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Laurence Simon Newsletter Jan 2014

Posted by: Laurence Simons 08/01/14

Lawyers under fire

During the Christmas and New Year festivities many people across the world will be nursing hangovers and vague feelings of existential guilt following their office party. Interestingly, it appears that the legal profession in particular has been enjoying itself over the festive season.

Research from Addison Lee showed that the legal industry was predicted to out-party most of London's workforce, reports the Lawyer magazine.

The capital's biggest minicab firm found that only fashion workers are set to spend more time on the lash than the capital's legal staff, with the former expected to party until 4am at venues such as the Orange Public House and Baltic Restaurant.

While the latter may not be able to reach the heights of debauchery or sartorial elegance achieved on the fashion circuit, they're still planning to enjoy themselves, and are expected to stay out until 3am at industry favourites such as Hakkasan and Marco Pierre White.

City of London workers, who are expected to enjoy a return to pre-recessionary Christmas parties this year, will be seen in the Madison Restaurant at One New Change, the Gun and W Hotel, according to the taxi firm's research.

One can only hope that the boisterous chaps of the financial services sector avoid a repeat of the famous 2002 incident involving a bottle of Grey Goose vodka, a dancing bear and some extremely frightened waitresses.

They can all feel superior to public-sector workers and architects, who will be taking it easy and heading home by midnight.

General Counsel 'must ensure data is kept safe'

The emergence of the internet and, latterly, cloud computing, has fundamentally changed the legal process and made many things easier for people working in the sector, particularly when it comes to collaborating with colleagues.

However, the computerisation of the lawyer's role has also brought about a number of drawbacks. As more documents are sent over the web, it's become impossible for mid-ranking legal advisers to justify buying expensive briefcases, much to their disappointment. Furthermore, the decline in printing might mean that trees are allowed to spread even further, potentially encroaching on urban areas and giving monkeys easier access to houses.

According to Brian Flack, General Counsel and Vice President of client services at Clutch Group, data security is also likely to become a major problem over the course of 2014, especially if General Counsel are not trained in dealing with this issue.

Writing for Corporate Counsel, he said: "IT departments around the world are renewing their efforts to develop and perfect systems to protect sensitive data from cyber-terrorism and from hackers trying to access client and customer data. GCs need to understand and to articulate the impacts that these security measures have - especially when they fail."

The oft-cited idea of hacking is the most colourful threat facing corporate information, but the reality is that remote access of computers happens only rarely. The biggest cause of privacy breaches is human error, often brought about by untrained or careless staff.

GCs need to work out what their potential liabilities are in this situation and put a plan in place to deal with the fall-out, declared Mr Flack.

In order to do this effectively they need to engage with professionals and experts from other parts of the business, including the IT department.

Mr Flack concluded by pointing out that cloud-based and online legal services are likely to become more prominent over the course of 2014, making it even more important for in-house lawyers to have strong data protection policies in place.

Fortunes mixed for UK law firms

An increasing polarisation is taking place among British law firms, with larger firms enjoying increased revenues and trade while their smaller counterparts struggle to make the grade in a difficult market.

It has always been the case that magic circle firms attract the most business - they are capable of spending far more on marketing than small to medium-sized enterprises and their international reputation gives them something of an edge.

However, previously smaller legal service providers could get by and even make a good living on local cases and less prestigious issues considered outside the remit of the likes of Allen & Overy.

This may no longer be the case, claimed Birmingham head of office at Mills & Reeve Steve Allen.

Writing in the Birmingham Post, he said: "Along the high street, firms are battling to get indemnity cover, without which they can't practice. Those traditionally reliant upon publicly funded work have seen their income slashed as a result of the savage cuts to the Legal Aid budget."

The fortunes of these firms are in sharp contrast to those of bigger organisation, with research from Deloitte showing that fee income is up by 5.2 per cent in the last quarter compared to last year.

Real estate and corporate work are also much improved, with the overall economic recovery across the UK making it easier for legal service providers to pick up lucrative work.

"I regret that while workloads and profits are returning to the top tiers, the challenges for smaller firms remain," concluded Mr Allen.

With further changes set to be brought about in the legal market over the next 12 months, we'll soon see if smaller firms will continue to be dominated by their high-income counterparts, or if boutique services will move into competition as businesses look for more focused, industry-specific offerings.

ACC: Corporate counsel skills are changing

To be an internal legal advisor, you need a particular set of skills. Hopefully not the kind that Liam Neeson showcases in Taken (gleeful ignorance of international law, monomania, callousness, self-seriousness), but still a wide-ranging and hard-to-master base of abilities.

One problem with developing the qualities needed to excel in the position of General Counsel is that the role is so often in flux, with technological and organisation developments meaning in-house lawyers now need to work in a broader way.

A new report from the Association of Corporate Counsel (ACC) has highlighted some of the most important skills for the job.

The study (as seen by Law magazine, because it costs several hundred dollars to buy) took on the views of hundreds of in-house lawyers around the world.

Some 84 percent of counsel and legal officers surveyed said that legal management duties are among the top three value drivers for General Counsel today, although in general there appears to be a sense that this is now a given rather than an additional skill.

This is reflected by the fact that 68 per cent of respondents felt this would continue to be an important factor over the next five to ten years.

However, General Counsel will continue to be important advisers to the boardroom over the coming years as compliance and regulatory requirements become more stringent across the world.

In-house lawyers based outside the US took the regulatory section of their job more seriously than those in America, with 44 per cent of international respondents pointing to this as a crucial part of their role.

Finally, it appears that General Counsel are increasingly being asked to work as strategists, helping firms plan for the future and avoid compliance issues well in advance.

"We believe the reason for that is the General Counsel provides a strategic role inside the company, to the C-suite as opposed to the board directly," said vice president and chief legal strategist at ACC Amar Saval.

South Africa 'is gateway to continent'

Although the South African economy has endured some turmoil over recent years, in line with the problems facing much of the rest of the world, it remains an attractive destination for legal firms keen to get a foothold on the potentially lucrative continent.

The sad death of international icon Nelson Mandela has brought the country back into the media spotlight, but it has been a focus of legal firms for the last few decades.

Its relatively impressive infrastructure and the amount of cash developed through the mining industry made it the perfect place for ambitious legal organisations keen to develop their international practice.

While the rand is slipping and industrial disputes have staggered the mining sector, opportunities still exist for legal organisations that are willing to be flexible, reports the Lawyer.

Webber Wentzel senior partner David Lancaster pointed out that many local firms have paired up with prestigious international counterparts - his firm recently signed an agreement with Linklaters.

"It's really difficult for independent South African firms to compete for the big work on the continent without some sort of international partner," he declared.

"There'll always be room for a strong South African domestic firm, but if you're looking to compete, particularly outside Africa, you have to do that with the capacity that an international firm or global firm has - that's what Norton Rose has shown.

As the South African government pushes for more investment in the booming renewables sector and makes a major effort to look for new oil sources, it seems likely the country's resource-rich economy will enjoy further improvements in the coming years.

And with the continent as a whole expected to enjoy a major fiscal expansion, canny law firms are understandably keen to build up their African links to make up for decreased business volumes in areas such as Europe and the US.

With South African investment flowing into legally-underdeveloped jurisdictions such as Botswana, Namibia and Zambia, it seems likely that many of the country's neighbours will also see an increased international law presence in the future.

Law Society faces vote of no confidence

A minor conflagration has erupted in one corner of the UK's legal world, with criminal law solicitors attacking the Law Society for a number of perceived failings and hitting the body with a vote of no confidence.

Liverpool-based lawyer James Parry - who led the revolt against Chancery Lane - told the Lawyer magazine that the organisation has failed to live up to its promises when it comes to discussing legal aid cuts with the government.

In a letter to society president Nick Fluck and chief executive Des Hudson, Mr Parry said: "The anger and disappointment of many of those present was made clear and was reflected in the vote."

In response, the society has told Mr Parry it will step up its campaigning efforts as well as reassessing how it engages with members.

"We have told him that we will fight the cuts, campaign more publicly, more vehemently and continue to push for more concessions for the benefit of our members," said a spokesperson.

However, there is mounting pressure on the leadership of the Law Society, with many professionals disappointed by their ineffective attempts to prevent the government from cutting legal aid provisions.