Firms' search for experts prompted in part by tougher laws andmore aggressive regulation as businesses grapple with wrongdoing claims
After decades of being over shadowed by their corporate colleagues, white-collar crime lawyers are among the most sought-after hires at London's top firms. LouiseHodges, head of the white-collar crime practice at Kingsley Napley, said “the headhunters are very busy”, while Jonathan Pickworth, a partner at US firm White & Case, described the sector as “very hot at the moment”.
“Every firm would love to have more white-collar capability,” said Nick Pale-ocrassas of the legal recruitment firm Major, Lindsey & Africa. “If [a lawfirm] has a motivated partner who is keen to jump ship, there will be 20 or 30 lining up to talk to them.”
A top lawyer could earn as much as $4m a year at a wealthy US firm. But even at firms with more modest pay packages, experts from the public sector can expect incomes to rise ten-fold.
The hiring spree has been prompted in part by tougher laws and more aggressive regulation. The Criminal Finances Act, which came into force last September, made companies liable for failing to prevent their employees from facilitating tax evasion, removing the need to prove there was a “directing mind” at the top of an organisation.
It followed the 2010 Bribery Act, which similarly shifted the burden of liability for bribery and corruption. In response, companies have turned to law firms to help them investigate internal allegations of wrong doing.
Several high-profile cases in the UK involving blue-chip companies, such as Rolls-Royce and Barclays, have also focused board room minds, as have fines and prosecutions on both sides of the Atlantic related to the manipulation of key interbank lending rates and allegations that banks conspired to rig the global foreign exchange market.
“There is a credible enforcement risk now,” said Ben Morgan, who joined magic circle firm Fresh fields Bruckhaus Deringer in September from the Serious Fraud Office, where he was joint head of anti-corruption. “The Bribery Act changed the criminal liability threshold, and after the Rolls-Royce deferred prosecution agreement people realised the UK threat needed taking seriously.”
Rolls-Royce paid fines to talling £671m when it reached settlements with UK,US and Brazilian authorities in January 2017. Fraud, bribery and money-laundering charges were “sufficiently serious that [companies] don't bet the farm on second-tier advice,”Mr Morgan said. “It might be expensive, it might be painful, but it's got to be right.”
Law firms better known for corporate work have realised the financial benefits of offering compliance services and internal investigations to clients, as well as having experienced white-collar crime lawyers on hand in the event of an investigation and prosecution. “Most firms want to start up [a white-collar crime division] if they're late to the party, or to build up if they have an existing practice,” said Mr Pickworth.
US firms have been particularly active int he area. Atlanta-based King & Spalding made two big hires this year to work with Gareth Rees QC, former executive counsel at the Financial Reporting Council, who joined in November. Ropes & Gray, Greenberg Traurig and Willkie Farr & Gallagher have also built up their corporate crime practices.
Top UK firms have followed suit. In April, Allen & Overy announced it had hired Eve Giles from Kingsley Napley, while Alison Saunders, the outgoing director of public prosecutions, will join magic circle rivalLink laters in October.
Lawyers who spent time in senior roles at public bodies like the SFO are particularly in demand. Los Angeles firm Gibson Dunn & Crutcher hired Sacha Harber-Kelly, another former SFO investigator, in November.
Slaughter and May is reported to be among the suitors courting David Green, former SFO director.
The pool of white-collar crime experts is relatively small, leading some civil dispute litigators to take on criminal work despite never having dealt with government authorities such as the SFO, the Financial Conduct Authority and HM Revenue & Customs.
“There is a real mixture of quality,” said one lawyer. “There are those who have been involved in actual matters and those who haven't but have read the Bribery Act, the small amount of case history and some speeches [from law enforcement officials].”
The enthusiasm for corporate crime experts is unlikely to wane given the renewed political focus on corruption and money-laundering in the UK.
MPs on the Commons foreign affairs committee highlighted the use of London “as a base for the corrupt assets of Kremlin-connected individuals”, while the Treasury committee is also conducting its own inquiry into economic crime.
The National Crime Agency said last month that “UK-registered companies continue to bribe overseas to improperly secure new business”.
'If [a law firm] has a motivated partner keen to jump ship, there will be 20 or 30 lining up to talk to them'