'An event no firm wants to go through' - new Locke Lord London head turns page on record SDT fine
Locke Lord's new London managing partner James Channo looks to the future after last year's SDT scrutiny
March 16, 2018 at 07:45 AM
4 minute read
"It was one of those unforeseen circumstances – he was a trusted partner who was known in the market, and what happened, happened. The fact that we responded quickly was a positive – a silver lining to an event that no firm wants to go through," says new Locke Lord London managing partner James Channo.
Channo, who officially took the reins of the US firm's London office on 1 January, stepped into the post in less-than-ideal circumstances in the wake of the firm's record £500,000 Solicitors Disciplinary Tribunal (SDT) fine last November.
The firm had admitted that it failed to prevent former London banking and finance partner Jonathan Denton from running what the SDT described as a "dubious" £21m investment scheme for two and a half years, before his firing in July 2015 and subsequent arrest at Birmingham Airport.
Former City chief Michael Collins – who came in to head up the office after Denton's departure – recently moved back to Locke Lord's Dallas base, leaving Channo to take over the London leadership.
"It was important to communicate internally and discuss what had happened," he says. "There was a discussion with staff to explain what had gone on, where the firm was and what happened. As soon they understood what the situation was, they recognised that we had reacted and were doing what we could to resolve the situation. It was unfortunate, but the staff here responded well."
Channo says the firm was cooperative throughout the Solicitors Regulation Authority (SRA) investigation into the Denton episode, something the SDT ruling noted, and adds that Locke Lord is "constantly looking to improve and make sure that it doesn't happen again".
Since becoming managing partner, he has been working with the firm's Dallas-based executive director Miles Holsworth to that end, and says the firm has appointed additional staff to better "monitor compliance" in the London office.
Despite the upheaval caused by the investigation, Channo is adamant that it has not halted growth, adding that he feels that the London office is heading "onward and upwards".
In 2017, the firm took in London turnover of $12.3m (£8.8m), down 3.5% on 2016′s figure of $12.75m (£9.1m), with Channo saying that "no circles have been fully formed".
"We are benefiting from the new hires that we made in 2017, and we will be continuing to hire aggressively in 2018," he says. "We will be looking at growing corporate and focusing on compliance, as well as more general corporate regulatory work. That is due to the current environment in terms of new regulations coming into effect and the potential effects of Brexit."
While Channo acknowledges the long-term uncertainty around Brexit, he feels one advantage for the office may be British companies looking towards North America for new business opportunities.
"With Brexit looming, it will be hard to overlook the impact that the North America might have in terms of opportunities. That said, I think there will still be North American businesses looking at the UK – the UK will still be a strong financial city," he explains.
The potential opportunities afforded by Brexit are predicated on running an integrated international firm, something Channo says is a focus for Locke Lord. "Locke Lord is a very good national US practice that is learning how to become international," he says, "We are getting better and better at it, but truth be told we are not there yet in terms of doing as much as we can.
"We try to run an integrated practice. I am in a small office in London, but I was given the opportunity to sit on the board and present our views and our thoughts on the UK practice. There is cross-selling between the UK and US, and we are increasingly focusing in on trying to increase that flow."
One of Channo's first acts as managing partner was to focus on the firm's associates, boosting their pay to a level he describes as being "towards silver circle" levels, and London associates now earn between £75,000 to £113,000 on a seven-year scale. "We had to move that pay scale in the right direction to keep attracting the right sort of people and to retain associates," he says.
Channo is clear that one of his primary aims is to bring some stability to the London office.
"I have been with the firm as a corporate partner since the doors opened in London in 2012, so there is continuity from that perspective. I think I know the office better than most people, and I can really help it develop and grow."
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