Edward Fennell’s LEGAL DIARY

April 14, 2023

Diary news plus insights, commentary and appointments from the legal world

April 14 2023

Editorial contact: fennell.edward@yahoo.com

SHORT THOUGHT FOR THE WEEK: A DESK OF ONE’S OWN?

An appealing prospect?

As you will probably have noticed JPMorgan Chase & Co has asked its managing directors to return to the old ways of working from the office for five days a week. In other words, the mood has shifted markedly against WFH – primarily on the grounds that people working in isolation are less productive and less creative.

The law, however, seems to be moving in a strikingly different direction. As our two stories this week illustrate, there is growing popularity for ‘Alternative Law Firms’ and operations such as Vario from Pinsent Masons which enables people to fit work around the other valuable – and indeed inescapable – aspects of their lives.

No doubt an elite cohort of lawyers will continue to be chained to their desks – or at least their laptops – permanently as partners at the top UK and US firms . But the law is a broad profession and can afford to accommodate those for whom work is not their only priority. And for that we should be grateful.

The LegalDiarist

In this edition of the Legal Diary

+ LEGAL DIARY OF THE WEEK

– Life/Work Balance needs Flexibility, says Vario from Pinsent Masons

– LexisNexis Recks its Best

– Crypto Work Good for Off-Shore firms says Reports Legal

– Think Alternative at Spencer West

+ CONTRIBUTED ARTICLES OF THE WEEK

– Royal Mail administration could cause crisis for employees and administrators alike, says Zara Aziz

– The Cineworld Crisis by Olexandr Kyrychenko

+ LEGAL COMMENT OF THE WEEK

on the decision of the National Crime Agency to launch a Joint International Crime Centre and the threat of AI to copyright music

+ LEGAL APPOINTMENTS OF THE WEEK

at Seladore Legal and Devonshires

+ E-VENTS

100 Years film interview

LEGAL DIARY OF THE WEEK

Life/Work Balance needs Flexibility says Vario from Pinsent Masons

For those of a certain age the world of work changed with the introduction of flexi-time – arrive when you want, leave when you want provided that you put in those 37/40/45 hours or whatever. Next, there was job-sharing. And now, of course, courtesy of COVID it’s kind of anything goes (although there is definitely a swing back towards some presenteeism in the office).

Nonetheless, as a new survey by Vario from Pinsent Masons has demonstrated, work for lawyers (like most other people) has to be made to fit, jigsaw-like, into a framework of other obligations and preferences.Respondents cited the need for flexibility to accommodate childcare, health issues, hobbies and downtime, and mirroring the clients’ own working patterns.

Speaking about the unsuitability of a traditional working week for modern lawyers, the theme became clear from commentators. “Productivity isn’t linked to fixed or full-time hours, and without flexibility you remove a large portion of highly experience talented lawyers from the market place.”

“At different times in your life, especially as a working parent or carer for others, you can need more flexibility than a traditional working week provides. You can still do a great job and make a significant contribution outside of this amount and pattern of hours.”

Kirstie Anderson, Senior Group HR Business Partner at Pinsent Masons, added, “Family dynamics have evolved over time, particularly since the pandemic, and one of our key aims is to ensure that we continue to support all workers, regardless of their family situation, as best as we can.

“We recognise the value of hybrid working and the benefits this may bring to a worker who may be a single parent or has significant care responsibilities, and we encourage our clients to operate similar policies with our freelancers where possible. Furthermore, the benefits of hybrid working also help those without children or dependents, meaning that it is an inclusive policy and does not discriminate against anyone’s family circumstances.”

Vario, which is part of Pinsent Masons, seems has got the balance pretty right.

https://www.pinsentmasons.com/careers/vario/Campaigns/The-Modern-Family

LexisNexis Recks its Best

Everyone in the legal sector knows LexisNexis and appreciates the contribution it makes to ensuring that legal business keeps going round. But the quality of the product reflects the quality of the organisation. So no great surprise – but, of course, plenty of congratulations – that it has picked up a string of awards from Comparably which rates organisation based on anonymous sentiment from employees.

Included among LexisNexis’s accolades are10th for Best Global Company Culture and 20th for Best Marketing Team along with other industry-leading companies including Microsoft, Google, IBM and others.It was also acknowledged in the ‘Best Company Outlook’, ‘Best Places to Work in New York’ and ‘Best Engineering and Marketing Teams’ awards.

“Receiving the Best Engineering Team award from employee feedback is confirmation of the exceptional culture we have, including the 1,800 technologists who are collaborating each day to achieve incredible advances in technology,” said Jeff Reihl, Executive Vice President and Chief Technology Officer, LexisNexis Legal & Professional. “There is no better time to bring your talents, skills, and whole self to LexisNexis.”

Meanwhile Amy Liedke, Executive Vice President, Human Resources, LexisNexis Legal & Professional commented, “Ongoing feedback from our amazing people is a critical input to our success as a business. Our employees are engaged in creating the next generation of technology innovations for the legal industry. The LexisNexis culture is one where people are genuinely connected to our mission to shape a more just world.”

Visit www.comparably.com/

Crypto Work Good for Off-Shore firms (so no surprises there)

The latest edition of Reports Legal magazine, published in the past week, focuses on the state of off-shore law firms. Now, any mention of off-shore these days leads quickly to the crypto world – not least because the most hilariously high-profile crypto collapse of late was at FTX whose founder Sam Bankman-Fried was living in some style in the Bahamas.

As Reports Legal points out, however, the fallout from FTX and other crypto casualties continues to keep offshore lawyers busy. “Following the collapse of any exchange, and particularly one where it was so popular and had such a meteoric rise, there are all sorts of implications in terms of litigation that will ensue,” Jason Romer, group managing partner at Collas Crill is reported as saying. “It will be predominantly Caribbean focused. Many funds have invested and been involved, given where the exchange was based.”

With all this work bubbling up the real challenge for these off-shore law firms lies in recruitment. “The bigger war for talent is in getting junior talent to come out of London and elsewhere,” said Christian Luthi, chairman of Conyers. “In BVI and Cayman, they are largely expats: when they can’t see their families, that becomes a big issue. [Particualrly] for BVI, it’s been a problem because there are multiple flights they have to go through. That’s made recruiting more challenging.”

So if this April’s storms and cold have made you question whether London’s worth it, be comforted with the thought that the British Virgin Isles await.

Click here to read the report

Think Alternative

If you want something new and different in law you don’t have to go so far as the Cayman Isles apparently. ‘Alternative law firms’ (ALFs) seem to be booming – and one of the boomiest is Spencer West which was named as the fastest-growing law firm of its type in the UK last year. Co-founders Simeon Spencer and Antoine West set up the fee-sharing law firm in 2018, and they believe that there is further growth ahead. Having recruited 54 new Partners and teams in 2022 it has already attracted a further 24 in Q1 2023. Revenues are up 47% year-on-year and are expected to continue to rise during 2023.

“Last year was a real momentum shift for us and this year has started even more quickly,” said West. “There’s just so much more to come from us as new Partners complete their first full year and more join the growing trend of lawyers moving away from traditional firms and taking control of their own work, fees, and careers.”

Moreover it’s growth has not just been in England. They now have a three-partner team joining in Germany, two Guernsey-based Partners to launch a new Channel Islands hub, and a third offering launched via a collaborative association with a leading commercial law firm in Northern Ireland. Also starting are new international collaborations in Hong Kong and Singapore, as well as ventures in Bermuda and Cayman (so there is a Caribbean dimension after all!).

Simeon Spencer said the firm’s expansion reflected “An increasing trend for highly-respected and experienced lawyers, including Partners and entrepreneurial Senior Associates, to move away from traditional firms and operate and develop their practices at ALFs.” He forecast an acceleration of the trend over the next five years – both for his firm and for others which operate on a fee-sharing, flexible model.

CONTRIBUTED ARTICLES OF THE WEEK

Royal Mail administration could cause crisis for employees and administrators alike, says Zara Aziz

With news that Royal Mail’s board could put the company into administration as talks between management and workers have collapsed, this potentially explosive move could have far-reaching consequences for employees of the postal service. It would also pose significant challenges for the company’s administrators.

Royal Mail dates back to 1516, and is thought of as being as solid, dependable and British as its own red post boxes. Yet, after its privatisation in 2012, it became another commercial entity operating in the highly competitive delivery sector.

The fact that the postal service is now making eye-watering losses may cause confusion for some observers, not least given the fact that Royal Mail reported operating profits of £416m at the end of March 2022. Such a dramatic turn in its fortunes raises questions as to how a previously profit-making entity suddenly finds itself in serious financial difficulties.

This only adds to fears that the possibility of Royal Mail entering administration could cause negative economic ripple effects, potentially having an impact on other industrial disputes ongoing in various sectors across the UK. The turbulent pay talks within Royal Mail are merely one example of a growing wave of workers’ discontent across the country, as employees from a wide range of industries and sectors are demanding better pay and conditions as rampant inflation and rising interest rates bite. This is happening as companies are themselves struggling amidst a stagnant economy.

As economic troubles worsen, the once unthinkable prospect of Royal Mail entering administration could well turn into a reality, with potential job losses among its 112,000 employees threatening a crisis for both workers and the wider economy. The insolvency of such an emblematic company as Royal Mail could well dent confidence in the British economy, and faith in similar institutions.

Last Post Box Standing?

Any administrator dealing with the potential restructuring of Royal Mail will also certainly have their hands full, as the complex nature of the company means that the Government will likely need to be involved in certain approvals. Should the company enter insolvency proceedings, administrators must focus on rescuing Royal Mail quickly and efficiently, in order to achieve the best outcome for the distressed company, and prevent a catastrophic loss of jobs for its workers.

Having already announced plans to cut some 10,000 jobs by August 2023, that already alarming figure may well increase markedly in the event of Royal Mail entering administration, and could spark crisis for employees and administrators alike.

Zara Aziz is a Solicitor at KaurMaxwell

The Cineworld Crisis by Olexandr Kyrychenko

This week Cineworld revealed it had no choice but to wipe out its shareholders as part of its restructuring plan. The cinema chain, like many others operating in the hospitality sector, has been struggling with hefty debts for some time now – and has subsequently filed for a Chapter 11 bankruptcy.

Under the new plan, the company’s debt will be converted into equity and creditors will be given a 100% stake. This comes at the expense of Cineworld’s shareholders, who will rightly be concerned about their equity interests – but should we expect litigation to arise as a result?

There are certainly always legal options available for disgruntled shareholders to explore if they lose out in a restructuring: a recent example is the ongoing class action against Credit Suisse by its US shareholders who are claiming the loss of their money was partly due to fiduciary duties being breached.

To that point, Cineworld’s directors have a number of duties to the company (as set out in s.171-177 of the Companies Act 2006) – so in the event that the shareholders can establish that these duties have been breached by the directors (or any of them), a derivative action can be brought by the shareholders in the name of the company against the offending director. The difficulty is, however, that this will need to point to more than mere mismanagement, and it is likely that much of the blame can instead be attributed to the devastating impact of the recent pandemic on the hospitality industry and the rise in streaming platforms’ domination of the market.

In addition, a derivative action is an action brought in the name of the company and so any moneys recovered would be payable to the company. Here, the shareholders would rank behind any creditors, thus it is unlikely that they will see any benefit themselves.

In this case, therefore, shareholders’ legal options are unfortunately limited – and if legal action does occur, it will be complicated and costly. So those involved would need to be both highly motivated and happy to fund the litigation without any realistic prospect of recovering the legal fees.

Olexandr Kyrychenko is a Partner at IMD Corporate

LEGAL COMMENT OF THE WEEK

TOPIC: The decision of the National Crime Agency to launch a Joint International Crime Centre

COMMENT BY: Mark Jones, Dispute Resolution Partner, Payne Hicks Beach

“Though the National Crime Agency has announced the launch of the Joint International Crime Centre, with a remit to lead the UK’s work on international crime, with no additional funding and being formed of existing bodies already doing this work (UKICB and ICCC) time will tell whether this new Centre will improve the UK’s capabilities when it comes to transnational crime.”

TOPIC: The request by Universal Music Group that major streaming platforms, including Spotify, should stop AI services from taking melodies and lyrics from their copyrighted songs.

COMMENT BY: Nick Eziefula, Partner at specialist media and entertainment law firm, Simkins.

“For the music industry, increasingly sophisticated music-making AI can be a powerful tool to augment and streamline the creative process, generating new opportunities. But its widespread use poses difficult questions. In particular, who owns the material written by AI? The user who inputs the relevant prompts? The developer of the tech? The owners of the original works used to train the AI? Or perhaps some combination of all of these? Where AI mimics the style of an artist’s work (or even their voice itself), has an infringement occurred? Could there even be a false-endorsement-based claim?

“Whilst the technology is relatively new, these legal headaches are in some ways familiar. The outcome of song infringement cases often depends on whether the alleged infringer had access to the original work – Ed Sheeran’s successful defence of a recent copyright claim largely turned on a finding that he had not been familiar with the song he was accused of copying. With AI, the output of the technology is inherently, and arguably even more directly, dependent upon the inputs – the many original works used to train the AI. Hence it is not surprising that rights-holders such as Universal Music Group are keen to establish that their works cannot be used to train AI without permission.”

LEGAL APPOINTMENTS OF THE WEEK

SELADORE LEGAL

Dan Hudson has joined Seladore Legal, which specialises in major and complex litigation and arbitration, to launch its white-collar and regulatory disputes practice. Formerly a partner with Herbert Smith Freehills, Hudson will now be re-united at Seladore (now just three years old) with former colleagues from HSF including Simon Bushell, now the Senior Partner at Seladore Legal.

With over 20 years of experience as a white-collar crime and financial regulatory specialist, Hudson has advised and represented clients on matters relating to high-value fraud and regulatory investigations, as well as issues concerning money laundering, bribery, and sanctions. This has included being involved in some of the most notable financial regulatory cases in recent years, including ICBC Standard Bank’s entry into the UK’s first-ever deferred prosecution agreement.

“Dan is a top legal mind and a trusted advisor in the corporate crime and contentious regulatory market,” said Simon Bushell. “Understanding financial crime for a firm like ours goes well beyond corporate compliance. Allegations of criminal conduct are a regular feature in large scale civil disputes and navigating the overlap is increasingly necessary.

“His arrival is a huge coup for the firm. He is among the best in his field and will undoubtedly be an asset as we strive to maintain the exceptional growth trajectory of the past three years.”

DEVONSHIRES

Baljit Basra is joining Devonshires as a partner in the firm’s Birmingham office (which opened in March 2022) where she will lead the Housing Management and Property Litigation team. Her recruitment brings the number of partners at the firm to 55.

Previously with Anthony Collins Solicitors LLP. Basra has 20 plus years of experience across a variety of activities including training Registered Providers, court advocacy, disrepair, statutory nuisance, possession and advising on policy and procedures.

“I am thrilled to welcome Baljit Basra to the firm,” said Donna McCarthy who leads, nationally, Devonshires’ 50 strong Housing Management and Property Litigation department. “We are confident that Baljit will be instrumental in driving further growth within our Birmingham office and across the wider firm. [She] is an incredibly well-regarded lawyer with an extensive wealth of experience and the whole firm is excited to work with her.”

Devonshires has grown significantly in recent years and now has over 260 staff, including solicitors and support staff in one ‘hub of expertise’, which enables teams to collaborate and deliver advice utilising advances in technology and communication. In addition several awards have been won in the City of London’s Clean City Awards Scheme, with recognised results, including Silver and Bronze awards in 2020.

E- VENTS

We hope that you’ve found this edition of the LEGAL DIARY interesting. If so, please relay on to colleagues.

Meanwhile please continue to send your legal diary stories, legal comment and insights to

fennell.edward@yahoo.com

Best wishes for a wet and blustery weekend!