Head of Financial Crime, Richard Kovalevsky QC, talks to fivehundred magazine about trading chambers for a law firm environment, the challenges ahead for the criminal Bar, and the current trends in financial crime.
Why did you decide to leave the independent Bar and 2 Bedford Row to become a partner at Stewarts?
At the Bar, I was involved in many large cases working as part of a large legal team. Over time, I realised that I enjoyed running these teams and empowering the other professionals I worked with. Strategic decision-making for clients facing the risk of prosecutorial action had become a regular exercise. These skills fit well with a law firm.
I chose Stewarts as I wanted to join a reputable firm where I could advise clients, work with different legal teams, and where appropriate, still appear as an advocate. Stewarts’ litigation reputation, as well as the fact it is highly regarded among its peers, the Magic Circle, and large US and European firms, made it attractive to me. I was keen to build a practice in a firm that had good European and US connections, as this is where a lot of my work at the Bar had been focused.
What were the challenges of establishing the firm’s financial crime department?
Managing the growth of the department has been the biggest challenge to date. I was fortunate enough to have been well received by my peers practicing in my areas of specialisms and by Magic Circle firms that I have been working alongside and we have won several significant instructions.
The challenge has been to ensure we have sufficient depth and expertise on hand to be able to service the growing workload.
We recently appointed David Savage as a new partner in the department, his financial crime experience is supplemented by his in-depth knowledge of sanctions law and practice, and we’ve had support from the related areas within Stewarts. Having high- quality lawyers is at the heart of Stewarts and I intend to ensure that quality is the critical common factor in all my hires. I am happy with the current shape of the department, and look forward to its further expansion.
What have you personally found to be the biggest challenge swapping chambers for a law firm?
Most definitely the commercial aspects of my role here at Stewarts. Not only am I running the department, winning new business, and servicing clients, I am also on the firm’s board. Stewarts is a significant business. It’s a balancing act getting everything done, but one I relish. Having said that, I am still adapting to the limited amount of annual leave that you get in a law firm compared to the Bar!
What advice would you give to other barristers thinking of making the switch? And for those going in the opposite direction?
For barristers looking to move to a law firm, I would say the biggest difference is responsibility. You are answerable to your fellow partners and responsible for, and to a certain extent answerable to, the firm’s employees. Your time is less your own, and you have to be comfortable with the business of law. The Bar insulates its members from the sometimes bruising conversations that are needed in relation to the financial aspects of conducting a case. Thought must be given to that. At a law firm, you have to be much more open to new people, ideas and situations.
The other way around? Making the switch from a law firm to the Bar would mean gaining much more time to focus in detail on isolated issues of law and, to a certain extent, fact. As mentioned above, you will be insulated from the commercial discussions and considerations that surround litigation and legal advice. On the other hand, someone making this switch is likely to miss the collegiate atmosphere of a law firm, and the continuing support of those who surround you.
What are the differences or challenges of advising individuals and corporate clients?
In representing corporates, you must always be aware that the client is seeking certainty and finality, and may be looking for a pragmatic solution. This often means that while it is important to win, there may be other factors at play in a business when determining the right strategy to achieve the best outcomes.
Individual clients, on the other hand, require an outcome that ideally vindicates them and ensures they suffer no loss. This requires strategic advice based upon achieving a defined goal. You have to work closely with a client to ensure their pressing needs are immediately catered for.
The UK is often described as having a ‘Rolls-Royce legal system’, but is that really the case when it comes to criminal justice?
I agree the UK does have a Rolls-Royce legal system, but in terms of criminal justice the problem is underfunding, particularly with prosecuting agencies. This has meant fewer cases being investigated and those that are investigated are taking longer to decide in respect of allegations of criminal behaviour. This funding issue and the subsequent delays must be addressed rapidly as the UK is falling behind in terms of the length of time that an investigation takes compared to the US and Europe. Over time, this could become a significant problem to the reputation of the UK legal system if it isn’t addressed.
What predictions would you make for the future of the criminal Bar?
The criminal Bar is likely to continue its separation between general and financial crime. Each area is becoming increasingly specialised, particularly financial crime. In addition, as law firms develop their own capabilities in these areas, the ground covered by the Bar will shrink. However, I think there will always be the need for experts in both areas of criminal law.
Do you see the professions merging in the future?
This is an interesting question with a complex answer. I think the professions are likely to merge to an extent, as law firms develop advocacy departments and capabilities to keep up with client needs and requirements. However, I think there will always be the need for specialist barristers in chambers with a reputation in specific areas. I think the era of the generalist at the Bar is drawing to a close. This is likely to cause the Bar to shrink in number to a point which represents its true position as a referral profession.
What advice would you give to the next generation of criminal lawyers, be they wannabe barrister or solicitor?
Remain passionate about what you do, and don’t be afraid to make the leap to specialise in an area which you find interesting and fascinating.
Please give us an overview of the current trends in financial crime and how any recent developments have impacted your practice?
I think there is a general feeling in the market that things in the UK have been quiet of late. The Serious Fraud Office (SFO) has been coming to terms with some large matters, some of which have been discontinued, and the police have been slow to bring new fraud prosecutions. Internationally, however, the market is busy with large corporates and their offices being swept up in corruption, fraud, and sanctions investigations. The work has been increasing substantially and has more than made up for the domestic shortfall in recent months.
Back at home, the indications are that the SFO, the National Crime Agency (NCA), and Max Hill QC (newly appointed as director of public prosecutions) are gearing up their efforts for a series of new investigations. The recent headline-grabbing activities of the NCA with unexplained wealth orders (UWO) is set to continue with greater activity in this area as the law becomes more settled. I also expect to see the SFO using more UWOs in the future.
I have to mention, too, that Her Majesty’s Revenue and Customs (HMRC) is increasingly active in prosecuting tax evasion and the Financial Conduct Authority (FCA) is similarly active in relation to market abuse offences. I can only see this increasing. I forecast that we are in for a buoyant period.
What about international trends? What are you seeing outside of the UK?
Paris and Frankfurt continue to be busy with investigations into financial crime, and the US continues to lead the way in this area and in sanctions. I think the biggest trend going forward will be more efficient alliances between international enforcement agencies such as the SFO in the UK and the Department of Justice (DoJ) in the US. We are seeing more investigations being run from several jurisdictions as a result of the increasingly international nature of business activity.
And finally, what has been your greatest achievement, in a both professional and personal capacity, to date?
I achieved all I wanted to at the Bar, having appeared as lead advocate in some of the most significant cases and gained recognition as a prominent figure within my field. I wanted to extend these achievements beyond the Bar, and feel I am on my way to doing so after only one year at Stewarts. I am ranked in The Legal 500 and have gained several significant instructions. I’m looking forward to the year ahead.
This Q&A originally appeared in FiveHudred Magazine, you can see the original here on page 14.
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