Edward Fennell’s LEGAL DIARY
Diary news plus insights, commentary and appointments from the legal world
January 13 2023
Editorial contact: fennell.edward@edward-fennell
SHORT THOUGHT FOR THE WEEK: WORK LIFE IMBALANCE – TIME TO GET OFF?
Image courtesy of Peloton
ALM LawCom this week ran a fascinating article on the measurement system used by Kirkland & Ellis to sort out the wheat from the chaff to determine who will secure the Holy Grail of equity partnership and the wealth which comes with it. It is a clear-cut, transparent but brutal system. In short, unless you are banking 2,500 billable hours a year then you have little chance of making it. So, if you can’t hack it, just stick in the slow lane.
During the Xmas hols a neighbour described the trials and tribulations of her son, an associate at one of London’s Top Six firms. He ‘s a hardworking, capable and ambitious lad. But after his Summer holiday he realised how intolerable his life had become with endless hours in the office and life so circumscribed by work. So, after much soul-searching, he decided to quit – and has now gone off to tour South America with his girlfriend. It’s the firm’s loss. But at what point, if ever, will they feel the need to change?
The LegalDiarist
In this week’s edition
+ LEGAL DIARY OF THE WEEK
– Hogan Lovells Backs Emergency Choppers
– Lawyers Nestling in Switzerland
– Today Walsall, Next Season Barcelona?
– Regulation needs More ‘Mutual Trust’
+ CONTRIBUTED ARTICLE OF THE WEEK
– DIVERSITY & INCLUSION: LAW FIRMS LEADING says RACHAEL KINSELLA
+ LEGAL COMMENT OF THE WEEK on inclusion at the Bar, the risks of crypto currencies, the state of legal aid and the closing statements at the Infected Blood inquiry
+ APPOINTMENTS OF THE WEEK at Clyde & Co and Fladgate
THE LEGAL DIARY OF THE WEEK
Hogan Lovells Backs Emergency Choppers
With ambulances queuing up all across the UK to hand over suffering patients to A&E departments one’s thoughts turn to air ambulances. Are they too stacking up in the sky to make their landings?
Well, the encouraging news is that in London the Air Ambulance’s medics, uniquely, can carry out open chest surgery, give blood transfusions and put patients into an induced coma at the scene of collection. What many people are not aware of, however, is that London’s Air Ambulance service is a charity, outside of the NHS and entirely dependent on voluntary donations. Moreover its aging helicopters are in need of replacement.
So yet another health crisis?
Not entirely. Thanks to pro bono legal advice from Hogan Lovells work on the contract negotiations for the new helicopters is now underway. “As a long-standing pro bono client we are pleased to be able to support London’s Air Ambulance Charity in its ambition to secure two new helicopters,” said Yasmin Waljee OBE, International Pro Bono Partner. “We know how critical the service has been to many of our individual pro bono clients for whom we have acted, in relation to the mass casualty terrorist incidents of July 7, 2005 and the 2018 Westminster attacks. We want to take this opportunity to highlight the invaluable work of the medics and pilots of the service.”
London’s Air Ambulance’s fundraising campaign, Up Against Time, needs to raise £15 million by 2024 and as part of this year’s appeal, the charity has produced an extraordinary short film with a legal dimension – Claire’s Story – demonstrating its vital work in saving lives across the capital.
To watch Claire’s Story and donate, visit London’s Air Ambulance Charity Up Against Time appeal page
Lawyers Nestling in Switzerland
Switzerland – always something of a puzzle not least as a melting pot of three different cultures and national traditions. Some of the many contradictions in the country’s character are highlighted in the current edition of the December edition of REPORTS LEGAL which we had the pleasure of reading over the post-NewYear break.
Particularly interesting is the piece on ESG (environmental, social, governance) in Switzerland. In it Caroline Clemetson, a banking and finance partner at Schellenberg Wittmer, comments that, “Switzerland doesn’t yet have ESG regulation for the financial sector, but they are working on it.” Fair enough. She then adds that, “Switzerland has the transparency requirements for climate that are entering into force and obviously for the human rights sector,” says Clemetson. “The Swiss government wants to go further than the EU and the rest of the world because we have that leading role, of being correct, doing things properly.”
That last observation may raise eyebrows in some quarters given the various organisations which have their headquarters in the country. It also has to be remembered, of course, that Switzerland was by far the slowest western European country to give women the vote – a right only realised in 1971. Indeed a referendum of (male) voters held in 1958 rejected votes for women by two-to-one.
Meanwhile in the investment finance sector changes via guidelines will be introduced this year. “The guidelines are going to be the huge thing for 2023,” says Clemetson. “For now, those that are ESG compliant are probably not performing as well as those that are not, in terms of financials. There’s a cost of compliance – a green cost… It’s a bit of a struggle, but that will come.” We will wait and see.
For the December edition of Reports Legal go to https://reportslegal.com/switzerland-crisis-what-crisis/
Today Walsall, Next Season Barcelona?
Keen eyed football fans will have noted that Walsall FC enjoyed a good game over the weekend beating Stockport County 2-1 in the FA Cup third round. Can the West Midlanders now go on to Wembley to win the fabled competition? That’s the question which the locals are already asking. It’s also probably on the minds of the team’s American owners the Trivela Group who have just splashed out not on an expensive striker but on the team’s Poundland Bescot Stadium with legal advice from the on-the-ball Corporate Finance team at Burges Salmon.
Currently lying 11th in the EFL’s League Two, Walsall, with all due respect, do not have quite the kudos of, say, Chelsea which was also acquired fairly recently by a US-based investor. Nonetheless Trivela seem to be delighted with their investment. “It was a pleasure once again to work with the experienced, skilful and pragmatic team at Burges Salmon for the completion of WFC’s property acquisition,” says Ben Boycott, Walsall FC’s co-chairman and Trivela Group’s managing director. “They have now guided us as a foreign investment firm through two fairly complex transactions in the UK, including the acquisition of the club and the club’s acquisition of the property, with multiple different sources of capital and several parties involved. They provided sound counsel and a steady hand throughout a complex process, and I look forward to continuing to work with them on future transactions.”
What exactly will those future transactions be, one wonders. Trivela’s admirable motto is that it ‘creates enduring value through the acquisition and management of association football clubs’. Mr Boycott received his MBA and M.Sc. in Financial Risk Strategy from the University of Alabama. So one hopes he does know something of the financial risks involved in buying an English football club (even with the assistance of Burges Salmon).
Regulation Needs More ‘Mutual Trust’
The relationship between lawyers and their regulators is always tricky. But according to speakers at a conference organised by the Council for Licensed Conveyancers (CLC) matters would be much improved if there was more mutual trust – in particular if the atmosphere allowed lawyers with concerns to share their anxieties at an early stage.
“You need to feel confident that you can ask if you’re not sure without a fear of opening a can of worms,” said Sarah Debney – a practitioner with experience of working at firms overseen by both the CLC and the Solicitors Regulation Authority (SRA). “That’s particularly helpful in an outcome-focused regulation environment because the rules are less prescriptive, and so ultimately, they are more open to interpretation, which potentially leads to uncertainty or inadvertent mistakes.
“As to how you establish trust enough to have a relationship with your regulator, ultimately they’re not your friend, but I think it does require an assumption on the regulator’s part that very few people set out to deliberately flout or ignore the rules and, on the regulated community’s part, that the regulator isn’t there to catch them out or to set traps for the unwary. An effective regulator should need to take disciplinary action relatively rarely. The majority of things can be brought into compliance.”
The CLC itself operates what is described as an ‘assisted compliance’ model in which the regulator seeks to collaborate with those it oversees to achieve compliance,“There are always going to be occasions when a regulator has to come down hard on an individual or a firm but the aim of ‘assisted compliance’ is to minimise them,” said Stephen Ward, the CLC’s director of strategy and external relations Trust between the regulator and the regulated can be fragile and so we are pleased that our approach is bolstering it and encouraging others to move over to CLC regulation.” So trust is what it’s all about – a commodity in short supply right now.
CONTRIBUTED ARTICLE OF THE WEEK
DIVERSITY & INCLUSION: LAW FIRMS AT LEADING EDGE
says RACHAEL KINSELLA
Law firms are leading professional services companies when it comes to diversity and inclusion (DEI) policy, according to iResearch Services. Over the past six months, law firms have been running DEI initiatives at higher rates (86%) than their professional services peers – outperforming accountancy firms (73%) consultancies (59%) and Architecture (45%).
The research recently conducted by thought leadership firm iResearch Services is featured in its latest reportA Fairer Future: Equality and Inclusion in Professional Services, which canvassed the views of 570 leaders across the UK and the US in professional service firms, in accountancy (31%), consultancy (30%), law (22%), and architecture (17%) sectors.
What does DEI look like in professional services?
DEI issues have been brought to the forefront of many companies’ board agendas, yet some businesses still struggle to measure and track DEI metrics. While 73% of firms have a formal DEI policy in place, 8% have nothing at all, and 32% cannot provide evidence that their DEI efforts are working well for their employees. Breaking down these initiatives into different diversity segments, it is clear that race/ethnicity is the biggest focus, at 35%, and that more work needs to be done on LGBTQ+ and disability policies. Only 12% of firms focused on LGBTQ+ policies and only 31% are running initiatives to support those with disabilities.
Providing evidence
There is greater transparency and discussion around DEI from legal thought leaders and professional bodies in the form of articles, blog posts, and workshops. Organisations such as the Law Society prioritise a significant amount of their external communications to research and demonstrate DEI initiatives.
Transparency is a key DEI issue. One driver of greater transparency within the legal sector is reporting requirements. In the UK, for example, the Solicitors Regulation Authority (SRA) requires all regulated firms, regardless of size, to collect, report and publish data on the diversity of their workforce every two years. Other professional services sectors, however, rely on voluntary reporting that is not standardised across the industry.
Converting words into action
The legal sector has demonstrated its forward-thinking attitude towards DEI initiatives, but the overall results demonstrate that there is still considerable work to be done to convert discussion into action. Particular emphasis is required on addressing the gaps at senior levels in law firms for women and under-represented groups. Turning these initiatives into demonstrable results will be the priority for firms over the next five years.
Rachael Kinsella is Editor in Chief at iResearch Services
LEGAL COMMENT OF THE WEEK
TOPIC: Diversity at the Bar
COMMENT BY: Nick Vineall KC, Chair of the Bar 2023
“Our professional stock-in-trade is argument based on evidence. We should never be afraid of collecting and analysing data about progression and earnings in chambers or in our practice areas. We need to realise that there may be complex reasons for the differences and patterns we see, so for instance we would need to know how much people work as well as how much they earn before proper comparisons can be made. But none of this should deter us from collecting and analysing the evidence.
“Good sets are already doing this, learning about who is thriving and who needs support. Sets that do this ensure that everyone has the same opportunities to advance their career.”
TOPIC: The state of legal aid and the decision by top criminal law firm Crawford King to cease its involvement
COMMENT BY: Jan Matthews, managing partner at Reeds Solicitors, one of the largest legal aid providers in the UK
“Cartwright King’s precipitous exit from the Legal Aid criminal law market is yet another indication of what is to come. It wasn’t long ago that the MoJ and LAA wanted large firms able to cover a wide geographical area; indeed, the aborted two-tier contracts were designed to create exactly such firms. We were told that being big would bring economies of scale, allowing the ‘swings and roundabouts’ of the fees to even out in the black.
It is now very clear that this was always a myth. In a business where the highest cost will always be salaries, there are few economies of scale to be had within the traditional structure of a criminal law firm, and the inherent weakness of the ‘swings and roundabouts’ has been made abundantly clear by the delay in our ability to bill Crown Court cases as a result of the pandemic and barrister strike.
The fact that Lower court legal aid work is increasingly loss-making is a fundamental weakness of the LAA contract and needs to change as a matter of urgency if this (or the next) Government wants a viable criminal legal aid provider base. Without it we will see many more firms leaving the market one way or another.”
COMMENT BY: Julian Hayes, senior partner at legal aid firm Berris Law
“The troubles and travails encountered by Cartwright King is just the tip of the iceberg of the crisis that firms throughout England and Wales have been suffering. The failure of successive governments to adequately fund the legal aid system, invest in a Justice system that has slowly crumbled over the last 12 years now accelerated with the covid pandemic and government bungling.
The Bellamy review was very clear as to what was needed before the cost of living crisis. Dominic Raab continues to twiddle his thumbs whilst the Justice system burns.”
TOPIC: The closing submissions to the Infected Blood Inquiry
COMMENT BY: Des Collins, Senior Partner at Collins Solicitors and lawyer to over 1,500 victims
“As we near the end of this long and thorough Inquiry, we call upon the Government to act now with compassion and true understanding of the severe harm needlessly caused to so many innocent individuals.
“Regrettably, the evidence largely has revealed a serious lack of political will to acknowledge the failings that took place, both at the time and subsequently. It is now time for that attitude to change.
“Our clients have waited far too long for justice. A proper apology and full compensation is overdue to all victims of this scandal.
“Whilst we await the final report there is much the Government must do now – including working with the victims to put in place the compensation framework it commissioned nearly two years ago.
“Finally, we urge the Inquiry not to shy away from naming individuals, attributing blame and criticising them, where appropriate, in its report as it is only when the details of failings are properly laid out that lessons can be learned. It is not only the mistakes that are made but how they are recognised and addressed that will define the reputations of those responsible. Proper attribution of responsibility for unacceptable failings is a huge part of achieving justice, vindication, restitution and closure.
“We have now said all we can to the Inquiry, and we express our thanks to those who gave evidence and to the Inquiry team for its diligence.”
TOPIC: The risks of crypto currencies to banks
COMMENT BY: The US banking regulators including the Fed, the Federal Deposit Insurance Corporation (“FDIC”) and the Office of the Comptroller of the Currency (“OCC”) in a joint statement
“The specific risks that banks should be aware of when taking on crypto funds include: risk of fraud; custodial legal uncertainties; inaccurate or misleading representations by crypto-asset companies; significant volatility of crypto-asset markets and the impact that volatility may have on deposit flows at crypto-asset companies; susceptibility of stablecoin projects to create “potential deposit outflows for banking organizations that hold stablecoin reserves”; contagion risk among the broader crypto-asset sector as a result of things such as opaque lending, investing, funding, service and operational arrangements; a lack of maturity in risk management and governance practices among the crypto-asset sector; and heightened risks with open, public, and/or decentralized networks where there is a lack of governance mechanisms to oversee the systems.”
APPOINTMENTS OF THE WEEK
CLYDE & CO – Leonardo Gianni
Leonardo Giani, an insurance specialist, will be joining Clyde & Co. as a partner to open the firm’s new office in Milan. Previously with Simmons & Simmons, where he headed the firm’s litigation and insurance practice in Italy, Giani has 20 years’ experience handling contentious and non-contentious matters, including assisting financial institutions in high profile and complex cross-border and domestic disputes, either in court or in arbitration. Italy has one of the largest insurance markets in Europe.
“Opening a new office within a firm that has such strong connections to the insurance market, with ambitions to grow a market-leading offering in Italy, is an exciting step in my career and a great fit for my own practice,” says Gianni. “I’m looking forward to working alongside my new colleagues and making connections across Clyde & Co’s global network.” and the opening of an office in Milan, Italy, in the coming months.”
Henning Schaloske, Chair of the firm’s European Board observed, “Leonardo has an excellent reputation both in the Italian market and with our clients in the rest of Europe, including in the UK. His expertise will provide a strong foundation for our Milan office to grow in support of the insurance market and our other practice areas too.”
FLADGATE – Douglas Cherry
Douglas Cherry is joining Fladgate as a Partner specialising in financial services and regulatory disputes. Formerly Cherry worked within both the Supervision and Enforcement and Financial Crime Divisions of what was then the Financial Services Authority. He has extensive expertise in relation to Financial Conduct Authority and Prudential Regulation Authority enforcement matters and regulatory processes, as well as investigations into audit conduct undertaken by the Financial Reporting Council. He also has experience in relation to civil fraud and asset tracing matters.
“As corporates are increasingly under the regulatory microscope globally, Douglas’ experience is key to strengthening our existing Funds, Finance and Regulatory practice and he adds to our bench of disputes experts,” said John Evans, Fladgate’s Head of Dispute Resolution.
Grant Gordon, Managing Partner at Fladgate, commented: “Douglas’ appointment signals to the market Fladgate’s ongoing commitment to investing in sector specialists to augment our existing practice areas, as well as to expand into new areas of expertise as we continue to pursue our growth strategy into 2023.”
So, 2023? Looks like being a pivotal year. Dare one offer, best wishes?
Regardless, please continue sending your legal diary stories, insights, comments and appointments to