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Laurence Simons newsletter April 2014

Posted by: Laurence Simons 23/04/14

Lawyer under fire

Sleeping with a client is, of course, professional misconduct and generally considered to be 'a bad thing', even if you just give them a cuddle and maybe have a little cry on their shoulder. For most lawyers, abusing their position in this manner would be enough - but not for Minnesota attorney Thomas Lowe.

Mr Lowe has been suspended from his position indefinitely after not just having an unprofessional relationship with a client he was representing in a divorce case, but sending her a bill for his, ‘bedroom services’.

He charged her an eye-watering $900 (around £540), so at least he might have a lucrative alternative career to fall back on now that he's scuppered his legal one.

The attorney has been practising law since 1985  and allegedly knew the client for several years before she chose him to represent her in this matter, reports Above the Law.

When Headline News reporter Nancy Grace asked Mr Lowe to clarify the story, he said: "I have no idea why you think this is a story 14 months after the press release went out. It's not Headline News in my opinion, and that's part of the ... reason no one watches CNN."

 However, he has "unconditionally admitted" the transgression, meaning it will be a year and three months before he has any chance to apply for reinstatement.

Before this current reprimand, Mr Lowe was placed on probation back in 1997 for buying class A drugs from a client. All in all, he appears to be making a heroic effort to redefine the role of lawyers by encouraging people to make bad decisions rather than advising them not to.

Internal Polish market 'offers opportunities'

Poland may have suffered its fair share of problems in the past, but the eastern European country has been the subject of a great deal of foreign investment since shedding its connections with the Soviet bloc in the late 1980s and has become something of a European hub for international law firms.

It enjoyed a good recession, performing better than many of its neighbours and not facing too much of a slow-down, but could the number of law firms working in the country now be reducing the volumes of work available?

Warsaw continues to be home to several big Western legal practices, reports the Lawyer magazine.

Gide Loyrette Nouel Warsaw partner Hugues Moreau suggested that the country's economic success could actually be working against international law firms, pointing out that newcomers are finding the market increasingly harsh.

However, Dentons Warsaw managing partner Arkadiusz Krasnodębski suggested that international firms are likely to continue slogging along in the Polish sector, even if they choose to move on from other nearby countries.

"That might mean they pull out of other locations while staying in Warsaw, because Poland is a relatively strong market that is still improving," he argued.

Investment and litigation is likely to drive the business law market over the course of 2014, interviewees told the news source.

Furthermore, Poland's economic stability has encouraged the government to invest in major infrastructure projects, which could create a great deal of work for legal firms able to get a foot in the door.

GCs 'worry about cyber security'

What keeps general counsel awake at night? The sound of the cats outside fighting? The soft thrum from the flat upstairs, which the guy apparently keeps tropical fish or something, at least that's what he says? A lingering memory of a summer holiday as a child?

The answer, of course, is cyber security. According to Mary Ellen Callahan, chair of the Privacy and Information Governance Practice at Jenner & Block LLP and former chief privacy officer at the Department of Homeland Security, in-house identified this as their top priority three years in a row.

Ms Callahan was speaking at the International Association of Privacy Professionals Global Privacy Summit, where nobody wears a name-badge and all speeches are conducted in a dramatic whisper.

The Securities and Exchange Commission (SEC) began to review public company disclosures on cyber security only two years ago, reports Bloomberg BNA.

However, American firms are still acutely aware of the reputational and financial damages that can result from a network breach, meaning general counsel are often being asked to develop a level of technical expertise beyond the norm for a lawyer.

Elaine Wolff, partner at Jenner & Block and moderator of the session on the SEC and cyber security, added that the organisation's guidance is informal and should not be treated as a regulatory framework.

The important thing to know about the guidance is that "there is no existing rule, requirement or regulation that actually references cyber security," she concluded.

EY to tap into Asian market

Accounting and consultancy firm EY (formerly known as Ernst & Young) is attempting to make waves in the legal market, with plans afoot to launch a legal services unit in China through the acquisition of Shanghai-based Chen & Co.

While changes to the regulatory framework have seen a host of British companies open legal companies on the high street, with the Co-Op among those to get involved, it is less common for an accountancy firm to reach out to the vast Asian market.

EY, KPMG, PWC and Deloitte - the 'big four' - already have an impressive foothold in China thanks to their policy of snapping up consultancy firms there, reports the Lawyer.

This means they could be ideally placed to provide legal services in the country, making them a viable rival to the Magic Circle and Biglaw firms also keen to become players in the lucrative Asian legal sector.

By expanding into legal advisory work they aim to build on the amount of work they are already doing for top Chinese companies, driving up competition in what is already a highly competitive market.

EY's recent China move comes two months after the firm hired former Herbert Smith Freehills' Singapore managing partner John Dick in a bid to launch a legal services unit in Singapore.

The consultancy also offers legal work in several jurisdictions through locally registered law firms, including Australia, India and Japan. It is considering opening a firm in the UK utilising the alternative business structure framework, although this could prove more complex than operating through a subsidiary in a foreign country.

South Africa 'is legal hub'

Law firms are flocking to South Africa as they attempt to find a way to enter the potentially lucrative African legal market, despite the fact that industrial disputes and other issues have reduced the country's economic clout.

The legal services firms establishing bases in the country include Linklaters, Hogan Lovells and Eversheds, all of whom signed deals with local companies in 2012 and 2013, reports Legal Week.

DLA Piper, Norton Rose Fulbright, Baker & McKenzie and White & Case already had offices in South Africa, along with a host of less prominent organisations.

"I thought the mining and manufacturing slowdowns might have led to a decrease in appetite to establish a presence in South Africa," said Norton Rose Fulbright South Africa managing partner Rob Otty, who expressed his surprise at the number of new entrants to the market despite its decline.

Hogan Lovells former Africa head Andrew Gamble, who led the team negotiating the combination with Routledge, admitted that the host of legal organisations already establishing a place on the African continent is driving other firms to do the same.

"It shows there is enthusiasm for global firm presences, and that there are not only good opportunities in the region but also international muscle to help support them. It has enabled them to create a seamless offering and on that basis they have taken away a significant amount of work from the independents," he explained.

That being said, South Africa's local firms appear to be maintaining their sangfroid about the entrance of new competitors, suggesting there is plenty of work to go around.

ENSafrica chief executive Piet Faber said global partnerships simply present the same threats and opportunities as native companies do, meaning they are unlikely to upset the balance too much.

A partner at a firm associated with an international player added that few international firms have had a major impact on the South African market, with most lawyers still working on similar mandates and with similar client bases.

However, entering the country is still worthwhile, not least because there are a host of business opportunities beyond its borders for firms keen to expand into the rest of the continent from a South African base.

Infrastructure development and investment is taking place in many nearby countries, creating new roles for legal experts and advisers.

UK North-south divide in solicitors' salaries

There are many differences between the north and the south of England, which can be simply summarised by suggesting that the south is the good bit and the north is the bad bit.

Well, maybe not - if you're a whippet and flat-cap enthusiast, there's plenty to keep you entertained past the Watford gap.

This latter news will be pleasing for solicitors in the north of the country, who have seen a major pay gap emerge between them and their southern cousins.

The Law Society's 2013 annual earnings factsheet, based on a survey of 1,506 randomly selected private practice solicitors, found median earnings of £47,000 for southern lawyers, reports Legal Futures. This dropped to £40,000 for northern respondents.

Wales was the most improved area on this metric, jumping to £41,000, up from £38,000 last year.

However, those working in Greater London are still outperforming all their counterparts, with median salaries of £73,000.

Gender disparity remains an issue, with male solicitors tending to earn more than woman at each grade throughout their career and an average gap of 30 per cent.

Law Society chief executive Des Hudson said: "A solicitor's salary should reflect their experience and skills, not their gender. We encourage employers to judge a solicitor on merit rather than on their background or the number of hours clocked up each week."

Female lawyers to get their own football league

There has been a great deal of debate over the role of women in the legal profession recently, with studies highlighting how much they are struggling to reach the top tiers of the industry and the possibility of quotas raising its head once again.

It is undeniably a complex situation - how much are individual career choices to be factored in? Is unconscious bias an issue? Would making it mandatory to promote a certain number of female workers smack of tokenism?

Well, I don't know. But on the bright side, female lawyers in London will now be able to take out their career frustrations through the time-honoured ritual of stamping viciously on their boss's ankle and pretending it was an accident, because they are getting their own football league.

Until now male lawyers, barristers and clerks have been on their own, with the 23-strong London Legal League set up in 1966, reports the Lawyer magazine.

But now its founder, retired Baileys Shaw & Gillett partner John Wilson, is setting up a new league for women and feels that their growing representation within firms should be mirrored on the pitch.

"I've made many friends in the legal profession over the years through football, some of whom are substantial partners in their firm."

"I used to kick lumps out of them on the pitch and we're still pals, that's what it's all about. We have currently six or seven firms who are definitely interested in joining. They'd only be playing five or seven-a-side which means that you don’t have to have that many players available for the matches," he added.

Well, it might not help get more female lawyers partner status, but it's definitely a start.

Money - can't buy you love?

What motivates you in your career? The chance to take part in prestigious cases? A burning desire to prove yourself? Or is it, well, money?

Not to be too cynical, but the general assumption - especially in relatively well-paid professions such as the legal one - is that most workers are motivated by their pay packet.

However, there are signs this may not be true. For instance, some lawyers are tempted by the better work-life balance offered by in-house roles, despite the fact that these might be less remunerated.

A new survey of lawyers in four states produced by Florida State University measuring 'subjective well-being' found that legal workers in 'prestige' jobs, who had the highest grades and incomes, aren't as happy as lawyers working in public-service jobs for substantially lower pay.

Judges were the happiest of all, presumably because of those wigs.

"Factors marginalised in law school and seen in previous research to erode in law students (psychological needs and motivation) were the very strongest predictors of lawyer happiness and satisfaction," explained the study.

"The data therefore also indicate that the tendency of law students and young lawyers to place prestige or financial concerns before their desires to 'make a difference' or serve the good of others will undermine their ongoing happiness in life," it concluded.