Continental Breakfast: your daily update on what’s happening in Europe.
The legal services industry isn’t exactly known for innovation.
Lawyers are inherently conservative and change averse animals, and law firms have as a result tended to be years behind other professional services businesses when it comes to areas such as technology, working practices, business development and marketing.
But things are slowly starting to change. Thanks in part to growing competitive and cost pressures, firms are beginning to commit significant time, effort—and money—into finding new and more efficient ways to practice. Witness the recent rise of artificial intelligence within the industry—several leading U.S. and U.K. firms have started utilizing machine learning software in order to speed up document review.
What innovation is to be found within law firms is generally driven by management and operations directors—or external consultants. It rarely involves meaningful input from those in the lower echelons of the employee food chain.
Kudos, then, to London-based Simmons & Simmons, which has launched a new initiative that will allow its lawyers to apply for a break from fee-earning in order to dream up ways in which the firm might modernize its business.
It is a genuinely innovative approach to innovation and a great idea. Not only does the involvement of a large number of diverse perspectives increase the likelihood of effective new ideas being generated, it should also help foster employee engagement and, I would imagine, boost morale by showing junior lawyers that those running the firm value their input. Not to mention the fact that it is more cost effective—an associate’s time is far cheaper than that of a senior partner or strategy consultant.
Simmons lawyers will have to pitch their ideas to a committee of 10 partners and the firm’s heads of business development, human resources, information technology and marketing. If selected, lawyers will be given time and possibly even financial support to work on their proposals.
It isn’t the first example of innovation at the firm. Earlier this year, Simmons launched a 100,000 pounds ($123,000) fund to provide free lawyering to financial technology startups—a move recently followed by a number of other U.K. law firms.
National midmarket practice Addleshaw Goddard announced earlier this month that it will provide up to 500,000 pounds ($620,000) of mentoring and legal advice to fintech startups over the next 12 months, while Slaughter and May is currently selecting fledgling U.K. fintech companies that will each receive up to 30,000 pounds ($37,000) of work free-of-charge.
Brexit Delays U.K. Financial Regulatory Reform
The U.K.’s financial regulator has warned that a planned reform of rules governing the sector will have to wait until the likely outcome of the country’s withdrawal from the European Union becomes clearer, the Financial Times reports.
The Financial Conduct Authority’s chief executive Andrew Bailey said that the regulatory review had a “tie-over” with Brexit.
The U.K.’s decision to leave the EU has left British-based businesses facing an uncertain regulatory outlook. Financial institutions are particularly concerned about a potential loss of access to the EU single market, which many rely on to run European trading operations out of London. There are questions over whether financial institutions will be able to continue to access the single market via the EU’s so-called “equivalence” rules, which requires a country to demonstrate that its regulatory environment is comparable to that of the EU.
The U.K. government has proposed a historic bill that would see all EU rules converted into British law as soon as the country leaves the political bloc.
Olswang’s Pre-Merger Exits Continue
In yesterday’s column, I mentioned how partners have been leaving London-based media and technology specialist Olswang ahead of its merger with CMS Cameron McKenna and Nabarro.
The latest to head out the door is corporate technology partner Rob Bratby, who is set to join Arnold & Porter’s U.K. office.
News of his departure comes just one day after The American Lawyer’s U.K. sister title Legal Week reported that Olswang’s patent prosecution co-chair Justin Hill is set to join Dentons’ London office as head of its European patent prosecution and opposition practices. Olswang restructuring chief Alicia Videon previously left the firm for McDermott Will & Emery, while life sciences co-head Stephen Reese has moved to Clifford Chance.
Olswang partners were forced in early October to sign a lock-in that commits them to staying at the firm for 12 months after the three-way merger goes live in May 2017. Those that refused will have to leave the firm before the combination, which could ultimately be joined by a U.S. firm, takes effect.
Bratby, who until recently managed Olswang’s Asia practice, is heading from one merger situation to another, with Arnold & Porter recently agreeing to combine with Kaye Scholer.
Almost all of the largescale combinations involving U.S. law firms over the past few years have been cross-border. DLA Piper, Dentons, Hogan Lovells, Norton Rose Fulbright, Squire Sanders…the list goes on. The deal to create Arnold & Porter Kaye Scholer, as the firm will be known from Jan. 1, 2017, bucks that trend. In fact, it is the first tie-up between two Am Law 100 firms since Locke Lord and Edwards Wildman Palmer got together in January 2015.
The vast majority of the new firm’s 1,000 lawyers—more than 90 percent, according to my calculations—will be based in the United States. Kaye Scholer does have outposts in Frankfurt and Shanghai, and Arnold & Porter in Brussels, but they’re tiny, collectively housing less than 30 attorneys.
Arnold & Porter has just under 50 lawyers in London, with a relatively broad practice covering everything from corporate and antitrust to intellectual property. The office is best known for its strength in the life sciences and pharmaceuticals sectors—particularly in product liability defense work. Kaye Scholer also has an outpost in the city, but its small, 18-lawyer practice largely focuses on funds and midcap private equity work.
Post-merger, London will be Arnold & Porter Kaye Scholer’s fourth-largest location, after Washington, D.C. (400 lawyers), New York (325 lawyers) and California (175 lawyers in three offices).
It will also be one of the largest London offices of any U.S. law firm. While American firms have collectively had a massive impact on the London market—particularly when it comes to the recruitment of leading partners—few have managed to individually impose themselves across the Atlantic. So while the latest NLJ 500 data shows that around 90 U.S. firms now have offices in the U.K. capital, employing more than 6,000 lawyers, most of those practices remain small. In fact, excluding the products of large-scale trans-Atlantic mergers, just 10 U.S. firms have more than 100 attorneys in London. Most have fewer than 60.
Arnold & Porter chair Richard Alexander has said that the firm will be seeking to expand in London following the merger and will take on additional office space once the combination completes.