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Legal ability is no more than permission to play

What is the leadership structure at Kennedys?

As the senior partner of Kennedys I am supported by a global strategy board which meets monthly. The board includes partners from across our global network of offices, ensuring that global perspectives are always considered in advance of any key developments at the firm.

In addition to this, and providing invaluable support on the operational side of the firm, we have business services directors representing our business development, finance, HR, it, facilities, and risk and compliance teams who work collegiately. I meet with them as a group weekly and all report directly to me. We also have four client facing divisional heads, based on work types, who in turn are reported to by a number of team leaders. .

How would you define the firm’s culture, and how important is it to the management team?

The culture at Kennedys is very important to me. Some time after becoming senior partner I met a consultant called Jan Thornbury to talk about culture and values. She made it very clear that this would not be so simple as the production of laminates of aspirational phrases. She told me that if I engaged her I would not see her for two months. She would be meeting Kennedys’ staff and clients and asking them why they continued to work for us or send us work. Then she would tell me what Kennedys’ culture and values were and we would work with that.

Our published culture and values of being approachable, straightforward, supportive, distinctive and making a difference came out of that process. They represent who we are and are a covenant between all partners and staff to continue to be that way.

This is a very distinctive culture that makes us a successful firm for whom people enjoy coming to work. Our culture is a source of strength and differentiates us from our competitors. Our values are the DNA of our firm: they are at the core of our culture and guide us in everything we do. For me, and the management team at Kennedys, this means always trying to do the right thing in the right way.

What are the biggest challenges facing firms of your size, and specialisms, around the world?
How is Kennedys prepared to meet those challenges?

Our vision and strategies are designed to address what we see as the biggest challenge to Kennedys and similar sized firms, which is the consolidation and globalisation of our clients. They expect us to be in a position to deliver to them the right service, in the right part of the world, from the right resource and at the right price. Neither growth nor tech are aims in themselves, but they are both part of the way in which we are meeting, and will continue to meet these requirements.

Since 2010 and the establishment of the ‘LatAm facing’ Miami office, Kennedys has opened seven offices across the Latin America region – what has been the experience of this process from a management perspective?

The management of our expansion in the Latin America region has been surprisingly smooth. While there are obvious regulatory standards that must be met, and these understandably take time, the process of growth in this region has been a very positive one. It helps that, in Alex Guillamont (head of Latin America and Caribbean practice), we have somebody with boundless energy and an excellent reputation in the market who has a good understanding of where clients require us to be within the region.

With major global (re)insurers decentralising their LatAm claims functions in recent times, Alex and I persuaded the strategy board that future significant growth in the region was best achieved by establishing Kennedys’ offices in the key jurisdictions safe to operate in, with Miami providing support, and continuing to deal with other jurisdictions. As you can see this has been a very successful process.

In addition to your 37 offices around the globe, you also have 17 associate offices. What do you look for in an associate office and how difficult is it to ensure each office’s culture gels with Kennedys’?

Kennedys’ view has always been that growth should be strategic and not for its own sake, and this is also true when formalising associations. Before we reach the stage of forming associations, we would typically have worked with that firm on a number of matters, over a meaningful length of time.

Each associated office we have follows a long-standing relationship between like-minded firms. Many of our own offices around the world began as associated offices, a process we liken to dating with a view to marriage.

Of Kennedys’ 270 partners, 34 began their careers at the firm as a trainee. What must firms do better to ensure they can retain the best talent?

I qualified at Kennedys and was supported throughout my formative years at the firm, so the importance of supporting young professionals is something that the management team and I are very keenly aware of.

By having clear routes for progression and empowering our lawyers through a variety of HR and partner-led initiatives, we have always looked to ensure that we not only nurture talent but look to retain it also. We deliver internal programmes that provide support and career progression for lawyers at every level. I am also very proud of our award-winning, and ground breaking at its inception, legal apprenticeship programme, which is being extended to business services apprenticeships next year.

Conversely, what has the firm found is the best way to attract talent from elsewhere, both from competitors and from in-house legal teams?

We have a very clear vision of our place in the world as a large specialist niche firm, which attracts those who feel undervalued at full service firms. Whilst we have a strong reputation experience in the insurance sector, and a growing reputation within corporate and commercial circles, it is the culture and the people that play a huge part in making Kennedys such an attractive employer. They are a source of strength that differentiates us from our competitors.

What advice would you give to those just starting out in law and for those who might be about the make the step up to partnership?

I feel that if one is not moving forward, one is going backwards. There are many career opportunities within law, all requiring a strong mix of technical skills, project management ability and commerciality. It is important to remember that these things are only truly developed over time, so a career mindset opposed to a job mindset is required.

For those looking to embark on a step-up to partnership, I refer to some sage advice that I received during my career: when in doubt, make a decision and then move heaven and earth to make it the right one. No-one ever crossed a ravine in more than a single leap.

When it comes to diversity, what is Kennedys doing to ensure each of its offices is representative of its country’s legal market?

We are very conscious that as a global firm we need to ensure that everyone, whoever or wherever they are in the firm, is respected for who they are and that we all share and embrace the same values.

Our apprenticeship programme and global involvement in initiatives that celebrate diversity and inclusion, such as being global sponsors of last September’s Dive in Festival – the festival for diversity and inclusion in the insurance sector – demonstrate our commitment in this regard.

And what about wellbeing and work-life balance? How is Kennedys dealing with these issues which are increasingly important to the next generation of lawyers?

I am never very sure about the phrase ‘work-life balance’ as work is very much part of life. It needs to be enjoyable, however, and provided everyone delivers one need not be restrictive as how they deliver.
There has been significant investment in our IT infrastructure over the last five years that has enabled us introduce agile working globally, giving secure access to all of our systems no matter where any individual may be working on a given day.

Our partners and HR remain actively engaged with our people. Our induction
and follow-up processes ensure that any emerging issues important to the current and the next generation of lawyers are identified and taken account of to create the best working practices and environment we can achieve.

In addition to your role as senior partner for the firm, you also continue to fee earn. How do you find the time to do this?

The clever people at Harvard and Cambridge talk of the ‘producer/manager dilemma’ within the service provider industry; when you get good at your job you are promoted to management! I agree with them that managers need to keep their hands in if they are to be taken seriously by their partners and staff and if they want to be listened to in their clients’ board rooms.

That means that I have had to make the time, assisted enormously by the partners to whom I delegate a great number of management tasks relating to lawyers and clients, and by our great team of business services directors, who so ably look after those parts of the business which would need managing, whether we sold law or any other product.

How is technology changing the way Kennedys interacts with its clients?

What we have experienced with our award-winning Innovations Toolkit is that insurance clients are, understandably, incredibly receptive to being shown ways in which our technology can both empower their claims teams and save them money. Our core principle is to help our clients use lawyers only when they really need one, and this is the driver behind all of our products and innovations. Understanding what puts our clients under pressure enables us to tailor solutions which improve the delivery of legal services.

Will technology ever replace lawyers, as some have suggested?

The technology versus human debate is one that will be raised for many years to come, but there are many facets to this argument. One that is often overlooked is the importance of the human relationship between lawyers and their clients. To my mind, this interaction will always be required.

There is also the viewpoint that technology should be viewed as an extension to a lawyer’s ability, by working with it, rather than against it. Most firms seem to be working on the basis that the role of technology is to do the old task more efficiently. That is important, but to my mind the real value of technology is reaped when one uses it to deliver a brand new solution that renders the old task unnecessary.

Clients are demanding more and more innovation from their external legal providers. How are you meeting this demand and what tangible results have already been achieved for the firm’s
clients?

By listening to our clients, understanding the pressures upon them and meeting the increasing demand for innovation. We have invested significantly in this area in the last two years. We have recruited a Head of Research and Development, embedded a data science team and opened a new business in India with a nine-strong development team.

Our capabilities and offerings to clients, in regards to innovation, are now a significant part of our business. Our flagship innovation, KLAiM, which is a virtual lawyer, has enabled clients to manage low value insurance Iitigation themselves, without needing to instruct a lawyer. For such cases this has reduced our take up clients’ legal spend, by avoiding defence fees entirely for at least 80% of litigated cases, while saving them more than £4m to date.

What would you say to any scepticism about innovation hubs/idea labs being just another marketing gimmick?

The Ideas Lab that has been implemented at Kennedys, which is a platform supporting client-focused ideas that seek to create future products and deliver modern legal services, is one that has certainly dismissed any internal scepticism about innovation hubs being viewed as a marketing gimmick.

The engagement we have had throughout our global network of offices has been overwhelming and, above all, underlined that there is a realisation within Kennedys that, with the right approach, innovation can strengthen relationships with clients. It has also had the collateral benefit of being more inclusive of the younger generation of lawyers, who in participating in the Ideas Lab have felt more engaged with the firm’s direction of travel.

Finally, other than innovation, what do you think lawyers generally could be better at?

Not hiding behind a professional carapace, but getting across to clients and the world at large that we are not only hardworking and highly skilled, but also human beings whose loyalty and friendship is as valuable a product as the technical legal advice we provide.

We should all aspire to being problem solvers and successful project managers. Legal ability is no more than permission to play.

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Morning person or late riser? It doesn’t matter

How would you define Mayora & Mayora’s culture?

I would define our firm’s culture externally
as one that is centred on personalised service to the client. The partners and associates in charge of handling cases know every detail of the case and this allows us to provide an excellent service to the client.

Internally, the culture is one of camaraderie and harmony. This helps us work as one team, which makes our work more efficient and effective.

What changes have you made in the firm that will benefit clients?

The main change we have made as a firm is to expand regionally. We are no longer a well-respected local firm, but instead an integrated regional firm with offices in every country in the Northern Triangle. This translates into providing clients quality legal services across borders, while taking advantage of cost-saving synergies between offices.

What are the biggest challenges facing firms in your region?

The biggest challenges are rapidly changing technology, regionalisation, decreasing foreign direct investment and government corruption.

What are the top three things clients want and why?

Clients want immediate attention, quality service and reasonably priced fees. The reason why they want immediate attention is because, as they say, business doesn’t sleep. Clients want answers quickly so they can continue on with their business operations.

With the other two items, these are related in some sense. Clients want quality service at a reasonable price because legal services are a business cost that they want to minimise as much as possible. However, they still want a robust, well thought-out answer because they understand that legal issues must be resolved correctly or they risk large losses or, in the worst of cases, shutting their doors.

What have you found is the best way to retain your top talent?

We have found that the best way to retain talent at the associate level is to offer flexibility and work-life balance. We are entirely on the cloud, which allows our associates to work from anywhere in the world, so long as they have an internet connection.

We also do not have any formal hours for associates so if one associate is a morning person and wants to come in at 7:00am and another is a late-riser who wants to come in at 10:00am, we do not mind so long as during the month they complete their minimum billable hours. We also invest heavily in professional development of our associates, assisting them in payment of LLMs, continuing education courses and other events to improve their legal knowledge.

At the partner level, all partners across all jurisdictions share from the same profit pool. This helps retain partners because it aligns all our goals and helps us work as one, single unit leading the firm.

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Law firms must drive social change or lose the talent war

DLA Piper is well known for the size and scope of its network. What are the specific challenges of leading a firm of this size and scope?

Excepting the nightmarish logistics associated with time zones and travel, which do unquestionably make leadership positions in global firms more cumbersome, I also generally believe the challenges are fundamentally different, both in size and scope in regional markets and major money centres, which require an analytical depth to create a coherent and executable cross-cultural strategy.

The key to leading a legal enterprise of this type is recognising that one is a steward to an entire community, not just the lawyers, and that all constituencies have to be included, supported, and protected. For us, that means the needs and legacies associated with a global community spread across more than 40 countries.

In order to lead a firm like this successfully, it is incumbent upon our most senior leaders to listen carefully while remaining calm, and articulate our vision and the related strategic market tactics necessary to achieve those goals. Pivoting and adaptation are daily requirements for colleagues and clients; personal needs must be addressed, individual talent nurtured and institutional glue discovered, which emphasises and promotes the notion that we are on a journey together, not as silos but as one.

To build something that can be sustained and continues to have a durable impact, leadership needs to meet people wherever they are and bring them forward together to reap the benefits of the global platform.

The firm’s expansion over the years has involved various acquisitions and combinations. What issues/challenges do these combinations throw up? And how are those managed?

There are two seminal acquisitive notions that the firm adheres to: never expand simply for the sake of expansion and do not stretch to do a bad deal. Combinations should be both opportunistic and strategic (while ring fencing risk), with an eye toward compatibility and the improvement of brand equity – both from a business point of view and through the prism of social change, all the while enhancing firm culture.

We also recognise the importance of indigenous leadership because we realise, borne of experience, that we cannot simply parachute people into various regions and expect success to follow. This approach has been central to our identity and our ability to build and elevate our platform. Integrating new firms and large groups takes work and, in almost every way, the hardest work needs to be undertaken and accomplished after they are part of the firm, creating the greatest possibility that our newest and long-term productive people will be personally fulfilled, their aspirations met and their success scalable and repeatable.

Since becoming global co-chairman and Americas co-chairman, what percentage of your time is spent practising law versus firm management?

The majority of my time is spent on firm management issues, but I continue to maintain client relationships and often provide sophisticated counsel in existential situations, in addition to providing
guidance to our lawyers in some of our most significant client matters.

What do you think are the top three things most clients want and why?

It seems elementary, but clients want a core person who is identified and respected so that when there is an issue, a unique challenge, or a need for high-level, strategic advice they have a ‘throat to choke’.

Second, they also want their most important firms to be more than simply lawyers; they want us to be business advisors and risk managers who help anticipate and prepare them for what’s lurking around the corner in their industry or sector. With that kind of advice required, there is a natural adaptation of our service offerings.

Third, clients want to know that we are with them shoulder-to-shoulder in their business and their communities – their risk is our risk and their success is ours, which serves as a catalyst for the building of brand equity.

Is technology changing the way you interact with and service your clients?

Absolutely, but that is certainly nothing new nor unique to DLA Piper – it has been on the march for quite some time. Now more than ever, however, clients are asking for new, better, and more sophisticated thinking in the ways we provide services, and we are, obviously, committed to its delivery.

This translates into a sustained commitment through capital resource allocation to practice innovation and firm infrastructure development that not only allows us to work more effectively on our clients’ behalf, but allows our lawyers more freedom and creativity.

In addition, advances in our own technology, infrastructure, and innovation, as well as our willingness to delegate these roles and authority to true technology and business professionals, plays a significant part in our success in helping our clients assess their future industry risk and extending our market reach and share of their legal spend.

What have you found is the best way to retain talented partners and associates?

Maintaining a compelling business and professional proposition that can capture the hearts and minds of our people (as op-ed columnist David Brooks has famously written) is the difference between a thick and thin institution, all the while creating a sustainable and inclusive culture of which they are not just a part, but are helping to drive. This includes helping all of our productive parts find and develop the career path that is most suited to their talents and needs, and complements the needs of the firm, clients, and the social fabric of the profession and society.

Diversity is increasingly important to clients. How do law firms increase diversity, especially in leadership positions?

By acknowledging our mistakes and failures, focusing on them and not wavering from our commitment to permanent change. Diversity, inclusion, and belonging are both moral and business imperatives for DLA Piper. It is an area of intense focus for me and the rest of our leadership.

For too long, law firms looked at each other and saw that improvements were roughly on par, so they were content to maintain the status quo. It was about the competition, not what is right. I am not a believer in that. If we are not driving social change – meaning diversity, inclusion and belonging at all levels – we are losing the battle for talent. And once that battle is lost, a firm cannot recreate the value proposition that should be a critical component of an enduring legacy.

After all, what are we trying to accomplish? Are we not trying to build a community that reflects the best parts of society? To the extent we can just achieve that and maintain it as part of the moral and cultural fibre of the firm, then we are building something that will be attractive to the talent we hope will find a new and different firm, like DLA Piper, compelling. At DLA Piper, we are building greater freedom to be authentic and not hide. We are doing all of this aggressively.

For those just starting out in law, do you have any advice?

First, learn the fundamentals. Youth affords one the opportunity to build that professional foundation. One will never have that opportunity again, so it is important to do so from the outset. It is also critical, as I mentioned above, that one be their authentic self – anything else is unsustainable and, ultimately, untenable. Learn to accept and move on from those things you cannot control and/or may think are unfair. And, finally, be aware of the market and how it is changing and evolving so that you can do the same with your personal and professional development.

Looking back over your time as global and Americas co-chairman, what’s surprised you most about running a law firm?

No day is surprise free and the requirement to summon your pastoral capacities makes one, as a leader, more authentic, approachable, and filled with the kindness that the firm often needs in the trench wars we are consistently fighting. I am constantly struck by the level of creativity, innovation, and collaboration we are able to achieve on a global scale for the common good – in service to our clients as well as the needs of society while confronting the day-to-day and long-term challenges of world business and the profession.

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When it comes to law firm branding, be bold

Branding processes happen more often than we think. Six companies I have worked in rebranded during my tenure with them; two others immediately after I left them. My experience in the legal profession is limited to commercial law, as CEO of three of Norway’s largest firms, but I have also been fortunate to be involved in international rebrands as a partner in PwC and in Grant Thornton.

The pace of change is undoubtedly picking up in law firms, with mergers, partner moves, and changes in client loyalty all contributing to a rethink in a very traditional industry. There are three typical branding situations, the most common being primarily visual, the second needing more emphasis on communication, and the third requiring a rebrand or repositioning of the entire firm.

The cosmetic approach

Most leading firms are proud of their history and achievements and are resistant to major changes. They often aim for a new look, maybe even a new feel, but don’t try (or even want) to suggest they have changed. This is the classic, almost minimalistic, branding exercise; new logo, new colour palette, revamped website and stationery, and maybe a name change, where Smith, Jones and Brown is shortened to
Smith Jones.

It is rather like putting on makeup; you look better and feel better but most observers will know the firm hasn’t really changed. This may be a good thing, but many of our clients are in industries where the leading players didn’t even exist 20 years ago. Can we really be confident that law firms are exempted from this trend?

Market opinion

Where there is a mismatch between the market’s opinion of a firm’s competence, service level and reputation, and the view held by management and the partners, then a more extensive rebranding is needed. ‘The market’ will usually not only include clients, but also the business community, lawyers outside the firm, students, and market commentators, including law firm rankings.

This can’t be fixed by only implementing cosmetic changes; it must be accompanied by a vigorous communication strategy that focuses on actively updating key players, including the firm’s existing clients, on the skills, services, and true strengths of the firm. Within the bounds of client confidentiality you must demonstrate you have demanding clients that trust you with complex matters, as well as demonstrating thought leadership through active participation in legal and business discussions and forums.

Media exposure can also be a powerful tool, not necessarily using expensive advertising, but preferably by finding topics that interest financial, legal, or industry publications and websites. Getting the message to decision-makers is the key to success.

Walk the talk

However, a comprehensive rebrand is needed to promote a new firm or one that has changed significantly, through mergers, acquisitions, or other major developments. This was our challenge in SANDS.

In March 2015 the firm initiated a total repositioning of itself; essentially transforming a large firm serving a wide range of clients to one tailoring its services for the high-end business market, starting with a new strategy, new management, and a new partner model. There have been a number of radical changes internally and we needed a rebranding project to match and which would educate the market. We decided to pursue a strategy of ongoing rebranding, realising that we could get our message across more easily and more powerfully by actively communicating changes as and when they happened; effectively ‘walking the talk’.

One of our successes was getting the media interested at an early stage. We decided to be very open and honest about our ambitions, plans, and actions. We downsized or terminated non-strategic practice areas and client segments while strengthening others, in some cases building new teams and services from scratch. We also launched a massive lateral hire partner project: in several cases we recruited three-partner teams rather than individuals. We also more than doubled our number of female partners.

These high-profile events attracted attention from the financial press, resulting in more than two years of regular articles and interviews in publications read daily by decision-makers in business. The fact that most new partners came from our leading competitors was obviously newsworthy, but we also initiated discussions and dared to debate our values publicly, such as on work-life balance and the pitfalls of maximum profit as a dominating incentive for partners.

In this way, we were noticed by competitors (useful for recruitment) and the business community long before we launched the visual brand. Another ‘walk the talk’ rebrand project was our offices. We commissioned a new head-office building in Oslo and moved in the same week we launched the new brand.

Visitors are in no doubt they have come to a different law firm, not just due to its size and location, but also because the interior
design team, led by our excellent marketing director, created a client/visitor experience that differentiates us in the market.
We wanted a consistent SANDS look, feel, and quality, so during these last three years we have moved to new, custom-designed offices in three of the other cities we are located and have revamped the interior design at the two other offices.

What’s in a name?

Yes, we also created a new website, chose a new colour palette, modernised our use of social media etcetera. However, the other major decision was to change our brand name and we chose to change it radically. The two name partners both start with S and we chose SANDS, based on S and S. In this way we kept a link to our past, but chose a name that is different, international, very recognisable, and easily branded in our logo and other graphical design contexts.

The most important lessons learned are the need for boldness, intensity, stamina, and consistency. We had fairly small project groups, selecting people who were passionate, but also willing to work hard over a long period of time. Four members of senior management were heavily involved in all the projects, ensuring commitment and that the same thinking, culture, message, and brand were at the heart of all our repositioning work.

Our turnover has increased by 55% in these three years, so the market has definitely noticed that we have changed.

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New government means new rules of business in Italy

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The Italian government’s recent declaration of support for the cause ‘gilets jaunes’ (yellow vest) protesters in France, even going so far as to proclaim ‘don’t give up’, has reinforced their support of the sovereignty of the people of the Republic of France – and at the same time those of the Republic of Italy.

Not yet even 12 months old, the new government, headed by Matteo Salvini (leader of the League party and acting interior minister) and Luigi Di Maio (leader of the 5 Star party and acting deputy prime minister) has reinforced its support for the ‘people’ through a series of legislative decrees. While on one hand this is quite honorable, on the other it can lead to impediments for business.

It all started quite quickly with the passing of the Dignity Decree (Decreto di Dignita), not even
75 days after the government came
to power, which introduced a series of reforms to an Italian labour market that was certainly more favorable to employees than businesses. With the third highest unemployment rate in Europe (recorded by Eurostat at 10.3% in December 2018), it is something which appears needed to be addressed – especially if one takes into consideration that youth unemployment for the same period was recorded at 31.9%.

It is on the youth that the government is especially concerned with as we see through the incentives it has given to business through the Dignity Decree. This includes a 50% reduction on social security contributions for any new employees hired on indefinite work contracts and the reintroduction of vouchers as a payment method for students and unemployed workers. More recently with the 2019 Budget Law there are even more incentives for companies to hire both PhD students under 34-years old and youth (under 30-years old) who are the top of their class with savings of up to €8,000 on social security contributions per new hire on an indefinite work contract – either full or part time.

However, while the government is greasing the labour wheel on one end it is creating impediments for employers on the other – in terms of having a flexible workforce. For example, within the Dignity Decree the amount of time a company can hire a fixed-term worker has been decreased from 36 months to 24 months – and only 12 months if there is no justifiable reason to extend a contract. In addition, the decree has also increased the penalties for employers caught dismissing workers without ‘just cause’ from four to 24 months of wages to six to 36 months.

In addition, if your business has received assistance from the government in the past five years and you decide to transfer your business operations out of the country – as it would be a more efficient for your business – then your organisation will need to repay the Italian government two to four times the value of the financial assistance provided.

Moves such as these are bringing back the shadow of a time when it was incredibly difficult for employers to dismiss workers in Italy. The more obstacles employers have to running a flexible workforce the more difficult it is to run a business efficiently. Constraining employers to hire workers only on full-time contracts is not the answer. In fact, there is a risk it may have the opposite effect and lead to international investors shunning Italy for other countries where labour markets are more flexible. In fact, recent statistics appear to indicate that Direct Foreign Investment in Italy has slowed since the new government was elected.

In 2016 the OECD published the report Enhancing Economic Flexibility: What is in it for Workers which revealed that ‘making employment protection of regular contracts more flexible is associated with more transitions into employment in countries that have above-average activation programs’. In addition, ‘Active labour market policies (ALMP) contribute to creating an environment where making
regular-contract protection more flexible translates into greater hiring chances for jobless people’. Those that are most adversely impacted by flexible labour policies are low-skilled/under-educated workers.

This last group are those the government may be appealing to with its more job protectionist policies. This is perhaps also illustrated by a new incentive in the 2019 Budget Law, at the other end of the scale of the incentive for academic excellence, which offers companies €1,500 in tax rebates for hiring new truck drivers under 35 years of age on full-time contracts (but only if the company reimburses the new employee for the cost of obtaining the special license for the transit of goods).

In Italian, fixed-term contracts are referred to as ‘precarious’ work contracts. We are sure the use of this term does not help the situation as it makes it seem as if such a contract is ‘dangerous’, but it is not. It is only ‘uncertain’ in that it is not permanent. In this labour market a job is a job and we doubt offering a ‘citizens wage’ to those who do not work is going to reinstate confidence in the system, but that is a discussion for another day.

A flexible labour market allows businesses to remove the ‘dead wood’ from their organisations and replace it with a more efficient and proactive workforce. This is what makes an organisation great, an economy great, a country great. Italy certainly is and would be even more if it allows business to operate as it should.

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Collaboration and curiosity are key

Please give us an overview of the current legal market in Finland and how any recent developments have impacted your practice?

Legal services are offered in Finland by variety of different type of actors, mostly by attorneys-at-law offices but also by other law firms and by consulting and accounting firms. The competition has been increasing, but it has also been welcomed and spurred us to work even harder to stay on top of the curve.

Digitalisation has affected legal market in Finland. This means that new digital tools have been implemented, but digitalisation has also had a big impact on legal questions we are dealing with daily. Fintech is not the only, but certainly one, of fields of law that are more and more affected by digitalisation and include more complex substance questions than before.

Also, as around half of Finnish fintechs currently in practice were founded within the past five years, the need for legal services within the fintech industry and lawyers with expertise in fintech has increased. Naturally, also the wide and extensive legislative amendments, in particular in the field of payment legislation and data protection, have made lawyers around Europe busy.

What significant trends exist in the fintech market presently? Are you seeing these just domestically or internationally as well?

Finland has provided a good landscape for the practicing of fintech for a long time and pioneered e.g. online banking in the 1990s.

Currently we have a strong and vivid fintech market in Finland. Especially crowdfunding platforms and B2B services have been particularly strong. Lately, payment platforms and services have strengthened. Such services do still form a big part of the Finnish fintech market.

Another significant trend that we have seen recently has been the growing cooperation between traditional banks and fintechs. Such trend is being seen internationally, but especially in Finland.

In addition, several blockchain projects are live and more are being developed in Finland.

What are the three biggest challenges to practising fintech in Finland?

Many fintechs have found it challenging to keep up with the ever-changing and, to some extent, stringent regulatory requirements.

Another challenge is regulation that does not exist or has unclear scope of application (e.g. companies involved in ICOs must assess whether the ICO falls within the scope of securities market regulation). Third challenge for practising fintech in Finland is how to adequately secure the product and the valuable customer data. Fintechs do face such technical challenges regardless of where they operate, but the Finnish regulatory regime requires adequate data protection and sets several types of notification obligations that need to be taken into account.

How does fintech fit into the firm as a whole? Is it easy to collaborate with other teams?

We see fintech as a complex of various legal questions that relate to several fields of law. This requires seamlessly connected teams that support clients in achieving their objectives and growth.

Putting the most suitable teams together not based on structured practice groups but on the matter at hand has long been at the core of our approach. Fintech requires such an approach, and, thus, fits to our firm well. Taking into consideration that fintech is a shared interest for many lawyers, collaboration with each other is also easy.

What advice would you give to the next generation of fintech lawyers?

Fintech lawyers need to master relevant financial regulations and other relevant fields of law, such as regulations covering the processing of data. To be a good fintech lawyer you would need not only comprehensive legal skills on certain topics, but also an understanding on what fintech – and the particular business – is about.

Compared to some other fields of legal services, fintech is not defined by a specific set of rules and regulations, but rather by the business solutions it provides. Fintech lawyers also need to be curious and keep up with the development.

What are your predictions for fintech in Finland over the next five years?

The Finnish fintech scene has been growing rapidly, and we expect it to do so also over the next five years. As building a company and customer base is to certain extent slow, we will surely see more investments in fintech companies over the next five years.

In particular PSD2 is currently fostering open banking and overall boosting new fintech services in Finland. However, customers will see these new services in a larger scale only during the next few years, as banks have not yet opened dedicated interfaces to allow third-party service providers to access customer accounts.

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Can Paris take advantage of the fintech boom?

Please provide an overview of the current legal market in France and recent developments?

French authorities and regulators have exhibited constant interest for fintechs, which are driving technological innovation and providing additional financing sources. Regulations implemented in the last few years demonstrate French regulators’ commitment to establish appropriate frameworks that foster the development of fintechs companies while ensuring investors’ protection.

In order to bring together fintechs, public authorities and supervisors, the Banque of France and AMF (Securities regulaor) have launched a ‘Fintechs Forum’. The objective of the area is to be a venue for monitoring developments, engaging in dialogue, and making proposals.

Crowdfunding regulation

France implemented a regulatory framework for crowdfunding activities in 2014. The main objective was to ensure investors’ protection and information while allowing crowdfunding activities to develop.

The 2014 reform included a new exemption from the banking monopoly for crowdlending activities, allowing individuals to grant loans through crowdfunding platforms. This exemption from the banking monopoly is limited to individuals (i.e. not businesses) acting outside of their professional activities. Moreover, loans are limited to €2,000 by lender and by project (€5,000 if the loan is without interests), the loan maturity has to be less than seven years, and the borrower cannot borrow more than €1m per project.

Crowdfunding internet platforms have to register with the French securities regulator (AMF) either as crowdfunding intermediaries or as crowdfunding investment advisers. They are not required to register with the French securities regulator if they already benefit from a licence as financial services providers. The regulatory framework details information that crowdfunding intermediaries are required to disseminate to their members in order for them to be able to make informed investment decisions, and information they are required to request from their members to verify their identity.

An ordinance dated 1 October 2016 amended the general regime of promissory notes and established a new crowdfunding debt instrument for them. Those issued via a crowdfunding platform are referred to as ‘minibons’. Since they are not financial instruments, are not subject to the prospectus requirements.

Distributed Ledger regulation

An ordinance dated 8 December 2017 provides for the amendment of article L. 211-3 of the Monetary and Financial Code to authorise the registration of financial securities which are not admitted to a central security deposit on distributed ledgers.

Initial coin offerings (ICOs) regulation

The French Treasury recently proposed a new legislative framework for ICOs that has yet to be adopted.

Under it, token issuers established in France will have the opportunity to request an optional visa from the AMF. This visa would be non-mandatory. This regulatory strategy emphasis on non-mandatory provisions to foster professionalisation and promote sound market practices while avoiding constraining frameworks which might deter innovation and lower the French market’s attractiveness.

Crypto currencies platform

France is contemplating the introduction of a regulatory framework for crypto-asset intermediaries. This draft regulation is currently under discussion to the French National Assemblée and it is planned to be enacted in March 2019. The draft law add a new category of investment services providers, referred to as crypto-asset services providers, which would be subject to either mandatory or optional requirements.

Payment services regulation

France has implemented on 13 January 2018 the Revised Payment Services Directive (PSD2) which obliges banks to establish an access rights to the bank accounts in favour of Third Party Payment Services Providers (TPP) and to an increased diffusion of the information relating to the payment services made available to customers.

Online transactions often rely on third-party facilitators to convey customer money to a merchant. With PSD2 implemented and the creation of PISPs, the merchant and the bank can communicate with each other directly.

Furthermore, PSD2 create and develop Account Information Service Providers.

What significant trends exist in the fintech market presently? Are you seeing these just domestically or internationally as well?

There are three significant trends internationally: the growth of fintech, the importance of the blockchain technology applied to fintech services, and the solution offered by fintech with respect to compliance.

What are the biggest challenges to practising fintech in France at the moment?

The biggest challenges for French fintechs are low use (including lack of notoriety) of services offered by fintech, users’ reluctance regarding security issues, and the various asperities (lack of harmonisation, lack of regulation or legal answers, etc.) in the regulatory framework.

How does fintech fit into the firm as a whole? Is it easy to collaborate with other teams?

The fintech team grew organically over the years within the banking and financial services department. It is not structured as a separate team but rather included in the banking and finance department. All banking and finance lawyers are encouraged to:

  • monitor regulatory changes related to fintechs;
  • improve their understanding of technological issues (such as understanding how a distributed ledger work); and
  • deepen their knowledge of the fintech industry (by monitoring new start-ups, attending industry events, etc.)

Advising fintechs requires understanding the technological challenges faced by startups in this area. Our goal is not to develop an independent fintech practice, but to encourage our banking and finance lawyers to develop an interest and an expertise in technological innovations in the financial industry.

What advice would you give to the next generation of fintech lawyers?

The main advice would be to deepen their understanding of the technological angles. Understanding technically distributed ledger technologies, decentralised applications, crypto-assets, and other technological innovations is essential to advice fintech executives.

What are your predictions for fintech in France over the next five years?

The French fintechs ecosystem should attract more talents and investments in the future, says a survey by Exton Consulting. Conducted on behalf of centre of excellence Finance Innovation, the study draws an overview of fintech in France.

France has ‘comprehensive regulations’ with respect to fintech, with clearly defined rules for companies looking to scale up. Fintech can rely on a strong governmental and ministerial support. Moreover, Paris is home to a high concentration of financial institutions and asset managers.

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Malta’s ‘bull-like’ market

Please give us an overview of the current legal market in Malta and how any recent developments have impacted your practice?

The Maltese legal market is currently thrusting rather vibrantly, particularly in the blockchain and crypto
sphere, following the christening by parliament of a unique, non-intrusive and principles-based regulatory framework specifically regulating DLT platforms and virtual financial assets.

Malta is witnessing a huge bull-like market wherein many big players in the crypto realm are setting up shop and are seeking to obtain certification from the Maltese regulators to avail themselves of the bonding effect brought about by the higher standards and benchmarks propounded by the new laws and regulations. This recent development led to the formation of a dedicated blockchain legal team led by a number of partners across the firm.

What significant trends exist in the fintech market presently?

The most outstanding fintech niches which are setting up in Malta mostly relate to e-payment services, insurtech, DLT solutions, and capital raisings through the offering of tokens on a blockchain. The blockchain hype can also be noticed across a number of jurisdictions in the EU, although not as prominently visible as it is in Malta.

Another trending area is that of equity-based crowdfunding which is augmenting economic growth through new and increasing flows of credit to SMEs. In this vein, the MFSA has also recently introduced a tailored regulatory framework for investment-based crowdfunding (IBC) by publishing a new set of requirements regulating the operation of IBC services under the Investment Services Act.

What are the three biggest challenges to practising fintech in Malta?

One of the biggest headaches for small fintech businesses in Malta, and possibly in other countries in the EU, is that their profile may not fall within the risk appetite of most banks. This wary stance notably weakens their access to loan financing since the banking sector might not be acclimatised to the fast-paced growth within the fintech environment.

Another challenge is the risk of cyber threats, which, if not prevented and/or tackled well, might eventually drive investors back to more traditional forms of financial services. Being the smallest EU member, it is imperative that Malta employs better employment retention mechanisms so as to avoid the brain drain of valid employees moving from the regulator to industry.

How does fintech fit into the firm as a whole? Is it easy to collaborate with other teams?

GANADO Advocates has been at the forefront of fintech and blockchain developments on the island. We have been working closely with regulatory entities and industry leaders to become fully equipped with legal knowledge in this new sphere and we have also been heavily involved in the drafting of the recently enacted legislative framework. This shows that fintech is one of the budding areas which at our firm is given considerable priority.

The blockchain team has been active within the area from its early days, and has since been assisting clients, local and international, with blockchain based projects and cryptocurrency enquiries. Furthermore, the same team smoothly interacts and collaborates with other departments within the firm, especially on specific corporate, and employment matters as well as issues relating to investment services.

What advice would you give to the next generation of fintech lawyers?

The fintech space is a fast-changing environment, which is constantly presenting unprecedented and often mind-boggling dilemmas. Lately, fintech solutions are disrupting the conventional financial services scene in a rather aggressive manner and, in this respect, it is best for lawyers to widen their horizons and to try to understand at least the fundamentals of the underlying technology being utilised.

Frequent meetings with start-ups and tech entrepreneurs will help lawyers appreciate and grasp more the underlying dynamics of the fintech service or product. It is imperative for fintech lawyers to understand how the innovative technology has morphed the traditional legal rights and obligations of both users and service providers, to offer the best possible service to their clients.

What are your predictions for fintech in Malta over the next five years?

The incumbent Maltese government put fintech as one of its top priorities. While sowing the seeds to establish Malta as the go-to blockchain island, another potential market has already been pinpointed, which is that of artificial intelligence (AI). In a recent consultation paper, it has in fact highlighted the prospect of regulating AI solutions under the Innovative Technology Arrangements and Services.

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Fintech to mature in Mexico

Please give us an overview of the current legal market in Mexico and how any recent developments have impacted your practice?

The Mexican legal market has rapidly evolved during the last 10 years, mainly attributable to:

  1. the rapid expansion and establishment of Mexican offices of several international law firms, as well as the ‘re-integration’ of traditional legal practices within the Big 4 firms; and
  2. the enactment of several legal and regulatory reforms during the 2012-2018 presidential term, which led to the liberalisation of several markets (such as telecoms, power, and oil and gas), as well as the reshaping of the regulators in charge of basic economic aspects (e.g. COFECE, IFETEL), market regulation (e.g. CNH, CRE, CENACE, etc.) and environmental and safety policing (e.g. ASEA), among other aspects.

With regards to the fintech market, this has rapidly grown in Mexico since 2013, following the creation of the National Entrepreneurship Institute (INADEM), a public institution specialised in providing attention and solutions to the needs of entrepreneurs and MSMEs, with an emphasis on developing technological, financial and OTT services in Mexico. However, it was until March 2018, with the recent enactment of the Financial Technology Institutions Law (the ‘fintech law’), that the fintech market was deployed. Such event also resulted in the amendment and restatement of several provisions of other financial laws and regulations.

It is now obvious for practitioners, that fintech institutions will be of the utmost importance in the development of the financial and transactional markets in Mexico, and will have an impact not only on the financial regulation, but also on several topics such as privacy, competition, antitrust and consumer protection laws in the near future.

What are the current trends in the fintech market?

On September 2018, the first package of general (secondary) provisions applicable to the fintech law were published. In specific, the Mexican fintech regulatory framework has been recently enacted with: (a) provisions applicable to crowdfunding institutions; (b) general provisions applicable to the operation of e-money institutions; and (c) anti-money laundering and countering the financing of terrorism for fintech institutions.

From the operating point-of-view, fintech institutions have begun to apply for authorisation to operate from the Mexican National Banking and Securities Commission (CNBV), and it is expected that during the following year, at least 50 of the 73 companies that participated in the consultation prior to the enactment of the fintech law, will be authorised as Mexican fintech companies.

Acting as local counsel, we have been involved in regional projects, such as advising a Chilean fund entering the Mexican entrepreneur market, and worked together with our Canadian affiliate regarding crypto-mining and electric power regulation in Mexico.

What are the three biggest challenges to practising fintech in Mexico?

  1. The lack of regulation for application programming interfaces, sandbox models and privacy rules for fintech institutions.
  2. Compliance with the corporate governance rules set forth in the general provisions, as such can become a burdensome process for several companies, especially the small ventures commencing operations.
  3. The political moment in Mexico, as the landslide victory of the opposition candidate in the presidential election on 1 July, will impact the administrative structure of several financial regulators, such as the CNBV and the Bank of Mexico.

How does fintech fit into the firm as a whole? Is it easy to collaborate with other teams?

In our firm, fintech is considered as part of the banking and finance practice and it has become a key topic for our financial services industry as a whole. Our legal practitioners have teamed up with our corporate governance, AML, cybersecurity and risk management teams for the review, elaboration, and finalisation of several papers within our firm, mainly aimed to advice our clients as a truly diversifed ‘one-stop shop’, as well as with the development of fintech labs with the mutual participation of private and public actors.

In Deloitte Legal Mexico, we have been able to advised a roboadvisory company together with our risk management team, and have prepared a preliminary opinion to a crypto-mining company to establish and commence operation in Mexico, together with our transfer pricing and BPS teams.

What advice would you give to the next generation of fintech lawyers?

There is a need of highly specialised services in the fintech market, and now is actually a good moment to begin with the study and discussion of these topics. As the regulation continues to evolve, only those able to understand the market will be capable of advising both public and private clients in complex transactions.

What are your predictions for Mexico’s fintech over the next five years?

The Mexican fintech market will expand during the following two years as authorisations and licences will be granted to several companies during the following months.

From a regulatory point-of-view, an adequate regulation of the application programming interfaces and other
software communication protocols will be essential for the operation and market entrance of new competitors. Also, we predict that further legislation will be enacted to incentivise fintech in Mexico, specifically regarding tax incentives.

We consider that the Mexican fintech market will be in a maturity process during the following five years; however, this evolution will also be important for traditional banking institutions, as they will also apply for crowdfunding and e-money authorisations, and will begin processing crypto-currency payments during the following years.

Finally, sandbox models will become relevant from a legal point-of-view, as an ex ante regulation for this type of projects is impossible, an optimal ex post regulation together with the appropriate supervision and risk analysis will be the key factor for incentivising innovation while developing a more accurate regulatory framework.

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Brexit fears are overstated

Please give us an overview of the current legal market in the UK and how any recent developments have impacted your practice?

The UK fintech market has been very busy over the last year, and appears not to have been significantly impacted by Brexit as yet. We are starting to see legal work in fintech move more often from pure start-up work to either partnerships with large incumbents, or to those large incumbents seeking to carry out fintech projects themselves and looking for lawyers with experience of working in the area. This has in turn led to growth and stabilisation of the practice area.

What significant trends exist in the fintech market presently? Are you seeing these just domestically or internationally as well?

There is a significant growth in the work around open banking as the area develops and matures, and the open banking APIs published by the major UK banks become ever more sophisticated and reliable; growth of this area in other jurisdictions is further behind, often due to lack of standardised API specifications.

There has also been a rationalisation of the market in cryptocurrencies and blockchain, as the ICO investment boom has narrowed and focused on projects with genuine utility, and more traditional structures around cryptocurrency start to bed in.

What are the three biggest challenges to practising fintech in the UK at the moment?

The first is that while technology law and regulation have traditionally been separate disciplines or areas of legal practice, fintech amalgamates the two, hence there is the practical challenge of making sure lawyers practising in fintech are sufficiently versed in both technology law and financial regulation.

The second is sorting the wheat from the chaff, especially in the cryptocurrency space where there has been a lot of excitement and investment but less in the way of quality sustainable offerings.

The third is uncertainty over Brexit, and not knowing even at this late stage what kind of deal may be reached to enable fintechs to conduct business internationally, or what the rules governing such conduct might entail.

How does fintech fit into the firm as a whole? Is it easy to collaborate with other teams?

It sits across all the practices. It is led from the core commercial technology team, which incorporates the financial regulatory team and the data protection team; but it spans across corporate/investment, IP and disputes, employment, and tax.

We are all sat in open plan and meet regularly to discuss what’s going on in the industry and what we’re involved in; the nature of the work also means that we are frequently working together on matters, combining our own various areas of expertise in the same way that much of fintech is combining previously disparate skill sets.

What advice would you give to the next generation of fintech lawyers?

Be adventurous in what you set out to learn, get to know the industry at all levels, and be prepared to read a lot of regulation and make a call on how existing laws apply to new pieces of technology and business structures that legislators never even thought of.

What are your predictions for fintech in the UK over the next five years?

We predict that the adoption of fintech solutions will become more widespread, through a mixture of distribution via the trusted brands of incumbent financial institutions, and roots-up usage by young adults as their first encounters with financial services.

More financial institutions will partner with fintechs in cobranded services, and it will be easier to get these deals over the line as the institutions continue to learn to deal with start-ups in different ways from how they have previously dealt with major IT suppliers.

Brexit fears are overstated in this area, so long as immigration rules allow the attraction and retention of the many types of talent needed in the industry.

More services will be developed and operated outside London. More fintechs will have become incumbents in their own right. Consumers and businesses alike will benefit from an increased range of services and level of convenience that will be greatly beneficial to the whole economy.