Legal Business

‘A bit unsettled’: Lloyds legal team to report to finance arm after latest restructure

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In-house Lloyds Banking Group

The legal team at Lloyds Banking Group (LBG) will now report to the bank’s finance team in the group’s latest reorganisation, which led to the departure of chief people, legal and strategy officer and ex-Linklaters managing partner Simon Davies, after less than two years.

The move will shift responsibility for the legal and strategy teams to LBG’s chief financial officer George Culmer, with group general counsel Kate Cheetham reporting directly to him.

The changes, which will be implemented from 4 September 2017 subject to regulatory approval, will also see Cheetham attend the group’s executive committee.

In a statement, António Horta Osório, Group chief executive said the changes were fundamental to prepare the group for its upcoming strategic plan for the 2018-2020 period.

‘They are a key step to ensuring the continued alignment of the bank’s capabilities and strategy as a simple, low risk, UK focused bank with our customers’ evolving needs.’

However, one lawyer in the bank told Legal Business that the move ‘wasn’t normal’ adding ‘it shows things are shifting around a lot and things are a bit unsettled.’

The lawyer added that LBG has recently ran a colleague engagement survey, internally revealing wider discontentment within the bank’s legal team. This came amid one of the largest legal recruitment drives undertaken by LBG.

‘The morale is so low. People feel like they don’t have enough support to do their jobs. Some of the feedback was that the legal structure was very hierarchical and bureaucratic.

‘They have allowed a lot of people to go and have made a lot of people redundant but then they have gone on a recruitment drive and the external market is quite nervous about joining the bank. They can’t get enough candidates interested in some of the roles, particularly in commercial banking.’

However, it is understood that the exact detail of the survey has not been discussed among staff. Additionally, a source close to the bank has said that following the recruitment drive LBG will be making appointments to the legal team in due course.

Last year Legal Business reported that LBG was pushing an incentive scheme to its lawyers to secure new recruits into senior legal roles following a string of exits.

kathryn.mccann@legalbusiness.co.uk

Legal Business

‘People are really upset’: Lloyds to axe 22 legal roles as part of further restructure

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In-house Lloyds Banking Group

Lloyds Banking Group (LBG) is to axe a further 22 legal roles as part of a further restructure of the bank’s legal team. In addition, a total of c.5.5 full-time equivalent (FTE) roles will be created.

It is understood that LBG’s group GC Kate Cheetham relayed the news in a conference call earlier today (22 March). The call was led by Cheetham, and according to an internal source the bank’s chief people, legal and strategy officer Simon Davies was not involved.

Another lawyer at the bank added it was likely some of the redundancies will be voluntary.

‘People are really upset. One of the key things to come out is that a lot of people are so fed up that they are themselves thinking of putting their hand up to just go. The restructure last year was such a failure. The dust hasn’t settled from last year. Quite a lot of people share that view. The morale is quite low. People are so concerned especially in relation to Brexit and they are not sure what direction the bank is going. It is an uncertain time for us in the legal function.’

The role reductions are part of the bank’s strategic review which was announced in October 2014, however in relation to the legal function the overall goal is to reshape the legal function to enable people to work on big projects and reduce bureaucracy.

A LBG spokesperson said: ‘Lloyds Banking Group’s legal division is today announcing 22 net role reductions as part of the total role reductions already announced within the Group’s 2015-2017 strategy. This takes into account the creation of c.5.5 FTE new roles which will ensure the team has the right skills to support the Group deliver its strategy.

‘This process involves taking difficult decisions, and we are committed to working through these changes in a careful and sensitive way. All affected employees have been briefed by their line manager today. Accord and Unite were consulted prior to this announcement and will continue to be consulted.

‘The group’s policy is always to use natural turnover and to redeploy people wherever possible to retain their expertise and knowledge within the group. Where it is necessary for employees to leave the company, it will look to achieve this by offering voluntary redundancy. Compulsory redundancies will always be a last resort.’

Last year Legal Business revealed that LBG was pushing an incentive scheme to its lawyers to secure new recruits into senior legal roles following a string of exits.

kathryn.mccann@legalease.co.uk

Legal Business

Deus ex machina: Linklaters signs up Lloyds and RBS to ring-fencing software

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Legal tech LinklatersLloyds Banking GroupThe Royal Bank of Scotland

Linklaters has launched a pair of artificial intelligence (AI) products in the latest innovation push for the Magic Circle firm, including a tool to navigate ring-fencing reforms for core banking clients.

Both Lloyds Banking Group and The Royal Bank of Scotland (RBS) have used the firm’s LinkRFI software, which is used to classify thousands of customer names in a fraction of the time it would take a human to complete. The classifications are needed to help ensure separation between banks’ retail and investment arms, to comply with ring-fencing reforms introduced by the Bank of England.

The tool is now being used by the firm’s main banking clients ahead of a January 2019 deadline for implementing reforms. However, Linklaters would not confirm which banks were using the product.

The software was developed under banking partner Benedict James, relationship partner for RBS. Other lawyers taking a lead in its development were partner Tom Wells and key Lloyds relationship partner Edward Chan (pictured), who also manages the firm’s approach to the use of AI.

In addition to its banking tool, Linklaters has been developing its own AI platform, named Nakhoda, for data extraction and document analysis using legal logic. The firm has formed a new collaboration with London-based AI firm Eigen Technologies to roll out the product.

The firm’s AI working group has been headed up by Chan, with Linklaters announcing it was working with provider RAVN Systems last May.

Chan told Legal Business: ‘We are looking at several third-party products and are also building our own platform. A lot of the tools are quite optimised for one task. No single product works in all situations, so we might end up with some kind of toolbox, rather than a single killer application.’

According to one senior lawyer at RBS, the bank was set to sign a licensing agreement for the continued use of LinkRFI and had been exploring other AI options, such as using due diligence tool Kira.

matthew.field@legalease.co.uk

See the feature: ‘The arms race – City rivals ramp up AI tech for the battles ahead‘

Legal Business

Deus ex machina: Linklaters signs up Lloyds and RBS to ring-fencing software as firm develops brace of AI products

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Legal tech LinklatersLloyds Banking GroupThe Royal Bank of Scotland

Linklaters has launched a pair of artificial intelligence (AI) products in the latest innovation push for the Magic Circle firm, including a tool to navigate ring-fencing reforms for core banking clients.

Both Lloyds Banking Group and The Royal Bank of Scotland (RBS) have used the firm’s LinkRFI software, which is used to classify thousands of customer names in a fraction of the time it would take a human to complete. The classifications are needed to help ensure separation between banks’ retail and investment arms, to comply with ring-fencing reforms introduced by the Bank of England.

Legal Business

Simmons, BLP and Reed Smith win places on Lloyds’ specialist roster as bank gears up for commercial panel review

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Adviser reviews Berwin Leighton PaisnerLloyds Banking GroupReed SmithSimmons & Simmons

Simmons & Simmons, Berwin Leighton Paisner (BLP), Bond Dickinson and Reed Smith are among 24 firms to win a place on Lloyds Banking Group’s (LBG) specialist sub panel, which sits below the bank’s main core roster of eight firms.

It is understood that the firms on the specialist panel can be supported at times by the bank’s core firms on more specialist pieces of work. The bank’s core firms are: Addleshaw Goddard, Allen & Overy, Ashurst, CMS Cameron McKenna, Eversheds, Herbert Smith Freehills, Hogan Lovells and Linklaters.

In addition, firms are gearing up to pitch for Lloyds’ commercial banking panel, which is due to start shortly and is expected to include about 80 – 100 firms.

Speaking to Legal Business, one law firm partner said: ‘The main panel allows us to do work for pretty much everything. There are sub panels within the main panel and if you are appointed to the main panel you know which sub panels you are on. But then there are additional firms that are not on the main panel, which also get appointed to sub panels.

‘The banking pass through panel is different – it is much bigger and that process hasn’t started yet although it is due to start shortly.’

In a statement, a spokesperson from LBG said: ‘Following a rigorous and competitive tender process, the list of the group’s specialist legal panel was finalised in December 2016. The panel will include 24 firms which have been designated as specialist because they are able to offer services which are fully aligned to the needs of our group’s businesses. As previously announced, we will be announcing our specialist firms for our commercial banking division during the first half of 2017.’

LBG finalised its UK legal roster in October last year with DLA Piper and Norton Rose Fulbright losing their spots as the bank’s core panel shrunk from ten to eight firms.

kathryn.mcann@legalease.co.uk

Read more: ‘A buyer’s market – The trends and traumas in adviser reviews.’

Legal Business

Norton Rose and DLA lose out as Lloyds finalises UK roster

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Adviser reviews DLA PiperLloyds Banking GroupNorton Rose Fulbright
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Lloyds Banking Group panel shrinks from ten firms to eight

Last month saw DLA Piper and Norton Rose Fulbright (NRF) lose out as Lloyds Banking Group (LBG) reduced its UK legal roster from ten to eight firms.

Legal Business

Lloyds’ in-house changes continue as senior FCA director takes litigation GC position

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In-house Lloyds Banking Group
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Lloyds Banking Group has made Tom Spender its new general counsel (GC) for its litigation, regulatory and competition group after his departure from the Financial Conduct Authority (FCA).

Spender joins as GC for litigation after he quit the FCA in February, along with the regulator’s head of market monitoring Patrick Spens, who moved to PwC.

While at the FCA, Spender was director of retail and regulatory investigations and part of the senior leadership team, having joined the regulator in 2002. He also served as head of FCA supervision, monitoring the conduct of three of UK’s largest banks.

Spender began his career as a litigator in Australia with (then) Allens Arthur Robinson, before moving to London to join Allen & Overy.

Lloyds group GC Kate Cheetham said: ‘I am delighted to welcome Tom on board – I know he will play a key role in how we support the group in its journey to continue to be the best bank for customers.’

This year, Lloyds has seen a series of shake ups in its in-house legal team. The bank recently lost its GC for group legal Hugh Pugsley and head of legal wealth management for international retail John Pitt, with the pair leaving for HSBC. In March this year, the bank also appointed a head of legal for ringfencing, with former Berwin Leighton Paisner corporate partner Frances McLeman taking up the role.

In June, Legal Business reported Lloyds was pushing an incentive scheme to its lawyers to secure new recruits for senior legal roles, with general counsel for commercial banking Joanna Carver circulating a memo to the bank’s 300-strong legal team asking for help in filling up to 15 management roles with new recruits, promising referral fees as a reward.

matthew.field@legalease.co.uk

 

 

Legal Business

Lloyds offers bonus for help filling senior legal roles amid shake-up

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In-house Lloyds Banking Group
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Unease over department restructuring continues

Lloyds Banking Group is pushing an incentive scheme to its lawyers to secure new recruits into senior legal roles following a string of exits. The move comes after the bank made multiple redundancies as part of an ongoing restructure.

Legal Business

Lloyds offers bonus for help filling senior legal roles amid management shake-up

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In-house Lloyds Banking Group
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Lloyds Banking Group is pushing an incentive scheme to its lawyers to secure new recruits into senior legal roles following a string of exits. The move comes after the bank made multiple redundancies as part of an ongoing restructure.

An internal memo circulated to the legal division in recent weeks from the office of Joanna Carver, general counsel (GC) for commercial banking, appealed to the bank’s 300-strong legal team to help find recruits to fill up to 15 management roles, promising referral fees as a reward. The bank has expressed a preference for hires from its current external adviser panel.

High-profile departures during the last 18 months include former GC for group legal, Hugh Pugsley, and head of legal for wealth management and international retail, John Pitt, who both departed for HSBC, while disputes chief Philippa Simmons left last summer.

At the same time, staff facing job cuts are understood to be appealing their redundancies, meaning the bank is likely to miss its July deadline for the new structure to go live. One internal lawyer says: ‘They can’t do anything until all the appeals are heard – you can’t put a structure chart out until this is resolved.’

The memo comes amid reports of low staff morale driven by the sweeping team restructuring.

One Lloyds lawyer told Legal Business: ‘They’ve just made all these people redundant and suddenly they’re offering referral fees to staff so that they can bring new people in. Then why are they making people redundant?

‘What was supposed to bring in structure has ruined the structure. People are so unhappy, morale is so low, and everyone wants to leave.’

Those mid-tier management roles up for grabs recently saw six internal candidates vie for three places. Successful managers included Jon Alexander, head of legal for lending support; Greg McEneny, head of legal for wholesale markets; and Lucy Purkiss, head of structured capital markets.

In recent weeks Carver, who joined from Barclays last summer, held a town hall meeting at Addleshaw Goddard for the bank’s in-house lawyers, during which she made efforts to communicate the strategy behind the restructure.

Lloyds refused to comment.

sarah.downey@legalease.co.uk

Legal Business

In-house: Lloyds loses wealth management chief to HSBC

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In-house Lloyds Banking Group
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Mired in controversy over the restructuring of its internal legal team, Lloyds Banking Group (LBG) has lost another senior figure as it has emerged its head of legal for wealth management and international retail, John Pitt, is set to join HSBC where he will work alongside UK general counsel Hugh Pugsley, also formerly of LBG.

Leading a team of 13 lawyers across three sites in the UK, Pitt’s wide reaching role means he serves as head of legal for Lloyds Private Bank (UK), the Bank of Scotland Private Bank (UK), the Bank of Scotland Germany and Netherlands, Lloyds Bank International (Crown Dependencies) and Halifax Share Dealing (UK).

A qualified barrister and trained at Linklaters, Pitt joined LBG as head of legal in 2009 from Insight Investment where he headed a team advising on issues relating to asset management. Prior to this he served as a senior commercial solicitor at HBOS for four years until 2008 and as a Treasury legal adviser before that.

Pitt is set to work alongside HSBC’s UK GC Pugsley who departed LBG last year. Pugsley, a former associate at Allen & Overy, served as GC for group legal at LBG, overseeing over 60 lawyers supporting the group’s executive functions including providing advice on financial reporting, listing obligations, M&A, corporate development, IT and group operations, treasury, HR, and property. He also previously served as head of corporate M&A for the group legal division.

This latest high profile departure comes amidst reports of low morale by staff at the bank and it is understood that multiple exits from the in-house team are expected in the coming months.

In a bid to prepare itself for the looming ring fencing reforms set to take effect next January, just weeks ago it emerged that the bank had quietly appointed corporate partner Frances McLeman as head of legal for ring-fencing at Lloyds Banking Group. Additionally in February Legal Business revealed the bank appointed a specialist sub-panel for commercial mortgage-backed securities (CMBS) work ahead of its global panel review this summer, with US and Magic Circle firms among those taking places.

sarah.downey@legalease.co.uk