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Research Trends and Conclusions: Business Crime Defence 2012

With the benefit of over 14 years of research and tens of thousands of votes from clients and private practitioners, Who’s Who Legal takes a closer look at developing trends in the business crime defence legal marketplace worldwide.

INTRODUCTION

Whoever said that “crime doesn’t pay” clearly hadn’t spoken to the lawyers. Researchers for The International Who’s Who of Business Crime Defence Lawyers, now in its eighth edition, received an unprecedented response from white-collar criminal defence practitioners worldwide and the overriding theme of the feedback was that it has been a very busy year. This wealth of opportunity has given a greater number of lawyers the chance to shine and their efforts are recognised in this publication, which lists 56 more experts than the previous edition.

COMPLIANCE

Although no single factor is wholly responsible for the increase in activity, the boost to many legal practices is due in large part to what one source described as the “international permeation” of the UK Bribery Act 2010. This highly anticipated statute criminalises a much broader range of enterprise than any pre-existing anti-bribery legislation. The extra-territorial scope of the Act and its application to foreign companies which conduct business in the UK has created a flurry of compliance activity in businesses across the world. Researchers received reports of a significant uptick in compliance advisory work from firms across Europe, India and the Middle East, with some lawyers predicting that this type of work will be “keeping us very busy for the foreseeable future”.

In England, the increase in compliance work offers an opportunity for large corporate law firms to “get their foot in the door” of what has hitherto been a sector dominated by boutique law firms. The existing corporate client-base of magic circle firms renders them well-placed to extend the services they offer to encompass this kind of advice, although their activity has not yet affected the upper echelons of English business crime defence – all 12 of the new inclusions in the English section of our directory hail from white-collar crime boutiques or small multidisciplinary firms. The lack of impression made by corporate firms in this regard is thought by one interviewee to be attributable to two factors: firstly, they face “stiff competition” from some consultancy firms which are also advertising their Bribery Act compliance services, and secondly, “it is simply too soon” after the Act has come in to force for them to have established a real reputation for this work.

Across the pond, the research tells a different tale. The US’s main anti-bribery legislation, the Foreign Corrupt Practices Act, is now firmly embedded in commercial culture. Over the last 15 to 20 years many large corporate law firms have been able to build an impressive practice in compliance work and some have succeeded in developing this expertise into a broader criminal defence practice. This trend is exemplified by our findings – of the 33 new inclusions in the jurisdiction, 16 are from international corporate firms. Whether the trend will be repeated in England in the years to come is uncertain, but, as one source commented, it is clear that the magic circle is “increasingly focusing on white-collar criminal defence as a profit centre”.

ENFORCEMENT

English boutiques need not feel too threatened by the approach of corporate competition, however. Sources reported that there has been a huge upturn in the number of white-collar criminal investigations in the last year, and in this area the expertise of boutiques remains unrivalled. The hot topic amongst them is the inevitable introduction of deferred prosecution agreements (based on the US model) whereby the Serious Fraud Office (SFO) will grant immunity to companies who self-report if they agree to conduct business subject to certain conditions. This will represent a significant departure from the SFO’s current modus operandi, which encourages self-reporting without guaranteeing immunity for companies which own up to their illegal activity – a policy which one practitioner described as “all stick and no carrot”. Due to their expense and difficulty, prosecutions are already considered to be a last resort for the SFO and many of those we spoke to predicted that they will become even scarcer when Parliament legislates for deferred prosecution agreements. Furthermore, several lawyers commented on the surge in judicial review challenges to the investigation process, demonstrating that litigation has “migrated from the trial to the investigative stages”.

Our research reveals that the trend for greater enforcement activity is not restricted to the United Kingdom, but is truly international. Competition law enforcement agencies worldwide are benefitting from improved inter-jurisdictional cooperation with their investigations, resulting in a marked increase in criminal antitrust work for many of the lawyers we spoke to. The uptick in such work has given greater visibility to lesser-known attorneys, enhancing their reputation to such an extent that they have gained entry into this publication for the first time.

But although the number of lawyers featured in this edition is significantly higher than last year, the number of firms and jurisdictions from which these experts practise has not grown at the same pace, as Chart 1 below shows. The slow rate of growth in the number of firms featured illustrates that the best firms continue to attract the best legal minds, thus restricting access to the top tier for many new market entrants. One source cites such firms’ “enviable adaptability” as the reason for their success, as it allows them to take on whatever business crime work is prevalent at the time, regardless of the sector from which it arises (eg, health care, competition or financial services). For the past five years the number of jurisdictions featured in The International Who’s Who of Business Crime Defence Lawyers has remained relatively constant and the lawyers featured in this edition, as in previous years, are overwhelmingly concentrated in the US and England – these two jurisdictions account for over 50 per cent of the 89 new nominees in this edition.

Number of Lawyers

Chart 1: Number of lawyers, firms and jurisdictions featured in this publication since 2005

An interesting trend emerging from this year’s research is the sensitivity of business crime defence work to political and economic pressures. In India we received reports of exponential growth in corruption investigations in the wake of the Spectrum case. Investigations of financial services fraud have been stepped up in Canada following the commencement of the Allen Stanford case. In the face of so much anger and negative press surrounding the financial sector, the UK and US governments wish to appease the public by addressing the problems within the industry with positive action rather than rhetoric. One way in which this can be achieved is by visibly cracking down on certain types of business crime. Hence there has been what one lawyer called a “rash” of insider trading cases in the United States – this type of illegality may not go to the heart of the financial crisis, but it was shrewdly pointed out to researchers that these cases are “easier to make out” and therefore more likely to result in success for enforcement agencies. Health care, another highly contentious issue in the US, has also received additional attention from the Department of Justice. Last year we reported that the US administration had designated more prosecutors to deal with health-care fraud and for many of the practitioners we spoke to, this type of work has now become part of their staple diet.

Given the constantly changing focus of white-collar crime defence work, skill in additional areas of law is greatly valued. It is perhaps unsurprising, then, that roughly seven per cent of the lawyers featured in this book also appear in other Who’s Who Legal publications – a significantly higher proportion than is found elsewhere.

Additional Sectors

Chart 2: The broad range of additional sectors in which business crime defence lawyers practise

The variety of expertise is remarkable, with business crime experts active in over half of the practice areas covered by Who’s Who Legal. Although all additional capability is highly prized, it is clear that most of the practice areas represented in the chart above would not bear relevance to all types of business crime work. Litigation, however, permeates the full spectrum of legal practice and is particularly useful in criminal defence where so much of the work is contentious. Of the 36 lawyers who are listed in other Who’s Who Legal publications, 20 are listed for their outstanding skill as commercial litigators and of them, three-quarters are based in the United States. This may provide some insight into the extraordinary success of white-collar crime practices in that jurisdiction and it will be interesting to note whether a similar pattern emerges in other countries in the future.

The introduction of the UK Bribery Act 2010 and the uptick in international enforcement activity have kept even the most seasoned business crime defence lawyers on their toes this year. The current trend for compliance work has also introduced some new names to the market, though whether their presence can be sustained in the face of such tough competition remains to be seen. Enforcement agencies worldwide continue to phase their investigations according to the diktats of the political and economic climate, meaning that there is little certainty about the kind of work lawyers might be dealing with in future. In the West, however, the prosecution of financial crimes seems likely to occupy the authorities for some time. Whatever the focus, the findings of our research demonstrate that business crime defence lawyers are in constant demand. Much of the credit for their relentless activity must go to the lawyers themselves, whose skill in adapting and applying their expertise to a broad range of work ensures that quiet periods are few and far between.

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Nominees have been selected based upon comprehensive, independent survey work with both general counsel and private practice lawyers worldwide. Only specialists who have met independent international research criteria are listed.

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