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Economic

The Global Reach of ALSP Giants

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Law is not a profession that is standardized across the world. The law and its associated value systems, moral codes, normative principles–have been highly debated since time immemorial. However, there is one thing that we as a global society understand about law; it is necessary everywhere.

It is no longer sufficient for a law firm to simply be local, and full of experienced professionals. There are new demands in this modern world; demands for a tech enabled legal team, streamlined legal operations, and–recently–demands for globalization. One definition of globalization is, “the process by which businesses or other organizations develop international influence or start operating on an international scale”. In the context of law, we can understand globalization as the natural next step a company/law-firm might take after aligning itself with some form of legaltech.

“Law firms have the unquestionable challenge of adapting to change”

Alternative Legal Services solved the problem of efficient, flexible and cost effective legal services. Legaltech even further rectified whatever efficiency issues a legal team had. But then, where does globalization come in? What specific bottlenecks does it solve? We could start by looking at the sentiment that’s driving the constant reconstruction and metamorphosis of legal-teams in today’s world, a sentiment that’s shared by Luis Fernando Guerra, Managing Partner of Deloitte Legal Spain, “Law firms have the unquestionable challenge of adapting to change.”. It’s interesting, the interview with Guerra originated from an article that questioned the managing partners of eight large law firms in Spain and Portugal about their projections for the legal industry in 2020. Guerra mostly spoke on legaltech, while the Managing Partner who was interviewed directly after, Duarte De Athayde of Abre Advogados, argued that globalization would in fact be driving progress within the legal industry. Athayde made an interesting correlation, drawing on the topic of technology and the lighting speed at which it propulsively dominates not just the legal industry, but every industry in the world. With the emergence of each new gadget, software, product, come a unique set of challenges and inquiries. As Athayde rightly pointed out, “lawyers must be a step ahead for better understanding of the situations and propose legal solutions for the new market realities”, and the reality is, the new global market is entirely hinged on tech, which means globalization and legaltech are inextricably intertwined. In this new age, tech is borderless, thus demanding a type of law is also borderless.

“it is now very much an issue of how the legal professionals under your umbrella can benefit others”

It’s not just legaltech that’s putting the pressure on legal teams to globalize, but the ALSP market as well. Alternative Legal Service Providers use their talent pipelines for flexible legal resourcing. It’s a lucrative industry, and the pressure to maximize one’s talent pool is only getting bigger. It’s not just that law companies want to dominate an area’s legal-sphere to acquire the best clientele and legal talent for themselves, it is now very much an issue of how the legal professionals under your umbrella can benefit others. Let’s take Pinsent Masons for instance, an international law firm headquartered in London, UK. This past December, its ALSP branch, Vario, acquired two ALSPs in the German market. Pinsents already had three offices in Germany, so Vario’s expansion into the market was seen as an “obvious next step”, as stated by Managing Director Matthew Kay. Xenion, one of the ALSPs Vario acquired, was one of the few flexible resource providers in Germany that handled over 150 placements in the last three years. By acquiring Xenion, Pinsents is ensuring their presence is felt all over the German legal market. Dominating the German market as a provider of legal services was not enough, nor was it enough to partner up with legal tech startup Genie AI to provide tech enabled services–Pinsents hadto complete the triad; it had to secure the ability to provide assistance to the German law firms/in-house counsels themselves.

“a law firm with word class capability”

You’d be hard pressed to find a successful law company that isn’t expanding its global reach by offering Alternative Legal Services. The largest, most prestigious international law firms are the very ones that ensure they offer flexible lawyering as a service; DLA Piper, Clifford Chance, EY, Allen & Overy…the list goes on. Those 4 companies alone make up a revenue total of $43 billion. Elevate has asserted itself as the ALSP industry’s main competitor, and one of the ways it did this was by acquiring Halebury (UK) and Cognatio (Hong Kong) in January of 2019, effectively ballooning the size of its flexible resourcing business. Most recently, Elevate partnered with Ashurst in November, a multinational law firm based in the UK who cite themselves as a “law firm with word class capability”. By partnering with Elevate, whose locations are dispersed across major cities in the US, Ashurst becomes even more globally inclined, but then, so does Elevate by being able to expand into locations in the Middle East and Europe such as Dubai, Glasgow and Madrid. It’s a little unclear as to who benefited more from this partnership, but the point is that both have expanded within the context of their flexible resourcing talent pools, and as VP of Elevate Janvi Patel put it, both are able to provide its clients with “even more greater flexibility and more cost-effective ways to meet their needs”. Global or multinational law firms are not a novelty per se—the real novelty comes through with how Alternative Legal Services like Alternative Staffing, coupled with globalization, are changing the legal industry. In the November press release regarding Elevate’s partnership with Ashurst, Patel directly acknowledged flexible legal services as being a world-wide hot commodity, “There is a growing worldwide demand for the flexible resourcing model,”. In other words, growing in size and across borders is optimized within the framework of an ALSP, and more to the point, ALSPs have the potential to be successful anywhere.

“they’re the border-evading secret weapon of the legal industry”

The beauty of ALSPs and offering contract lawyers is that they’re the border-evading secret weapon of the legal industry. Some of these ALSPs would rather identify as ‘professional services networks’, especially if their global reach sprawls over continents, like Eversheds Sutherland for instance. They’re a titan within the legal industry, with 69 offices in 34 counties, and as such are one of the 50 largest legal practices in the world. With such massive global coverage, it’s no wonder why the ALSP they spun off in June 2019, Konexo, has a dedicated service called Konexo hub, a legal tech based portal designed to support in-house counsel and aid them in outsourcing legal work. With Konexo hub, finding legal help anywhere in the world would be almost effortless. Prior to being spun off from Eversheds, Konexo was generating about £40m in revenue at the time and was projected to grow to £100m over the next five years due to its spin off, but by tapping into the global legal resourcing market with Konexo hub, perhaps it’s growth will be accelerated.

On Allen & Overy’s website, they boast of their ‘global coverage’, a proud headliner that outlines its presence in over 30 countries. They define the global reach of their firm as “seamlessly combining our international resources, sector expertise and relationship law firm network to deliver cross-border work in the markets and regions important to our clients.”. A&O much like Pinsents, operates its ALSP under the name Peerpoint, described as “a global flexible resourcing platform”. Perhaps that is the future of the law firm; an amalgamation of services, equipped to handle any legal issue, anywhere, with the backbone of the firm resting in its flexible legal resourcing tools/talent pools. The lucrative globalization occurring within the ALSP market re-affirms the notion that legal services are needed everywhere, that a lawyer’s work isn’t necessarily limited to one pushpin on the map. Globalization promotes social and professional diversity within companies, and helps to armor legal teams around the world with legaltech. Make no mistake, the global reach of ALSP giants will continue to spread, until perhaps every law firm is “international”.

Economic

Tackling Non-Tariff Barriers: African Continental Free Trade Area (AfCFTA) Trading in East Africa Region

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“Tearing down these trade walls is key to regional integration in the continent.” – Ms. Pamela Coke-Hamilton.

Traders within the East Africa region should be elated with the African Continental Free Trade Area (AfCFTA), which came into force in January 2021. Prior to the commencement of the AfCFTA, many traders haddifficulties engaging in cross-border trade within the region due to non-tariff barriers. For example, dealing with roadblocks and hectic custom procedures, restrictive licensing processes, certification challenges, uncoordinated transport related regulations and corruption. Understandably, non-tariff barriers (NTBs) are construed to mean restrictions that are put in place that make importation and exportation of products really costly. It is worth noting that NTBs often arise from laws, regulations, policies, private sector business practices and they are used to protect domestic industries from competition.

In order for East African traders to fully enjoy the benefits of AfCFTA, it is imperative that NTBs are eliminated. All hope is not lost as there is a groundbreaking online mechanism of eliminating NTBs. Notably, African Union in collaboration with UNCTAD came up with a simple and user-friendly website which allows traders to report NTBs they encounter when trading within Africa. As a result, governments are required to respond and eliminate the said barriers. It is against this backdrop that this paper seeks to analyse how to tackle non-tariff barriers in the wake of AfCFTA trading. Further, it seeks to provide recommendations to the massive challenge that NTBs pose on intra-African trade and integration.

AfCFTA Protocol on Trade in Goods

Annex 5 of the AfCFTA Protocol on Trade in Goods provides for mechanisms of identifying NTBs, institutional structures for their progressive elimination within the AfCFTA and reporting and monitoring tools for NTBs. This begs the question: What obligations do AfCFTA state parties have with respect to ensuring elimination of NTBs?

Annex 5 to the Protocol establishes a reporting, monitoring and elimination mechanism where privatesectors can file complaints on specific trade obstacles. The complaint is then forwarded to the responsible state party to give its feedback on the complaint and resolve it expeditiously. Additionally, through the reported NTBs, improvements are made to the national and regional trade policies.

Government Obligations

State parties are required to appoint national NTB focal points to help resolve NTBs. The NTB focal points are thereafter trained in using the online tool, how to receive NTB complaints in real time and how to resolve the barriers within the set deadlines. Notably, the focal points will receive email alerts whenever a trader lodges a new complaint or a government comments on an ongoing case.

Goodwill from governments is an essential ingredient for successful elimination of NTBs since the AfCFTA mechanism is built on stronger foundations. In addition to the national focal points and public-private National Monitoring Committees, an NTB Coordination Unit will be created in the newly established AfCFTA Secretariat in Accra, Ghana. The NTB Coordination unit will monitor barriers and progress towards their resolution. Furthermore, state parties will be required to ensure that an NTB sub-committee meets regularly to assess progress and challenges.

Creating Awareness in the Private Sector

State parties need to create awareness about the online platform to the private sector. This is owing to the fact that the NTB mechanism is available to all and sundry: micro, small and medium-sized companies, informal traders, and youth and women business operators. Through the AfCFTA NTB mechanism, all stakeholders have equal voices since the platform is transparent. Additionally, internet connectivity should be available at smaller border crossings so that informal traders do not face any obstacles while trying to make NTB complaints through the platform. Worth mentioning is that in places where there is no internet access, an offline short-messaging-service (SMS) feature will also be rolled out in the medium term.

Procedure for Elimination of Non-Tariff Barriers

State parties must exhaust the existing online notification NTBs channels before escalating a complaint or trade concern to the AfCFTA level. However, there are additional procedures in resolving disputes. For instance, where a state party fails to resolve an NTB after a factual report has been issued and a mutually agreed solution has been reached, then the AfCFTA Secretariat and an appointed Facilitator will recommend dispute settlement.

Appendix 2 of the NTB Annex outlines mandatory processes and deadlines. For instance, an NTB complaint must receive
an initial response within a period of 20 days. Moreover, if no resolution has been found after 60 days, then the parties should request for an independent facilitator to be appointed. If coming to a resolution isproving difficult, then parties can take the matter for dispute settlement.

Despite these deadlines and procedures being crucial, small traders could be in need of a quick solution to the NTB on the ground. Looking at the Tripartite region online mechanism and the speed at which NTBs have been resolved, traders should have faith that they will receive swift assistance.

Language (non-tariff) barriers

Different traders speak different languages and for instance a Swahili- speaking truck driver from Tanzania may want to lodge a complaint about the number of import documents required when delivering cotton fabric to Rwanda. That complaint would then need to be sent to French-speaking Rwandese officials, raising a possible language barrier.

The NTB online tool mitigates potential language difficulties with a plugin that automatically translates complaints from English, French, Arabic, Portuguese, Swahili and 12 other African languages into the official language of the receiving country.

Conclusion

As East African traders envisage the end of the COVID-19 pandemic or at least its receding soon, their hope is that AfCFTA will be an encouraging stimulus for Africa’s development. The groundbreaking online AfCFTA NTB mechanism is a good starting point. Suffice it to say, it will need considerable improvement before a rules-based, expeditious and binding arrangement will be in place. The absence of private complaints to a judicial forum remains a deficit. This is owing to the fact that complaints are dealt with on an ad hoc basis. This will not bring about permanent and systemic solutions. Instead, it will provide legal certainty, further predictability and establish binding precedents. The AfCFTA NTB mechanism is ahead of the curve globally. It is an innovation the world will want to watch closely to see what it can learn from Africa and the AfCFTA.

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Economic

A Femtech Boom – Putting Women First

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A market anomaly

Historically, investment in health issues that exclusively or disproportionately impact women has been scarce. Only 4% of global healthcare R&D funding has been allocated to women’s health, even though it represents an economic burden of $500 Billion – and women are 51% of the world’s population.

At the root of this disparity, there is an educational gap about women’s health, as well as a pervasive lack of women in top leadership roles. This lack of representation – and therefore decision-making power – spans across research institutions, venture capital firms, corporate boardrooms and politics.

The rise of Femtech

Over the last decade, the number of women leaders and start-up founders, especially in tech, innovation and science, has been steadily growing. This growth goes hand-in- hand with their increasing purchasing power, which has fuelled the rise of ‘Femtech’: a new market in which technology is used to put women’s health needs at the top of the global agenda.

The word “Femtech” was coined in 2015 by Ida Tin, CEO and Founder of period tracking app Clue, to label a market which originated at the intersection of three trends: the growth and consolidation of the tech industry, advances in the feminist movement, and a shifting healthcare landscape, with individuals starting to behave more like consumers than patients. Tech innovation, equal rights movements and changes in consumer practice have converged to meet women’s health needs. This emerging technological field includes medical devices, digital platforms, and tech-enabled products focusing on fertility, pregnancy, maternal and hormonal health, parenting support, menopause, and cancer prevention – as well as sexual and reproductive health and pleasure.

Economic activity and awareness have been steadily growing over the past ten years. Across the globe, female founders have put their heads down to question, innovate and redesign: they have improved and tended to the physical, financial and emotional journey of women who seek fertility treatment; they have democratised access to maternal care; they have built software tools to help women track and understand their hormonal cycles; and they have created software solutions aimed at making parenting and work-life management more seamless.

However, only when Femtech was estimated to become a $50 Billion category by 2025 did the world really start to listen. Within the last 12 months, funding allocated to Femtech start-ups reached $1 Billion in total. There were also several early successes. Feminine hygiene start-ups ‘This is L’ and ‘Sustain Products’ were acquired by P&G and Grove Collaborative respectively. Last Autumn, fertility benefits company Progyny had a successful IPO. Finally, in early 2020, maternal health telemedicine and benefits platform Maven hit a record when it announced its $45 Million Series C, the largest round ever raised by a female founder in Femtech – a round that boasted celebrity investors (and public advocates of the gender equality movement) like Mindy Kaling and Reese Witherspoon.

In the UK alone, Elvie, the start-up behind the pelvic floor trainer and innovative wearable breast pump device, raised $42 Million in a Series B. Additionally, CVC Capital Partners acquired over 20 speciality women’s health assets from Teva Pharmaceutical Industries Ltd, a US $703 Million deal that culminated

in the establishment of global specialty pharmaceutical Theramex, a company solely committed to supporting the health needs of women. Headquartered in London, the company markets a broad range of innovative, branded and non-branded generic products across 50 countries around the world. The company’s women’s health portfolio focuses on contraception, fertility, menopause and osteoporosis and includes key brands such as Ovaleap®, Zoely®, Seasonique®, Actonel®, Estreva® and Lutenyl®.

The activity generated by Femtech’s start-ups and businesses has spawned an entire economic ecosystem. For instance, Johnson and Johnson has been co-sponsoring innovation summits with a focus on women’s health, and P&G Ventures, having expressed strong interest in menopause and the “ageing well” segment, has recently partnered with Vinetta project to source its next billion-dollar women’s brand from the community of entrepreneurs.

What next for Femtech?

Throughout 2020, investors, thought leaders and founders have sought to tap into Femtech’s full growth potential. Rather than continuing to focus on the female reproductive journey (and related health concerns), the sector can provide the lens through which we further appreciate how disease impacts women differently.

For example, symptoms of heart disease in women are different from those of men and are more likely to be misdiagnosed. Depression is more common in women (1/4) than in men (1/10). Also, women are seven times more vulnerable to autoimmune diseases and are two to four times more likely to experience chronic fatigue.

There’s a market for educational resources to depart from the current approach of separating and isolating health problems. Instead, user-friendly holistic treatment options that treat the individual as a functional system can facilitate diagnosis and manage symptoms, enhancing the general quality of life.

Additionally, there is a tremendous opportunity to develop tech solutions aimed at increasing treatment access in rural areas and developing countries. The Femtech movement is progressing into a more intersectional territory, where it seeks to understand how to make healthcare services and therapeutics more attuned to the specific needs of the female physiology.

Investing in a Fairer Healthcare System

Women’s health has traditionally been considered a niche market, despite the
fact that women make up half the population, manage the majority of household income, and handle a good portion of the healthcare needs of their families. Some have explained this anomaly as the result of gender biases, with a predominantly male investment community struggling to understand the value proposition, empathize with the problems, or make an accurate assessment of how much women would pay for solutions.

Education and awareness continue to be instrumental in Femtech’s growth. However, companies in the space find fundraising challenging, not least because educating investors about women’s healthcare and its market potential is one of the leading causes of deal cycle friction. This highlights the glaring gap in our education system in areas of women’s sexual and reproductive health.

While highly lucrative deals remain within familiar circles, a shift in the wider investment community is occurring, driven by female and diverse funders who early on identified the value in the sector and are putting their money to work. The same women who drive demand for these products – those who seek a more personalized, more convenient, and more effective healthcare experience – are increasingly willing to invest their money towards a better future for women’s health.

Whilst the impact of the pandemic on health-tech innovation and investment remains to be seen, one thing is certain: this ‘niche’ sector has established itself as one of the most disruptive health-tech markets of the decade.

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Economic

“Uber” Uber: the far-reaching implications of the Supreme Court’s decision in Uber BV & Ors v Aslam & Farrar

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On 19 February 2021, in a unanimous judgment, the UK’s Supreme Court dismissed Uber’s final appeal againstthe decision of the London Central Employment Tribunal made following
a preliminary hearing, that the Claimant drivers fall within the definition of “worker” set out in s.230(3) (b) of the Employment Rights Act 1996 (“ERA”). In doing so, the Supreme Court upheld the Tribunal’s finding that the Claimants worked under an implied contract with Uber London pursuant to which they undertook personally to provide transportation services for Uber, which is neither a client nor customer of any profession or business undertaking carried on by the Claimants.

There had been no written contract between Uber London and the drivers. Uber London held the private hire vehicle (“PHV”) operator’s licence in respect of Uber’s London operations. As a result, Uber London, and not the drivers themselves, nor Uber BV, the Dutch parent company with which the Claimants did have written contracts, bore the statutory responsibilities of accepting and fulfilling PHV bookings, and ensuring that any vehicle provided by it for carrying out such booking is a vehicle for which a PHV licence is in force, driven by a person holding a PHV licence. In view of that regulatory context, personal service had never been in dispute; Uber did not permit drivers to share driver accounts on its app, which would, no doubt, have made it difficult for Uber London to ensure that it complied with its statutory responsibilities.

Hence the employment status aspect of the case turned entirely upon the question of whether the Claimant drivers had undertaken to provide transportation services “for” Uber London or whether, as Uber contended, Uber London acted as a booking agent for them, assisting them to conclude separate contracts with each of their passengers.

This question meant that the Supreme Court had to consider whether and how the ordinary principles of contract law and agency law apply to the world of work, and to apply the common law tests for employee status, particularly the tests of control and integration, but with an understanding that “The basic effect of limb (b) is, so to speak, to lower the passmark, so that cases which failed to reach the mark necessary to qualify for protection as employees might nevertheless do so as workers” (Byrne Bros (Formwork) Ltd v Baird [2002] ICR 667 at [17]). There has been no determination that Uber drivers do not achieve the ‘higher passmark’; Messrs Aslam and Farrar had simply not pleaded this.

The Supreme Court’s dismissal of Uber’s contentions in relation to these matters has implications far beyond the lives of the Claimants, and indeed the lives of Uber drivers more generally.

In relation to the ordinary principles of contract law, what was fatal to Uber’s argument (based on its own circumstances) was the absence of a written agreement between Uber London and drivers. This left the Employment Tribunal to determine the nature of the relationship between the two, by inference from the parties’ conduct, considered in its relevant factual and legal context. The Supreme Court concluded, at paragraph 49, that there was no factual basis for Uber’s contention that Uber London acts as the drivers’ agent when accepting private hire bookings. In addition, without expressing a concluded view, the Supreme Court held, at paragraph 48, that an agency arrangement would not be compatible with the PHV licensing regime. The latter must surely have implications for all PHV operators who have heretofore treated their drivers as principals in and agency relationship with them (see Addison Lee v Lange & Ors [2019] ICR 63); licensing law may prevent this.

Of even greater significance was what the Supreme Court said about the relevance of the ordinary principles of contract to the world of work more generally. Uber had argued for primacy to be accorded to the written agreements such that the question of whether a person is a “worker” is approached by interpreting the terms of any applicable written agreements, at least as the starting point. Uber argued that this was the principle for which the case of Autoclenz v Belcher [2011] ICR 1157 was authority, and if not, it should be overruled.

In rejecting Uber’s argument, the Supreme Court not only affirmed its decision in Autoclenz; it went even further than it had in that case.

From paragraph 69 of its judgment, the Supreme Court explained the inherent illogicality of applying ordinary principles of contract law, unvarnished by the fact of legislative intervention, to the world of work. It said that doing so would give employers a free hand to contract out of statutory employment protections, a matter which had not been canvassed in Autoclenz; that case had instead focussed on inequality of bargaining power as the means by which traditional contract law could be side-stepped in the employment context in order to avoid injustice. But of Autoclenz, the Supreme Court in Uber said, “…the task for the tribunals and the courts was not…to identify whether, under the terms of their contracts, Autoclenz had agreed that the claimants should be paid at least the national minimum wage… It was to determine whether the claimants fell within the definition of a ‘worker’ in the relevant statutory provisions so as to qualify for these rights irrespective of what had been contractually agreed. In short it was a question of statutory interpretation, and not contractual interpretation.” Statutory interpretation required consideration of the statutory purpose which, in the case of the statutes relied upon by Messrs Aslam and Farrar, was “…to protect vulnerable workers from being paid too little…required to work excessive hours or subjected to other forms of unfair treatment…” ([71]) and that:

“Once this is recognised, it can immediately be seen that it would be inconsistent with the purpose of this legislation to treat the terms of a written contract as the starting point in determining whether an individual falls within the definition of a ‘worker’. To do so would reinstate the mischief which the legislation was enacted to prevent. It is the very fact that an employer is often in a position to dictate such contract terms and that the individual performing the work has little or no ability to influence those terms that gives rise to the need for statutory protection…” ([76]).

If the question were not one of statutory interpretation, the law would in effect be according Uber “power to determine for itself whether or not the legislation designed to protect workers will apply to its drivers” ([77]).

This is the truly revolutionary portion of the Supreme Court’s judgment. Though it has long been understood that the label which the parties give (or more commonly, the more powerful party gives) to the relationship is not determinative, it is now not even the starting point. Contrary to Uber’s contentions, it (and related written terms) is to be accorded no greater primacy, than any other aspects of the working relationship.

More specifically to Uber itself, the Supreme Court held (at [93] et seq.) that five aspects of the relationship between Uber London and drivers particularly highlight the substantial control Uber exercises over drivers, which demonstrates that the drivers are in fact working “for” Uber, within s.230(3)(b) of the ERA. These are that:

(i) the remuneration paid to drivers is fixed by Uber;

(ii) the contractual terms on which drivers perform their work are dictated by Uber;

(iii) while never required to log on to the drivers’ app, once they are logged on, drivers’ choice about whether to accept requests for rides is constrained by Uber; Uber controls information provided to the driver in advance of accepting a ride and Uber monitors drivers’ rates of acceptance of ride requests;

(iv) Uber exercises a significant degree of control over the way drivers perform their services including by vetting the types of cars drivers may use, directing them to passengers’ pick-up locations and from there to their destinations and using its rating system as an internal performance management tool;

(v) Uber restricts communication between drivers and passengers to the minimum required to perform any given trip.

As a result, the transportation provided by drivers is designed and organised in order to provide a standardised service from which Uber, and not individual drivers, obtains the benefit of customer loyalty and goodwill ([101]). That point exemplifies the significance of the Supreme Court’s judgment to the “gig economy” as a whole; how can any gig economy enterprise attract and maintain customer loyalty to its product or service other than through such standardisation? In turn, how can such service be provided without controlling the way workers undertake their work just as Uber was found to do?

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