Edward Fennell’s Legal Diary – Edition 28

Diary stories, comment and insights from the legal world

Friday 2 OCTOBER 2020      Edition 28

SHORT THOUGHT FOR THE WEEK

SMALL IS BEAUTIFUL (AGAIN)?

Everything is topsy-turvy right now and it’s anyone’s guess as to whether post-Covid  (if that ever happens) the new normal will be for law firms to expand, contract or remain where they are. But, undoubtedly, the general belief until early Spring was that bigger was better with the legal press full of nothing but expansion and amalgamations by large firms with smaller firms (not all of which went well).

Contrast this with the experience of boutique litigation firm Lipman Karas LLP which has announced the appointment of Adam Greaves as a principal in the firm – the first lateral hire at partner level in London since the opening of the UK office in 2012. The firm’s strategy has been to be slow but sure. Only the right person would do at the right time and place. As London office principal Andrew Ford commented, “It is difficult to find the right person to join a boutique practice where teamwork is at the heart of everything we do.”

Maybe under the new dispensation we all need to become a little more boutiquey.

The Legaldiarist

In this week’s edition

THE LEGAL DIARY

+ Nicky Morgan at Travers Smith

+ Freshfields makes up its mind

+ Lee Ranson stays on at Eversheds Sutherland

+ Insurance rates on the up

+Cardinal bids Ciao to Italian Stallion

LAW PLATFORM

Vital importance of biodiversity, says Stephen Shergold of Dentons

THIS WEEK’S LEGAL DIARY

Welcome Back Baroness

The internecine warfare in the Tory party last year brought an end to the Parliamentary careers  of many able and principled  politicians. One of the great survivors, however, proved to be Nicky Morgan whose conflicts with Boris Johnson never quite reached the final crisis point experienced by some of her colleagues (including not least David Gauke, the former Lord Chancellor). Her reward came post-election with appointment to the House of Lords under the moniker The Rt Hon Baroness Morgan of Cotes where her wealth of experience across matters ranging from digital culture to equalities makes here a versatile resource for the Government.

But clearly she still has time – and energy – on her hands so it is no great surprise that as a former Travers Smith solicitor she has now rejoined the firm as a Consultant to the firm’s Technology Sector Group. The benefits to both sides are obvious. Having been a successful Secretary of State for Digital, Culture, Media and Sport she can draw on unique insights into Whitehall thinking. All of this adds richness to the firm’s offer to clients in the fields of data protection and compliance. As Travers Smith’s Senior Partner Kathleen Russ commented,” We are seeing an increasing demand from clients for our assistance on of the key legal, risk and regulatory issues across a broad spectrum of technology trends, such as fintech, AI, data protection, data breaches and tech investments. Nicky’s substantial legal expertise, coupled with her in-depth understanding of the technology sector and knowledge of the current policy and political landscape, will enable us to further enhance the support we provide to clients at a time of both increasing scrutiny and regulation, as well as new opportunities for business growth in the sector.”

For her part Nicky Morgan – sorry, The Rt Hon Baroness Morgan of Cotes –said, “It is a delight to be working with Travers Smith again where I spent eight very enjoyable years until my election in 2010.” Just how enjoyable those years after 2010 were will be a question for the historians.  

Freshening Things Up

It’s all change at Freshfields with the arrival of a shiny new top management team including  Senior Partner Georgia Dawson whose most recent credentials include being the firm’s Asia managing partner and the leader of the Asia dispute resolution practice.

By chance – or maybe not –  this coincides with the introduction by the firm of Unmind, a workplace mental health and wellbeing app, which is designed to   enable its partners and employees “To proactively measure and manage their mental wellbeing.”  

Any suggestion of ‘measuring’ by lawyers instantly sets off alarm bells. Will there be league tables of mental well-being scores? Can time spent on mental well-being measurement be set off against billable hours targets? The big questions go on and on –including what exactly is meant by ‘to proactively measure’ – why not just measure?

The story is that the  Unmind platform will offer Freshfields colleagues’ access to tools created by experts in neuroscience, cognitive behavioural therapy, mindfulness and positive psychology. It includes tailored mental health support and personalised suggestions, from focus and mediation exercises in the morning, to using sleep and unwind tools at night. (So what happens during those ‘all-nighters’ then?)

In fairness Freshfields has done its bit on mental health issues having trained more than 260 employees globally in mental health first aid. The firm has also signed the Mindful Business Charter, a collaboration between banks and leading law firms committed to promoting better mental health and wellbeing in the workplace.

This is all a long way – and a generation – from the days when the firm was well-known for its drivehard culture. And as for having a woman as Senior Partner – well, it speaks for itself.

For Ever and Ever?

Just as Freshfields opens a new chapter with the election of Georgia Dawson so Eversheds decides to continue with the tried and tested Lee Ranson who has been reappointed as Chief Executive of Eversheds Sutherland (International) LLP for a further four years.  

Pamela Thompson, who chairs the firm, highlighted Ranson’s achievements over the past years and especially during the difficulties of recent months.   “We are fortunate to have had Lee leading the firm during the past few challenging years, none more so than 2020,” she said. “Despite geopolitical and economic turbulence and, now, an unprecedented health crisis, the firm has gone from strength to strength. I am confident that with Lee as our Chief Executive we are in a strong position to meet both challenge and opportunity.”

For his part Ranson acknowledged just how far the firm had come. “The firm has changed beyond all recognition in the 30 years since I first joined, and I am proud of everything that we have achieved together. I look forward to working with our talented teams around the world over the coming period.”

The fact that he credited ‘around the world’ will be significant. When Eversheds was created out of a merger of English provincial firms back in the early 1990s – around the time that Ranson started out  –  it proclaimed that its mission was to serve the UK market only. There would never be any overseas adventures for Eversheds. How things have changed!

Going up!

Against a backdrop of  news that Osborne Clarke is facing a multi-million pound court dispute with Taylor Wimpey and Persimmon Homes over claims of negligence and breach of contract,  Hazlewoods  (the Chartered Accountants and Business Advisers who specialise in the legal profession) have predicted that law firms face increasing Professional Indemnity Insurance (PII) premiums this Autumn. The estimate is that the average premium for the mandatory minimum PI insurance will  increase by around 30% to 40% on last year. Added to that the  larger law firms are likely to have to shoulder increased insurance premiums for the price of ‘additional layers’ of PI insurance above £3m. Normally in the past these additional layers have come cheaper.

As Hazelwoods points out, “The rising cost of professional negligence insurance is also being driven by a shrinking pool of insurers in this area, as many have gradually withdrawn from what has been an unprofitable market for several years. Some insurers are effectively refusing to provide PII cover to smaller law firms or those with significant exposure to residential conveyancing, making it harder for some law firms to find an insurer.”

These developments clearly show the way the wind is blowing for the legal sector as a whole. Some of the top flight firms might still be enjoying wealth beyond their wildest dreams but for the rank and file the times are definitely getting much harder. As Andy Harris of Hazelwoods points out, “With fewer insurers in the market and those who are left increasingly risk averse, law firms will need to prepare themselves for a difficult renewal season.”

Lessons from Latin Lawyers

In these uncertain times it is reassuring that Italy continues to create stories about lawyers which could only come out of the country of Cesare Borgia and Machiavelli.

Featured in the Italian newspapers this week is the case of Cardinal Angelo Becciu who has been forced to announce his resignation amidst a flurry of questions about use of Vatican funds and an inquiry into a ’palazzo di Londra’. 

So far, so par for the course. What adds spice to the story from the legal perspective is the activities of lawyer Ivano Iai who has close ties to the cardinal’s family. Unfortunately for Sig. Lai those ties have now been cut following publicity surrounding the lawyer’s Instagram account and images of Sig. Lai emerging out of the sea like Hercules wearing little more than the tightest of briefs covering the most prominent of groins.

Now admittedly Sig. Iai has a lot to show off. With a ferociously honed body he could easily grace the front cover of any body-building magazine. But is it seemly that a lawyer should be displaying his manhood quite so prominently? The Cardinal’s family thought not. As the newspapers report, it had become a matter of ‘hilarity on social media’. A lesson for all London lawyers to note – even if you have a body of a God, don’t think you are God (especially if your client is a cardinal). 

 LAW PLATFORM

We need to act on biodiversity, says STEPHEN SHERGOLD of DENTONS

This week’s UN Biodiversity Summit in New York brought together global leaders committed to arrest the rate of biodiversity degradation across land and marine habitats. But words need to be backed up by actions including hard law, says Stephen Shergold, head of the UK environment practice at Dentons. These are his observations:

‘ Addressing the consequences of biodiversity destruction lags way behind climate in terms of common consciousness, yet is equally important to our sustainable future. The damage to people’s health is less visible: whereas people are connecting the impacts of hurricanes, wild fires and floods to climate change, it will take much longer for people to realise the detriment to their health from global biodiversity degradation.

 Decarbonisation has been driven by law for over quarter of a century, from early emissions trading schemes and Kyoto’s flexible mechanisms in 1997, but it is only in the last few years that widespread acceptance of the Paris Accord has led to meaningful commitments by multinationals and the advent of energy transition. As a global community, we clearly need to move faster than this to address the catastrophic consequences of biodiversity destruction.

 The challenge for global leaders who are to make these commitments today is to articulate that message and educate their citizens. Their ability to bring forward the regulations that are needed to drive change will only be politically acceptable if they do. They need to legislate, and they will need to do so quickly.

 In parallel, business needs to act. We have recently seen how civil society has pressured business to move before regulators have been able to deliver an even playing field. As a result, responsible businesses have subscribed to the UN Sustainable Development Goals and the biodiversity commitments therein.

 Making those commitments real will now come under close scrutiny by investors, consumers and other stakeholders. Do businesses know their impact on biodiversity? Where projects have direct effects, are biodiversity management plans being effectively implemented?  Are contractors and suppliers adhering to the same corporate standards?  Has executive leadership developed a strategic approach to the business risk associated with biodiversity degradation? Is leadership acutely aware of the nature of legal mechanisms that will arise to regulate this change? Are detrimental impacts reported within the business?’

Board rooms should start asking these questions, and business performance must answer them – shareholder value depends on it.’ 

The Legaldiarist returns to the UK from Italy next week and normal service will be resumed. Please send your news and comments about the legal world to

fennell.edward@yahoo.com