The message from the Hong Kong Monetary Authority that banks must do more to cater to foreign start-ups and small and medium-sized businesses has been welcomed by the head of Ogier's Corporate Practice in Hong Kong, Nathan Powell.

Yesterday, the HKMA intervened to warn local banks that due diligence requirements – which have been significantly tightened in recent years – have been applied too stringently and in a way that is disproportionate to the likely risk levels of foreign small and start-up customers.

The HKMA statement underlined the importance of anti-money laundering and counter-terrorism controls, but said that a risk-based approach should be adopted by banks to stop small firms from being effectively excluded from banking services.

Nathan said: "We welcome this statement by the HKMA, which brings us to a more level playing field and a more business-friendly environment.

"The international regulatory environment has put more pressure than ever on banks in terms of compliance and due diligence, but this shift to a risk-based approach is a pragmatic and forward-thinking one.

"We look forward to the HKMA publishing its list of banks willing to offer services to foreign small and medium-sized enterprises and start-ups, an initiative which will help to resolve some of the recent issues."

(Source: Ogier)

Between the negotiations of the latest US-China and US-EU trade agreements, policies surrounding the repatriation of US jobs, and the country’s affairs in the middle-east, political unrest has the consequence of national uncertainty, leading to more and more hesitation from businesses in regards to legal risks and economic confidence.

The US is today undergoing one of the potentially most nation-changing shifts in its political and cultural history, with the ongoing presidential election, and all the other baskets the US has its hands in.

Below, Bill Waite, CEO of The Risk Advisory Group, a London-based leading, independent global risk management consultancy, attempts to amalgamate the extent of said potential, and gives his expert opinion on the prospective of an ironically ‘isolated’ United States of America.

In terms of legislative reform, what would you say are currently the biggest concerns pertaining to the possibility of greater political and cultural isolation of the US in years to come?

Clearly, the world as it stands is a place of great uncertainty. From the US Presidential election, to Brexit, to a resurgent China developing its outreach policy in Asia and turmoil in the Middle East, there are a number of unanswered questions with regards to the political and cultural situation in the US, and its place in the world more broadly.

Businesses rely on certainty, or at least as close as they can get to it, in order to make key decisions, and that is proving difficult to come by at the moment. In a legislative sense, the Trans-Pacific Partnership (TPP) between the US and China, for instance, isn’t being supported by either of the two main US Presidential candidates, making ratification seem increasingly unlikely.

Similarly, the Transatlantic Trade and Investment Partnership (TTIP) between the US and EU looks unlikely to reach any sort of agreement, owing to a lack of enthusiasm on the part of primarily France and Germany. They argue that the US is unwilling to give up any concessions, rendering the bi-lateral aspect of the deal somewhat questionable.

Ultimately, this uncertainty is creating an environment of enhanced risk, subsequently impacting on everyone doing business and their decision-making processes. As a result, we find that businesses are prioritising research into local political environments and stakeholders, in order to gain as much insight as they can into how these occurrences are affecting the individual countries and regions in which they operate.

Given the isolationist policies touted by Donald Trump, what do you think the US can expect if he is elected President? What would be the advantages?

Perhaps the most notable of Donald Trump’s touted policies from an isolationist perspective is his pledge to force other members of NATO to contribute more to the organisation financially, or otherwise risk the US failing to respond to acts of international aggression. It would seem as if Trump is questioning the very heart of NATO in making the statements that he has.

The most concerning thing is that as soon as the US steps back and says “we might not intervene,” it sends a strong and dangerous message to any non-allies in the region. This, coupled with the fact that Vladimir Putin has made a point of testing boundaries in the past, through his advances into Crimea and other countries’ airspaces, does add a sense of peril to the position that Trump adopted.

But in terms of potential advantages, there is certainly an argument that having a US President maintaining an open and frequent dialogue with Vladimir Putin, as Trump has also pledged to, could have a positive effect on international relations. Engagement, even on points that they do not agree on, would ultimately appear to be a more constructive option than complete separation.

On the other hand, what might Hillary Clinton’s policies set forth if she is to be elected? And in this case, what would be the benefits?

Hillary Clinton’s policies with regards to isolationism are probably slightly more nuanced. While she has reversed her position on free trade agreements, coming out in opposition to the ratification of TPP, having originally been a proponent of it, TTIP, and more historically NAFTA, her position towards broader international alliances is less hawkish.

Much of Clinton’s recent opposition to free trade appears to be down to political expediency, but perhaps owing to her time as Secretary of State, and an international profile that generally appears to be more positive than her domestic one, there doesn’t seem to be any evidence that she will adopt the same positions as Trump on issues such as NATO.

However, it must be said that if both Trump and Clinton continue to take a short-term view towards the negotiation and ratification of trade agreements, in terms of what will gain most favour in election time rather than the broader economy, it is likely that the US will ultimately suffer for it in the long-term.

Do you believe either presidential nominee has policies that would prove significantly challenging in A. passing and B. logistically being implemented? Please explain.

On Clinton’s side, perhaps the issue most worth mentioning is the Iranian nuclear deal. While there has been some backlash against the deal in US Congress, she appears to remain committed to it being passed. After several years of supporting the deal in her capacity as Secretary of State, and her successor John Kerry’s continued endorsement of it, she would probably require some relatively compelling evidence to reverse her position at this point.

Ultimately, this would appear to be a sensible position for the US to take. Reengagement with nations with which the US has experienced friction in the past, and the stimulation of trade with those nations, would appear to be a positive in that it creates a sense of mutual interest that can be referenced should relations turn sour for any reason.

To add to that, there are numerous economic benefits to entering the Iranian market, and indeed our client base has expressed significant interest in the country from an investment perspective. As a country of almost 80 million people, with a highly educated population and access to significant resources, both natural and financial, there are clear opportunities for Western businesses.
As for Trump, his well-publicised policy of building a wall along the US-Mexico border is one that bears some scrutiny. The assertion that Mexico will make a substantial capital investment in a wall that is to be built on US soil is a difficult one to comprehend if it is considered critically, and without answering how he is going to make it happen, Trump certainly faces a logical and logistical challenge.

Both candidates are likely to face challenges from likely Congressional obstructionism. The Republican Party is facing a difficult fight to retain control of the Senate in the face of Trump’s unpopularity in several key states, but it appears likely that the House of Representatives will remain in Republican hands. Hence, even if elected President, Clinton will face an uphill battle in terms of enacting her policy agenda. However, the picture could prove worse for Trump if elected, even with a Republican Congress, given the widespread hostility towards him within his own party.

In terms of employment, both parties are under pressure to repatriate employment to US citizens. How do you believe this could affect investment in the US? What else could be impacted?

The repatriation of US jobs is a policy that clearly garners a lot of favour amongst the US public, particularly in the so-called ‘Rust Belt’ that have perhaps felt the effects of globalisation hardest in terms of the outsourcing of jobs overseas.

Ultimately, it is a policy that is unlikely to be delivered within the lifespan of one Presidency. It would take too significant an investment domestically in terms of capital, infrastructure and training in order to be viable within that time span. But American corporates are acutely aware of stakeholder pressure, not only from government, but also from their consumers and the people who live in the communities in which they operate, and so there is likely to be a response at some point.

If we look through the economic cycle, rising costs and wages in the jurisdictions that US jobs were initially outsourced to, the demand for high-quality talent, and corporate social responsibility programmes will mean that jobs will most likely start to come back, but most probably in the longerterm.

Thinking about existing agreements like the North American Free Trade Agreement (NAFTA) that have accelerated the process of outsourcing, their fate appears at this point to be dependent on the success of each US Presidential candidate. Should Trump be elected, he has said that he would walk away from NAFTA, but this is unlikely in the case of Clinton. While her stance on TPP suggests that there will be something of a stop with regards to free trade agreements, at least in the nearterm, there is unlikely to be any withdrawal or walk-back.

With the TTIP coming to an alleged failing conclusion, and the UK opting for a Brexit, what does the future of the US’ relationship with Europe look like, and what are the current economic and legal challenges ahead?

Perhaps the most high-profile recent example on this front is the implementation of the EUUS privacy shield, which lays out certain regulations pertaining to data transfer between the two blocks.
However, while this has been successfully implemented for the moment, it would be a stretch to connect it with TTIP, as TTIP goes so much further in terms of its effect on the day-to-day political and economic environment in Europe. The privacy shield was a complete necessity, because so much business depends on the transfer of the data in question, but there
is so much trade and reciprocal FDI between the EU and US that conversely, the absence of TTIP simply represents ‘business as usual’.

If we are to consider the most recent example of EU-US relations being questioned, that of the $14.5 billion Apple fine that was recently announced by the EU, this is unlikely to have a significant effect either. While it will probably ensure that not many businesses are rushing to Ireland to incorporate, it is not likely to affect US FDI into Europe. Tax is a factor in such decision-making, but it is not the only factor.

How would you say is the US’ retreat from the international stage becoming more and more of a concern in terms of global economic powers?

Isolationism rarely has a positive effect on a country’s economy, and in terms of the free trade agreements that we have discussed that is most likely the case. Free trade generally represents a more positive course of action, economicallyspeaking. If a country retreats from international trade, and attempts to service its own market purely domestically, the more likely we are to see a weakened global economy.

What further challenges does the US face in terms of isolationism, especially on the back of its activity in the Middle East and its relationship with non-American/ Western cultures?

Neither US nor Western policy in the Middle East has appeared to have a positive effect over the last 15 years or so. If we consider interventions in Libya, Syria, Iraq and Egypt, there has never
been a particularly favourable outcome from an attempt to affect regime change, neither via the overwhelming force of the Bush administration, nor the more targeted attempts under Barack Obama.

There needs to be a significant amount of effort from both sides in order to engender any sense of stability in a region that is geographically and strategically at the centre of the world.
Ultimately, isolationism is not the way to go, but neither are the recent interventionist strategies and policies that we have witnessed in the region. A lack of thought around some dramatic foreign policy decision making has created a great deal of instability in a short amount of time. Extremism is a very slender branch of that, but one that has undoubtedly also created a large amount of political, economic and geopolitical instability in the recent past.

Last month one of the largest tech companies in the world, and certainly the biggest in revenue, Apple Inc. was issued with a 13 billion Euro ($14.5 billion) fine from the EU Commission, for unpaid taxes; the largest tax penalty for a US tech company.
This logically set in motion a trail of discussions and actions that will inevitably change the way tax evasion and avoidance is dealt with, in some form. At the end of August, an EU investigation concluded that the Irish government provided Apple with a favourable tax rate that would enable Apple to pay 1% on EU profits in 200, down to 0.005% in 2014.
Both Apple and Ireland are appealing the huge fine, on the grounds of a government tax break that the EU ruling qualifies as ‘state aid’, the issuing of which would be against the EU’s tax rules.
European Union Competition Commissioner Margrethe Vestager recently admitted that this ordeal would not be the last for American companies that don’t like paying tax.

On this matter, Lawyer Monthly has heard from several experts around the globe, from tax partners to commercial law and corporate law specialists. We’ve also had the pleasure of hearing from Dr. Liza Lovdahl Gormsen, Director of the Competition Law Forum & Senior Research Fellow in Competition Law at the British Institute of International and Comparative Law.
Offering some insight into the variety of perspectives that exist on this ongoing tax affairs, our guests answer the following questions:

• Is this situation shadowed by a political agenda?

• Is this contributing towards the fight against white collar crime?

• What are the facts we are not hearing in the press?

• How important is the repatriation of assets and how should corporate taxes function?

• What are the biggest legislative obstacles ahead in relation to tax avoidance or corporate tax payments?

• Will Apple’s fine incite reform for multi-nationals tax practices and what could the foundations of that ideally look like?

• How do you believe the EU can modernise taxations systems to reflect a 2016 globalised economy?

Rufus Ballaster of Carter Lemon Camerons LLP Solicitors:

The idea that a business can face a retrospective tax charge for having agreed a deal with a country in which it expanded following that deal – a charge possibly imposed decades later – is a massive constitutional problem and one which may well cause problems rippling in current and future activity.
We see some of the world’s largest and most successful corporations under attack recently about the tax they are paying and the business practices they have adopted and this is sure to prevent any sympathy emerging from the media or the population generally.
Other contexts though might produce other reactions. If a whole industry were saved with jobs and areas preserved from mass redundancy because a major company is persuaded to rescue it, the idea that years later the ‘White Knight’ may be told by a supra-national power that it must pay more tax would offend sensibilities. Even worse, it reduces the likelihood of a state in the future managing to attract a similar rescue bid if there is another industry in crisis.
Economists might say this is a good thing – that only if failing businesses go to the wall rather than being rescued can a truly fair international market apply – but it is socially and politically appropriate and economically beneficial for the area in question if jobs can be saved and activity preserved and it is constitutionally important that a deal done by a taxpaying business with a tax raising state is certain, that it cannot be undone years later to the detriment of the business which relied on it.
If what a sovereign state offers to a business in return for it doing certain activity in that state is not something upon which the business can rely in the future, we have a degree of business uncertainty which is potentially catastrophic.

Sheraz Akram – Head of Corporate & Commercial Law at DJM Solicitors

Apple has made it clear that it sees the EU ruling as a purely political move rather than an enforcement of legal position. In my opinion, the decision has an element of political agenda. The effort to crack down on corporate tax avoidance within the EU resonates heavily with EU members and their voters.
The issues around taxation and white-collar crimes should not be confused. There is not a discussion around whether Apple has committed any crime, but whether the organisation needs to pay any additional tax for its operations in Ireland.
The particular contentious issue within this case is whether the tax agreements between Apple and Ireland are contrary to EU rules. Apple has not been reprimanded, or given a penalty to pay; it is simply required to pay tax it may have avoided in the existing arrangements.
The media is reporting this particular tax issue as a scandal and something out of the ordinary. The fact is that this is not the only case of its kind. The Netherlands was ordered to recover large sums of money from Starbucks in 2015, so we could just be looking at the tip of the iceberg.
From a pure common sense point of view it cannot be ethical for Apple to have paid the alleged 0.005% tax in 2014 for its European operations. Once a case such as this has been identified it is essential that action is taken, particularly given the austerity measures that are still being introduced throughout the world.
There needs to be a consistent approach to corporate tax that works to retrieve a fair amount of tax from organisations of all sizes. I believe that if you set tax levels sensibly, you are more likely to get corporates paying the correct amounts, rather than putting complex structures in place to (legally, for most parts) avoid taxes.
The process of establishing how much corporate tax a company should pay is, in itself, extremely complex due to the international nature of large organisations. The flow of monies and inter-company arrangements make it extremely difficult to capture tax in any one jurisdiction. The global community has not, as yet, come close to achieving a solution that can ensure large corporations pay a fair amount in tax.

Stuart Green – Teacher in Taxation at Durham University Business School

An effective corporate tax rate of 1% on profits booked in Ireland might suggest that the hissing coming from Apple is not justifiable. Apple is the world’s most valuable company. Back taxes of £11 billion would be a tail feather or two for the company. Still, one might consider that some of the noise from Silicon Valley is justified. Retroactive changes to tax systems hardly provide for certainty. Many would question their equity, too. Accountants at Apple might be checking their iPhones for a time-travel app.
Will Apple and other US tech-companies flock back across the Atlantic? Probably not. The long-established and close ties between San Francisco and Ireland bring strategic and operational benefits to their European operations. Corporate tax rates in Ireland, even without ‘sweetheart’ deals, compare favourably with those in the US. McDonalds, Amazon and other US companies that use similar tax arrangements in Europe have vast cash reserves.
Still, the Irish government has much to consider. It is proud of its low rates of corporate taxation: only Cyprus and the Baltic states are similarly competitive. To be seen to support the EU ruling might undermine Dublin’s business-friendly reputation. On the other hand, an additional £11 billion in tax revenue would prove useful given the weakness of the Irish economy.
Multinationals lay golden eggs. The Irish government and the EU should be wary of killing this particular corporate goose. Apple is important to Ireland because of the personal taxes paid by its employees, not because of revenues from corporate taxes. The reasons for this imbalance are complex: their resolution is probably beyond the power of the EU. Approaches to both personal and corporate taxation have failed to keep pace with the consequences of globalisation.
That is the challenge for the governments in Europe and elsewhere. An approach to taxation that is rooted in the early twentieth century needs to be reformed to reflect the realities of 2016.

Erika Jupe – Tax Partner at international legal practice Osborne Clarke:

Tax avoidance has become front page news and this has undoubtedly caused it to rise up the political agenda.
The Apple case is just one of a number of cases brought by the EU Commission using EU State Aid rules to challenge tax rulings, which they view as facilitating tax avoidance. Is this an inappropriate attempt by the Commission to extend its influence to the field of direct tax which is supposed to be matter only for National Governments? The view that State Aid rules are not the correct way to challenge tax avoidance is a view that is supported by many, including former EU Commissioner Neelie Kroes who has argued strongly that tax avoidance is better tackled by changing international tax rules. The process of change is already underway as part of the Base Erosion and Profit Shifting (BEPS) Project being carried out by the OECD, which is expected to fundamentally overhaul international tax rules. These changes would not affect past tax avoidance, however.
In reality the EU Commission has an ever-increasing role in setting direct tax policy in the EU. Directives seeking to abolish withholding tax on cross border payments or enabling tax-free cross border reorganisations have been welcomed by business and national Governments alike. However more recent proposals such as the Common Consolidated Corporate Tax Base or “CCCTB” (which aims to harmonise the way in which EU companies determine their taxable profits and allocate then to different countries) have met with much less enthusiasm, in some cases outright opposition. The EU is also seeking to introduce a Tax Avoidance Directive which is intended to set minimum standards throughout the EU and a financial transaction tax.
There have been a number of recent legislative developments which are seeking to make multinational companies more transparent about their business and ownership structures to reduce the risk of tax avoidance. The major development is the adoption of Countryby-Country Reporting (CbCR) rules which require the largest multinational groups to disclose information about the business and financial arrangements to Tax Administrations. The CbCR rules are supposed to level the playing field between taxpayer and tax authority by giving Tax Administrations better access to information, allowing them to assess and challenge tax avoidance risks. The Finance Act allows the Government to introduce rules requiring companies to publicly disclose their CbCR reports – but whether this will be done remains to be seen.

Dr. Liza Lovdahl Gormsen – Director of the Competition Law Forum & Senior Research Fellow in Competition Law at the British Institute of International and Comparative Law:

The European Commission is not imposing a fine on Apple, but has asked Ireland to recover allegedly unpaid taxes. It is important to distinguish between a fine and recovery. The latter is a mechanism, which attempts to restore the situation before the granting of aid, and not equivalent to imposing a fine for anticompetitive behaviour.
An effort to deal with multi-national tax practices is already ongoing – and has been for some time. For example, the OECD/G20 Base Erosion and Profit Shifting (BEPS) project Action 5. Because an international effort is already underway, the US Treasury Secretary Jacob Lew has been angered by the Commission’s use of EU State aid law to scrutinize certain practices of tax administrations vis-à-vis advanced pricing agreements in various Member States. He has formally expressed concerns that the Commission’s “enforcement actions… are inconsistent with, and likely to contrary to, the Base Erosion and Profit Shifting (BEPS) project.” Given that reform of multi-national tax practices is already underway, what is more likely to happen is a debate before the European Courts of the Commission’s novel interpretation of the concept of selectivity in the State aid rules in relation to national tax arrangements.
There would be significant risks in changing the tax system retroactively. Thus, we should work towards avoid this happening.
There is a delicate balance between the Commission’s State aid powers and Member States fiscal sovereignty in the area of corporate taxation. What is clear is that the European Member States have explicit sovereignty in relation to direct taxation. Thus, the EU has to be careful. The Commission knows this, so in recent years there have been two major responses by the Commission to the perceived problems with Member States offering advanced pricing agreements. One response came when the Commission published a proposal to include an automatic exchange of advance cross-border rulings and advanced pricing agreements in the Council Directive on Administrative Cooperation in the field of taxation.
This Directive has been adopted and comes into force on the 1st January 2017. While it does not provide for public disclosure, although the Commission is currently pressing for public disclosure of the country-by-country tax reports which must be filed with tax authorities by large businesses, the new Directive requires tax rulings to be disclosed to the Commission. Another response by the Commission, and the focus of the discussion here, is the State aid investigations concerning advanced pricing agreements granted to certain multinational corporations by Member States.
I understand that Ireland has decided to appeal the Commission’s decision in Apple. I can only imagine the Irish conundrum following the decision. However, it would be short term thinking to support the Commission’s decision as Ireland would risk jeopardising its long term corporate tax base. A support for the Commission’s decision would create uncertainty, which would be bad for corporate investment.

Daily we are seeing new businesses strategies and models emerging around the globe; some of these are now contributing to what we are calling a GIG economy. This is the overall businesses environment in which organizations and companies outsource labour, via direct or third party contracting for shortterm independent employment. A recent study conducted by Intuit predicted that by 2020, 40% of US workers would be independent workers, and looking at the growth of companies such as Uber, AirBnB and TaskRabbit, we can expect a further expansion of the GIG economy throughout Europe and Asia in no time.

However, this type of business has left space for much controversy and issues relating to employment and contracts, evidenced by some of the recent lawsuits brought towards Uber, from contracted employees who wished to have similar benefits as a full-time employee. Clearly, there are loopholes and voids that need filling in this market, and legislative development can take some time, relying mostly on judicial precedents.

Lawyer Monthly wanted to hear your thoughts on this matter, and set out to hear from various professionals worldwide on what the legal implications, expectancies and conclusions might be in relation to the GUG economy; here’s what they had to say.

Jonathan Maude, Partner at Vedder Price

The large amount of money in the recent Uber settlement has grabbed headlines. However, it comes as an anti-climax and disappointment to many who have been waiting for the Court’s decision and hoping it would provide some much needed guidance on the status of those working and serving in the fast changing GIG economy, and the uncertain employment landscape it is ushering in. The ever growing digital on-demand or GIG economy relies on contractors working “gigs” or doing piecework - rather than on paying employees through the regular payroll. Whatever the benefits, those individuals who work “gigs” in this way lose a raft of social and employment protection they would enjoy as employees. It was this loss of status and protection which the Uber drivers challenged, claiming that they should be classified as employees.

This case therefore challenged the very basis of Uber’s business model. A definitive answer from the Court as to the drivers’ status would have been welcome, and would have provided some certainty and guidance not only to the individuals but also to the new and growing wave of on-demand businesses that operate on a similar model to Uber.

The settlement means that, for the moment, it looks as though we will have to do without definitive guidance from the Court, assuming the settlement is approved. However, this looks set to be a temporary stay only. This case has raised the consciousness of these issues - partly owing to the fact that Uber is becoming a household name and because of the size of the settlement - and on the real status of individual “gig” workers. We expect that many will share our view (looking at the case from the outside) that, had the case proceeded (and under English law), the drivers would have been said to be employees. This is primarily because of the level of control exerted by Uber and the overall brand management. To our mind, the size of the settlement recognises this risk, and looks likely to give impetus to further similar challenges. Businesses operating on the contractor model will be very aware of this, and the potential huge ramifications. They will be aware too of the need to prepare for and contingency plan for such challenges, or to change their relationship with their contractors.

While this case and others like it are shining the spotlight on the lack of protection and rights given to the new and growing army of workers working under these business models, it is too early to say precisely how this lack of protection will be addressed. One thing that does seem certain, however, is that this is an area where we can expect to see developments in further cases, law and policy, both in the UK and globally.

Paul Kelly, Employment Lawyer and Partner at Black Solicitors LLP

The problem with ‘the GIG Economy’ is that the law has been slow to catch up. A business model which shuns the traditional idea of employment in favour of a person working for themselves - taking on individual “gigs” - is increasingly common in almost every aspect of our lives. Whilst the Gig Economy can be viewed as having empowered those who want to work for themselves, in the post-recession landscape we find that more and more people are turning to - or being forced into - this type of work because they simply cannot find traditional employment. And in the process, the dividing line between employment and self-employment has become blurred.

Perhaps the most high-profile recent example of the blurring of the employment/self-employment distinction concerns the taxi app, Uber. Uber has been taken to the Employment Tribunal by some of its drivers who claim, amongst other things, that because their work for Uber is their only source of income, they should be treated as employees. Delivery firm Hermes has also faced similar criticism. Many of their self-employed delivery drivers earn less than the minimum wage due to the rates Hermes pays – though this does not appear to have dissuaded Amazon who are said to be considering adopting a self-employed approach for some of their deliveries. Most recently the courier firm, Deliveroo, has hit the headlines by allegedly requiring couriers to sign contracts which not only confirm that they are selfemployed, but also provide that they will pay Deliveroo’s legal fees if they assert to the contrary in the Employment Tribunal.

The GIG Economy claims many advantages for those businesses that adopt the model. It can give companies like Uber and Hermes national coverage without the complication and cost of setting up regional operations. It also provides them with a flexible workforce that operates 24 hours a day. Most importantly, companies subscribe to this model because it involves lower overheads – the business has fewer employees and so is able to reduce the financial and administrative burden which accompanies things like paid sickness absence, disciplinary and grievances hearings, sick-pay, maternity, paternity and parental rights, and pension auto-enrolment.

The advantages for individuals – beyond the obvious attraction of flexibility – are not so clear to see. But two years ago when the CIPD surveyed those working on zero hours contracts they found that 65% of them were happy with their work-life balance, compared with 58% of their full-time colleagues – so any work model which has a lower level of commitment for the individual seems to be popular.

The GIG Economy is said to be a natural evolution of our working practices and a by-product of a ‘Millennial’ generation that values work-life balance and flexibility over income and status. However, further regulation is needed to clarify the employment status of ‘Gig’ workers. The model is open to abuse by unscrupulous employers who would seek to exploit those with little bargaining power by cajoling them into performing all the functions of an employee but without giving them the associated rights and benefits.

The GIG Economy is not going to go away. As we become more and more connected and dependent on technology, traditional companies need to re-examine their business models. This new model may or may not work for them. But better to consider (and perhaps discount) the model, than find that it has been successfully adopted by a competitor

Emma O’Leary, Employment Law Consultant at ELAS

The main legal consideration businesses should be making in regards to the GIG economy would be employment status. This is the big question when it comes to people working in the GIG economy – are they really self-employed or should be they be considered workers? There are various tests which can be applied depending on the circumstances.

Rulings in the recent Uber employment tribunal case as well as the cycle courier cases could be momentous and have a phenomenal effect on GIG economy business. They could even lead such companies to consider revamping their whole business model. Unions are calling for more regulation on these type of businesses and it may be that the judgements give some definitive guidance on employment status once and for all. The UK Government seems to be avoiding the issues in terms of regulation and, given the current political climate, it’s even less likely that they will get involved. Addressing the employment status issue could be expensive for employers and something this Conservative government is unlikely to want to tackle.

We can expect to see many more tribunal cases from the ‘workers’ which could then adversely affect the GIG economy – it’s already happening in the US as well as here in the UK. If the judgements in these cases don’t go the employers’ way then financially it could close them down. The flood gates will open, the workers will receive payouts for underpaid wages and holidays and there could be a knock on effect on the financial stability of the companies involved. This would ultimately affect their place in the competitive marketplace if these payouts result in a hike in prices for the consumer.

Very little is to be expected in terms of regulatory development on existing companies in this realm – the government won’t want to deal with it. It’s too difficult for them to resolve and they won’t want to give credence to the worker’s rights. The judgements in the recent cases will shed some light, we would hope, but they won’t technically be binding decisions unless and until one of the parties appears to the Employment Appeals Tribunal – only that court and above can create a legally binding precedent. Meanwhile, companies which operate on this GIG economy, or indeed any company that tends to engage ‘self-employed’ operatives, may want to take advice on how safe their employment status presumptions are and tighten them up if necessary.

Matt Walters SVP Operations for Capital GES

The staffing industry, in the legal sector and elsewhere, is in a constant state of evolution, where any semblance of a traditional model of recruitment now seems shortlived at best. Over recent years the ubiquity of reliable technology and connectivity, paired with a generation of digital natives with an expectation of instant availability, have led to a new world of work: the gig economy.

In recent years the concept of ‘gig’ work has gathered considerable pace as businesses come to fully embrace the notion of a flexible workforce. The GIG economy is a marketplace in which businesses engage with workers for short-term engagements, or gigs. The significance of this emerging economy is enormous, as workers, clients and staffing companies realise that vital experience, contacts and perspective can be gained without resorting to traditional hiring practices.

As an increasing number of workers are choosing to work ‘gigs’ rather than entering into full-time employment, it is critical that businesses fully understand the landscape of the GIG economy and the implications of engaging with these workers. Firstly, it is important to address the unparalleled opportunities that can arise from the gig economy. ‘Gigs’ allow businesses to access a wide talent pool of flexible workers.

This heightened level of flexibility and access to talented workers is one of the fundamental reasons for so many businesses to engage with ‘gig’ workers. The CEO of on-demand talent marketplace MBA&Company summarised the trend well, stating: “You can now get whoever you want, whenever you want, exactly how you want it.”

Indeed, one of the most pressing questions surrounding ‘gigs’ is that of worker misclassification or deemed employment. If a worker is generating a majority of their income from an engagement with a company, should that company not be deemed to be socially responsible for that worker? In other words, is the worker not just, in effect, an employee? This and other questions are inevitable in any major shift in working practices, and will present significant challenges and opportunities to companies and regulators over the coming months and years.

The GIG economy will change the staffing landscape, and we can expect that rules and regulations will be introduced to deliver clarity. Companies such as Uber are blazing a trail in this area by pushing countries and local authorities to clearly define when a user of a sharing app becomes an employee of the company. This precedent being set by the sharing economy (a subset in its own right of the gig economy) will allow companies in the wider gig economy to thrive in comparative safety.

The GIG economy is here to stay, and as the trend continues to expand it is critical that businesses consider how they engage with their gig workers. Staying informed and understanding the law is key to making the most of this new era of both flexible and talented gig workers.

Christopher Tutton, A Partner at Constantine Law

The GIG economy is undermining and redefining traditional legal concepts, particularly in relation to what it means to be an employee. The GIG economy relies on self-employed contractors to provide a flexible labour supply at much lower cost. This in turn creates significant cost savings for consumers.

Moving away from traditional employment models however, is not without risk. Operating a contingent labour supply brings its own challenges, such as how to deliver the same standard of service with a reduced level of control over the ‘workforce’. GIG economy companies need to put systems in place to ensure customer service and quality control are not compromised, or they will struggle to grow their brand.

Another potential risk is in relation to health and safety: direct employment arrangements have more regulation on working time limits and health and safety requirements. Health and safety standards could be eroded unless there is careful thought and adequate resources given to the issue.

Companies operating in the GIG economy also need to be mindful of the fact that whilst their business model may be popular with consumers, public attitudes towards the sector are divided. Companies can be viewed as controversial due to concerns about worker’s rights and unfair competition. Reputation management should be a key consideration for businesses in the sector.

We have seen litigation in California which saw Uber drivers being found to be employees. There is currently litigation in the UK employment tribunals against Uber in which drivers are claiming to benefit from a myriad of employment rights such as holiday and sick pay).

As with many changes arising from technological advances and changes in attitudes to work, the law has not been able to keep apace.

I would anticipate we see an attempt by unions and employee groups to put the brakes on the GIG economy by increasing regulation and lobbying for changes to the law to protect key employment rights. These include in particular the right to form trade unions, not be unfairly dismissed and to receive holiday and sick pay.

Whilst the sector may face further regulation, businesses should be looking at ways they can harness the power of the GIG economy, as, whatever the pros and cons of the model, it is here to stay. Businesses should seek to find a sustainable balance towards working conditions, quality control and health and safety whilst continuing to meet consumer demand for lower costs and flexibility.

Ian Dawson Head of Employment Law at Shulmans LLP

The suggestion that by 2020, 40% of people in the US may find themselves in a situation whereby they are self-employed under the GIG economy model, of course throws up questions in the UK about reference to employment security and fair play.

On the one hand, there are employment protections such as unfair dismissal, which do not necessarily apply when contracting an individual on a flexible and self-employed basis. The employee becomes a self-employed entity, allowing them to seek other revenue streams, removing almost all requirements of a business in reference to minimum benefits. Although it may seem as though businesses have the advantage here, this distribution of power will be unsustainable as the economy matures.

Inevitably, a time will come whereby the biggest companies in this economy, such as AirBnB and Uber, will be challenged by competitors of an equal footing, allowing the self-employed individuals to barter their own terms to seek the most profitable and convenient agreements. Any existing companies of this model would be wise to foster an environment of fairness at this early growth stage, in order to create a sense of community and loyalty. This should then help prevent a situation whereby the majority of its revenue earners ‘jump ship’ to pastures new, leaving the business unable to fulfil its services to the paying public and ultimately, to a potential demise.

One way to alleviate this threat could be to operate over two platforms; one in its current format and another with a traditional bank of full-time employees. With an ever-shifting market and with many businesses operating on a global scale, this will help employers meet the need for flexibility which the market requires.

It is evident that changes in legislation will be required to meet these fast-paced economic developments. However, the fundamental acknowledgement of treating employees fairly, whether actually employed or contracted, should be the best course of action - should they wish to grow and sustain their market share in the future.

Rhiannon Cambrook-Woods Managing Director, Zest Recruitment & Consultancy LLP

The GIG economy may still be in its infancy, but figures from the Recruitment & Employment Confederation predict that by 2025 the GIG economy will add £45 billion to the UK’s GDP and create work for 766,000 people.

Driving this are two key groups: millennials looking to take greater control over their careers, and those with a few more years under their belts who want more flexibility and variety in the work they are doing, opting instead to combine their main career with a number of often-diverse roles.

As the demand for this way of working increases, so too will the value legal employers place on it. But they need to be ready for it, its implications and the challenges that will need to be faced:

First, we are likely to see a change in work patterns. Law firms will be required to become more agile and turn many of their preconceptions of how employees work on their heads. Indeed, the use of temporary workers has by and large been to plug short-term gaps in the workforce. But this is likely to change, as workers at both ends of the skills spectrum will increasingly expect to be able to work flexibly. As it stands, law firms overall are less geared for such flexibility.

Second, increases in the number of people working flexibly could pose a perceived threat to those who work full time, or have less experience. This could see an increase in silo specialists who will be recycled from interim post to interim post. The effect of this could see an exclusion of other candidates, which in turn could see the talent pool become much smaller; thereby, creating an ‘us and them’ corporate culture.

A third major challenge facing law firms will be the way they manage quality control. As more people opt to become ‘gig workers’, firms need to ensure that contracts are allocated to the best person for the job, not the one who offered the cheapest rate.

Fourth, is the impact on the law firm’s brand. Managing a team of permanent and flexible workers will be a challenge, but so too is the ability to ensure continuity of service throughout the customer journey.

Fifth, with the downward pressure on pricing showing no signs of abating, the GIG economy is a good fit for the legal sector, as those with the skills that are needed can be drafted in ‘on demand’ and can quickly get to work to fulfil a specific role, within a specific timeframe.

Then there is the question of pay. Law firms will need to clarify the legal and tax status of gig workers to ensure they receive the same protections (and benefits) as other self-employed workers. One of the key challenges will be in the support afforded to gig workers, such as the provision of professional training.

The GIG economy may pose a number of challenges for legal firms, but it presents even more opportunities. As the firm’s needs change, having a flexible and external workforce that can be quickly scaled up or down could prove invaluable for practitioners under increasing pressure to reduce their costs while maintaining a high standard of service to their clients.

The legal sector is currently in a state of flux. Research1 has shown law firms are aware technology must be embraced to meet their full growth potential, but very few have taken the plunge and tackled this issue head on. Here to talk to Lawyer Monthly about this is Simon Michie, CTO at Redcentric, a leading managed services provider delivering innovative technology to businesses to improve productivity and efficiency through careful consultation.

It’s worrying that there are legal firms which haven’t realised the benefits of embracing the latest technological advances, especially when 24% of legal professionals cite enhancing operational efficiencies as a main priority. Due to the vast amount of rules and regulations in place within the sector, lawyers can spend days at a time completing admin, rather than adding value to their clients and the company as a whole. Updating the technology used to complete these tasks is now becoming critical to the future success of the business.

Recent statistics show 74% of legal firms plan on investing in new technology to address business and IT challenges over the next two years. Such investment has the potential to turn the hard work already in place within the sector into increased business growth. However, to do so law firms must implement technology with these growth goals in mind, to ensure they achieve the greatest return possible.

Which legal sectors are currently in need of the most investment in new technology to facilitate its operations? What factors/ considerations contribute to this?

While many law firms are already investing in new technology to transform their businesses, a significant number still carry out tasks with a traditional mind-set. I see senior employees and founders are often wary of implementing new technology because it’s alien to them. In reality, they are ignoring significant productivity gains. Many are put off by the necessity of training and believe it’s quicker to remain as they are, but it’s actually affecting their growth.

Those with many years’ experience in legal firms must embrace change instead and move away from their traditional methods. Only an hour learning about a new technology could save a business days and days’ worth of time taken up by laborious tasks - time which can instead be spent adding value to the clients and growing the business.

How can law firms explore new ways of operating with various new technologies? How does a law firm find out what the best way to do things is?

Law firms can explore new ways of operating with various technologies in a variety of ways. Whether it be an application, infrastructure or voice, firms can utilise trials of the systems and get hands-on experience without committing to pay an ongoing fee. Law firms can also attend workshops for different technologies, learning about what’s on offer and obtaining an in-depth understanding of how they could benefit their business.

Networking is key to investigating how effective implementing a new technology is. Often, bigger firms will use similar technology to smaller companies as a result of positive referrals from other firms. By discussing the options out there with other businesses and their customers who also use new technologies, law firms can gain an unbiased understanding of how best to strengthen their strategy.

Building a Legacy

The first step is to take stock of the technology used within a law firm and ask if it is truly fit for purpose. Systems that only meet the bare minimum requirements to carry out a task may seem perfectly viable, but legal professionals may be doing themselves and their clients a disservice due to time wasted using inefficient systems. This is shown by a staggering 42% of law firms stating their business growth plans are hampered by the legacy IT systems they have in place. Clearly, investment must be made to remedy this issue, even by firms aiming to keep expenditure low to increase profit margins.

When looking at investment, it’s clear there is a fine line between smart financial planning and removing funding from key arms of the business. Investing in new technology is the perfect example – many budget holders will be more interested in spending on recruitment to facilitate new business goals, which in turn can drive growth. However, if the technology used is hampering productivity, the business is setting itself up for failure as clients may look elsewhere for firms which offer more competitive service level agreements.

Legacy hardware will be slow running, while legacy software will fail to integrate to any new industry services or applications; from free digital storage to the latest database management tools. The time dedicated to research ahead of trials, communication with clients and even powering up hardware is exacerbated. Additional minutes spent on individual tasks quickly add up and equate to time wasted, which could be spent adding value to the business.

Do you have examples of a specific technology that is outdated and still in use, thus contributing to said disservice or time-waste?

Businesses using old hardware, from outdated PCs to servers, will inevitably suffer as time goes on. They must ensure their hardware is up to date or replaced if possible, when it’s more than five years old and beginning to slow down every day processes.

Applications must evolve to stay ahead of the game or catch up if they’re behind to avoid wasting a business’ time. If a law firm is running an on-premise infrastructure on its own hardware, the IT team must be delivering these applications and customising them so they are seamless. The workforce must be given the tools to work as efficiently as possible to see the benefits of marginal gains.

Do you have examples of technologies or strategies firms could make use of, even with a small investment budget?

The most effective strategy law firms can make use of is not a specific technology – but a service. It’s far more powerful to give an IT director a concise understanding of the IT estate than invest in the latest technology. Law firms should instead invest in understanding exactly what the business needs, how their operations are currently running and where the pain-points are. They should ask themselves ‘what actually needs upgrading?’ Is the hardware in place nearing its end? Often, legal IT teams are also understaffed - they are asked to introduce huge systems, without the necessary time. If most time is spent making the hardware work, undoubtedly this will never be done effectively.

Every Cloud has a Silver Lining

Legacy hardware is relatively easy to replace but for law firms to remain competitive, they must update their technology to ensure their services continue to evolve. Lawyers today may need to access trialcritical documents on the move, rather than just from the office. This is why it’s so important that law firms securely embrace Cloud computing and mobile devices to ensure the workforce is working as smartly as possible. If lawyers are spending tens of hours every week out of the office, accessibility to an office server becomes an essential part of their armoury.

Growing a firm with a Cloud-based infrastructure ensures lawyers can easily work on upcoming cases securely while travelling. If technology is utilised well, the ability to work from any location with an internet connection will see law firm productivity increase noticeably.

The law firm’s IT team will also have a clearer view over the entire system, as updates can be efficiently deployed over a Cloud infrastructure, rather than tackling devices separately. There is absolute peace of mind that each and every corporate device, whether it be a desktop, laptop, tablet or smartphone, will be secure and users have access to business critical files and applications. The IT team can then invest its time in adding value to the business, rather than constantly fighting against issues caused by legacy systems.

Do you think firms stray clear of Cloud based systems due to privacy or security concerns? How can this stigma be addressed?

Cloud computing is one of the fastest growing segments of the IT industry. Only last year, there was said to be a steep increase in the rate of adoption of cloud computing applications, with some of the biggest movers found in the government and regulated industries.

However, many law firms are staying clear of implementing Cloud-based systems due to privacy or security concerns. Law firms must decide which operational architecture best suits their business in order to thrive in the long-run – and if this involves the Cloud, they must shake off their doubts and worries. Understandably, in-house systems provide visibility and control while there is still a stigma to Cloudbased systems, where security is considered a problem.

Businesses must ensure they are fully aware of the risks of data breaches with the Cloud and be vigilant at all times once they are in place. If the workforce is knowledgeable and prepared from the out-set, there is no real reason they cannot introduce a Cloud-based strategy to immediately transform their business. Wary firms should also consider a hybrid-approach, where data storage is shared between MSPs and on-premise systems, further calming security fears.

What is your forecast for the proliferation of Cloud based systems for various operations, based on current growth of this technology and the correlating increased need for it in the legal industry?

Technology is growing and advancing all the time. The growth of mid-tier law firms is often driven by acquisitions and this approach would be far more successful if they used Cloud-based systems as well due to the scalable nature of this technology. The M&A process inevitably results in additional employees and new working environments – working on the cloud means these new elements of the business can be aligned in no time at all. Those who are not embracing this approach may thrive due to a positive reputation in the sector, but won’t have the same level of growth or potential than if they did implement a more flexible system. As more and more of their clients become media-savvy, law firms must meet their expectations and ensure they are utilising technology to add value to the business. While many firms are still hesitant to leave behind traditional methods, the time will come when only businesses truly implementing new technologies will be able to survive in the competitive industry. Law firms will be forced to embrace technology to survive and will reap the rewards as a result.

Embracing New Technology

Once a law firm has embraced the Cloud, it is in a position to build on its competitive advantage. Productivity gains will be clear once a remote server is available, but applying emerging technology on top of this will further increase business efficiency.

An example of this is the AI technology which is revolutionising the way lawyers conduct research into previous cases and legal precedents ahead of trials. Traditionally, this saw lawyers spending hours pouring over text books and journals with very little steer as to where the information they need is located. New technology enables lawyers to simply type a question into an app and the required information will be available in a matter of seconds. Reducing the research process from days to hours or potentially even minutes is having a vast impact on legal firms which have already adopted this technology, enabling them to take on more cases and increase the scale of their growth plans. The competitive advantage which can be gained through technology will then become apparent.

The UK’s legal firms are at a pivotal fork in the road, down one path are mediocrity and a continued reliance on legacy IT and age-old processes, while the other path increases productivity and facilitates business growth. Clearly, the time has come to invest in technology and revolutionise the legal sector for the better. Those who fail to do so will be left behind by their competitors and quite simply won’t survive to tell the tale.

As you believe lawyers are easily able to find answers on legal matters with a few clicks nowadays, does this mean self-representation could consequently grow in frequency in future?

While lawyers are easily able to find answers on legal matters with only a few clicks, I don’t believe technology will truly enable selfrepresentation or impact on it growing in frequency. People will always require specialist advice which law firms can readily and expertly provide. However, advancing artificial intelligence (AI) is making workplace processes faster and more efficient, as seen by the work carried out by Blue Prism in creating an AI customer services workforce. The efficiency gains this use of AI offers highlights the amount of time lawyers will save to then spend on other critical processes, such as the potential outcomes of a trial. Technology will therefore become a firm’s unique selling point rather than resulting in increased self-representation.

The skills of lawyers will remain key to the success of the firm and technology will enhance this. Their productivity levels will increase, driving a more cost-effective firm.

If law firms adapt from the lengthy and attentive methods of the past, and cases become solvable in little time, leaving space for more clientele, would the public not pick up on this and be dissatisfied with the potential lack of detail and care gone into the service provided to them?

New technologies enable lawyers to drill down to the detail of a case much quicker and deliver faster, more accurate services which in turn, costs less for their clients. Lawyers will have access to detailed real-time information to support better and smarter decision making overall. Firms must embrace technology to aid and create efficiencies in their own work. This will eliminate human error and have a beneficial knock-on effect to their clients as a result.

This month, Lawyer Monthly hears from Elena Servini, Associate Solicitor, Corporate & Commercial, and Acuity Counsel Director at Acuity Legal Limited, a commercial firm headquartered in Cardiff and with an office in London, UK. Elena answers some questions about her role and about the firm’s diverse legal services, but specifically confronts the question: ‘Is it better to outsource legal counsel, or hire an in-house lawyer?’

How have you witnessed the evolution of legal services over the last few years?

Acuity’s focus is on commercial transactions, primarily corporate and real estate. We have seen that clients are not just looking for us to provide them with legal services – technical legal knowledge is a given – they also want added-value services such as increased efficiencies in the form of project management skills backed up by technology. Gone are the days of five trainees indexing boxes of documents for weeks at a time, which was one of my first ever jobs. Clients are also looking for us to work smarter to save them money.

One of the ways we do this is by looking at how we staff a transaction. We now use transaction managers (who are not qualified lawyers) to manage the non-legal aspects of transactions and help them run more smoothly, freeing up the lawyers to deliver on the technical aspects of the deal.

How do you think lawyers can work more efficiently and better engage with their clients?

Transactional lawyers need to learn other skills to complement their legal knowledge, for example project management skills, and widen the skill set of a team by creative employment; not all members of a team working on a transaction will be lawyers.

Lawyers can also cut down on the admin burden on clients and be prepared to take on some of the risk. We are a regulated profession and we have to do certain things to engage with our clients, which can be perceived by the client as obstructive. So the challenge is to achieve a balance between following the rules and not annoying your clients.

What do you believe should be the primary considerations and priorities of an in-house lawyer?

Only thing I can say is that feed back from our clients indicates that in-house-lawyers are expected to participate more at board level in the strategy of the business, rather than getting bogged down in day-to-day legal work.

Can you explain to LM what the Acuity Counsel service involves and what impact it has had?

We developed the Acuity Counsel service in response to the amount of day-to-day work we were doing for our clients (as opposed to transactional work for which we are better known).

We identified a need to develop an offering as a trusted legal partner to support a finance director or an in-house legal team. It is aimed at mid sized businesses – big enough to have day-to-day legal needs but not big enough for significant inhouse resource.

We work with our client to establish their anticipated legal spend over the coming year and break that down into a monthly allocation which is charged at a flat hourly rate. If the client does not use their hours they roll forward to the next month and if they overuse their hours in one month they are deducted from the next month’s allocation.

Most businesses find legal work comes in peak and troughs and this way of working gives clients plenty of flexibility. We don’t tie anyone in – there is no annual commitment; we want our clients to enjoy working with us and for us to get to know their business and become their first point of call on legal issues. We give monthly or more regular updates on hours so clients can keep a close eye on their legal spend.

Why can outsourcing the right legal counsel at times be more beneficial than instructing an inhouse lawyer?

Outsourcing helps you get the right specialism for the right piece of work. A mid-sized business without the resources to employ a team of in-house lawyers will find they are unable to cover every specialism, or manage the volume of legal work they are likely to generate.

A law firm such as Acuity has experts in a variety of areas – for example commercial contracts, dispute resolution, employment and real estate – who are up to date with the latest legal developments and supported by teams of people and technology.

Accessing this in the right way and at the right pricemeans a business can avoid the uncertainties, commitment and overheads that come with employment.

Rather than choosing to work either with an outsourced legal counsel or your in-house legal counsel, is it possible that the two could work best together to meet the needs of a business?

Yes and we do this at Acuity through Acuity Counsel. The inhouse lawyer can direct strategy and manage the legal workflow of the business while we support them in specialist areas and tackle the day-to-day work, which frees them up to look at the bigger picture.

We can also help on the project management side by, for example, helping to put in place contract procedures, protocols and lines of communication between the in-house lawyer, ourselves and other teams in the business to ensure the work gets done efficiently but with all the necessary checks and approvals.

For the business itself, the board has the reassurance that a specialist law firm is supporting its in-house legal team at a fixed cost. This gives certainty that legal risk is being effectively managed.

You believe client autonomy is important; can you please explain why?

Directors and managers of businesses are sophisticated individuals. We work in particular with a lot of owner-managed businesses and these clients need to be involved in every aspect of their business. Many managing or finance directors with whom we work have knowledge of what it takes to negotiate a contract or of how to protect their brand.

We do not believe legal services are a ‘dark art’, to be delivered in an impenetrable way to preserve their mystery. We prefer to work on an open and transparent basis with a view to developing a partner relationship with our clients – as if we are part of their team, rather than just a service provider.

To this end we have developed and recently launched the Acuity Counsel Client Portal, which contains a wealth of precedent documents, tool kits, checklists and articles. This enables clients to access information and carry out certain tasks (such as preparing a first draft non-disclosure agreement) themselves if they wish, with us available at the end of the phone to answer questions or check off the final version.

The portal also contains copies of documents we have concluded for our client so the client can avoid having to come back to us to ask for copies once they have become buried in an exemployee’s email in-box.

How can outsourced legal counsels also reduce the burden of administrative processes on their clients and what impact could this have?

We try really hard to make Acuity Counsel as accessible as possible. One of the ways we do this is by having a one-stage engagement process at the start of the relationship. We do not repeat this before each piece of work – the client is free to pick up the phone to anyone in the firm at any time in the knowledge that they are being charged the same rate if they are speaking to a senior partner as they would be speaking to an associate.

There is no need to agree a fee for each piece of work, and we do not stop work once the core monthly hours have been used. As we report to the client on a monthly basis (more often if required), there are no surprises when it comes to fees.

How do you think the proliferation of practising women in legal counsel has affected the legal services landscape?

I think it’s fairly well accepted that businesses have been quicker than law firms to adopt flexible working policies. These are attractive to everyone, not just women, given the demands of caring for others that are placed on many who nevertheless wish to continue with a professional career.

Businesses that are able to look forward in this way are in a position to attract some great talent, which would otherwise be tied up in private practice. These individuals are going to bring a great deal of experience and knowledge to a business, as well as introducing smarter ways of working, particularly on the transaction management side.

When working with outside law firms, expectations are likely to be high and this can only encourage law firms to raise standards to compete for the best work.

What are commonly the challenges of your role at a digital transaction management company and how do you navigate these?

One of the key challenges I currently face in my role at DocuSign is providing assurances about the legality and validity of electronic signatures to customers. As with any technological innovation, change takes time to affect and electronic signatures are no different. Using an e-Signature tool to complete transactions offers huge benefits for customers (both economic and environmental), but first and foremost, trust services such as DocuSign must be able to prove to customers that electronic signatures are a secure method of authenticating transactions.

This challenge has been compounded by the fact that until recently, legislation around eSignatures in the EU was based on the E-signature Directive (1999).The directive was confusing, and failed to take into account recent developments in mobile and cloud technologies. Fortunately, the implementation of the eIDAS regulations on July 1st embodies a significant step in the right direction in terms of encouraging the adoption of electronic signatures and pushing the region closer to the ideal of the Digital Single Market.

Could you describe what a work day in your shoes looks like?

My overarching focus is providing advice and consultancy on legal and regulatory issues in relation to the DocuSign electronic signature platform, and ensuring the business complies with, inter alia, its global data protection, data security, privacy and cyber-security obligations. On a daily basis, this involves drafting and negotiating cloud service/SaaS agreements for subscribers in the EMEA region, and advising on EU electronic signature laws. Currently one of the biggest focuses in my role is making customers aware of the new eIDAS regulation and how it applies to their business. It is important that businesses understand when they are required to use certain signatures as well as how they can take advantage of what is now a more predictable regulatory framework for electronic trust services. As such, advising companies on how they can work with eIDAS is now a central part of my role.

How are you currently working towards expanding the positive impact of your role on clients and the business?

Since joining DocuSign, generating growth across EMEA has been a key aspect of my remit. Thus far, the team has grown from 20 people in London to more than 200 employees across London, Dublin, Paris and Tel Aviv. DocuSign now counts more than 225,000 customers and 85 million users generating almost 950,000 transactions per day.

Can you tell LM about the recent implementation of eIDAS, what this is, your involvement and how it will affect regulatory procedure?

The eIDAS Regulation aims to enable citizens, businesses and public sector bodies to carry out convenient and secure electronic transactions across EU borders. The regulation comes in two component parts. Firstly it will enable mutual recognition and acceptance of electronic identification systems across EU borders. The second part of the regulation is concerned with establishing a common legal framework for a selection of ‘trust services’, consisting of electronic signatures, electronic seals, time stamping and website authentication.

There are three types of signatures as defined by the regulations: electronic, advanced and qualified. Whilst a simple electronic signature is adequate for the vast majority of transactions, there are some situations where advanced or qualified electronic signatures may be required, due to matters of national law, because they afford more security and a higher level of authentication.

It will be in the best interest of businesses operating within the EU, to work through secure electronic signature platforms in order to add the highest levels of security and evidential weight to their electronic transactions. The businesses that do so will play an important role in pushing the EU towards its ideal of the Digital Single Market.

How will this then affect private businesses, non-profits and government transactions?

Whilst eIDAS is to be welcomed, I do not think its implementation will have a profound impact on the current market practice in the UK. The business community favours – and UK jurisprudence supports – the use of simple electronic signatures for transactions under UK law. Having said that, there are some industry sectors – notably banking and healthcare – where we have seen a marked preference for digital signatures and the Regulation may reinforce this trend.

I also think that the Regulation could potentially spur greater adoption of electronic and digital signatures by public sector bodies offering online services. From a business perspective, eIDAS will establish a more predictable regulatory framework for electronic transactions. Therefore, I anticipate rising demand from businesses for trust services and for secure electronic signature platforms like DocuSign.

Are there any risks to be aware of regarding the application of the eIDAS?

It is important to remember that eIDAs does not standardise EU laws on what form of signature is necessary for valid execution of an electronic contract. The Regulation provides that a qualified electronic signature has the equivalent effect of a handwritten signature but otherwise leaves it to national law to define the legal effect of electronic signatures.

This means that an EU Member State (or its courts) may prohibit use of electronic contracts for certain transactions and require a paper-process. For instance, a land transfer in the UK can only be registered with HM Land Registry if it is signed by hand. And, of course, in civil law countries such as Germany and Italy, some documents must be formally notarised in the presence of a public notary.

You previously spent many years working as the senior legal counsel for Inmarsat; how did your experiences there contribute to your achievements at DocuSign?

At Inmarsat, I advised on a wide array of commercial, corporate, M&A, telecom, IP/IT, regulatory, SaaS, data protection and compliance matters. In particular, I focused on advising on global data security, cyber-security, data retention and lawful interception of Inmarsat traffic. This left me acutely aware of the importance of developing and maintaining customer trust and confidence in digital processes, and this remains central to what my role at DocuSign entails.

Do you have any further goals for your role as GC at DocuSign, and for the development of new legal strategies and regulations in the wider practice?

My current goal is to build on the partnerships that DocuSign has established with leading law firms such as Linklaters and Allen & Overy, and encourage additional firms across the legal sector to adopt electronic signatures. In doing so, I hope to demonstrate the wide-ranging benefits that the use of digital signatures allows law firms to offer their clients when assisting in digital transformation.

In 2013, with the introduction of the Jackson reforms, the legal sector had to dramatically change the way in which it generated leads. These changes signalled a new era for the sector as law firms were forced to rethink the company structure in order to secure new business, as the ‘no win, no fee’ model was turned on its head. Now that law firms are taking matters into their own hands, the question is: how can law firms increase the number of leads they generate? UK based firm Ruler Analytics ‘closes the loop’ between marketing and sales by matching real customer data against the exact marketing source from which it was generated. Utilising visitor level journey tracking to definitively calculate ROI for every marketing channel.

Here, Lawyer Monthly talks to Daniel Reilly, Co-Founder of Ruler Analytics, on how their new software can help law firms tackle the growing issue of marketing their business.

How did the Jackson Reforms change the way law firms approach the legal market? What limitations were imposed and what has been the alternative?
The banning of referral fees being paid and received, following the Jackson reforms, changed the way a lot of legal firms approached their marketing almost overnight. Profitable firms, which previously did little to no marketing and opted to rely heavily on cheap, risk free, leads from third parties such as garages, claim companies and online affiliates, could no longer access these as a revenue source.

Since the reforms came into effect, these law firms have had to rely on their own marketing efforts to generate leads and remain competitive - having found themselves in a suddenly crowded market place. Many chose to dive head first into the previously alien world of online marketing as the land of opportunity. While this is a great way to market their firm, many have struggled to adapt straight away, as it has required the creation of new department focus that previously never existed.

Since the ‘no win, no fee’ method was turned on its head in 2013, how have law firms had to adapt their marketing strategies?
As well as banning referral fees, the Jackson reforms also did away with the ‘no win, no fee’ model, allowing law firms to avoid the more hazardous claims. However, this also reduced their potential customer base, and affected the number of people claiming, meaning that every penny spent on marketing had to count. While for decades marketing departments have been seen as ‘fee burners’ and a poor relation to fee earning lawyers, in light of the Jackson reforms, legal firms have to re-weight their focus on the role of marketing. In fact, according to a survey of 150 legal professionals1, over a third have increased their marketing budgets since 2014.

For legal marketing departments to demonstrate the true ROI of their marketing efforts, and justify budgets for marketing campaigns, it’s important to know how leads are generated. This can be achieved by establishing the marketing source of the lead - this information can help law firms to identify what their most effective and least effective marketing channels are so they can tailor their efforts accordingly.

Stephensons law firm, which has offices in Altrincham, Horwich, Manchester, London, St. Helens, Leigh and Wigan, has utilised data analytics and the Ruler Analytics package to drive productivity, generate leads and track ROI. The marketing team wanted to demonstrate clearer ROI to each legal service department and support business development in terms of giving them more specific visitor profiles. There was a need to have better management information regarding the source of work, as it was often difficult to determine from clients if they have clicked on a paid for link, or come through organically.

Realising the importance and opportunity in determining how leads are generated Stephensons enlisted the help of Ruler Analytics to help enable them to see which keywords had brought visitors onto the site organically, making for a more informed, key-word friendly marketing and advertising strategy. With the software, the team now has the ability to determine which calls come from paid for or organic searches, as well as garner a better overall understanding of the ROI on their activities and justify budgets.

How can law firms track and analyse their adapted marketing efforts? How can they guarantee their method is successful?

Lead generation is crucial in identifying potential clients. Online leads can come in from numerous sources such as search engines, email marketing, banner advertising and social media, so it’s essential that law firms analyse their marketing efforts to ensure they focus their budgets on the sources that are resulting in the most leads.

One of the main online marketing channels for law firms, especially the one’s beginning from a standing start position, is Pay Per Click (PPC). This normally runs on a bidding model where the highest bidder takes the top position in search results.

However, the problem most firms face with this model is that the technology to track whether these clicks are successful in generating revenue are, in most cases, limited to online conversion. With many people choosing to call rather than complete an online form, it has made it very difficult for law firms to justify their PPC spend. Many may have resorted to guesswork to determine what drove sales and which keywords were used to get potential buyers onto their site.

However, there are now innovative integrated calltracking and analytics packages available, which allow marketing departments to get the missing piece of the puzzle, as well as improve their conversion rate online and by phone.

This type of cohesive software can carefully monitor the individual client acquisition journey online, measuring conversions and tracking phone calls, by corresponding website conversions to keyword searches or sources. The call tracking software also links sales directly to PPC, organic, mobile and offline marketing campaigns.

ROI can then be determined by matching marketing channels and initial enquiries to fees earned. By using such data software, law firms can better inform their marketing strategies and base decisions on fact, rather than guesswork. With this information, they can focus on the marketing campaigns that are the most successful and target more customers.

How can a law firm identify the source of work, whether itbe pay per click or via organic reach?

Most analytics packages available will identify the source of a click and identify how someone landed on a website by corresponding website conversions to keyword searches or sources. However, the second that user picks up the phone or does any offline action the source will be lost. The only way the source can still be identified is if the firm in question has call tracking software installed. Integrated visitor lever analytics and call tracking software will be able to provide the missing information and match the keyword data to the visitor journey, conversion or phone call to reveal the exact source of the lead. Law firms will also be able to discover lead location using software that can track leads from logging the users IP (Internet Protocol) address.

At what point can a law firm implement new strategies on the back of a successful ROI?

Once a ROI has been demonstrated, law firms can analyse their marketing strategies to determine which
campaigns are the most successful and profitable. Armed with this information, marketing departments can remove spend from less profitable campaigns, and use these savings to put into more profitable campaigns and test new ones. It means firms can cut costs and ensure spend from the marketing department is going as far as possible, as well as making sure no marketing effort goes
to waste.

What alternative strategies would you recommend law firms implement in order to gain more valuable work?
Other than using data and call tracking to maximise ROI, there are a number of PPC marketplaces developing on social networks such as Facebook, Linkedin and Twitter, which should be explored. These all have more advanced user targeting, as these networks contain more individual user data to target upon. It’s also worth mentioning organic search engine optimisation and content marketing as a way of generating leads.

Finally it’s important to look inward to your website and how it is setup for mobile and conversion. A small change here can affect all of your campaigns in a positive way.

How would you advise law firms to increase their clientele, while still ensuring the utmost quality and attention is given to them?
Be experimental and don’t be afraid to try a variety of channels to see what works. For firms refining or embarking on their first marketing campaign, key performance indicators (KPIs) are key to define what success will look like.

Once an organisation knows what success will look like, the next step is to actually measure it across the client acquisition journey. It’s important to track everything in order to make ccurate decisions on whether the campaign worked or not.

Small onsite changes can also make big differences to boost clientele. Firms can use data to see how a customer moves through a website. Understanding this journey will give firms useful information about how the client finds the website and whether it is easy to navigate or not. Data can also reveal if people searching for something are immediately exiting the page because perhaps the brand is confusing or not providing the information that they require.

How does Ruler Analytics’ software tie in with Google Analytics data?
Ruler Analytics fully integrates with Google Analytics allowing data to pass between each platform. While Google Analytics is a staple for digital marketers the world over, the application doesn’t look to provide details on individual users, companies, calls and tie them back to leads. This automation therefore means that marketers can gain greater insight into the client acquisition journey by simplifying, and adding to, the limited and complex information Google Analytics provides.

Ruler Analytics differs from Google Analytics though, by having integrated call tracking, company and user identification. The tools provide information such as which company the visitor is from, what keywords and source they used to find the firm and which pages they visited. In terms of call tracking, these packages also give insight into whether it was an inbound call and what was said on the call.

Ruler Analytics also re-provides the keywords marketers can’t get on Google Analytics. While Google Analytics has removed keyword data from its organic search information, Ruler Analytics provides ‘reprovided’ information providing valuable insights on the keywords used for customer acquisition. Combining this information with the attribution for online enquiries and phone calls at keyword level, the software allows marketers to better inform their marketing strategies and base decisions on fact, rather than guesswork.

How can this software be used as a tool for reputation growth and therefore an increase in appeal to certain legal sectors?
The software gives law firms the ability to track and listen back to the calls they receive so they can determine whether the call was answered or not and how long it took to answer. By analysing the quality of the inbound calls, firms can make key decisions about how their staff deal with customers and make operational improvements when required. By ensuring employee’s answer calls promptly and effectively, law firms can enhance their customer experience and grow their brand’s reputation within the marketplace.