I like Ed Mills-Webb!

It’s always Clyde’s.  

GC won’t be happy. 

Clyde & Co is in trouble; for every good partner there is an awful one.

@ 08:13

It’s always Clyde’s what?

Wait til the SRA find out what they have done with BLM’s £40m…

@09.03 - it's what always Clyde's?

There will be more than red faces at Clyde. They pride themselves on their regulatory compliance team which advises other law firms on compliance with SRA rules and how to deal with SRA investigations. They get appointed by other law firms and paid handsomely to “investigate” potential misconduct before that other law firm decides whether to self report to SRA. They have a large group of partners who handle this business. But it seems that the SRA have decided that the firm itself has been in breach of the SRA rules and principles, so their own house appears to be out of order. To get referred as an institution to the SDT in this way shows the conduct was considered to be at high levels of seriousness.

if I was one of the firms that has hidden behind an “all clear” investigation from Clyde and Co, I would be wondering if they also got that wrong and if that “nothing to see here” message I gave the SRA following one of Clyde’s “investigations” now has the same veneer of respectability …

"Wait til the SRA find out what they have done with BLM’s £40m…"

Was it, buy the founders a very large mansion in Beverley Hills using the organisation's own funds, get pictured chugging champagne on the terrace, then try to claim that it wasn't really a misuse of donors money (and/or barefaced graft) in the way that it might superficially appear to be because they were actually going to use the building as some kind of 'Campus' for the organisation but without giving specific detail or ever seeming to follow up on that premise. Then go completely silent about it thereafter.

Oh, no, wait... that was the other BLM.

Come on Mr FC! You should be able to keep your own house in order! 

A big benefit of getting a firm like Clyde to handle an “investigation” of your own firm’s conduct (often at senior levels) is that a lot can be buried under “legal privilege” and hidden even from your own partners. If a firm just “investigates” internally, it is much more difficult to hide evidence in that way as all the partners in your firm should be able to see it (subject to some limited exceptions). So if your mate on the executive group has been maybe up to “no good” and you want as the general counsel or compliance guy to cover yourself and that it has all been “investigated”, you get your other mates at Clyde or one of the similar firms to handle it. They are sure to agree with you there is nothing the SRA needs to look at and all the juicy evidence gets hidden forever! Hey presto, everyone is happy! 

Clyde in their own website boast about the benefit of getting them to help you “investigate” is that legal privilege can be used to conceal all that info…

Before any of you feel sorry for Clyde, take a look at the SDT’s judgement from the previous money laundering case. It looks like they were letting themselves be used for what anyone can see were very dodgy money moving transactions and where the firn admitted themselves they did “not understand” these. The SDT said:

“The defaults in question were particularly glaring as the firm was a large and previously reputable firm”.

”Previously reputable”! Ouch, that must hurt but if you read the detail you will see why they got referred. It seems they got blinded by the fees for allowing their accounts to be used and put the whole firm’s reputation at risk. 

Anon@1046 is not exaggerating, the SDT gave Clyde a right spanking before, I just found the judgment. SDT also said Clyde “let down the profession”. Pretty shocking. They had not even been instructed on the underlying transactions but just on the money moving aspects, where anyone can see it screams “money laundering”. Money goes into one account and then Clyde get instructed to release it to another without any knowledge of or involvement in the underlying deals, with a web of offshore companies involved. Unbelievable! All for a fee of 15,000 Euro a time. 

Stop bullying Clyde and Co. They are a great firm. Me and my mates run a legitimate business taking bets on the footie and the races. None of the other law firms would take us on but Clyde were really helpful and gave us a presentation on how to comply with the regulations and all that and not get caught out. We got some great tips from them. They even helped us get a bank account in some island that we never even heard of. We just pay into their account, they take their skim, I mean “legal fees”, and they shoot the rest off to our account. They explained the highest amounts we can put in their bank before the “alarm bells would start ringing”. They have really good tax people too, we don’t pay anything. They told us too that all our emails are “legally privileged” so we don’t need to worry it all gets out. They are the best. 

Every time this gets talked about, we’re told that the Preston Turnbull partners valiantly resigned in a show of solidarity to Ed but this is misleading. It takes a long time to set up a new firm and this would have been in the works for ages. Ed was just the convenient catalyst, do you really think the partners resigned and set up their own firm out of solidarity?

Clydes is still a cesspool but let’s not pretend Preston Turnbull are saints.

‘Right turn Clyde’, straight back before the SDT.  

I once joined a podcast given by two of Clyde’s regulatory and investigations partners, one of them is thought of as one of the London experts when it comes to SRA and SDT matters. The talk was about compliance and reporting obligations and they talked in some detail about money laundering and what to look out for and the sort of business firms should not take on. It amazes me that it was going on at the same time in their own firm. 

The Clyde SRA investigation and compliance team talked about in earlier posts must be very embarrassed they could not deal with this and stop it going to the SDT, through engagement with the SRA. Clearly something has gone very seriously wrong and why would other firms now appoint this team to help them deal with SRA on their own troubles with the SRA about potential misconduct? Who would appoint the team at the firm that has itself been referred to the SDT and where that team could not agree remedial steps with the SRA to stop that referral happening? Do not underestimate how long this would have been going on for before the SDT referral and how much opportunity there would have been for Clyde to persuade and convince the SRA not to take that step and to call on all the relationships and credibility with the SRA it thought it had and instead reach some discrete “agreed outcomes”.
 

For a firm itself to be referred to the SDT by the SRA (rather than just an individual being referred) is rare and very serious as it means that the regulator believes that problems are institutional and not just personal mistakes, that the issues affect the whole partnership and its systems and that the levels of fault are thought to be very significant. 

@ whitewash 

“If a firm just “investigates” internally, it is much more difficult to hide evidence in that way as all the partners in your firm should be able to see it (subject to some limited exceptions)”.

No, this is precisely what doesn’t happen.  Advice provided by internal counsel is privileged within the client group too.  The client group is kept to key people (eg on the board) and not disseminated to hundreds of partners who have no right to it either.  Moreover, partners may themselves be witnesses in the investigation so obviously they can’t see the internal advice.   Your comments are naive and suggest no experience of how these things work.  
 

@7.51 - we all like people who haven't been found guilty of any wrongdoing whatsoever by the BSB!

Anon @ 1244, Whitewash is actually correct, as least as regards a true partnership. In a true partnership, all partners have the right to see all information, including relating to disputes and regulatory matters, unless the partnership deed provides otherwise and subject to some exceptions as Whitewash says. It may be that the partnership deed allows some info to be kept confidential but there are plenty of partnership deeds that do not. It is different in an LLP which is the vehicle now used for many UK firms thought of as “partnerships”, but an LLP is actually a company and not a true partnership. Even in an LLP, if its constitution contains a contractual duty of good faith between partners (they often do), the obligation to disclose everything is there, again subject to any exceptions set out in that constitution. 

You seem to have that level of knowledge which gets you part of the way there, but not all the way. What seat are you in for your training contract? 

Anon 1244, one of the main reasons to appoint a firm like Clyde to “help” with internal investigations is to help maintain privilege and keep that evidence away from pesky partners who might start asking questions and trying to work out what happened by accessing information they are entitled to internally as partners in the firm. Appoint Clyde, and everything can then be bundled and sent to them as “privileged” and should be beyond the reach of those questioning partners and avoiding those difficult questions, especially if there have been any allegations of cover up by a firm at senior levels. This is common knowledge amongst regulatory lawyers and another reason to appoint a third party firm, as well as purported “independence”. Clyde themselves say on their public web site:

“With investigations on the rise, our team can assist you to run an independent investigation, in a manner that preserves legal professional privilege (where necessary). We also ensure clients can mount swift and effective internal investigations and take appropriate steps as required.”

I hope the SRA also take a look at these cosy arrangements where firms appoint buddy firms to ”investigate” allegations of misconduct. Clyde specialise in being one of those buddy firms. Everyone in the profession can see these can bring disrepute and allegations of stitch up and cover up. A firm should not be allowed to pick its own choice of third party firm to investigate it and then use the “conclusions” to try and bat away the SRA and neither should the SRA allow that to happen. It is such a basic principle that I just shake my head that it happens all the time. Not of course for the junior lawyer in the investigates firm accused of misconduct, but only for more senior level partners.

Now Clyde have themselves been referred to SDT for institutional conduct, maybe other firms will think twice about the respectability they thought they had with the SRA when they tell them “We appointed Clyde to investigate those allegations independently and they confirm we are fully in compliance. No need for SRA to look at anything…”

@reg lawyer 

Given nearly all firms, and certainly in the city, other than eg Slaughters, are LLPs your point about partnerships is irrelevant.  Even then the agreement should be amended to protect privilege.  
 

On that point, any LLP agreement which allows all partners to see advice obtained / given by the central risk team is defective because it is very likely to cause privilege in that advice to be lost if the client group includes all partners (which in many firms means more than 100 people) who cannot all comprise the client group.  This is a basic point relevant to privilege.  Hence the agreement will cater for this.  In every firm I’ve been at (four, in the city) this is the case and that includes one general partnership.  
To allow all partners to see the advice may well also compromise an investigation which itself involves any of those partners as witnesses.   

Have a refresher of basic privilege principles, perhaps, over the weekend?  
 

Sounds like Clyde & Co should have stuck to shipping work and not tried to make themselves a mini Hogan Lovells. 

Imagine you are a general counsel, you appoint your mate at Clyde to help with an investigation of alleged serious misconduct in your firm and then he tells you what you don’t want to hear and that the SRA principles have been broken at senior levels in the firm and that it must all be reported immediately. 

it of course NEVER happens, as Clyde would never get appointed again. 

@imagine 

It does happen.  For a firm not to report misconduct that triggers the threshold itself puts the GC and risk team at risk and is likely to be far more of an issue than the the underlying event.  Covering up is never a good idea.  

It’s a bit unfair to criticise Clydes’ regulatory investigations team for the alleged misconduct of one partner five years ago in a totally different team.  I agree it isn’t exactly great optics, and is embarrassing that it’s happened again, but it wasn’t caused by the regulatory investigations side of the business who as far as I can tell.  I guess it will all come out.  

Let's all pile on following an accusation against a few former staffers in a firm with some 5,000 employees. 

Might have been a rotten apple. Could be a cover up. Let's wait and see what happens at the disciplinary tribunal.

Let’s all shed a tear for Clyde. They are so hard done by.
 

What other firms haven’t allowed their name to be used for dubious schemes that look like obvious money laundering earning recurring fees for them for long periods of time and without proper due diligence and where the regulator has cause to believe the systems and controls in the firm are part of the problem, whilst at the same time, preaching to others about compliance and their own expertise at spotting such schemes and purporting to hold themselves out as global experts in advising what is permitted and what is contrary to the rules? 
 

It’s terrible press for Clyde and I do feel a bit bad for those who are blameless there. But I can’t help but smirk a bit too, with them trying to be a “holier than thou” firm and focussing so much on their “expertise” in dealing with the SRA. What is that German word for that emotion I am feeling?

Let’s wait and see. 
 

Stop laughing and have some empathy! 

This had better not come out of my equity.  

@Imagine 11 August 23 14:14

I can confirm. In what today feels like a previous life, I used to do auditing. And I found things that I naively thought should be brought up into light. The people I reported to felt differently. In fact they felt so differently that I lost my job, but I got a carefully measured severance package that threaded the very fine line between a compensation for being ejected and a for being a bribe for staying quiet.

As I say, a different time when I was young and naive.

Speaking as a former C&C SEP: where there is smoke there is an absolute dumpster fire. They can - and do - continue to throw partners under the bus all they want, but no one is fooled.