Partners anticipate changes in the approach to regulatory action at the Financial Conduct Authority (FCA) after it announced that it had hired two senior lawyers from Herbert Smith Freehill's (HSF) and Latham & Watkins alongside a partner from Slaughter and May this week.

On Tuesday the FCA announced it had appointed HSF London litigation head Tim Parkes (pictured) and Latham & Watkin's former vice chair of global litigation John Hull to step into the top positions on its regulatory decisions committee (RDC).

Parkes will chair the RDC – a crucial part of the regulatory process which rules on enforcement, authorisation and supervision issues – and Hull will act as deputy chair from January 2016.

As well as the two senior appointments, the FCA has also recruited Slaughter and May competition partner Malcolm Nicholson as a member on its Enforcement Decisions Committee (EDC).

Partners suggest that the FCA is keen to bring on more senior lawyers onto its committees to give it extra clout. "The FCA's appointment of two experienced dispute resolution practitioners will generally be viewed within the financial services industry as a positive development," says Taylor Wessing London disputes partner Stephen Flaherty.

A City litigation partner adds: "Tim Parkes and John Hull are both very senior people so I think the level of seniority of people who have gone across has changed."

Meanwhile, an ex-FCA lawyer says that lawyers are increasingly taking the top jobs at the organisation. He says: "There is a shift towards lawyers. You can see that at all levels of decision making; more lawyers are involved at the senior level. Some of that is recruiting, and some is internal promotions."

For example, Tracey McDermott, previously a litigation associate at Dechert, stepped up to acting chief executive this month (12 September) following the departure of chief executive Martin Wheatley after the government declined to renew his contract.

At the time George Osborne said the watchdog needed "different leadership". The FCA is still searching for a permanent replacement for Wheatley.

It is McDermott's second promotion this year after she replaced Clive Adamson, the former head of supervision who left in the wake of the scandal caused by a botched 2014 media briefing that led to shares in major insurers plummeting.

Different mindset

With the number of lawyers on the rise, partners say that the RDC might be more open to defences against regulatory action.

Parkes and Hull are seen by some as the most significant hires since the RDC brought in Clifford Chance's (CC) Tim Herrington as chairman after the previous head of the RDC, former Slaughter and May partner Christopher Fitzgerald, resigned in 2004.

Fitzgerald departed after admitting to have talked about the details of an ongoing tribunal case to one of the hearing's judges, Terence Mowschenson QC.

At CC, Herrington represented clients such as Prudential, JP Morgan and Goldman Sachs.

"The hire of CC's Tim Herrington a decade ago was a real sign that the FCA wanted the RDC to be independent. They do not want people to think the RDC is just going to rubber stamp everything they do," says Ashurst financial services regulation partner Rob Moulton.

"People thought, if Tim Herrington is chairing this I'm going to get a fair hearing – and that is just what I think about the new names this week," explains Moulton.

Parkes and Hull also have a track record of acting for regulated companies. At HSF, Parkes acted for Lehman Brothers Finance SA on significant claims arising out of the collapse of the Lehman group.

"Their experience might indicate that the RDC will be more receptive in the future to defences to regulatory action which are based on points of law and evidence," says Flaherty. "If that proves to be the case then the FCA's Enforcement Division will have to undertake more time and effort on ensuring that any enforcement action is more clearly articulated and justified."

Moulton concludes that bringing more lawyers on board shows that the FCA is taking steps to provide a more balanced approach to its investigations.

"The FCA also needs businessmen who have been steeped in roles working in this area to answer questions such as, what sort of reasonable steps should a CEO take to avoid things going wrong? The new appointments retain this balance," he says.