Freshfields Bruckhaus Deringer has brought to an end a lawsuit brought against the firm by the liquidator of the insolvent Maple Bank with a €50m settlement payment.
The settlement came to light on Thursday (29 August) at a creditors’ meeting when the liquidator, Michael Frege of CMS, said he had recovered €50m for creditors to settle a €95m claim against the Magic Circle firm brought in April. Continue reading “Freshfields denies wrongdoing in tax advice amid €50m settlement payout”
Law firm culture is again under the spotlight after a survey of almost 7,000 lawyers across 135 countries found sexual harassment and bullying is rife within the legal industry, with the UK reporting above average levels of bullying.
The report, carried out by the International Bar Association, found 62% of female respondents in the UK reported they had been bullied in relation to their employment, alongside 41% of male respondents. These were both ahead of the international levels of bullying, at 55% and 30% respectively. Continue reading “UK legal industry plagued by sexual harassment and bullying, IBA survey finds”
A clear focus on a number of #MeToo episodes among City law firms has led to a close examination of culture by risk teams as well as wider discussion of reputational damage and the extent to which this can be measured.
We gathered leading risk experts from some of the UK and international firms in the eye of the storm to debate what steps can be taken not just to deal with reputational fallout but to ensure it doesn’t happen again. Continue reading “Picking up the pieces – the risk debate gauges the #MeToo era”
Ten years ago, very few large law firms needed external legal advice on dealing with their regulator. This was because the Solicitors Regulation Authority (SRA) would normally only take action against an individual within a firm rather than the firm itself. Since then, the SRA has increasingly used its powers to regulate entities and shown a much greater interest in how law firms are run. With that has come the era of big fines for firms that have breached the SRA’s Handbook.
While all large law firms will have experts in-house that deal with regulatory and risk issues, they are unlikely to have had extensive experience of the SRA’s investigation and enforcement procedures. In addition, external advisers can act as a sounding board on difficult issues, such as if, how and when to report a matter to the SRA. Continue reading “Sponsored briefing: Regulatory challenges in the year ahead”
The risks and exposures facing law firms have dramatically changed over the last decade. The legal industry now faces a significantly more complex risk landscape and one that will continue to evolve as technology transforms the way firms operate.The risks and exposures facing law firms have dramatically changed over the last decade. The legal industry now faces a significantly more complex risk landscape and one that will continue to evolve as technology transforms the way firms operate.
That is certainly the view of Sarah Clover, partner in Clyde & Co’s specialist lawyers’ liability practice. She believes that while the risk landscape is already more complex than ten years ago, new products and services will shape and test the boundaries of liability, and law firm’s regulatory and ethical obligations.
Clover says: ‘Working alongside our clients to identify the current and future threats facing their organisations, it is apparent that law firms continue to face pressure from consolidation, globalisation, increased regulation and ethical dilemmas, but in the near future this list will continue to grow rapidly.
‘As law firms find ways to operate using technology, automation, data analytics and artificial intelligence, to name a few, their exposures will become increasingly more complex.’
Clyde & Co’s specialist lawyers’ liability practice has defended the interests of law firms for over 40 years. The team has in it a large number of solicitors whose practices are dedicated to lawyers’ liability and regulatory work. Firms will be familiar with the work of partners such as Richard Harrison, Andrew Blair, Fergal Cathie, Neil Jamieson, James Preece, Tony Nurse-Marsh, Clive Brett, Tom White and Helen Rowlands. The current team’s roots stem from lawyers’ professional liability, their predecessors having drafted the first solicitors’ professional liability policy in 1928 and devised the first professional liability insurance scheme for solicitors in the mid-1970s.
It has acted in a series of landmark cases that have developed professional liability law. A very few of the notable highlights include:
Although the team has acted for over 40 of the top 50 law firms over many years, they will not descend into specifics, client confidentiality and discretion being of paramount importance to them.
According to Clover, some of the key threats currently facing law firms include:
Globalised civil exposures: The threat of civil claims is nothing new, but law firms are increasingly facing claims of greater severity and complexity. As firms operate in a more globalised marketplace, a growing number of liability claims traverse jurisdictional boundaries. Law firms must also grapple with a changing litigation environment, not least the growing prevalence of litigation funders who view professional liability claims as an attractive hunting ground.
Regulatory exposures: These represent perhaps the biggest shift in the last decade. The threat of regulatory investigation and enforcement is now as high as that in respect of civil claims. Indeed, civil and regulatory claims can feed off one another, with firms often facing parallel proceedings, which throw up a myriad of issues. Firms must now also navigate ever-more burdensome regulatory self-reporting obligations and an increasingly politicised atmosphere. In recent years this has led individuals at large firms to be brought before parliamentary committees in the full glare of the media spotlight and often without the procedural safeguards that a more formal regulatory process would entail.
Criminal exposures: Broadening criminal liability regimes, particularly in the tax sphere, have the potential to snag law firms. In line with other professional advisers, there is also concern about getting embroiled in criminal investigations brought against a law firm’s clients.
Data issues: Data breach issues are a core risk for all organisations and law firms are no exception. Firms must ensure they have the systems and controls in place to manage the risks posed by the introduction of the GDPR regime as well as the changing modus operandi of increasingly sophisticated cyber criminals. As recent history has shown, a significant data breach has the potential to destroy a firm.
In line with the increasingly global nature of exposures, Clyde & Co’s specialist lawyers’ liability team now boasts the largest global professional liability practice, and regularly acts in international and cross-border claims for global law firms.
Clover explains the reason for having an extensive global team: ‘Litigating overseas presents a number of challenges for organisations, including law firms. In addition to the practical difficulties of securing local representation and managing the translation process, firms must navigate cultural differences, local court systems, procedural requirements and the selection of local experts. Having boots on the ground is essential to consistent delivery of the highest quality service to our clients.’
Recognising that law firms face a broad range of exposures and challenges, Clyde & Co has developed a reputation as ‘the professional’s professional’, handling, in addition to civil claims, disciplinary and regulatory issues, a long list of other advisory work for professional services firms, including employment, bribery and sanctions, partnership and other corporate structures, as well as commercial and intellectual property advice. It has also built up a leading practice advising on the structuring of insurance and reinsurance arrangements for global professional service networks.
‘Our close-knit team works in tandem to draw on each other’s expertise and ensure our clients are equipped to face the evolving risk landscape that continues to threaten the operations of the world’s leading law firms,’ concludes Clover.
Sarah Clover has been a partner at Clyde & Co since 1992. She has specialised in lawyers’ professional liability for 30 years and advised on a wide range of professional liability claims against lawyers, including claims involving corporate finance, tax, pensions, commercial and residential property, litigation and commercial contract. She also advises clients on regulatory and disciplinary issues, risk management and policy coverage. Sarah has a wealth of experience in mediation and other forms of alternative dispute resolution.
For more information, please contact:
Sarah Clover, partner, Clyde & Co
T: 020 7876 6386
E: sarah.clover@clydeco.com
An under-wraps independent review of Baker McKenzie’s approach to a sexual misconduct incident six years ago has concluded there were ‘a number of shortcomings’ but details are scarce. Meanwhile Mark Hastings, the disputes partner sacked by Quinn Emanuel Urquhart & Sullivan earlier this year following ‘inappropriate behaviour’, has emerged at Mayfair boutique Grosvenor Law.
Bakers appointed Simmons & Simmons in February to review the way the firm had handled accusations that one of its London partners sexually assaulted an associate in 2012 . Continue reading “Review of Baker McKenzie #MeToo incident finds ‘shortcomings’ but details scant as sacked Quinn partner finds new firm”
The decade since the fall of Lehman has seen some dramatic changes to the profession, not least law firms’ risk teams. Ten years since Legal Business first collaborated with broker Marsh to create our annual risk management and professional indemnity survey, progress has been made but the threats to the key players within the industry have become more ominous.
We gathered together leading risk experts from some of the UK and international firms most affected by increased regulatory scrutiny, geographical cohesion, data security and PR disasters to reflect on the evolution of law firm risk management and look ahead to see how the landscape could develop over the next ten years. Continue reading “The risk debate: Silver linings playbook”
Our debut risk management and professional indemnity report with broker Marsh in February 2008 featured a timid segue into an unfamiliar topic. We suggested that neither were ‘glamorous subjects’, while observing that firms were ‘thinking harder than ever’ about how to mitigate risks. A necessary evil, if you will.
The risk landscape portrayed then – six months before Lehman Brothers was to collapse – still has a familiar ring: ‘When things are going well, as was the case from 2003 to mid-2007, resources are stretched and clients want every deal done yesterday. Throw in an overheated recruitment market in which the firm that blinks misses out, and the competitive pressure of having to race into every new, emerging market and firms could be forgiven for never thinking about their professional indemnity at all.’ Continue reading “Unstoppable: The Risk Report”
