Hello and welcome to the Fides Weekly Update. Take a look at this week’s top stories in legal and compliance, as well as a round up of this week’s Movers & Shakers in the legal market.
This week:
1. Allen & Overy Fuse start-up Bloomsbury sold to Facebook for $23m
One of the firms featured in Allen & Overy’s Fuse incubator, Bloomsbury AI, has this week been purchased by Facebook in a deal worth $23m to $30m.
The ‘acquire-hire’, which has seen Facebook purchase Bloomsbury and its 11-strong London team for their expertise in natural language processing, will see the social media platform put to use an AI tool that can read documents and answer questions about them.
It is thought Facebook will put Bloomsbury’s natural language processing AI to work to combat fake news stories on its platform.
Less known in legal tech circles, Bloomsbury AI joined A&O’s Fuse incubator as part of the second cohort in May. One of five successful companies from 80 applications, the start-up joined well-known names Kira Systems and Neota Logic, a machine learning technology provider for document review and analysis and AI-powered app development platform that allows the automation of legal processes respectively.
Other incubator firms include Fintech company Regnosys and fellow AI-powered intelligence firm Signal Media.
Incubators have become a popular method for law firms to showcase their efforts in innovation, with similar ventures deployed by Mishcon De Reya and Dentons, whilst earlier this year banking giant Barclays entered the legal tech space through its Eagle Labs programme.
A&O’s Fuse however, seems to house the firms making the greatest developments, not only due to Facebook’s purchase of Bloomsbury, but also the burgeoning success of fintech startup Nivaura. Its platform has created a lot of buzz in the financial sector recently, having performed a fully automated bond issuance using cyrptocurrency, which was all cleared, settled and registered on a public blockchain infrastructure.
The fact that the world’s largest tech companies are now looking at purchasing AI startups that have moved into the legal space is exciting news, and comes on the back of Slaughters recent announcement that it is to launch a second ‘legal tech focussed’ incubator to capitalise on the success of its Fintech fast forward incubator, which brought to the market Luminance, an AI platform initially backed by tech billionaire investor Mike Lynch.
Further underpinning the need for law firms to both embrace and upskill themselves in legal technology, Clifford Chance announced this week that it was partnering with a lawtech start-up Lexoo to offer technology vacation scheme placements to future trainees.
2. Blockchain edges closer to accessing financial markets
The Financial Conduct Authority (FCA) announced which firms are set to feature in its fourth regulatory sandbox, where they will be able to test their products in a live market environment.
Governed under the regulator’s Project Innovate initiative, 29 firms have joined cohort 4, and as with previous cohorts, they range from global players to niche start-ups. Launched in 2014, the initiative aims to help firms test their products and bring them to market, whilst also educating the regulator on what safeguards needs to be put in place with these new technologies.
Below is a breakdown of the types of firms participating and click here to see which firms made it on to the roster.
Retail banking, investment management and compliance seem to be the most popular areas for innovation, as the FCA focuses on facilitating the use of technology to provide a reduced cost to customers and better services for the public.
This round’s entrants seem to reflect the trend currently facing the financial services sector, with 40% of the new cohort utilising distributed ledger (DLT) or blockchain technology in their operations.
This will hopefully become a milestone in the market’s adoption of blockchain and smart contracts, as it looks to clarify questions around how the new technology could fit into our current regulatory regime, addressing any roadblocks brought by UK and EU regulation.
It will interesting to see how successful the development of DLT is in financial markets, as many of the sandbox firms look to apply their decentralised applications to securities transactions and settlements processes.
One firm in particular, Fineqia, offers a platform to both big and small crowd investors, which uses a distributed ledger to structure, execute and administer high-value debt and equity securities, often only available to large institutional investors.
Another platform hoping to transform the securitisation market is 20I30. Its objective is to tokenise shares and build a trading platform that will allow for tens of thousands of securities trades using crypto assets. The firm is preparing to conduct one of the UK’s fist equity-token offerings has already raised £1 million in seed capital.
Find out more about the FCA’s Project Innovate and its previous three cohorts of the regulatory sandbox.
Movers & Shakers of the week
Panel watch
Barclays heralds ‘new era’ with final panel review
Appointments
Drinks giant Pernod Ricard names new general counsel
LOD appoints former Olswang head of strategic development to lead managed services business
Moves
Hogan Lovells joins war for data privacy talent with new hire
Privacy partner Nicola Fulford joins the firm from Kemp Little
HFW boosts global disputes practice with Brussels and Dubai double hire
HFW has made a double hire for its global disputes practice, bringing in international disputes and litigation group head James Harbridge from Trowers & Hamlins, and Roger France from FieldFisher.
Dechert boosts City base with Sidley litigation partner
Dechert boosts London office with the hire Sidley Austin’s global litigation co-head Dorothy Cory-Wright.
White & Case signs up Macfarlanes partner as US firm continues London hiring spree
White & Case has recruited Macfarlanes private equity partner Emmie Jones as the US firm continues to build up its M&A capabilities in London.
DLA Piper adds six-strong Bakers financial services team to Antwerp office
DLA Piper has recruited a six-strong Baker McKenzie financial services and insurance team for its Antwerp office, headed up by partner Pierre Berger.
Jones Day London exits continue as sixth City partner leaves this year
Jones Day London disputes partner Lucas Moore joins private client specialist Payne Hicks Beach
Office Openings & Closings
Baker McKenzie to expand Belfast hub with 150 new roles
Taylor Wessing confirms location of new back office in Liverpool
Financials
Allen & Overy sees revenue and PEP tick upwards as firm restates US ambitions
Freshfields posts double-digit PEP hike as firm restarts revenue growth
HSF growth grinds to a halt as PEP reaches £852,000
Clifford Chance kicks off magic circle reporting season with 5% revenue rise and 16% PEP hike
Shoosmiths posts double-digit profit and revenue growth as PEP soars to record high