Legal Business

Sponsored Q&A: Deloitte

1. What are the key regulatory requirements and compliance challenges that law firms operating in Uruguay’s banking and finance sector currently face?

Capital Markets Act No 18.627 enacts the framework for companies operating in the Uruguayan Capital Market (issuers, brokers, investment advisers, etc); Law No 15.322 regulates the same for banks and all relevant entities acting as financial intermediators; Law No 16.426 regulates insurance and reinsurance framework (as well as Law No 19.678 that sets certain terms and conditions that shall be stipulated in the insurance agreements/policies); Laws No 16.713 regulates the Pension Funds Administrators (law that has been recently modified by Law No 20.130, that modified the Uruguayan pension regime); Law 16.774 rules mutual funds; and Law 19.210 and 18.573 regulates the payment system.

Legal Business

Sponsored thought leadership: Hot topics of tax controversy in Latin America


Like Anne Brontë said ‘… but he that dares not grasp the thorn should never crave the rose… ’. Argentina happens to be an attractive alternative to develop business in South America despite it showing some uncertainty when it comes to its economic situation. Taxes and its tax policy are not an exception and companies as well as individuals might find themselves involved in tax controversy processes. Since 2017 taxpayers faced a tax growing situation without precedents. The most important tax changes at a federal level since then that can be mentioned are:

Legal Business

Deloitte Legal continues New Law push with hire of Elevate global consultancy head 

Big Four accountancy firm Deloitte has again boosted its New Law credentials, this time with the hire of Jack Diggle from alternative legal provider Elevate to head up its Legal Management Consulting arm.

Diggle will be joining the firm alongside contract management expert Craig Conte and legal management consultant Tom Birdseye, both of whom also join from Elevate. The trio will now be responsible for bulking up Deloitte’s legal consultancy offerings to in-house teams, contracting functions, and law firms.  

Regarding the hires, Michael Castle, UK managing partner of Deloitte Legal, commented: ‘Today’s world requires a new approach to the delivery of legal services. Now more than ever, legal departments are having to address the challenge of dealing with increasing complexity and demand with the same or fewer resources.

’Jack, Craig and Tom have a wealth of experience between them that will help these departments and contracting teams rethink their operating models, achieve greater efficiencies and increase the value they deliver back to the business.’

The hires mark the latest push from Deloitte into New Law avenues. In May, the firm announced the hire of Emily Foges, boss of UK legal tech darling and Slaughter and May ally Luminance. Foges joined as lead partner of Deloitte’s legal managed services arm.

The threat posed to traditional law firms from auditing firms is often overstated due to legal and commercial conflicts. However, Deloitte’s approach of building a legal business more resembling to a legal process outsourcer fused with a consultancy could prove the most competitive model – as alternative legal services giant UnitedLex has demonstrated in the US.

Added Diggle: ‘General counsel and legal departments are facing multiple challenges: a heightened regulatory environment, increased workloads and the acceleration of new digitally-enabled, agile operating models. I am looking forward to building on Deloitte Legal’s experience in this space and helping our clients’ legal operations.’

Legal Business

Former Travers managing partner Lilley joins Deloitte Legal as employment head

Big Four accountancy firm Deloitte has bulked up its UK legal bench by hiring Andrew Lilley, the former managing partner of Travers Smith, to spearhead its employment practice.

Lilley will now focus on building the firm’s employment presence in the UK, as Deloitte joins its Big Four counterparts in further expanding its domestic legal capability. Lilley joins alongside Squire Patton Boggs employment partner Liz Pierson.

Commenting on the hire, Deloitte Legal’s UK managing partner Michael Castle said: ‘Andrew and Liz both have fantastic track records in their respective fields. As we continue to build Deloitte Legal’s presence in the UK, we are determined to hire the very best talent in order to provide our clients with best-in-class service.’

Lilley joined Travers in 1995 and served as the firm’s head of employment before being appointed managing partner for a four-year term in 2010. Lilley resigned in 2015 to explore a career in teaching. Pierson, meanwhile, had been a partner at Squire Patton Boggs since 2017, having previously been a senior counsel at Clifford Chance for four years.

The hires come off the back of another significant play from Deloitte in May, when it announced a non-exclusive alliance with US law firm Epstein Becker Green to provide employment law to clients.

Deloitte will hope to make up ground with the double hire, having been the last of the Big Four to make a push into UK legal. In January 2018 Deloitte secured its alternative business licence, while a year later the firm announced the hire of Allen & Overy banking veteran Castle to head its UK legal business after a four-month hunt. Currently Deloitte Legal counts over 60 practicing lawyers in the UK with more than 125 other fee-earners engaged in legal activities.

‘Andrew and Liz’s knowledge of employment law and reward will add to a wealth of expertise across Deloitte, providing clients with technology-enabled, practical solutions to tackle the complexities they face,’ Castle added.

Legal Business

New Law meets Big Four – Has Deloitte got the conviction to match its free-thinking legal pitch?

Thomas Alan asks if Deloitte can find a new angle on legal services

The often cited but seldom-seen legal arrival of the Big Four has long passed into a professional joke, though renewed investment from the major accountancy groups in the last three years has given the debate fresh urgency. But, truly, something must have changed in the wind, as even that traditional hold-out, Deloitte, has signalled its intention to build a significant law presence.

Legal Business

Accountants keep coming as Deloitte hires A&O banking partner as UK legal head

Deloitte has made a clear statement of intent in legal services by announcing today (14 January) that it has lured Allen & Overy (A&O) banking partner Michael Castle across to lead its UK legal arm, as the Big Four outfit looks for greater traction in the legal sector.

Based in Deloitte’s London office, Castle will now lead a technology-orientated legal offering for Deloitte, having spent more than two decades at A&O. Becoming an partner in 2007, Castle was not a standout name in a finance department replete with leading individuals but did gain profile in recent years after unsuccessfully running for the managing partner role at A&O, before eventually being beaten by current leader Andrew Ballheimer.

Deloitte revealed its ambitions on the UK legal market in January of last year, when the firm became the last of the Big Four to become an alternative business structure. The firm will now have to make up for any ground lost to its three rivals, with PwC, KPMG and EY all having a more established legal presence in the UK.

Currently, Deloitte has 2,500 legal professionals operating across 85 countries in the world, while in the UK it has over 50 practising lawyers and over 125 other fee earners, with both figures likely to rise this year. The hire of Castle, rather than a regional managing partner or general counsel, gives an indication of Deloitte’s intention to enter the legal mainstream moving forward.

For more on the rise of the accountants in legal services, read ‘Who’s afraid of the Big bad Four?’

Legal Business

‘Not another mid-market law firm’: Deloitte to make much-anticipated foray into UK legal market

Often trumpeted as a potential disruptor to the UK legal market, the last of the Big Four accountancy firms, Deloitte, is primed to enter the fray as an alternative business structure (ABS).

The global professional services giant confirmed yesterday (10 January) that it would be using technology such as automated document review and contract management to underpin the new legal offering. In addition, Deloitte will be launching a consulting service to help in-house legal teams get the best out of technology.

Deloitte will therefore apply for an ABS licence, with the firm intending to begin offering new legal services ‘early this year’.

Deloitte will enter the market well behind its three rivals, with PwC, KPMG and EY all possessing an established legal presence in the UK. PwC has by far the strongest legal offering, with a UK headcount of 320 and UK revenues of £60m. EY has around 85 UK lawyers while KPMG has approximately 100, with UK revenues of roughly £15m and £20m respectively.

Piet Hein Meeter, global managing director of Deloitte Legal, told Legal Business: ‘We have always monitored the legal market in the UK, and we already have a presence in around 80 countries. But we wanted to avoid bringing another mid-market law firm to the table. We have now developed something where we have positioned ourselves in-between the alternative providers and the traditional providers. It is unique, we are the first provider to bring a full spectrum of services, including both legal and compliance.’

When asked about Deloitte’s ambitions for the UK market, Meeter said: ‘It will be substantial. It has to be meaningful to satisfy our clients.’

He confirmed that an immediate priority was to hire a senior partner, in order to satisfy the SRA’s requirements for attaining an ABS.

Matt Ellis, Deloitte’s managing partner for tax and legal, added: ‘We don’t want to replicate a traditional law firm. We’re planning to use our technology and advisory skills to transform legal services and help address many of the challenges lawyers, whether in practice or in-house, are facing in today’s increasingly complex legal environment. By automating repetitive processes and completing routine tasks in a fraction of the time, lawyers will be able to spend more time on specialist areas.’

The new consultancy arm, being launched in conjunction with the legal business, will comprise of over 100 professionals across ten countries. Meeter said that a 2016 survey carried out by the accountancy firm showed that ‘62% of legal counsel, general counsel, CEOs and CFOs are looking to significantly review and transform the way in which their legal function operates.’

During 2017, PwC mounted a sustained a campaign to broaden its legal offering, launching a law firm in Washington DC  as well as a Lawyers On Demand-esque contract lawyering service .

For more on the Big Four’s assault on the UK legal market, read ‘Who’s afraid of the big bad four? Inside the accountants’ assault on law‘.

Legal Business

Top 100 firms defy Brexit upheaval with confident performance in first quarter of 2017/18

A lack of clarity on the state of Brexit negotiations together with tougher macroeconomic conditions don’t seem to have impacted the UK top 100 law firms which posted an average 8.5% increase in fee income for the quarter ending July 2017.

Deloitte’s quarterly legal sector survey showed the growth was largely due to a 7% increase in fees-per-fee earner at the country’s top players. However, despite this top-line growth, the growth in chargeable hours per fee earner at the top ten UK law firms was lower at 3%.

Players in the 11-25 bracket saw the biggest increase in fee growth of 10.5%, despite seeing a 3.5% increase in chargeable hours per fee earner.

Conversely, firms in the 26-50 and 51-100 categories reported the largest increases in chargeable hours per fee earner of 4% and 5% respectively while the increase in fee income for the 26-100 group was 7.8%

Currency impact accounted for some of the disparity, with the top 25 benefiting more from the weak pound due to larger international operations.

‘It was a strong quarter – stronger than some people predicted,’ Deloitte partner Jeremy Black told Legal Business. ‘Activity has increased across most practice areas.’

‘As a result of the Brexit vote there has been uncertainty for some time, but businesses have started to feel that it is not necessarily the right option to wait and see what happens. And on the private equity side, a lot of funds have a lot of money to invest.’

Management at the firms surveyed by Deloitte also revealed wary optimism for the rest of the year, with the top ten predicting an average 4.9% growth for the financial year ending in April 2018. Optimism was strongest among firms in the second half of the table, which expect an average growth of 6.7% on the 2016-17 financial year.

Legal Business

A&O teams up with Deloitte for pioneering joint venture targeted at banking giants


Axiom and Ashurst follow with similar service to meet regulations

In the first marquee joint venture between a Magic Circle firm and a Big Four accountant, Allen & Overy (A&O) and Deloitte have teamed up to create a tech-driven service to help banks handle post-Lehman regulation.

Legal Business

Magic Circle meets big four – A&O teams up with Deloitte for pioneering JV targeted at banking giants


In the first marquee joint venture between a Big Four accountant and a Magic Circle law firm, Allen & Overy (A&O) has teamed up with Deloitte to create a tech-driven service to help banks handle post-Lehman regulation.

The new service – dubbed MarginMatrix – will deploy automation to help banks address incoming global regulation of the $500trn over-the-counter (OTC) derivatives market. The rules under the European Market Infrastructure Regulation (EMIR) framework will require counterparties for derivative contracts not processed through an authorised clearing system to provide additional margins for their net exposures.

The reforms – which A&O estimates will require a large banking group to provide around $10bn initially in additional margin alongside thousands of new contracts – are a major compliance challenge for the securities industry and potentially a lucrative product line for advisers.

MarginMatrix codifies legal regimes in multiple jurisdictions and automates the drafting of documents based on computer-assisted analysis. A&O claims the system can create a document that would conventionally take three lawyer hours in just three minutes. On its estimate, the 10,000 OTC contracts a major bank would normally hold can be processed in 12 weeks with one person deploying the system, against 15 years of lawyer hours.

A&O will run the programme and provide legal input, while Deloitte will provide project management to large teams of negotiators in multiple jurisdictions.

A&O derivatives partner David Wakeling came up with the concept. He said the programme ‘will allow [major banks] to carry on trading derivatives without worrying that they may be, for example, complying with the US rules, but they’re not compliant with the Singapore rules. What we’re doing is gold plating all the regimes and making sure their trading relationships works all over in the world.’

After finishing a prototype of the programme in June last year, A&O approached Deloitte with a proposal in November. Wakeling (pictured) added: ‘We thought that it was all very well that our system would spit out a beautifully crafted legally compliant document, but it would probably be negotiated and there’s a lot of work around execution. We started talking to Deloitte and said: “You’re very good at large scale, disciplined projects.” The scale is thousands and thousands of contracts in multiple jurisdictions, so it’s the managed services arm coming in from Deloitte.’

A pioneering tie-up of a leading accountancy group and an elite global law firm on a high stakes project will be seen as a significant development for the legal industry and further bolster A&O’s progressive credentials after previous initiatives such as its flexi-lawyer arm Peerpoint and its suite of online services, aosphere.

A&O senior partner Wim Dejonghe commented: ‘MarginMatrix is an example of the way in which we are evolving our offering in the face of changing client needs. We foster a culture of entrepreneurialism and risk-taking, which enables our partners to deliver market-leading initiatives like this one.’

The new OTC regulation was expected to come into force on 1 September but the European Commission last week said the implementation deadline would move back, with a likely date in the middle of 2017, though US implementation will happen in September.

Wakeling said the reaction to the project has been positive. Six global banks have already signed up to the service including one ‘Bulge Bracket’ house. ‘What became very clear very quickly is that this is exactly what they needed. This is a very worrying thing to have global regulations kicking in this year in lots of regimes which are very complicated and a system and a process was exactly what they needed,’ Wakeling told Legal Business. ‘We very quickly picked up quite a lot of clients. It’s become a very significant business for us.’

Around 20 A&O partners are dedicating ‘significant’ time to implementation. A&O’s London derivatives partners Emma Dwyer, Guy Antrobus and Paul Cluley worked with Wakeling through the programme’s creation. Hong Kong derivatives partner Ross Stewart and regulatory/capital markets partner Yvonne Siew, Singapore capital markets partner Matthew Hebburn, New York derivatives partners Deborah North and David Lucking, and Washington DC-based partner Bill Satchell have also been involved.

Deloitte’s team working on the project includes its New York, Hong Kong and London offices. Its team is led by partners Hugo Morris and Katelyn Brown.

Morris commented: ‘MarginMatrix’s ability to codify the law across multiple jurisdictions, auto-draft contracts and provide a controlled workflow environment for contract negotiations will lead to significant cost savings and help maximise institutions’ ability to achieve regulatory compliance.’