#3 The Legal Profession This Week - Mandatory Vaccinations

By Violet O'Gorman​

Discussion around whether employee vaccinations should be mandatory has been heating up in the legal sector. Earlier this year, US law firm Davis Wright Tremaine announced that it will make vaccinations mandatory for lawyers to return to the office (Law.com), but has stated that it will “work out “reasonable accommodations” for firm employees who cannot get vaccinated due to disability, advice of a medical provider or religious beliefs.” (Law.com). At a roundtable discussion last week, the chairman of law firm Winston & Strawn also stated he would “not rule out making vaccinations mandatory” (Law.com), but that he would prefer to take the approach of encouraging employees to be vaccinated. Various employment lawyers have raised concerns that mandatory vaccinations in the workplace could lead to employers facing a host of discrimination claims, for example by pregnant women, or by those who do not wish to be vaccinated for health or religious reasons - as well as potential claims for unfair dismissal if employees refuse the vaccine (Law.com). At the moment, most law firms are planning on encouraging, rather than obliging, employees to be vaccinated. For example, law firm DLA Piper has “brought in experts to talk to personnel about the science behind the vaccines and the proof of their efficacy” (Law.com), whilst other firms are hoping to provide on-site employee vaccination to encourage uptake.

For the second year in a row, law firms have faced double-digit increases in professional indemnity insurance premiums. This, on top of financial uncertainty prompted by the pandemic, has proved to be a real expense for firms. “For Top 100 firms, the figure [for professional indemnity coverage] could be akin to more than 1% of their overall revenue” – which is potentially upwards of £1 million (Law.com). One of the reasons for increased premiums is a surge in high-profile claims; insurers have recently been “hit with a few big claims and inevitably […] look to recover that from increased premiums for everyone” (Law.com). Law firms are also subject to strict but “extremely broad” SRA requirements on minimum coverage, which require authorised “firms to have indemnity of up to £3 million on a per claim basis [which] covers everything from professional dishonesty, fraud or fines” (Law.com). In response to rising premiums, some law firms, such as Linklaters, have recently moved to a self-insurance model. This is done by creating captive insurance vehicles – “a form of self-insurance whereby a firm sets up a wholly-owned subsidiary [which] provides coverage solely to the parent company.” (Law.com). In doing so, a firm can model its coverage figures on its own previous claims statistics, and thereby design bespoke coverage with greater flexibility. However, there are potentially greater administrative and set-up costs to this type of model.

‘Business as usual’ – the notable deals and cases which went ahead this week:

Vinson & Elkins, Latham & Watkins, Clifford Chance and Allen & Overy are advising on a deal that will see US private equity firm KKR become a major shareholder in Finland’s largest electricity distribution company, Caruna. There is also set to be a second stage of the transaction closing later in 2021, which will involve KKR and Ontario Teachers acquiring “a further 40% holding in Caruna from pension fund Omers” (The Lawyer). It is understood that Vinson & Elkins are advising KKR, whilst Allen & Overy are acting for the seller, First Sentier Investors. Clifford Chance is advising Ontario Teachers, whilst Latham & Watkins is advising Omers.

Law firm Gibson Dunn & Crutcher is advising Danish consumer review website Trustpilot on its planned upcoming IPO on the London Stock Exchange. The firm is advising on aspects of English and US law. Trustpilot brought in over $100m in revenue in 2020, and its float is set to be “one of the largest tech IPO’s in the City since the pandemic began” (The Lawyer). The company is reportedly hoping for a market value of about £1 billion (Financial Times), in a move that comes amid a flurry of recent IPOs in the City