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The market for HR legal services remains a fiercely competitive one, from employment law to pensions to health and safety, as HR issues gain gravitas in the boardroom and are recognised as commercial and financial risks that need safeguarding.

Against this, there is increased competition from in-house teams which continue to up-skill, particularly in the banking sector, and from third-party HR advisers and claims handlers; and the prevailing economic climate is having a heavy impact on the available legal spend. Shrewd clients have sought to commoditise work outside of the City and demand greater efficiency and alternative fee arrangements. National firms – notably Addleshaw Goddard LLP; DAC Beachcroft LLP; Eversheds LLP; and Pinsent Masons LLP – are well placed to capitalise on this while also handling top-end work from London.

The challenging climate has also generated legal work, particularly ‘bet-the-company’ issues that require bespoke advice outside the realm of in-house teams. The state of the employment market is such that employees are up for the challenge of litigation, including an increase in discrimination and whistle-blowing claims driven by a climate of ‘nothing to lose’, and union activity is again in vogue. Employers, meanwhile, are more determined than ever to protect their business and enforce restrictive covenants, with many operating a zero-tolerance policy towards leavers who breach their post-termination obligations. The raft of High Court breach of contract litigation and team-move advisory work suggests the days of opening the cheque book and all parties moving on are gone.

From a law firm perspective, financial services remains a focal sector, in part because of the expanding regulatory and compliance obligations encroaching into employment law, such as the FSA regulatory code. Firms with strong regulatory teams are in demand, with Herbert Smith LLP, for instance, instructed by UBS to advise on its high-profile rogue trader case. Other leading employment practices, such as Allen & Overy LLP and Simmons & Simmons LLP, have long dominated the financial sector, but there is no room for complacency; there is a sense that even the investment banks are seeking value for money and considering firms other than traditional ‘finance’ firms for services.

The pressure on fees has been to the benefit of employment boutiques, where former partners of leading City firms can offer their expertise at a lower price, with the added bonus of being conflict free. Firms such as CM Murray LLP, Doyle Clayton Solicitors and Stewarts Law LLP are strong choices for senior executives needing expert muscle to challenge major institutions, as are broader, more established firms such as Farrer & Co, Mishcon de Reya and Withers LLP. The latter three lead our new Senior Executives ranking, alongside the mighty Lewis Silkin LLP.

In other disciplines, pensions issues have rarely been out of the media, with proposed changes to public sector pensions causing widespread industrial action. Legal work continued to focus on risk management of underfunded schemes, with a notable trend in risk dispersal to insurance companies via buyouts, buy-ins and longevity swaps. Sacker & Partners LLP stands out as a specialist pensions powerhouse, and CMS Cameron McKenna LLP, Hogan Lovells International LLP, and Linklaters LLP also retain a tight grip on their pole position for both contentious and non-contentious pension matters.

Health and safety, too, has been in the limelight thanks to the Corporate Manslaughter Act 2007, which has seen its first cases come to trial. Employee shares schemes and immigration continue to place great demands on clients and lawyers alike.

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Legal Developments in London for Overview

  • Personal accounts and auto-enrolment: looking ahead

    The government plans to introduce a new national ‘personal accounts’ pension system in 2012. From October of that year, all employers will be required to auto-enrol eligible employees into either the government’s new personal accounts scheme or, if it meets certain ‘qualifying’ criteria, the employer’s own pension arrangement.
    - Eversheds LLP

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