One of the most striking aspects of law firms’ innovations in the past year has been their sheer variety. While many can be grouped neatly into conventional subject areas, such as financial services and dispute resolution, others fall outside these categories and can almost be thought of as in a class of their own.
From pursuing justice for the victims of international war crimes to pioneering medical research, reshaping competition law and ensuring delivery of the 2012 Olympic Games in London, lawyers have pushed the boundaries in ways little recognised even by their clients, much less the general public.
One initiative, for example, involved developing a new strategy for challenging the UK’s Competition Commission, an independent body responsible for policing mergers and other inquiries related to regulated industries. Freshfields’ work on behalf of Tesco, the UK’s biggest retailer, is likely to alter fundamentally the way the commission investigates and regulates markets.
Following an investigation into the UK groceries market, the Competition Commission recommended the introduction of legislation to allow for a “competition test” that would have forced local planning authorities to reject applications for the construction or extension of large supermarkets if the operator applying for the development already had a significant presence in the area.
However, Freshfields successfully argued in a judicial review that the commission had failed to show sufficient evidence of the benefits from its proposed legislation.
Ultimately, Freshfields’ work should produce better results for consumers as well as the corporate sector, observers say.
Clifford Chance made waves in an altogether different field – stem cell research. The firm was asked by King’s College, London, and the University of Newcastle to advise them on their applications for licences to create human-animal hybrid embryos for stem cell research.
The applications, initially opposed by the government, were eventually successful after an intensive lobbying effort led by the firm.
“This work shows a determination on the part of the firm not only to act for the big pharma companies that share its global reach, but also to invest in the long term by offering technical advice and thought leadership at the very frontier of prevailing law and medicine,” says Michael Smyth, Clifford Chance’s head of public policy.
Meanwhile, Allen & Overy persuaded the US Securities and Exchange Commission to relax its rules on cross-border tender offers to facilitate the merger of SAP, the German software company, and BusinessObjects, a business intelligence company incorporated in France but operated principally from the US.
The solution devised by the firm will aid all future cross-border tender offers, not just those between France and the US.
The past few years have seen unprecedented strides in bringing the perpetrators of war crimes to justice. Hickman & Rose has been among the leaders of that fight, with its work on behalf of the victims of alleged crimes against humanity committed against the people of the West Bank and the Gaza Strip in the Middle East.
“This is immensely important work that aims to extend and strengthen the international reach of criminal law, and to protect civilian victims around the world,” says Daniel Machover, a partner at the firm.
Looking ahead to the London Olympics in 2012, Pinsent Masons has been working on the development of the city’s Olympic Park. The firm’s planning and environment team has been a lead force in managing this project for the Olympic Delivery Authority. Innovations include a form of flexible planning permission, and ensuring successful sustainability monitoring.
Carbon currency, nuclear notes
In the fight to control global pollution, an important new weapon is emissions trading, where companies or other groups are given economic incentives for reducing their emissions through the use of credits. However, the potency of such schemes has been hampered by a piecemeal approach to trading and liquidity, writes Megan Murphy.
Clifford Chance helped devise a legal framework that promises a fully tradeable “carbon currency”. The firm set up three emissions registries for the Voluntary Carbon Standard Association, thereby turning carbon trading for non-government organisations from a concept into a genuine market.
It is one of a number of legal innovations that show how law firms are embracing opportunities in the sustainable energy sector.
Claude Brown, Clifford Chance’s lead partner on the development of the global registry system, says: “If you say it is a commodity, that implies something tangible. If it is a contractual claim or right against the project, then you have the problem of enforcing that right. So we developed a legal framework that says it is a ‘promise’.”
Eversheds also worked on carbon-offset strategies via a creative agreement to provide legal services to Bharrat Jagdeo, president of Guyana, up to the value of the firm’s residual carbon footprint. By effectively storing carbon in the rainforest it is committed to preserving, Guyana has been given the means to buy legal advice from Eversheds. This will allow it to take to market Mr Jagdeo’s idea to monetise the opportunity cost of not felling its rainforest and the value attributable to the emissions reduced as a consequence.
Herbert Smith won plaudits for its work on Electricité de France’s takeover of British Energy, a £12.5bn (€13.7bn) deal that may ensure the UK has nuclear power over the next 10 years. Crucial to its success was the firm’s development of “nuclear power notes”, a mechanism designed to bridge the gap between buyers and sellers on the true value of BE.
A complex form of security that Herbert Smith believes can be modified for other transactions, the notes issued gave shareholders a contingent right to receive an annual payment over a 10-year period, calculated by means of a formula that references the power output of BE’s existing nuclear fleet and wholesale power prices in the UK.
CMS Cameron McKenna, meanwhile, structured a joint venture between rivals RWE and Eon, the German utility companies, to invest in the UK’s nuclear industry. It is the first joint venture with the aim of developing the next generation of nuclear power plants in the UK.
In April, the venture bid for two out of three sites auctioned by the Nuclear Decommissioning Authority, not only generating £20bn of inward investment but also helping to secure the UK’s energy supply.
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