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Corporate fraud and the law: the law is on the public's side



 

 

 

 

 

 

 

 

In politics, they’re having a debate about whether to have a “judge-led inquiry” or not, and I’ll let this discussion go ‘on a frolic of its own’. There’s one thing that the public should know about corporate fraud and the law: the law is on the public’s side.

We have a Fraud Act. It’s not a case we’re under-regulated. The Fraud Act was enacted by Labour to bring criminal prosecutions against fraud offenders in 2006. This is still in force, and that’s why the Serious Fraud Office is currently working out whether any criminal convictions can be successfully brought against traders for criminal activity beyond reasonable doubt. It’s not that ‘it’s too hard to satisfy an offence’ – it’s just the robust way in which the English criminal law works. The Financial Services Bill will probably need to be ‘tightened up’ to provide direct sanctions for the LIBOR fixing, and I understand that HM Government tends to make the necessary amendments.

I am mindful of this answer in Prime Minister’s Questions in Hansard, in how David Cameron may have inadvertently given an unfortunate description of the contribution of the criminal justice system, seeming only to rely on the parties’ morality. This is from Hansard (here).

13 July 2011 Col 319

Nicky Morgan (Loughborough) (Con): The Prime Minister is absolutely right to concentrate on wider issues than the BSkyB takeover. Is it not the case, however, that over the past few years, all those whom the public expect to behave—bankers, MPs, journalists, the police—have shown, or at least some of them have  shown, that they are not capable of meeting that trust. Regulation plays a part, but is it not the case that all those who have positions of responsibility must examine their consciences and work out how best to behave in future to maintain public trust?

The Prime Minister: My hon. Friend makes a good point. No regulatory system in the world can protect against all bad practice, and a sense of social and moral responsibility is vital, whether one is a banker, an MP or a journalist. I am sure that we can do better than the current system, because on the evidence of what has happened over the past 10 years and the warnings that have been ignored, it is clear that the Press Complaints Commission is not set up in the right way, and has not worked.

 

 

However, I feel uneasy about this answer, given the amazing work done by these corporate law firms and others in relation to fraud and white-collar crime in general. It’s essential that the public understand that not all corporates are bad, and that even corporates are not above the law. Taking the charitable view, I take this answer to mean that David Cameron feels that regulation is important, but one would hope that the parties involved act consistent with business ethics. What I reject, as indeed I hope Cameron would, is the notion that business ethics on its own is a replacement for the law.

 

 

Slaughter and May

Freshfields

Allen & Overy

Linklaters 

Clifford Chance

 

This post is personal, and should not be taken to represent the views of BPP or of the BPP Legal Awareness Society

 

 

 

February 18th and 19th 2012: "Walk the Thames" to support legal aid (including BPP Pro Bono Unit)



A huge group of people affiliated with the English legal profession is walking 40 miles in darkest February?to raise funds for London’s legal advice charities. New “registered walkers” include Lloyds PR solicitors, Baxter Webbe Solicitors and Islington Law Centre.

Each team has a fundraising page on Virgin Money Giving.? ?Very keen fundraisers are encouraged to establish their own individual page there but any team member can use the team page and ask everyone they know to sponsor them online through that page.

The purpose is as stated below:

 “Law Centres and specialist legal advice agencies provide their services through a mixture of legal aid funding, local authority funding and charitable donations.? The agencies make a huge difference to people’s lives, reducing debt, poverty and homelessness, and combating discrimination and injustice.? ?The Government have reduced the amount paid for legal aid by 10%. Local Authorities are reducing funding as part of their cost cutting.? ?In the second half of 2011 legal advice agencies in London have been closing at the rate of one a month. Had it not been for the funds raised by the walks and provided by law firms that closure rate could easily have doubled.? So while we can’t hope to replace the funding that is being withdrawn we can make a huge difference to the effects and maintain legal help for many thousands of vulnerable people.”

Lord Phillips of Worth Matravers  has sent out this message to recruit walkers:

 “Times are hard. More people than ever need free legal advice about housing, debt, benefits and employment. But funding for legal advice centres is shrinking. On 18 and 19 February I shall be leading the annual “Walk the Thames” expedition from Canary Wharf to Hampton Court to raise some of the money that is desperately needed to maintain these services. The company will be great and the scenery a delight. Please come and join us, whether on foot or on bicycle.”

If you’re a student at BPP Law School, please contact the Pro Bono Centre (which can also be followed here on Twitter) on their email probono@bpp.com.  Every walker recruited produces more funds for the important charities, and every penny raised this year is especially vital.  A warm welcome is extended any family, friends or external colleagues who wish to join your team. So far, the organisers have raised over £11,000.

This event has a lot of prominent wellwishers: Jordans is providing a goodie bag, Clifford Chance is hosting the start and Jordans and BPP Law School will be buying all participants a drink at the end of each day. The organisers are also grateful, as ever, to Allen & Overy for designing and printing our publicity and drinks vouchers

The instructions to participants are as follows:

Start

Day 1 starts at 8.30 at Clifford Chance’s offices at 10, Upper Bank Street in Canary Wharf where C.C. have kindly agreed to provide a hot drink and biscuits to start walkers off.? ?Because we are starting at the Isle of Dogs there is a quite a bit of river crossing and a quick tour of Battersea Park to make up the lost miles from our old Thames Barrier start.? ?After circling the inside of the Isle of Dogs you stay on the North bank until Tower Bridge where you cross and take the South Bank to London Bridge; over to the North Bank to the Millennium Bridge, where you cross to walk the South Bank to Westminster. Cross again and along the front of Parliament setting off for Chelsea Bridge. Cross the bridge and the route takes a route through Battersea Park to Albert Bridge where you cross the river again. From there it’s a reasonably straightforward route to Putney Bridge which you cross to go to the Rocket pub at Putney Wharf Tower in Brewhouse Lane Putney http://www.jdwetherspoon.co.uk/home/pubs/the-rocket  .

To see the map for Day 1 click here or go to http://g.co/maps/tc7nk

Day 2 will start at Putney Pier (Thames path south side again – just West of the Bridge) and take the South Bank Thames path all the way until we cross the River at Teddington footbridge. A little road walking takes you to Bushey Park where a circuitous route of the park makes the walk up to 20 miles before exiting at Hampton Court Gate and straight across the road. Enter through the back gate of Hampton Court and head for the main gate (signposted Trophy Gate) . Go out of the main gate and turn left and cross Hampton Court Bridge.  Cross the Road when you get to the station. Bridge road exits the small roundabout and the Prince of Wales is about 50 yds. down on the right. http://www.beerintheevening.com/pubs/s/12/128/Prince_of_Wales/Hampton_Court.

To see the map for Day 2 click here or go to http://g.co/maps/xt8cq

Start times?

Day 1 is scheduled to start at 8.00 a.m. Organisers will be there from 7.30 and they will remain there until about 9.30 a.m.   Participants do not have to wait for everyone to arrive before starting off. Day 2 participants get a lie-in as the organisers schedule the start at 9.00. Again organisers will be there half an hour in advance of the scheduled time and stay for an hour after.

LegalAware Review of the Year 2011 – Part 2 (Aug – Sep 2011), from OPEN 2012 to law degrees



Part 1 of my review of 2011 is here.

 July

As the training contract deadline was drawing to a close, I blogged about the online application form based on a meeting done by the BPP Careers Unit at Holborn. I was in the middle of studying leadership for my #MBA, so I wrote about Martin Luther King’s “I have a dream” iconic speech.

I got easily bored, and discussed how Yogi Bear should be ‘legally aware’, and I even likened the training contract interview to the driving test the following month. I gave a well received presentation on the employment support allowance for my student society, whilst the full impact of the phone hacking at the ‘News of the World’ was becoming more widely known and what effect our statute law might have. This was the birth of the #Leveson inquiry which would be a dominant feature of recent months. Phone hacking was now a very active area of debate in the Houses of Commons, which was to be the case for the months which followed.

August

I became increasingly interested in the methods that legal recruiters use to select people for interview for corporate law firms. I had in my sights the ‘situational judgement test’ where applicants have to make a decision ‘what they would do’ in that particular corporate situation; I made my own version up, and so far over 100 people have taken it providing me with clear answers, surprisingly.

September

On 1 September 2011, Alex Aldridge published a thought-provoking article, “Disabled lawyers still face discrimination” in the Guardian.

I commented as follows:

I’d very much like to thank @AlexAldridgeUK for writing such a constructive and positive article on a topic, in my personal opinion, which has become somewhat of a ‘white elephant’ for law firms and legal education.

I agree that all of the firms mentioned in the article have really ‘meant it’, when it comes to widening access to disabled students in the legal profession. I am mentioned in Alex’s article above, and I tweet at @legalaware. The article generated much-needed debate, and I hope that it begins to forge a path for the future, where all stakeholders can bring their views to the table equally validly. For example, I have always found @SundeepBhatia2 very encouraging in supporting me. Sundeep is a Law Society Council member, and is extremely committed to the values of equality and diversity, in letter as well as in spirit.

Although I have now passed my LLM in international commercial law and I am about to commence my LPC in January 2011 here in London, I now run the BPP Legal Awareness Society during my MBA, a student-run society to promote the importance of law to business, and business to commercial lawyers (our news and educational videos are located at http://www.legal-aware.org). This time last year, however, I went to the http://www.open-to-you.com/ (OPEN 2011) event which was immaculately organised.

It was a great opportunity to meet face-to-face legal recruitment experts, other law students, and, most importantly, lawyers generally at Managing Associate or Partner level. I’ ll be strongly encouraging my friends at @BPPLawSchool and@BPPBusiness, where I hope to be increasingly involved in our disability strategy at a personal level. As I am physically disabled myself, I think such an event is wonderful for introducing law students to issues such as reasonable adjustments in legal recruitment, and ongoing training. There was a brilliant session on interview techniques which I loved.

I happen to believe that a much more ambitious debate needs to be had, however. Disability is not simply about law firms meeting future employees face-to-face once-a-year, which I dare suits meets requirements of all those concerned. We need a decent acknowledgement that disabled people aren’t there simply for marketing purposes; disabled citizens are potent members of society. and can indeed secure “competitive advantage” for law firms in a directly relevant area of law such as real-life application of the Equality Act 2010 (http://www.legislation.gov.uk/ukpga/2010/15/contents).

Crucially, all disabled lawyers can exhibit remarkable skills in completely different areas of the entire range of corporate law specialities, such as share acquisitions or joint ventures, as indeed you’d find out if you were to attend the ‘OPEN 2012′ event. I believe that many disabled lawyers are also happy in high-street ‘social law’ in professional legal services firms offering specialist advice.

and

I couldn’t agree more with Tim’ s comment above: especially the need to ‘walk the walk’ as well as ‘talking the talk’ when it comes to inclusivity and diversity. This extends to all forms of legal recruitment, including careers fairs.

Tim is deaf as stated in his comment, and I have mildly impaired walking ability, as indeed also stated correctly in Alex’s article.

I feel intuitively that partners promoting disability in ‘top law firms’ (a term used in helenfcooke’s comment above), especially if they are not disabled themselves, could ‘do no harm’ ln listening extremely carefully to the views of people who live with disabilities.

This is, I suppose, what the people like me might call ‘face validity’ (cognitive neuropsychology was the subject of my own Ph.D., hence my somewhat late interest in psychometric tests for legal recruitment).

Ideally, I don’t feel it would be a bad thing if there were more disabled lawyers at Managing Associate or Partner level in these ‘top law firms’, anyway as I feel that there are few role models for disabled law students like me.

Furthermore, the proportion of disabled people in the general population is not altogether insignificant, so there is arguably no legitimate reason why disabled citizens should be underrepresented at senior level in such ‘top law firms’, or any law firm for that matter.

A new intake of students arrived at BPP University College. I hotfooted back from the party conference season to display my stall at Freshers Fair with Majid. During my conference, there were many interesting topics which I blogged on. Having already done pro bono work as a law student for several months by that stage, I attended a major event at the Labour Party Conference on the perils of the legal aid reforms. I concluded that the proposals did not constitute ‘justice for all‘. At some point during the year, probably inspired by two academic economists Prof Paul Krugman and Prof Joe Stiglitz, who both won the Nobel Prize in economics, that the Coalition policy was wrong and profoundly anti-Keynesian; I disagreed with Vince Cable’s interpretation of it in a blogpost I wrote on the “paradox of thrift“. I felt I had to tie in the notion of ‘economic rent’ and Ricardian economics in discussing bankers bonuses, however.

Later that month, I decided to make my own platform to help law students, particularly those with dyslexia and visual impairments, become good at the online verbal reasoning test; this is an obstacle for many law students getting even an interview for a training contract now. I wrote an introductory post on this here.

October

I became increasingly interest in how psychometric tests had managed to gain such an elevated status in legal recruitment; in fact, at one point, I reviewed the history of the situational judgement test, with a view to considering what the future holds.

On 14 October 2011, Alex Aldridge published an article in the Guardian entitled “Is the law degree an ass?”.

I commented as follows:

I really enjoyed attending this debate at UCL on Tuesday for two main reasons. Firstly, as a law student (about to study the BPP LPC in Holborn in January 2012, having successfully completed my GDL, LL.B.(Hons) and LL.M. as a mature student), I was interested to hear how academics answered the question “Do lawyers need to be scholars?’. This is particularly since I have received academic scholarships from three well-known institutions including Cambridge. Secondly, UCL is in fact where I did my own post-doc, and I have fond very memories of the place. I

I would like to thank the organisers @LexisNexis and UCL who took great care over the many delegates. I was able to sit near the front, due to my poor eyesight. I hope very much that @LexisNexis hold an event in the near future, with panel representatives including ‘real’ law students. I hope particularly @kevinpoulter will be involved as he is an experienced legal commentator who communicates well. I sat with fellow ‘legal tweeps’, @colmmu from the College of Law, and@legalacademia, a legal academic originally from Cardiff. It has been interesting for me (as @legalaware) to read the general feedback following the event, which converges on the notion that the scope for discussion about the issues was too limited, and drawn from people who were perhaps too senior. Notwithstanding these issues, I am very much looking forward to the outcome of the review to be conducted by the Legal Education and Training Review (LETR).

I have written a blogpost based on my own personal experience of this panel discussion on our ‘LegalAware’ website, the official website of the BPP Legal Awareness Society. On a positive note, Mr Bickerton explained his personal belief that the purpose of the degree is fundamentally not supposed to teach people how to be good at the law – his firm are rather looking for aptitude, interest, and a need to pursue law as a vocation. However, I found a bit alarming his relative disinterest as to what should be in the legal curriculum compared to the well-reasoned thoughts of the academics in the panel, in that the trainee recruitment of the Clifford Chance was of acceptable standards anyway. Ironically, it is perfectly possible for the Graduate Recruitment Team at Clifford Chance never to discover that you are a “scholar” if you do not meet their benchmark in their situational judgement test or verbal reasoning test. However you choose to define what a “scholar” is, most reasonable people would not define it as simply producing an arbitary mark in a psychometric test.

Personally, I found the views of Prof Richard Moorhead the most compelling. Prof Moorhead is at the University of Cardiff Law School (profile here). According to Prof Moorhead, lawyers ‘needed’ scholars, otherwise it would not be clear where the knowledge was coming from; scholars researched the key issues, and there is a key interdependence of lawyers and scholars – without scholarship, the advancement of knowledge would slow. The curriculum therefore needed to be exciting and innovating.

and

Interesting. I’ve had entirely positive experiences as a postgraduate student at BPP Law School, BPP Business School and College of Law doing my LLM, LLB(Hons) and MBA – but please bear in mind I’m bound to be happy at anything surviving a 2 month coma due in meningitis in 2007. i am also mindful of ‘advertising’ legal providers in this new ‘age’ of ‘expansion’ of legal services and legal education providers.

I did spend a lot of time at Cambridge, close to ten years in fact, as both an undergraduate and postgraduate student at Cambridge. I think @BaronessDeech is possibly being a bit tongue-in-cheek in her views about Cambridge, but I have always had a huge amount of respect for the jurisprudence FHS at Oxford.

I am now myself disabled, and I have passionate views about improving access for people like me who are visually impaired. Indeed, I have a chance to air them in the Comments section in a different article by @AlexAldridgeUK recently. I once had the enormous pleasure of meeting Prof Jim Harris. If you read his obituary, you’ll understand why,

Obituary in the Times

I didn’t study the Law Tripos at Cambridge – but I think i can understand where your impression of it as ‘stifling’ came from from my limited understanding of the organisational behaviour of faculties at Cambridge, @alienat. I think Cambridge suffers from a lot of very clever academics who don’t talk to each other when designing the Tripos, meaning that the Tripos is totally overloaded. As is usual in academic interests, they tend to be protective about representation of their own research interests in the undergraduate courses (and their examinations),
This was certainly my experience in an altogether different Tripos.

I would, however, be a bit disappointed if the Law Faculty (which does have an amazing research record, for example in criminology), were not able to input constructively into design of the law curriculum. They must however be extremely careful not to overload the curriculum (different from syllabus, by defintiion) with their suggestions, however.

Interestingly, since my comment was published, Clifford Chance have decided to discontinue their use of the Situational Judgement Test (they set exactly the same test in 2010 and 2011). I assume that this is not related to my comments above

 

LegalAware four-part series on psychometric tests: Factsheet 3 – What are situational judgement tests?



This is the third in a four-part series looking at psychometric testing.

Lots of employers use situational judgement tests (SJTs) during their recruitment stage, particularly at graduate level.

SJTs measure your behaviour and attitudes to work-related scenarios. With a bit of “insider knowledge” you will have nothing to fear. This is where it is most likely to have a substantial advantage to ‘understand’ the corporate environment or culture, from having done ‘relevant’ work experience. Possibly reading all the books in the world about what it is like to work in a City environment won’t fully prepare you for such tests. However, here is one very good book, which is available on Amazon UK:

http://www.amazon.co.uk/Need-Know-About-City-2009/dp/0955218632/ref=sr_1_1?ie=UTF8&qid=1318253145&sr=8-1

 

 

 

 

 

 

 

 

It is therefore perfectly possible for you to ‘train’ to become good at these tests. Currently organisations as diverse as Waitrose, the NHS, PricewaterhouseCoopers, Sony, Wal-Mart, Deloitte, John Lewis, the law firms Herbert Smith and Eversheds, the Fire Service and many more, are using SJTs as part of their recruitment process.

 

 

Situational judgement tests present candidates with a range of different situations that they might experience in the job for which they are applying. For each situation, a number of possible actions are suggested. There may be around 3 actions, but this varies. It is the candidate’s job to choose between these possible options and judge which is the most effective course of action to take and therefore which action they would take if faced with this situation.

SJTs are always multiple-choice; no answers other than the options listed are allowed.? The ‘name of the game’ is not to have an in-depth discussion over the various pros and cons of the various options on offer; often one of the options will be completely daft according to most reasonable people.

The situations (or “scenarios” as they are sometimes called) are almost always reflective of a real-life aspect of the job. SJTs are usually designed using ‘Subject Matter Experts’ – usually people who are successful at the job themselves. These experts are asked to suggest likely scenarios with which a jobholder might be faced and also to suggest possible responses and rate these responses for effectiveness. This forms the basis of the scoring system for the test. So in other words, how closely your responses match the answers rated highly by the ‘experts’ will determine how well you do on the test.

For employers, SJTs are a very cost effective, powerful and convenient way to select the potential strong performers from a large group of candidates. Employers will be more likely to use an SJT if they have a high volume of candidates applying for a role or position and if they recruit for this position on a regular basis.

How should you prepare for a SJT?

It has been suggested that one of the best ways to be prepared for a selection test, including a situational judgement test, is to be aware of what the test is seeking to measure. In other words, what aspects of you, as a candidate is the test hoping to pick up on?

Competencies are bundles of skills, abilities and personality traits which are considered by most experts to contribute to good job performance. The relevant competencies will vary according to the job or job-type being considered. As a law student applying for a training contract, you will normally be expected to demonstrate “graduate level competences”.

Graduate competencies will reflect the range of skills, abilities and styles that are effective at a graduate entry level role in an organisation.

They are unlikely to include managerial competencies such as ‘directing others’ and ‘strategic thinking’.

They will probably include some, or all, of the following:

  • Communicating, influencing and negotiating – looking for clarity, appropriateness and persuasiveness? of communication.
  • Drive to achieve results – looking for motivation and drive to achieve high standards and deliver results on time.
  • Planning and organising – looking for the tendency to approach tasks in a systematic and organised fashion, to prioritise activities and manage time.
  • Analysis and decision-making – looking for accurate and timely analysis of information, facts and data and good judgement with regard to what course of action to take based on that information.
  • People and relationship skills – looking for capacity to build effective working relationships, to have empathy and awareness of others and work well in a team.

No particular training or knowledge is required to take this type of test. However, as mentioned above, if practice tests are available on the employing organisation’s website, or elsewhere, it is well worth taking full advantage of these.

When you sit down to take the test, look closely at the detail of both the situation, the possible answers, what you are being asked to comment on and also whether you are being asked for your judgement or information about your most likely response. It is important that you read each scenario thoroughly.

 

 

Another point is that, as for ability tests, you are expected to use only the information provided in the question; do not make assumptions about the situation or scenario, even if it is similar to one that you have come across yourself in the past.

And finally, as mentioned above, if you have been given information about the competencies assessed then keep this in the back of your mind as you progress through the test. If you haven’t been given this information then make your best guess as to the competencies that are typical of the role for which you are applying. By identifying the competency or competencies that the question is addressing you can more easily get into the correct ‘mindset’ to judge the options effectively.

 


Example questions

 

1. Your friend, who has always been your competitor at law school, is about to give a Powerpoint presentation on share acquisitions in Korea as a trainee, and you know that the Managing Associate is looking forward to this presentation with interest. However, there appears to be a mechanical fault with accessing Broadband, and the only copy of the file is an email which she sent to you to check yesterday. You saved it on your memory stick, which you happen to have brought to the meeting. You know the memory stick is compatible with the computer she is using for her presentation. How do you decide to proceed?

Pretend you have forgotten the memory stick, and you cannot help. (0%)

Offer to upload the presentation on her computer using the memory stick, but to offer also to download the file from the internet if that fails from a neighbouring computer. (94%)

Ask the Managing Associate for help, to demonstrate that you enjoy teamwork. (6%)

 

2. You are a trainee in the corporate finance seat in London where all team members are extremely busy. You have recently been liaising with ten particular clients on an almost daily basis in France. Your Supervisor has asked you to canvass for opinions of various clients in different countries towards the recent fall in stock prices in the European markets. You feel you do not have time to do this task on your own in time. Which of the options do you consider first?

Seek help from other trainees to help you to write the report, and ask other trainees which clients should be contacted. (24%)

Seek help from other trainees to help you to write the report, and contact some or all of the ten clients to ask them for their opinions. (47%)

Research the information which could be obtained from the clients and punctually write a report. (28%)

 

 

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