £95,000 to £105,000.
Lawyers in the firm’s mid-level associate band, which starts at 3.5 years post-qualification experience (PQE) will also see a 9.5% pay increase from £126,000 to £138,000. Meanwhile, UK senior associates at 6.5 years PQE and above will see their salaries increase by almost 6% to £165,000.
This follows last year’s rise in NQ pay by £7,000, and a rise of 8% on NQ salaries in 2015. Overall, the firm has seen a 33% increase in NQ pay since the £78,000 starting salary it was handing out in 2013. Mid-level and senior associates also received a salary bump by the firm last year, by £11,000 and £12,000 respectively on 2015 levels.
This comes after a raft of US firm’s hiked associate payscales last summer, following in the example of Cravath Swaine & Moore, which raised base pay for first-year associates by $20,000 (£14,000) to $180,000 (£124,000).
In a move that sent shockwaves through the London legal market, a handful of those firms subsequently decided to pay equivalent salaries to their lawyers in London, with some pegging them to the dollar to address plunging sterling exchange rates. As a result, London NQs at Kirkland & Ellis and Akin Gump are currently on around £125k, where those at Weil are paid £115k.
Despite this, NQ’s at Sherman & Sterling will now be paid £20k more than their equivalents at Freshfields and Clifford Chance, and £26.5k more than those at Allen & Overy, in the battle by London firms to retain top associate talent.
Last year, Shearman’s revenue rose by 6% to $912.5m (£731m), with London revenues increasing by 14% to $169.7m (£136m). Firmwide profits per equity partner shot up 18% to $2.165m (£1.74m). In spite of this, Sherman decided to cut its equity partnership in the second half of 2016 and did not hire any new partners in Europe last year.
Movers & Shakers of the week
Nike appoints new European general counsel
Senior director of global brand protection Bill Berner has accepted the role of European general counsel as current GC Fabrizio Mecozzi is to take on a new US-based position at the company
Linklaters’ US banking practice faces blow with two partner exits
Linklaters’ former US banking head and US co-managing partner Jeff Norton is set to join Dechert in New York whilst fellow banking partner Sabrena Silver also departs, accepting a partner position with White & Case
London head of pensions for Ashurst Marcus Fink has joined PwC Legal
Linklaters bolsters Shanghai practice
Corporate partner Simon Meng and project development and finance partner Andrew Ruff both join Linklaters’ Shanghai office from King & Wood Mallesons and Shearman & Sterling, respectively.
Richard Given has left HSBC as deputy general counsel to become GC and company secretary of new fintech start-up 10x Banking
Gowling WLG loses innovation head
Head of innovation and technology for Gowling WLG Derek Southall steps down from his role to launch his own venture Hyperscale Group, but continues to work with the firm on a consultancy basis
Gibson Dunn makes third move for Latham partner in Germany
Dispute resolution and white-collar defence partner Finn Zeidler is the third partner to depart Latham & Watkins for Gibson Dunn in Germany, taking a partner role in the firm’s Frankfurt office
Two further partner departures for CMS ahead of merger
Corporate partner Peter Crichton and construction and energy lawyer both exit CMS to join McDermott Will & Emery and 39 Essex Chambers
Addleshaws builds out in London
Taylor Wessing’s Dubai head Habib Ullah leaves to join Addleshaw Goddard in its London banking practice
Quinn further expands City practice
Clifford Chance’s tax investigations and disputes head Liesl Fichardt has decided to join disputes specialists Quinn Emanuel Urquhart & Sullivan in its London office
Ashurst adds partner to Paris office
Ashurst has added to its shrinking Paris practice with leveraged finance lawyer Pierre Roux who joins from Linklaters as a partner
Office Openings & Closings
Osborne Clarke launches in Shanghai
Norton Rose sets up in Luxembourg marking eleventh European launch
Mergers & Alliances
CMS Cameron Mckenna, Nabarro and Olswang merger goes live under the CMS brand
Kennedys merges with 100-strong US insurance firm Carroll McNulty & Kull
Ashurst launches formal alliance with Singapore firm ADTLaw
Dentons makes seven UK promotions in 54-stong global round
Weightmans triples promotions as Kingsley Napley makes women majority of partnership
RPC, DAC Beachcroft and Bond Dickinson unveil 2017 partner promotions
DLA halves London round as HFW makes up three
Simmons & Simmons promotes seven in the City in a 12-strong partnership round