Hello and welcome back to the Fides Weekly Update. Here you’ll find a summary of what’s been happening in your industry this week.
For a brief round-up of the key developments, scroll down to take a look our regular ‘Movers & Shakers of the Week’ feature.
1). Majority of in-house teams to implement AI, research finds
The majority of corporate legal departments will have artificial intelligence systems for analysing and reviewing contracts in a year’s time, a survey of global businesses has found.
Understanding Legal AI from the Inside Out, conducted by US analyst Ari Kaplan Advisors for Seal Software, a supplier of AI-based contract review systems, found that 37% of respondents already review contracts and agreements with the assistance of AI.
Of those who do not, 47% say it is ‘likely or highly likely’ that their organisation will implement software in the coming year.
This finding is likely to encourage a new wave of interest in an industry which is capitalising on new developments in machine learning and natural language processing to scan contracts and other documents in a fraction of the time taken by human experts.
According to the research, the main use case for AI is the need to comply with data privacy legislation, such as the EU’s General Data Protection Regulation (GDPR), with 55% of respondents saying that they had implemented the system for this purpose. This was followed by the need to keep track of NDAs and procurement/vendor contracts.
Respondents also said that AI helped identify inconsistencies in their agreements, automate some elements of their review, and helps the management of mergers and acquisitions more effectively.
However, the survey also warns GCs to beware of claims that AI will work ‘straight out of the box’, or that it’s end product will not need further review by lawyers.
For the technology to work successfully, organisations need to train both their team how to use the systems appropriately, and the AI software itself by monitoring and reviewing outputs so the machine ‘learns’ the correct behaviour.
2). Lloyds plan to hire 700 wealth management advisors following tie up with Schroders
Lloyds Banking Group plans to hire more than 700 financial advisers as part of its push into the UK wealth management sector.
The hiring spree, reported by the Financial Times, comes on the back of a tie-up between the UK’s largest retail bank and listed asset manager Schroders in October 2018, into which Lloyds will transfer approximately £13bn of assets and associated advisers from its existing wealth management offering.
The deal, the highest profile of its kind between a British bank and fund manager, combines Schroders’ investment offering with Lloyds’ 27 million-strong customer base and wide distribution network.
As part of the tie-up, in which Lloyds handed Schroders an £80bn chunk of assets to manage on behalf of its Scottish Widows business, Lloyds is to take a 19.9% stake in Cazenove Capital, Schroders’ wealth management business. Lloyds will also transfer £400m of its wealth management business to Cazenove.
Lloyds has set a target of increasing assets under management from £13bn to £25bn, equivalent to annual growth of about 14 per cent, according to the FT.
To achieve this, Lloyds plans to grow its wealth assets by targeting its own bank customers who currently use other wealth management services. However, it will also be on the lookout for acquisitions, both of full businesses and individual advisers who can bring clients with them.
About 300 Lloyds advisers will join the joint venture at launch later this year, but the number is set to more than triple in the next five years. This would put the venture in direct competition with established UK wealth managers such as St James’s Place and Rathbones.
However, the limited number of quality advisors – many of whom are reluctant to join banks — could complicate Lloyds’ expansion plans.
Although yet to finalise the brand for their joint business, it is likely to feature the Schroders name more prominently than Lloyds to make it more appealing to staff and more affluent investors, according to individuals close to the discussions.
3). Movers & Shakers
In what is thought to be the first senior move from law to public affairs, Freshfields competition veteran John Davies is set to join the Brunswick Group as a Senior Adviser in April.
DAC Beachcroft has hired Kirkland & Ellis partner Chris Wall to head the firm’s banking practice after 18 months in the US firm’s London partnership.
EY has hired PwC’s head of financial services regulation Martin Sandler
Ashurst has lured counsel Waltter Kulvik from Sidley Austin as a corporate partner in Singapore.
Jones Day City private equity partner Neil Ferguson has resigned from the firm to join US rival Latham & Watkins
A four-lawyer private equity team led by partner Daniel Yeh has left Ropes & Gray’s Hong Kong office for White & Case.
Digital and data head at CMS Elle Todd has made the move to Reed Smith as the firm looks to expand its tech presence
Morgan Lewis & Bockius has completed a multi-office 15-lawyer raid on US rival Squire Patton Boggs, bringing over a seven-lawyer team in Washington DC, and an eight-lawyer team to launch an office in Abu Dhabi.
Dr. Jens Gölz joins the Frankfurt office of Simmons & Simmons from Allen & Overy where he was a counsel
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