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Laurence Simons Newsletter November 2015

Posted by: Laurence Simons 06/11/15

Are European gender quotas effective?
How Facebook could get you a job in compliance
Latest general counsel survey results
Lawyer under fire: When the traffic lights go out
Morocco tops firms’ “most wanted” lists
Anti-corruption measures boost Romanian legal sector
UK legal sector cyberattacks on the rise


 

Are European gender quotas effective?

Germany has recently launched a compulsory gender quota aimed at getting more women into top positions. In both the country’s business world and its legal sector, female leaders are few and far between.

Handelsblatt newspaper recently published a survey revealing that 59% of mid-size companies in Germany don’t have a woman in a leadership position, compared with an EU average of 36%. The Social Democrats justice minister, Heiko Maas, commented, “The quotas … are the biggest contribution to equal rights since the vote for women was introduced”, and added that the legislation will provide the impetus for a large cultural change in Germany. This brings new hope for female lawyers that the glass ceiling many have experienced is growing ever smaller.

Yet over in Norway, there has been a gender quota law in place for eight years and there are still zero female CEOs in the country’s 60 largest companies. Similarly, in the legal sector, the number of females who make partner dwindles. In a survey conducted by Norwegian researcher, Mari Teigen, only 37% of male respondents believed that women added any profitability by being at senior leadership level – compared to 58% of women.

So what can we learn from this? Are quotas redundant? Regardless, it seems there is a long stretch of the road to gender equality still to be travelled.

 


 

How Facebook could get you a job in compliance

Facebook, the tech giant, currently boasts over a billion users worldwide, a UK income of over £100 million and a tax bill of merely £5,000 – lower than most British workers. Yet the most surprising part is still to come; this is totally legal.

“Double-Irish” tax avoidance strategies are currently used by many industry giants including Starbucks, Apple, Microsoft and Google to shift money from higher tax countries to lower ones. So, for example, a large company will use different corporate entities so that a purchase initiated in the UK is “completed” in Ireland or Luxembourg.

But what does this mean for compliance professionals? Well, not much at the moment. But due to HM Revenue and Customs announcing that there is a £34 billion deficit in taxes owed, Chancellor George Osborne has announced that he plans to crack down hard on firms that are paying low amounts. It is thought that new legislation – announced in the upcoming autumn statement – will force companies to declare all of their UK profits. There will also be new criminal penalties imposed on any banks or accountants that aid tax evasion. So brace yourselves, it looks as though the compliance sector is about to get a whole lot busier!



 

 Latest general counsel survey results

Recent research from the Association of Corporate Counsel has revealed that two in three would leave their jobs if a better option came along. Hardly too surprising, yet 30% would also consider a lateral move.

The survey also indicated that the general working week for these professionals is roughly 49 hours long, which is in excess of average US and European workweeks of 40 and 35 hours, respectively. Despite this, however, in-house lawyers in Spain, Israel, Germany, the Netherlands, Belgium, Canada and the US reported higher than average job satisfaction.

As well as this, almost two thirds of respondents revealed that they have cross-border or multinational work responsibilities – which is a figure that rises to 86% and 82% respectively for corporate counsel in Europe and Asia Pacific. This goes some way in showing the truly international nature of most large modern companies.

Lastly, a resoundingly low 17% of those surveyed reported identifying as a minority, yet there are some signs of improvement. In the US, percentages of in-house lawyers who identify as an Asian/Pacific Islander rose from 5% to 7% between 2011 and 2015 and, similarly, from 3% to 5% for Hispanic respondents. Despite this, the percentage of respondents identifying as African American/black remained at 4%. It seems that true diversity within the corporate counsel community is still some way off.



 

Lawyer under fire: When the traffic lights go out

David Haigh, a UK solicitor, has recently been ordered to pay more than £200,000 in court costs after his claims of “human trafficking” were rebuffed.

Mr Haigh was arrested in May 2014 on suspicion of fraud, embezzlement and money-laundering, and has remained in custody in Dubai ever since – regardless of not yet being charged. Yet, in a bizarre twist, he is claiming that there was a “conspiracy” working on his incarceration all along.

Earlier this year, he launched a case against a senior lawyer and two executives from his former employer GFH Capital, claiming that they had engaged in “human trafficking” as a means to lure their innocent victim to Dubai. Their encouragement regarding his travels, the arrangement of a visa, settlement of a substantial immigration fine for his staying outside of the UAE for over six months and the procurement of an air ticket are all, apparently, evidence of their evil scheme.

But there is a silver lining for Haigh.

Oh wait, there’s not.

Courts won’t release money from his bank accounts until it has been proven that it belongs to him, so he is planning to defend himself in an Arabic-speaking Sharia court.

One thing it is quite clear: that David never learnt not to struggle when you’re sinking in quicksand – ironic considering he was “trafficked” to a desert city. Perhaps he’ll sue.



 

Morocco tops firms’ “most wanted” lists

Historically, Morocco has been a playground for French legal firms. Yet a new dawn of the country’s legal sector is upon us. A fresh, multi-tiered market is emerging whereby Anglo-Saxon giants, European firms and a number of developing independents compete for clients. 

Yet this is not a new phenomenon; one week in July 2011 saw Allen & Overy, Clifford Chance and the then-Norton Rose all launch in Casablanca. One year later, Baker & McKenzie came onto the scene, and since, many more big players have rooted branches in the country.

But why are so many firms relocating?

Well aside from strong cravings for a good tagine, these moves are also strategic, with Morocco providing a gateway to fast-developing Africa. Simon Levine, global co-CEO at DLA Piper, commented that strong growth levels across Africa are increasing opportunities for investment. This, in turn, is resulting in a rising demand for legal services. He remarked that: “Over the past decade, six of the top 10 fastest-growing countries were in Africa and the continent continues to grow – the African Development Bank has forecast a five per cent growth in GDP for 2016 and US$73.5 billion in foreign direct investments in 2015.”

Don’t forget to pack your sunscreen!


 

Anti-corruption measures boost Romanian legal sector

Anti-corruption measures within Romania are gathering momentum – so how are they affecting the country’s most booming parts of its legal sector?

Many investigations related to political events, public officers and a range of economic activities have recently been undertaken. The conviction from the government to resolve issues of this nature is going some way in encouraging investment from overseas. Yet most of the legal work – including in areas such as energy and infrastructure – still resides within the country’s own walls.

However, many long-term developments within these sectors are public projects and many are being halted by the government in a bid to combat corruption. Law firms are having to adapt to find the best business solutions for the companies affected – and some are reaping the rewards. Not only this, but there is lots of new legal work emerging from the banking sector – not necessarily on the finance side, but within restructuring, consolidation and balance sheet clean-up.

Yet there is a darker side. Ever-decreasing budgets within the legal sector mean that firms are being forced to innovate with services, fees and costs. High hourly rates are scarce in the face of fierce competition for clients, and so many now believe firms must run as more conventional businesses in order to remain profitable. Yet the law in Romania still prevents this, and management options are restricted – such as the use of advertising.

So what next? Romania must continue on its path of battling corruption, yet must be wary of the strict limitations it is placing on sectors – such as legal – that could otherwise be set to grow.


 

UK legal sector cyberattacks on the rise

The Solicitors Regulation Authority, a body which operates throughout England and Wales, has revealed that increasing numbers of law firms have fallen prey to cyberattacks so far this year. This number marks a rise from last year, and is evidence that hackers are becoming increasingly sophisticated and innovative when breaching legal sector security systems.

In each case – and there have been roughly 50 – between £40,000 and £2m has been stolen through schemes which include phishing for bank details, malware spying on individual computers, redirection of sensitive emails and the transference of standing orders. In fact, some lawyers even report having received emails claiming that their firm has changed its banking details, and asking for individuals’ private financial information – a technique which is described in cyber tech terms as “as smooth as sandpaper”.

Although firms are consistently instructed to keep up to date on security software updates and installations, systems are still being hacked. Steve Wilmott, head of intelligence and investigations at the SRA, commented: ‘We don’t want to deter you from using new technology and you can’t gold-plate every aspect of your service, but you can mitigate the risks.’

So keep your eyes peeled, don’t give out financial – or any other – information unless you know who is receiving it and perhaps consider getting a little more inventive than “123password”. Unless you’re actively seeking the kind of publicity TalkTalk has just “enjoyed”.