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The Times

Friday, September 23 2016

Frances Gibb and Jonathan Ames bring this morning’s must-read of all things legal, including news, comment and gossip.

Today

  • Women solicitors earn 19% less than men
  • Supreme Court to rule on Taliban claim against army
  • US firms target Linklaters for partner raids
  • Ex-Tory MP instructs Carter-Ruck to delete naked photos
  • Barristers must speak English, demands watchdog
  • Brexit countdown: Passports lost and found
  • Comment: Rulebook reforms will damage solicitor brand
  • Blue Bag diary: One baked earlier for Labour
  • More Blue Bag: Old school lawyer creates an old school brigand

Tweet us @TimesLaw with your views.

 
Story of the Day

Women solicitors earn 19% less than men across profession

Male solicitors are earning dramatically more than their female colleagues at law firms across England and Wales with pay levels that are 19 per cent higher, research reveals.

The stark gap shows that male salaried partners at the top end of the earnings bracket are making as much as £60,000 more than women at the same level.

Male partners are on £135,000 a year while women counterparts are on £75,000, the research from the Law Society shows. The higher up the seniority ladder, the wider the pay gap. At junior levels male solicitors earned 10.6 per cent more than women.

Top earning women equity partners at law firms on average take home £150,000 annually, while their counterpart male partners earn £30,000 more. However, at the top end of the junior ranks, the gap is much closer, with men earning £67,000 and women not far behind at £63,000.

According to the research by the Law Society, which acts as a quasi-trade union for solicitors, the median average annual salary across all private practice law firms last year was £54,000, a 4.8 per cent increase on the previous year.

Predictably, across all areas of practice, earnings were highest in London, with a median figure of £76,000. Solicitors in the East Midlands drew the short end of the earnings stick, with a median of £38,500. The researchers found that specialising paid dividends. Those solicitors who spent more than half of their fee-earning time on a specific practice area had higher median earnings than non-specialists.

The survey also confirmed what solicitors working in the dwindling areas of law that attract state funding have known for years – they are getting poorer. The research found that lawyers working for legally aided clients had 32 per cent lower earnings than those without legal aid clients, meaning that equity partners without legal aid clients earned as much as £125,000 a year more than those who did not.

Those who spent no more than half their fee-earning time with legal aid clients earned over £20,000 more than those who spent a greater amount of time on legal aid work.

At the lower levels the gap is at least starting to narrow: since 2000 women junior solicitors’ median earnings have risen by 18.6 per cent (based on 2015 prices), compared with a 10.2 per cent increase in men’s median earnings. Since 2000 the earnings of women in the top 25 per cent have increased by 33.7 per cent compared with a 9.5 per cent increase in men’s earnings in the same bracket.

Catherine Dixon, chief executive of The Law Society, said: “We want all solicitors to be confident that the law is a profession where talent, ability and application are rewarded irrespective of gender or background.” She said that the society “encourages all firms regularly to review their pay policies to identify reasons for any gender pay gap and to address them.”

Jessica Standley, chairwoman of the London branch of the Association of Women Solicitors, added: “Whilst it is encouraging that the gap is narrowing it is disappointing that in 2016 there is still such a discrepancy in pay particularly in more senior positions. We hope that firms will continue to properly remunerate women solicitors in senior positions and ensure that the gap continues to narrow.”

 
 
News Round Up
Supreme Court to rule on Taliban claim against British army

A human rights law firm heavily criticised for its involvement in unfounded claims of abuse against British soldiers in Iraq is behind more than half the allegations of war crimes by UK forces in Afghanistan, it emerged yesterday, writes David Brown.

Leigh Day is representing, among others, a Taliban commander who made bombs to kill British soldiers in a case which could pave the way for millions of pounds of compensation claims from hundreds of Afghan militants.

The Supreme Court will rule as early as next month if the Ministry of Defence has to pay damages to Serdar Mohammed because he was kept in custody by British troops for three months after his capture.

After Mohammed was handed to the Afghan authorities he was convicted of taking part in the Taliban insurgency which claimed the lives of 456 British servicemen and women.

A ruling in the case is awaited as it was revealed yesterday that police investigating alleged war crimes by British military personnel in Afghanistan have received 664 complaints relating to 181 individuals.

Investigators have already dismissed 93 of the cases but are still investigating 551 cases of alleged ill-treatment relating to 157 individuals, including Mohammed.
None of the cases investigated so far have uncovered evidence strong enough to be referred to the Service Prosecution Authorities which rules on whether soldiers should face criminal charges. Fewer than five serving and former soldiers have been interviewed under caution.

A Whitehall source said yesterday that Leigh Day represents 81 of those complainants still under investigation. Martyn Day, the founder of the law firm, is facing a solicitors’ disciplinary hearing next year over allegations the it paid prohibited referral fees of up to £75,000 to those claiming abuse in Iraq and failed to provide crucial documents to an inquiry in alleged abuse.

A spokeswoman for Leigh Day said it is acting for 90 Afghans in cases against the MoD who allege they were unlawfully detained or mistreated or their relatives were unlawfully killed. Most of the claims are on hold pending the ruling in the Mohammed case, she added.

The spokeswoman said that the criminal investigations “are separate from the civil cases brought by Leigh Day on behalf of Afghan citizens which are all brought against the MoD, not individual soldiers and concern allegations of unlawful detention, abuse whilst in detention and unlawful killings”.

US firms poach partners from Linklaters above magic circle rivals

Four firms in the City of London are more vulnerable than any others to poaching raids by US rivals, a report published yesterday claims.

In the crosshairs of the Americans toting large wallets are King & Wood Mallesons, the Anglo-Sino-Australian practice, Linklaters, the magic circle player, Berwin Leighton Paisner, another City firm, and the London office of Kirkland & Ellis, which is itself a US-based practice.

Research from The Lawyer magazine pointed at KWM as being the most vulnerable, with US firms having poached 12 partners from the practice since the start of last year.

The report claimed that of the magic circle firms, Linklaters was the most targeted by US predators: the firm has lost 10 partners to US firms in the Square Mile since the beginning of last year. Of the rest of the magic circle, Freshfields Bruckhaus Deringer has seen five partners go to US firms, Allen & Overy four, and Clifford Chance three.

Kirkland & Ellis, which is based in Chicago, is in the odd position of being both a poacher and victim. According to the report,12 of its partners during that time have gone to the London outposts of US rivals but at the same time, Kirkland has itself poached five Linklaters’ partners.

The report states: “Kirkland has one of the highest churn rates of all the US firms in London, according to the International Top 30. A total 76 per cent of City partners promoted since 2011 are still with the firm.”

Ex-Tory MP instructs Carter-Ruck to delete naked photos

The former Conservative MP Brooks Newmark has instructed a law firm to have archived pictures of his naked selfies deleted from the internet.

Newmark, 58, resigned as minister for civil society in 2014 after he was found to have sent sexually explicit photographs of himself to a female undercover journalist he thought was a party activist.

The married father of five has now instructed the media law firm Carter-Ruck to ensure that his selfies are removed from the internet on the ground that he owns the copyright to the photograph.

Alasdair Pepper, partner at the law firm, is asking all newspapers and any other publishers to take down the photograph of “our client partially dressed at his home”.
The firm is not requesting that any story associated text be removed. However, it argues that any use of the photograph without permission is in breach of copyright.

Since he left politics, Newmark has been studying at Oxford University. Carter-Ruck confirmed it was acting for Newmark. The move is not unprecedented: some years ago the firm took similar action over a photo used by restaurant owners in a mock-up poster of Michael Winner.

Barristers must speak English, demands watchdog

Some of the greatest orators of British history have been members of the English bar – but the regulatory body is clearly worried about falling standards, having issued an edict demanding that barristers must be able to speak English fluently and communicate using “correct … grammar, spelling and punctuation”.

The list of “threshold standard competences” from the Bar Standards Board – the watchdog for the 15,000 practising barristers in England and Wales – has been sent to all chambers.

The 36-page document sets out “the minimum level or standard to which the competences should be performed on day one of practice”.

Some might take the view that much of the document falls into the category of stating the obvious, but clearly the board considers that young barristers needed to be reminded to speak proper.

Barristers, says the “professional statement” document, “will have an effective command of the language and be able to use it appropriately, accurately and fluently so as to handle complex and detailed argumentation”. Some older barristers might query whether “argumentation” is actually an English word.

Nonetheless, the statement ploughs on. Barristers, it says, should “use correct and appropriate vocabulary, English grammar, spelling and punctuation in all communications”. And finally, just in case there was any confusion, the board demands that barristers must “speak fluent English”.

A spokesman for the regulator told The Brief that the “competences … will be widely recognised by practising barristers but one of our key aims here is to help training providers and students to understand what standard and competences are expected of barristers from day one”.

Brexit countdown – legal update as leave approaches

Passports lost and found

Edward Fennell reignites The Brief’s Brexit updates, a series of articles in the run-up to B-day – if it ever comes, of course …

During the “phony war” period prior to serious engagement with the European Commission over the terms of Brexit, a mix of fear and hope is felt across the business scene. In particular, more than 5,000 UK businesses are reckoned to be worried about the prospect of losing their financial services “passporting” rights.

Passporting is claimed to be impossible without freedom of movement. But is that entirely true? Look more closely and the regulations are not always what they seem. For example, take the Alternative Investment Fund Managers Directive (AIFMD), which prescribes the regime relating to the marketing and management of funds within the EU.

As Simon Currie, a partner at the London office of Morgan Lewis, a firm based in Philadelphia, points out “The AIFMD specifically provides for fund managers in non-EU countries to take advantage of the AIFMD passport to market and manage funds in the EU if there are no significant obstacles from an investor protection, competition, market disruption and systemic risk perspective.” Crucially, points out Currie, “acceptance of free movement principles is not part of the equation”.

The AIFMD arrangement is not unique. According to Currie: “A number of more recent EU directives contain equivalence regimes for non-EU firms under which the benefits of the directive can be extended to firms outside the EU provided that, broadly, they are subject to equivalent standards as those set under the relevant directive.

These equivalence regimes are not conditional upon acceptance of free movement of people, so are not incompatible with a Brexit outcome under which the UK imposes controls on EU migration.”

Of course whether the Brussels negotiators will be minded to agree that UK arrangements are “subject to equivalent standards” is likely to be a matter of diplomatic goodwill.

In Brief

Why their profession’s failures mean lawyers don’t win top City jobs – London Evening Standard

Why Hire a Lawyer When a Robot Will Do? – Bloomberg

Ai Wei Wei lawyer jailed for 12 years – The Times

Kuwait lawyers fight world’s first mandatory DNA sampling law – New Scientist

Italian lawyer sues airline after 'enduring' nine-hour flight seated next to an obese man – Daily Mail

 
Byline
Comment

Rulebook reforms will damage solicitor brand Corinne Staves

The legal professional faces the risk of permanent damage if regulators do not listen to City of London solicitor warnings over proposed regulatory changes. This could be bad news for clients, solicitors and the Square Mile.

The Solicitors Regulation Authority says that the changes will bring regulation up to date and lead to better innovation and competition, but interested parties are not convinced.

Currently, firms must be fully regulated when individuals operate as solicitors or perform “reserved legal activities”, which includes court work, conveyancing and drafting deeds.

In future, it is proposed that all solicitors will be subject to a code for individuals, imposing competence and ethical standards, but only regulated entities will be subject to the code for firms and its stringent prudent and ethical business management obligations.

Of course, City legal work is often not reserved – for example, mergers and acquisitions and capital markets transactions. This should mean that de-regulation offers City clients better choices and lower costs. Under the current proposals, it is not that straightforward.

For example, solicitors in unregulated firms will not be required to carry a minimum level of professional indemnity insurance to cover claims for negligent advice.
Unregulated entities may choose to carry it but clients will have no comfort on cover levels, and no assurance that those levels will not reduce in future.

Regulated firms will continue to be subject to strict rules when handling client monies. But while individual solicitors will be prevented from holding client monies, unregulated entities through which they operate will be able to hold monies without being subject to any rules on how those funds must be handled and segregated from business monies.

Advice from regulated firms and individual solicitors will continue to attract legal privilege, and the client confidentiality this assures. Unregulated entities will not, meaning that clients will have an unenviable choice: instruct the unregulated entity and forgo privilege, or instruct the individual and secure privilege but – in the event of a claim – have recourse only to the uninsured individual and their personal assets.

While solicitors in unregulated entities will be bound by conflict and confidentiality rules, the entity will not. What scope will individual solicitors have in influencing entity-wide policy decisions about systems and processes, including on client acceptance, to ensure that conflicts do not arise and confidential information is sacrosanct?

Clients will not be able to quickly, easily and clearly understand the implications of instructing a solicitor in an unregulated entity rather than a regulated firm. Costs should arguably be lower as a result of reduced overheads, which will be welcomed. But it may not be until after the event that clients fully appreciate the value of having tightly regulated, well-supervised and well-insured advisers.

Unless the SRA takes heed of the warnings from the City and overhauls the current proposals, the future looks gloomy for clients, and for the legal services profession as a significant contributor to the UK economy.

Corinne Staves is a partner at Maurice Turnor Gardner, a City of London law firm

 
 
Tweet of the Day

A lawyer is a person who writes a 10,000-word document & calls it a brief -NeilHudgell quotes Kafka in comedy slot @legalfutures #pifutures

Catherine Baksi @legalhackette

 
 
Blue Bag

One baked earlier for Labour

Punters will have to wait until tomorrow morning for the much-anticipated Labour Party leadership result, but one law firm is getting its ducks in a row early to cover both eventualities.

Stuart Thomson, head of public affairs at Bircham Dyson Bell, one of London’s small coterie of parliamentary agent and lobbying law firms, electronically swanned around Fleet Street newsrooms yesterday touting analysis of the one-I-prepared-earlier variety.

If the bookies’ favourite, Jeremy Corbyn, romps home, then Thomson will say: “It is difficult to know how many MPs will want to be reunited with the party leadership now that Corbyn has won again. Many will simply prefer to remain quiet on the backbenches. A split looks unlikely but the more desperate MPs and members become, the more likely a radical solution becomes.”

If the outsider, Owen Smith, pulls off an upset, not to worry – like any good scout Thomson is prepared. He will say: “Having become Labour leader, Owen Smith’s troubles are only just beginning. Internally, he needs to be reproached with Momentum and work out how the large membership can continue to be engaged and motivated in a positive way.

“Critically Owen Smith needs to raise his public profile. If he wants to win an election, he needs to demonstrate party unity but also gain a profile that has so far eluded him.”

Check against delivery in about 24 hours.

Old school lawyer creates an old school brigand

Richard Gregory sounds like The Brief’s kinda lawyer … a combination of Judge John Deed and the Philip E Marlow character from Dennis Potter’s The Singing Detective.

Gregory is the lead character in a recently published novel from Michael Simmons, a former partner at what was Finers (and is now Howard Kennedy), who practised partnership law for more than 50 years. The book, Low Life Lawyer, is set in the 1950s and 60s, charting “the rise and fall – and rise again – of a rogue lawyer who happens to be a talented jazz clarinettist”.

His former partner, the ever-present and avuncular Mark Stephens , describes the story has having “overtones of Kingsley Amis” with Simmons depicting “a world of privilege governed by the old boy network where public school-bred professional piracy brings profit, and the biggest brigand of all is Richard Gregory”.

If only there were more of his type prowling the City of London today.

On their bikes …

The latest group of lawyers squeezing into ill-fitting Lycra and jumping on expensive touring bikes that they are unlikely to understand set off yesterday from London and headed for Paris.

The Mackrell International London2Paris was founded by Mackrell Turner Garrett, a City law firm, and now involves a range of professional services practices including legal outfits.

This year they are enduring the pain in aid of Larchfield Children’s Home, a charity established to help Tanzanian children whose parents have died of AIDS, and Vaincre la Mucoviscidose, a French charity that provides support to patients and their families affected by cystic fibrosis.

So far, more than £15,000 has been raised with more donations flowing in as the cyclists ducked and dived their way through London traffic en route to Dover.

 
 
Closing Statement

Time and money

In a world in which time is money, the experts with the strongest stories of what that means are physicists and lawyers, ponders Gary Slapper. And sometimes those two fields are brought to bear on the same issue.

In 2001, to show that his client had submitted a form on time, a lawyer from New South Wales tried to show that there was between the 14th and 15th of October, a gap of “a thousand millionth of a second”. He failed.

The court wasted little time (depending on how you measure it) in rejecting that argument. That there was no such time bracket might have disappointed some law firms on the lookout for new slots for fee-earning work.

A colourful picture of the way in which some law firms measure time once appeared in a cartoon in the New Yorker. Sitting at his desk, a partner is giving some final advice to a young associate just leaving his induction meeting. “Remember,” the partner says “to round each billable hour off to the nearest week.”

Gary Slapper is global professor at New York University, and director of its London campus; twitter @garyslapper