Business Crime Defence 2015: Trends

On 27 May 2015, seven FIFA officials were arrested in Zurich, Switzerland, on corruption charges before the start of the 65th FIFA Congress. The arrests made on behalf of US authorities are a stark reminder of the long arm of US justice, which has been the driving force of corruption and bribery investigations worldwide in the past few years.

Taking Anti-Bribery Enforcement Global

As business has become global, so has anti-bribery enforcement. The extraterritorial reach of laws such as the US’s Foreign Corrupt Practices Act (FCPA) and the UK’s Bribery Act have increased awareness among companies worldwide as to the risks of enforcement by overseas authorities. Moreover, jurisdictions are beginning to enhance their own or introduce new laws with respect to fraud and corruption. The resulting picture is one of increased regulation, scrutiny and enforcement. The “new normal” sees companies and individuals the subject of investigations and often resulting criminal proceedings, which have increased the need for legal representation tenfold.

From conducting internal investigations to ensure companies’ compliance programmes stand to the test, to representing companies and high-level executives in the courtroom, business crime defence lawyers are finding their workloads on the rise. “It’s been a lucrative few years,” said one London-based lawyer. However, this new found attention to the practice area is not without its drawbacks. “Every firm professes to have white-collar crime capability,” he added. While there is no doubt that there is enough work to go around, the number of law firms with a practice in this area has increased considerably in western Europe – following in the US’s footsteps.

Nowhere is this trend more prominent than in London: a market once dominated by a few specialised outfits. In 2008, we listed 22 London solicitors at just 10 firms; by comparison our 2015 research lists 49 London-based lawyers in 22 firms. Today, the legal market is a mix of city, US and specialist firms each offering a slightly different service but with considerable overlap. The market has expanded via lateral hires; new entrants have focused on headhunting lawyers from the specialist firms and from the authorities such as the Serious Fraud Office (SFO). For the most part, the international firms are focusing on representing corporates with the boutiques representing the individuals in the related cases, but it’s not a hard and fast rule. Many of the lawyers from specialist firms such as Kingsley Napley or Peters & Peters, who now reside in international or US firms still represent a considerable number of individuals, and many specialist firms are beginning to represent more corporates. Moreover, while some larger firms are seeing great success in building out their capabilities in white-collar crime and investigations, others are not. From our discussions with lawyers in London, the message is clear: firms need to recognise their expertise and more importantly their limits. Following the dressing down of partners at Allen & Overy in the Dahdaleh bribery case back in 2013, where the two partners involved were criticised by the SFO for “putting substantial pressure” on a prosecution witness, firms and clients are being far more cautious. In recent months there have been several instances of full-service firms bringing in specialist expertise to work alongside them, which according to some is helping to address the need for in-depth knowledge of the regulators and processes.


One further area of concern for London practitioners is the SFO’s dislike of internal investigations. The SFO has raised concerns over private practitioners “churning up the crime scene” by conducting interviews with witnesses and suspects before the SFO becomes involved, and then claiming privilege over the interview notes. A burgeoning and lucrative area of work, lawyers are watching closely to see how this issue is resolved and what impact it will have on the way in which law firms conduct internal investigations in future.


Outside London, Paris was consistently cited as a legal market undergoing change. In the last four years the United States Department of Justice (DoJ) has taken home more than $1.3 billion in negotiated fines from four major French companies. The biggest settlement came in December in the case of Alstom, the French engineering giant, which paid the US a record $772 million, surpassing fines imposed on Siemens of Germany and on American companies including Alcoa and KBR. It is therefore of little surprise that there has been an increased emphasis on compliance programmes within French companies as they begin to establish a chief of compliance function with a reporting line independent of the chief legal officer. However, there is still a long way to go. “France is the bad student in the class when it comes to enforcement,” according to Daniel Lebègue, president of Transparency International France, who recently noted that in 15 years, only four French individuals, and not a single company, have been convicted of paying bribes overseas. In response, the larger firms in Paris have been hiring specialists who previously resided in boutiques or were sole practitioners. Examples include the moves of former Metzner Associés practitioners Aurélien Hamelle and Antonin Levy, now working at Allen & Overy and Hogan Lovells respectively. Elsewhere in Europe, Germany and Italy are also stepping up their pursuit of foreign bribery.


Many are heralding Asia-Pacific as the next frontier of work. A few firms are already active in the region with established practices in Hong Kong or Singapore while other lawyers based in Europe or the US are focusing on ways in which to export their expertise to clients in the region. There has been a definite increase in enforcement actions against multinational corporates alleged to have paid bribes in the course of carrying out business in the PRC; one high-profile example is the JP Morgan “Sons and Daughters” matter. This FCPA investigation is looking at a programme used in China whereby the banks China and Hong Kong offices offered jobs and consulting contracts to the children of well-connected officials in China (including the heads of state-owned enterprises and senior party officials) in return for lucrative business opportunities in the Chinese market. Outside China, other jurisdictions are currently in the process of reviewing their laws and adopting anti-corruption legislation as seen in India and Myanmar. Australia is also beginning to recognise the issue of corruption and the Australian federal police are beginning to exercise their anti-bribery powers. Lawyers described it as a “wakeup call for directors and executives, to check compliance programmes are up to date”.


Lawyers in Brazil reported a marked increase in investigations work beginning at the end of 2014 into early 2015 in light of the Petrobas scandal. The CVM, Brazil’s securities industry watchdog, has opened eight investigations into executives at the state-controlled oil producer relating to a graft and money laundering scheme inside the company. A handful of large construction companies that acted as contractors for Petrobas are also being investigated.


One of the more recent developments in this sector is the worldwide scope of investigations and the interplay between different agencies and jurisdictions. The current Libor-fixing scandal is just one battleground and many individuals are caught in the crossfire between the SFO and DoJ. Tom Hayes, a former UBS employee who is currently at trial in Southwark Crown Court, was at the centre of a transatlantic row back in 2012 when UK politicians opposed his extradition to the US. With more and more cases having a US link – “there is very little the US are not involved in”, said one lawyer – we are likely to see more of these battles.

These transatlantic cases typically play to the strengths of the US firms with strong practices on either side of the pond, of which there are a growing number. US firms have been aggressively hiring in London during the last few years and are now enjoying their success in being able to offer clients a holistic approach to their concerns. Back in 2005, the first year in which we began our research into the business crime defence market, the only American firm in our research was DLA Piper – the result of a 2005 merger between UK-based DLA and Chicago-based Piper Rudnick. In this year’s edition, we see nine US firms with a London presence making the grade to be included among the world’s top practitioners.


While there is still room for improvement, it is clear that clients are becoming more sophisticated in selecting counsel and putting together their legal teams, as seen in the decision to bring in specialists to sit alongside other professionals. Many of the lawyers we spoke to welcome this development and are encouraged by the early signs they are already seeing in markets as they play catch-up with the US. Altogether lawyers are optimistic concerning the opportunities in the market at present and expect to remain busy for the foreseeable future.

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