Agenda | Spring 2016
Policing in-house counsel
The Financial Conduct Authority (FCA) launched a consultation in January on whether in-house lawyers at finance houses should be policed under the incoming Senior Managers Regime, in an attempt to clarify uncertainties regarding the overall responsibility of an in-house legal function under FCA’s rules. Bringing lawyers under the regime, designed to boost accountability in the City, could potentially usher in yet another front for finance counsel and conflict with the professional regulation of solicitors.
Panels and price freezes
Underlining the increasing friction between major banking clients and advisers over panel terms and rates, The Royal Bank of Scotland’s law firm panel review ended in January with the state-owned bank’s bluff apparently being called. RBS had asked for a five-year freeze in rates in return for an extended period on its adviser roster but all major firms declined. Those confirmed again to its panel for three years included Clifford Chance, Linklaters and Allen & Overy.
ITV in January became the first in-house legal team to sign up to Rare’s Contextual Recruitment System, underlining the spread of diversity initiatives seen at law firms into major in-house legal teams. As the first to offer an in-house solicitor apprenticeship under the new Trailblazers Apprenticeship in Law initiative, the broadcaster has committed to using the system to broaden its potential talent pool. Progressive in-house teams will be hoping to further build on their reputation for outclassing private practice on diversity.
Legal costs still hitting major banking groups
The first quarter of 2016 saw the UK banking reporting season in full swing, with Lloyds Banking Group, Standard Chartered and HSBC all raising their provisions for settlements and legal claims.
The numbers are significant: Lloyds’ annual accounts showed provisions for legal actions and regulatory matters came in at £813m, an increase from £521m the previous year; HSBC revealed its legal settlements and provisions increased to $1.7bn from $1.2bn the previous year; and Standard Chartered’s annual provisions for regulatory settlements and legal claims rose by 6% to $115m.
Birth of a behemoth
Royal Dutch Shell kicked off a review of its external legal roster following its £47bn acquisition of BG Group in January and as the term of its existing panel comes to an end. Both companies re-organised their in-house legal teams, with BG’s legal head Tom Melbye Eide (pictured) appointed GC for the upstream business at Shell. The merger unites Shell’s 700-lawyer global legal team with the 85-lawyer equivalent at BG and brings together two of the best-known corporate counsel teams in Europe.
Who will represent corporate counsel?
The possibility that in-house counsel will soon be relieved of the burden of paying practising certificate fees to support the Law Society has rapidly become a realistic possibility after the UK government late last year said that it was considering fully separating the society from the Solicitors Regulation Authority. The Law Society has often been criticised for failing to represent in-house counsel effectively, though current chief executive Catherine Dixon (pictured) is given credit for seeking to bolster links with the C&I community. The society currently receives over £30m a year to carry out its representative activities.
Safe Harbour 2.0
In-house lawyers were given much-needed guidance on data protection law last quarter after an agreement was made between the EU and the US in February to make it easier for organisations to transfer data across the Atlantic, replacing the now invalidated ‘safe harbour’ scheme, which
has been challenged in the European courts. The headlines the deal attracted reflects the increasing struggle for business and general counsel in managing data amid an increasingly complex global regulatory framework.
Brexit looms as GCs struggle to draw up a game plan
The UK government confirmed in February that the upcoming referendum on UK’s membership of the EU will be held on 23 June in what is one of the biggest issues facing business – and general counsel – for years. Research conducted across IHL and its sister brands Legal Business, The Legal 500 and GC, confirmed that general counsel are hoping that the UK stays in – with 64% against and 25% backing Brexit. The wariness of lawyers reflects concerns regarding UK investment and the sheer challenge of unpicking 40 years of UK/EU legislative activity.
In-house counsel are already facing headaches over ring-fencing reform, as the UK’s biggest banks work towards splitting their retail and investment banking operations to comply with new regulations set to come into force on 1 January 2019. Lloyds Banking Group asked panel firms to pitch for ring fencing-related work last quarter. The issue is expected to feature increasingly prominently on the agenda of major banking groups, who are already struggling with a heavy regulatory load.
Moves that matter
- Colt Group’s longstanding general counsel Robin Saphra departed the company following a business review. Saphra was succeeded by Caroline
Griffin Pain, who becomes company secretary and legal counsel.
- Insurance group RSA saw the surprise departure of high-profile legal chief
Derek Walsh. Succeeded by deputy Charlotte Heiss, Walsh’s departure meant delays to RSA’s panel review for the third time since last year.
- RB (formerly known as Reckitt Benckiser) appointed Linklaters senior corporate partner Sarah Wiggins as interim GC after its group legal affairs chief Claire Debney departed in the business in February, less than a year after the departure of former leader Bill Mordan to Shire.
- Longstanding Credit Suisse managing director and EMEA general counsel Maria Leistner (pictured above left) has resigned for rival UBS, where she will succeed Andrew Williams as wealth management GC. Set to locate to Zurich, Leistner will carry out a review of UBS’s current panel.
- Royal Bank of Scotland lost general counsel John Collins to Santander UK just 11 months into the role. Having ran a team of over 400 lawyers at RBS, Collins joins Santander UK as director of legal, compliance, regulatory affairs and anti-money laundering. Collins, the longtime deputy to predecessor Chris Campbell, is one of the UK’s most prominent in-house counsel in banking and regarded as a significant loss for RBS.