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Disgruntled firms heap scorn on Nunavut government contracting practices

NEWS: Nunavut September 21, 2016 – 9:59 am

First Air, Northwestel complain about loss of contracts to southern companies


Panel members Hannah Uniuqsaraq, Mark McCulloch and Ron Dewar,  discuss the Government of Nunavut's NNI policy at a session held Sept. 19 in the Iqaluit Arctic Winter Games arena building in connection with the Nunavut Trade Show. (PHOTO BY STEVE DUCHARME)
Panel members Hannah Uniuqsaraq, Mark McCulloch and Ron Dewar, discuss the Government of Nunavut’s NNI policy at a session held Sept. 19 in the Iqaluit Arctic Winter Games arena building in connection with the Nunavut Trade Show. (PHOTO BY STEVE DUCHARME)
Nunavut Trade Show participants gather in a room at the Arctic Winter Games building in Iqaluit for a discussion on Nunavut government contracting policies. The trade show ends Sept. 21, when it will open itself up to the public between 11 a.m. and 2 p.m., then start shutting down. (PHOTO BY STEVE DUCHARME)
Nunavut Trade Show participants gather in a room at the Arctic Winter Games building in Iqaluit for a discussion on Nunavut government contracting policies. The trade show ends Sept. 21, when it will open itself up to the public between 11 a.m. and 2 p.m., then start shutting down. (PHOTO BY STEVE DUCHARME)

While participants set up booths inside the Arctic Winter Games arena in Iqaluit ahead of the Nunavut Trade Show, many of the territory’s business people walked across the hall for a panel discussion on Nunavut’s newly amended Nunavummi Nangminiqaqtunik Ikajuuti, or NNI, policy.

And some of them were not happy with how that policy works.

The NNI executive coordinator, Ron Dewar, along with the Government of Nunavut’s procurement manager, Mark McCulloch, and Nunavut Tunngavik Inc.’s policy and planning director, Hannah Uniuqsaraq, lead the Sept. 19 discussion.

They said the government will ensure the April 1, 2017, rollout of the policy is a smooth one.

“We need to have a policy focused on Inuit business,” Dewar said. “The bid adjustment system we were using needed to be reworked.”

The NNI policy is the GN’s tool for complying with Article 24 of the Nunavut Land Claims Agreement, which says government must help Inuit-owned businesses in the Nunavut settlement area win government contracts.

The NNI system works by providing a competitive advantage to Nunavut-owned and Inuit-owned businesses.

The GN does this by applying bid adjustments that reduce their bid prices to theoretically lower levels than prices bid by non-Nunavut and non-Inuit companies.

This past May, after five years of consultation, the newly amended NNI policy was released to the public with stricter definitions of what counts as Nunavut-owned and Inuit-owned companies.

Several business people in the audience were noticeably concerned about the amended policy.

First Air President Brock Friesen told the panel that the GN frequently contracts southern airlines for cheaper charter flights, despite First Air’s investment in the North, and the approximately 400 people they employ in the Arctic.

A quarter of those employees are Aboriginal, Friesen estimated.

“My question is not about a company that fits, but a company that doesn’t fit,” Friesen told the panel.

“I don’t know how we can be made to fit. First Air is 100 per cent Inuit-owned, by the Inuit, by Makivik [Corp.], the Inuit of northern Quebec. The same people in Nunavut arguably.”

“For the sake of one per cent difference, I see southern carriers, who create no employment in the North, no long-term interest whatsoever in the North, yet the government gives contracts to southern carriers and gives us no preferential treatment, despite bending over backwards to be part of the economy in Nunavut,” Friesen said.

Dewar described the NNI policy as “constitutionally protected in Nunavut” and the GN must adhere to Inuit-ownership requirements as established by law.

“I would think if you’re up here, you have all your infrastructure, your crews, technology, investments, your building and facilities. Is it not possible that you would not be able to put in a bid significantly more competitive than someone who does not have the same facilities you have?” Dewar said.

“The Nunavut agreement is very specific to the Inuit of the Nunavut settlement area, it does not apply to the Inuit in Labrador, or Makivik or Inuvik, for example,” Uniuqsaraq added.

McCulloch said First Air could still get bid adjustment points for its Inuit employment in Nunavut, but suggested a First Air partnership with Inuit-owned companies like Qikiqtani First Aviation Ltd. would net additional adjustments.

Another attendee, who identified himself as an employee of telecom provider Northwestel, also criticized the GN for going out of Nunavut when purchasing supplies in bulk.

“Lets not forget that we have a business here in Nunavut and this is the way we can sometimes survive over the profitability level. And by bypassing contractors, companies that are well established in Nunavut for years and years, I don’t think it’s going to be helping in the long-run,” he said.

“It’s quite upsetting to hear that the GN, which is signing on the NNI policy, is bypassing its own rule to some degree.”

Dewar responded that for large supply orders outside of Nunavut, such as fuel, Nunavut cabinet ministers must sign-off on sidestepping the NNI requirements.

The Nunavut Trade Show will continue at the Arctic Winter Games arena building until Sept. 21.

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Calling for fix to bill allowing 9/11 victims to sue Saudi Arabia, Graham raises eyebrows at S.C. law firm

WASHINGTON — U.S. Sen. Lindsey Graham wants changes to a bill that would give 9/11 survivors and victims’ families recourse to sue Saudi Arabia.

The South Carolina Republican’s push to revise the existing language, however, has him at odds with one of the state’s largest law firms that is representing almost 6,000 people who either survived or are related to a victim of those terror attacks.

“Our hope would be that Sen. Graham and other would-be detractors would take a careful look at the text of the bill and realize that, as it’s been presented and passed unanimously by the entire Congress, they would realize that it represents good public policy for the United States,” said Robert Haefele, an attorney working on this case at Motley Rice, a plaintiffs firm based in Mount Pleasant with offices around the country.

The debate over the so-called “Justice Against Sponsors of Terrorism Act” is also taking place after the measure passed both chambers of Congress and has been sent to President Barack Obama, who plans to veto it on grounds it would potentially harm the United States’ relationship with an important ally, plus prevent a situation where the U.S. could be sued in retaliation.

Lawmakers plan to vote to override the veto before they leave Washington, D.C., for a month-long, pre-Election Day recess in October, giving them a narrow window in which to act.

Graham said that if lawmakers and the Obama administration can’t agree on a compromise before a veto override vote is scheduled in the Senate, he’ll vote in favor of the override.

“Right now it’s ‘either or,’ ” Graham said earlier this week. “You’re either for the families or you’re for Saudi Arabia. How about this? How about a path forward for the 9/11 families that’s done in a fashion that will not be seen as a hostile act towards Saudi Arabia?

“ ‘Either or’ politics is not where I want to go, but it may wind up that if nobody’s trying to accommodate this problem, we’re just gonna vote,” Graham continued, “and if I have to vote, I’m going to vote to override the veto.”

As of Tuesday afternoon, Graham said it appeared that there would be no agreement to reevaluate the language.

Still, some supporters of the legislation are chafing as Graham, an influential and outspoken foreign policy hawk, makes headlines saying he isn’t satisfied with the current product, creating a possibility that the bill’s enactment could be delayed even more than it already has.

“We haven’t been convinced that there’s anything wrong with the language that exists,” Haefele said, “and we have concerns that any effort to change the language would simply be an effort to delay the bill’s enactment.”

Graham, a co-sponsor of the legislation, used parliamentary maneuvers back in April to prevent the bill from moving forward.

In the original bill, Saudi Arabians could be sued only if they took certain actions within the scope of their jobs. While Saudi Arabia has not been implicated in the 9/11 attacks, 15 of the 19 airplane hijackers were of Saudi descent.

At some point between the bill’s introduction and preparation to move it through the Senate, a revision was made to the bill to remove those “scope of employment” protections, potentially making it more difficult to determine whether an individual committed a crime independently or in connection to their employers — or country.

Graham objected to those changes. Later, after efforts were made to ease his concerns, Graham lifted his hold on the bill and the Senate advanced it. The House followed suit earlier this month, but some of Graham’s concerns persisted.

As for how his position on this issue could interfere with his relationship with Motley Rice, Graham said he didn’t expect it to be a problem. On Monday evening, he told The Post and Courier he hasn’t heard from the firm, which has given Graham thousands of dollars over the years in campaign contributions, according to the Center for Responsive Politics.

“They know where I stand,” he said.

Haefele also didn’t indicate the disagreement would cause damage, though he said many of Motley Rice’s clients have reached out to Graham’s office to express their displeasure.

Meanwhile, U.S. Sen. Tim Scott, R-S.C., said he is still “studying the unintended consequences” of the bill.

“In the end,” Scott said, “I lean towards providing more access to sue.”

Emma Dumain is The Post and Courier’s Washington correspondent.

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SHAREHOLDER ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Inteliquent, Inc. – IQNT

NEW YORK, Sept. 21, 2016 /PRNewswire/ — Pomerantz LLP is investigating claims on behalf of investors of Inteliquent, Inc. (“Inteliquent” or the “Company”)

IQNT, +2.93%

(isin:US45825N1072). Investors are advised to contact Robert S. Willoughby at or 888-476-6529, ext. 9980.

The investigation concerns whether Inteliquent and certain of its officers and/or directors have violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

[Click here to join a class action]

On August 2, 2016, pre-market, the Company filed a Current Report on Form 8-K with the U.S. Securities and Exchange Commission reporting its second quarter 2016 results. The Company missed its profit expectations and lowered revenue guidance to the range of $360 million to $370 million, down from previous guidance in the range of $370 million to $390 million, and lowered its EBITDA forecast to the range of $80 million to $85 million, down from a previous forecast of $82 million – $92 million. On this news, Inteliquent stock fell $4.29, or 20.54%, to close at $16.60 on August 2, 2016. On September 19, 2016, post-market, Inteliquent announced the resignation of the Company’s Chief Financial Officer, Kurt Abkemeier, effective September 23, 2016, citing Abkemeier’s pursuit of “another career opportunity at a software company.” On this news, Inteliquent stock fell $1.37, or 8.2%, to close at $15.34 on September 20, 2016.

The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See

To view the original version on PR Newswire, visit:–iqnt-300331833.html

SOURCE Pomerantz LLP

Copyright (C) 2016 PR Newswire. All rights reserved

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Looking Forward to NAWL’s 10th Annual Report on Women In Law

NAWL Women Lawyers Report

Infographic from the 2015 Survey on Retention and Promotion of Women in Law Firms published by the National Association of Women Lawyers (NAWL®) and The NAWL Foundation®. Visit for more information.

Each year, typically around this time, the National Association of Women Lawyers (NAWL) and The NAWL Foundation release the results of their annual Survey on Retention and Promotion of Women in Law Firms. This survey is the only one of its kind, as it collects data on hundreds of law firms as a whole rather than from a subset of individual lawyers. The data comes from tracking of the progress of female lawyers at all levels of private practice up to the most senior positions.

As noted by NAWL’s 2015 report, the situation for female lawyers remains challenging. Some notable data include: 

  • Women account for only 18 percent of equity partnerships — that’s a two percent increase over the past ten years.
  • Not a single firm reported having a woman as their highest earner.
  • The typical female equity partner earns 80 percent of what a typical male equity partner earns.
  • Lawyers of color represent only eight percent of equity partnership roles nationwide. Lawyers who identify as LGBT make up only two precent.

These numbers are a small sampling of the facts and figures available in the report. They help illustrate the breadth of the problem facing our profession and point towards an underlying systemic issue that routinely undervalues the role of women and minorities in the practice of law. I encourage you to download the report and give it a closer read.

Unfortunately, a lack of diversity in the legal arena is a persistent problem that plagues our profession. The only way to combat this kind of injustice is to make active strides towards inclusion. Every law firm in America needs to ask themselves if they’re doing everything they can to ensure that their firm doesn’t remain stuck in a non-diverse rut.

It is our hope at Milestone that this year’s NAWL Survey on Retention and Promotion of Women in Law Firms will be markedly better and will continue to improve every year. Unless the legal profession as a whole actively works to fix this problem, it won’t get better. The numbers published annually by NAWL is clear evidence that a lack of diversity continues to be a very real problem. It is incumbent upon everyone who considers justice to be a worthwhile goal that we take strides to improve the situation for women and minority professionals.

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As the Market Struggles to Recover, Midwest Law Schools and Their Students Adapt to New Realities

Katie Weber graduated from Ohio University in 2010 with a Bachelor of Fine Arts in Acting. She then worked for two years as a salesperson and high school drama coach before realizing one day while sitting in her cubicle that she was unhappy with her job prospects. So she decided to go to law school.

“I decided getting a J.D. would give me the most bang for my buck,” she says. “I knew that the legal job market was struggling, but I saw it as flexible and you can use it to go into business, policy work or politics.”

Weber was under no illusion that she’d be guaranteed a spot at a big law firm earning six figures after she finished her three-year degree. In fact, her base salary as a new lawyer would likely be around $50,000, a respectable wage but a distant cry from what some first-year lawyers expect to make at small and midsize firms. On top of that, she’ll be paying off her law school debt for a couple decades.

“I knew it would allow me, with the student loan payment, to have the same standard of living I had previously, but I’d be happier with a more rewarding career,” she says.

This past May, Weber graduated from Cleveland State University’s Cleveland-Marshall College of Law and is now clerking at Moore Yourkvitch and Dibo, a small boutique firm started by fellow Marshall grads, while awaiting her bar results. She hopes to land a full-time job there.

“I’m walking out of law school with $120,000 in debt, all federal, which allows you to pay on an income-based repayment plan,” she says. “I believe my payment will be around $400 a month. I chalk it up to reality – it’s the tax you pay for not having a college fund.”

While the top 10 percent of this year’s class has landed full-time associate positions at big law firms, some of Weber’s friends have taken on temp work or teaching gigs to pay the bills while trying to find a full-time job. “We’re competing with people who have been laid off and have five to 10 years of experience,” she says.

Even as the economy improves, the entry-level job market remains tight for new law school grads. According to a recent article in Bloomberg News by Kyle McEntee, director of the advocacy group Law School Transparency, 59.2 percent of 2015 graduates found long-term, full-time jobs as lawyers within 10 months of graduation, up from 58 percent a year ago. This figure has improved the last four years, creeping up about 1.35 percent a year.

Law schools are also admitting far fewer people now than during the recession, when young people applied in droves only to find out the job market still sucked when they graduated. Yet there are still more lawyers than full-time jobs. There were 37,000 law grads in 2015 – way down from 52,000 in 2010 – yet there were only 23,687 long-term, full-time law jobs waiting for them, according to the American Bar Association. That’s a 6.8 percent decline from last year and just 14 more jobs than in 2011, the year considered the bottom of the market.

“The trend of fewer legal jobs should concern law school administrators,” writes McEntee. “The evidence does not support plans at the vast majority of schools to increase enrollment to stave off deep financial trouble.”

Cleveland-Marshall professor emeritus David Barnhizer recently published a paper arguing one or more law schools will close in the coming years. With declining population, a shrinking legal services market and a limited pool of applicants, Midwestern law schools are particularly at risk, he argues. “Some law schools should – and will – close,” Barnhizer says. “But none have. It would be healthier for the market if they did.”

Financial Death Spiral

Barnhizer’s paper, “Competitive Data Trends for Great Lakes and Midwest Law Schools, 2012-2015,” argues that law schools are still deeply troubled despite an improving legal services market. They’re pumping up their numbers by admitting less-qualified students, he says – the very ones who rack up loans and may have trouble finding jobs when they graduate.

“The systematic pressures on law schools trying to survive … will create a sort of financial ‘death spiral’ in which law schools rely on greatly expanded financial aid packages in an effort to ‘buy’ students,” he writes. “This creates an incentive to admit marginal students at the lower end of the scale who pay full tuition in order to fund the subsidies and scholarships given to more highly qualified applicants.”

As evidence, Barnhizer cites the fact that both Case and Akron law schools no longer have minimum GPA requirements for their scholarships. While Case has had this policy for a number of years, Akron changed theirs more recently.

Many law schools are also offering steep tuition discounts to woo students. For example, Case Western Reserve University is one of nine law schools in the country with tuition discounts in excess of 50 percent. Barnhizer says other law schools have become heavily dependent on foreign students paying full tuition to complete an LLM degree (equivalent to a master’s in law).

David Lat, founding editor of the legal news site Above the Law, says Barnhizer’s analysis is true of law schools generally. “There’s definitely been a trend in the direction of law schools admitting students with weaker credentials in order to keep their class sizes either the same or not shrinking as much as they otherwise would,” he says. “One manifestation of that is that average LSAT scores have been going down.”

According to Law School Transparency, 2014 LSAT scores at 37 law schools were so low that half of incoming students were considered to be at high risk of failing the bar. In 2010, the same could be said for only nine schools. “We’re not aware of a time when so many law schools had something like an open enrollment policy,” the study’s authors wrote, concluding that the percentage of graduates who pass the bar “will drop significantly over the next three years, leaving thousands deep in debt with few prospects for employment that will enable them to pay off their debts.” While it may serve as an exceptional example, Indiana Tech law school in Fort Wayne saw only one member of its inaugural graduating class pass the July bar exam.

Barnhizer says it’s not a matter of “if” but “when” law schools close. Great Lakes and Midwest law schools will shrink another 10 to 25 percent, he says, with regional schools like Marshall, University of Akron and University of Toledo at risk of further decline. Over the past five years, Ohio has seen a 40-percent decrease in students taking the LSAT, for example, and data shows a leveling of that number over the past three years.

Historically, law schools have been seen as the cash cows of the university system, and Barnhizer says deans milked that opportunity for all it was worth during the recession. Yet those days are over, and today schools like Ohio Northern and Akron are facing a major budget crunch. Of course, law schools are prestige operations and universities have a built-in incentive to keep them no matter how poorly they’re performing. Those most at risk are probably stand-alone schools not attached to a university.

“Many law schools in the region are in ‘survival of the fittest’ mode,” Barnhizer says. “Several are likely to simply wither away.”

Lat is not so sure any university-affiliated law schools will close. “The university may keep the law school afloat on the theory that in good times law schools are cash cows, and that if we can get through these tough times, it may end up paying off for us,” he says.

Law school deans refute Barnhizer’s argument, arguing that they’ve battled back from the brink by reducing class sizes while maintaining high standards.

Andy Strauss, dean of University of Dayton’s law school, says his 2016 class is 113 students, up from 90 in 2015. “At the same time, credentials are up – the median LSAT score went up from 148 to 149,” he says. “It had been at 148 for the previous three years. In terms of GPA, last year we were at 3.04 and this year we’re at 3.14.”

Strauss also takes issue with Barnhizer’s argument that law schools need to reduce operational costs by cutting faculty – Dayton already did this several years ago, he says.

Austen Parrish, dean of Indiana University’s Maurer School of Law, says it’s important for law schools to give opportunities to lower-scoring students. “Where I disagree or think it’s more nuanced is that there’s a big question of whether law schools should be elitist institutions,” he says. “No one argues you should close a bunch of colleges because English majors aren’t getting jobs.”

“There are tremendous unmet legal needs in our society,” adds Benjamin Barros, dean of University of Toledo’s law school. “A lot of ordinary people can’t really find affordable legal services. There’s a good argument to be made that we need more lawyers in our society even right now.”

Moreover, after years of decline, enrollment and scores are trending up at many schools. Wayne State saw a 15 percent enrollment increase and higher LSAT scores in the past two years. University of Akron saw a two-point increase in its bottom quartile LSAT scores. Scores stayed strong at Marshall despite enrollment dropping from 110 to 100 in the past year.

“We’re coming off of a bubble,” says Jeffrey Standen, dean of Northern Kentucky University’s law school. “It’s a little misleading to look at the last five or six years and point that trend line in the future and conclude that things are bleak.”

Not every school is seeing an uptick. Ohio Northern University’s first year law class is 59, down from 69 a year ago and down 51 percent from 2010’s 120. LSAT scores there have tumbled four to six points from 2010 to now.

Barnhizer’s argument that law schools will close is bogus, Barros says: “It hasn’t happened yet and we’re in year six of a pretty tough market for law schools. If anyone would have closed, I would have thought they would’ve by now.”

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Law firms fearful of M&A slowdown

THE RECENT slowdown in merger and acquisition (M&A) activity is increasingly at risk of impacting the profitability of law firms as the impact of Brexit vote further dents business confidence.

Research from Thomson Reuters Legal found that 24 per cent of finance directors at the UK’s top 100 law firms fear that weakness in M&A work is now a major risk to profitability, up from eight per cent last year.

The survey results reflect a trend seen elsewhere by Thomson Reuters, which earlier reported that global M&A activity was 18 per cent lower in the first quarter of 2016 than in the same period the prior year.

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Law firms worry that M&A slowdown will hit profitability

Declining M&A activity and downward pressure on fees will hit profitability at the UK’s top law firms, lawyers have predicted. However, new opportunities in London’s booming fintech sector will help to offset these risks.

According to a new report by Thomson Reuters Legal, almost one quarter (24 per cent) of the finance directors (FDs) at the UK’s ‘top 100’ law firms fear that an M&A slowdown will place their profits at risk, down from with 8 per cent last year. Almost three quarters (72 per cent) of lawyers worried that downward pressure on fees will remain a major threat to the profitability of their firms, while cost over-runs on fixed fee work is the next biggest concern, with 40 per cent citing this as a ‘high risk’ to profit margins.

Among the same group of financial directors, 48 per cent said that they were anticipating an influx of regulatory and compliance work this year, while 28 per cent predicted that technology would be the fastest-growing sector of the year, singling out London’s growing fintech community as a particularly bright spot.

“The technology industry in particular has seen massive investment in recent years which has propelled growth in the UK and we expect this trend to continue into the long-term,” said Samantha Steer, director, large law segment for Thomson Reuters UK&I Legal. “London-based fintech start-ups have seen high levels of private equity investment flooding in which has helped to stimulate corporate activity whilst also cementing the city’s position as a leading fintech hub.”

Steer added that the buoyancy in M&A transaction volumes last year was a key driver of profitability for law firms. However, in the first quarter of 2016, global M&A activity was down 18 per cent on the previous year. Law firms are now worried that business confidence will be eroded due to post-Brexit headwinds, the ongoing oil price slump and the slowing Chinese economy.

“Further growth was in question even before the Brexit vote and will be even more so now,” added Steer. “M&A transactions are a vital source of work for law firms, both in themselves and because they generate a significant amount of workflow across a range of other practice areas. If fears that corporate finance activity is weakening are realised that could rattle the sector.”

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Three Kenyan law firms named among Africa’s best at Johannesburg awards gala

Three Kenyan law firms have emerged winners in this year’s African Legal Awards fete.

Anjarwalla & Khanna, Bowmans Law and Iseme Kamau & Maema (IKM) Advocates were recognised at a ceremony held in Johannesburg last week.

The African Legal Awards are an annual forum that seeks to recognise firms within the continent’s legal community that have recorded exceptional achievement and shown significant progress over the past year.

IKM Advocates, an Africa member of DLA Piper Group received recognition as the transportation and infrastructure team of the Year in conjunction with DLA Piper UK.

The award acknowledged the role the advocates played in advising the Kenyan Government on the Medical Equipment Services (MES) project, the largest health sector Public Private Partnership deal in Africa worth $500 million (Sh50 billion).

The high profile project involved the central procurement of supply, installation, testing, maintenance and lifecycle of medical equipment, training and construction and fit out works at 94 hospitals across the country.

Corporate law firm Anjarwalla & Khanna was listed as the African Law firm of the year in the large practice category having attained several of the milestones they had set out in their strategic vision.

The firm with over 50 advocates has in the recent past advised NIC Bank on its takeover of three other banks’ multiple existing lending facilities of $100 million (Sh10 billion) to T.S.S. Group of Companies.

Corporate and commercial legal practice firm Bowmans Law emerged victorious in two categories as the property and construction team of the year as well as being the best employment law team.

Bowmans recently advised Old Mutual Property on all legal aspects of their investment in the Two Rivers Mall.

IKM’s Managing Partner, James Kamau, said the success and strength of the partnership to deliver the medical equipment supplies project relied on strong collaborations as the transactions involved multiple jurisdictions.

“The recognition of the novelty and impact of the MES Project to the Kenyan people is most welcome and fits squarely with the IKM mission to offer our clients quality service while ensuring the highest ethical standards and positive impact to our community,” he said.

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Brexit vote complicates planning for local firms

Local businesses with overseas operations are grappling with the June 23 decision of British voters to exit the European Union, and the result has greatly complicated long-range planning.

Law firms with a London presence predicted shortly after the vote that uncertainty, possibly for years, would follow. But the full range of strategic issues raised by the British vote is only now coming into focus.

“Overall, from a business standpoint it makes both short- and long-term planning very difficult,” said Kathy J. Wyrofsky, president of International Products Corp., a maker of specialty cleaners and assembly lubricants based in Burlington, N.J.

The company has a facility in south London and has used the U.K. as a platform for selling into the European Union. But the Brexit vote has put that strategy in doubt.

The question for businesses like Wyrofsky’s is whether the favorable trading terms enjoyed by EU-based companies will disappear. Meantime, the company must navigate rules coming out of Brussels that could change once again as the British leave.

One particularly costly regulatory scheme requires that the company designate a U.K.-based agent to register various chemicals it uses. Wyrofsky says she has no idea if, after Brexit, they will need to find an agent on the continent.

“All of these things are coming out of Strasbourg and Brussels and it is very difficult to know whether they will apply to us or not,” she said.

The company makes ample use of container shipping, hence its south London location. But Wyrofsky and other executives at International Products are searching for alternative sites, should the U.K. location lose its advantages.

As a consequence, Wyrofsky is planning to scout locations for a facility in the Netherlands. Some of these changes may have been made even without a Brexit vote, Wyrofsky said, noting that more manufacturing now is done in eastern Europe.

“Brexit is pushing us to move a little faster,” she said.

Jonathan Turner, chairman of Langhorne-based TurnaSure LLC is facing his own set of uncertainties. Turner’s company makes specialty devices that measure whether bolts used in the construction of bridges, buildings, highway traffic signs, and other structures have been tightened enough. The company made more than 1.5 million of these washer-like “direct tension indicators” for the construction of the Huey P. Long Bridge in Louisiana, and sells to companies in the U.K. and Europe for projects there. What Turner doesn’t know, but would love to find out, is whether the Brexit vote will halt business and residential investment coming into the U.K., dampening a construction market that has benefited TurnaSure. If so, the company would begin looking at other markets, such as South America, in addition to selling in the EU, Turner said.

“I am not alone in our industry,” said the British-born Turner, who lives in Society Hill. “Anyone exporting to companies in the U.K. who are enjoying the big market in the EU, all are going to have the same worries. I do think this is going to have an effect on companies who have set up factories in the U.K. in order to avail themselves of 500 million customers [in Europe].”

This sense of uncertainty was on full display at the law firm Morgan, Lewis & Bockius LLP on Thursday, where the British deputy consul general in New York, Ross Allen, appeared on a panel of experts to talk about the Brexit fallout.

Allen said there was zero likelihood that the British government would reverse course and somehow arrange to remain in the European Union. That said, he expects that London will remain a major financial center. The U.K. has an extraordinarily dynamic economy, he said, adding that the city of Birmingham alone produced more jobs last year than were created in all of France.

Yet one of London’s biggest draws is its capacity to attract top talent from around the globe, and that is now in question given that pro-Brexit voters expect tighter immigration restrictions. Panelist John Stadtler, a partner at PricewaterhouseCoopers LLP, pointed out that global companies expect a deep talent pool in London and now are growing concerned that such changes will harm recruiting.



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Moody's: Impact of losing 'passporting' rights under EU law would be manageable for rated banks

Release date- 19092016 – Moody’s: Impact of losing ‘passporting’ rights under EU law would be manageable for rated banks.

The impact of a formal withdrawal of the United Kingdom (UK) from the European Economic Area (EEA) — and the subsequent loss of passporting rights granted under European Union (EU) law-would likely be manageable for most UK-based financial firms (including branches and subsidiaries of non-EU firms), as well as for EU firms with a presence in London, says Moody’s Investors Service in a report published today.

‘Passporting’ applies to a wide range of permissions granted to banks, investment banks, asset managers and financial market infrastructure providers under a range of EU legislation, which allows them to carry out activities across the EEA.

Moody’s report, entitled ‘Banks-Europe: Impact on Financial Institutions’ ‘Passports’ following the UK’s exit from the EU,’ is available on Moody’s subscribers can access this report via the link provided at the end of this press release. The rating agency’s report is an update to the markets and does not constitute a rating action.

‘Should the UK leave the single market as well as the EU, UK-based financial firms (including branches and subsidiaries of non-EU firms) may lose their passporting rights,’ says Simon Ainsworth, Senior Vice President at Moody’s. ‘If this were the case, then firms would need to move sales, trading and middle office staff to the EU, along with capital, liquid assets and IT infrastructure.’

This outcome would be credit negative, as it will have costs and is likely to reduce profitability at least in the short term. The rating agency considers that moving operations would likely be manageable in terms of credit fundamentals, absent any other shocks.

But Moody’s considers it unlikely that all permissions granted to financial firms will be lost. This is because, even without a formal arrangement, EU law already provides for limited recognition of non-EU regulatory regimes for the purpose of undertaking investment and banking business.

‘In particular, we consider that the third country equivalence provisions contained within the incoming MIFID 2 EU directive may provide firms with an alternative means of accessing the single market. The complexity of (quickly) unwinding the status quo and a desire to minimise the initial impact on European domiciled banks will likely lead to the preservation of most cross-border rights to undertake business,’ explains Mr. Ainsworth.

However, third-country equivalence provides less certainty for firms than passporting, as it depends on an European Commission judgment-a political decision-which could take time to make, and withdrawn at a future date.

‘While bank that use the UK as an entry point for most EU operations should not suffer materially altered credit fundamentals if they lost their EU passports, the uncertainty around the outcome of any new arrangements mean that it is likely that some banks may choose to move some UK based activities to the EU before the UK’s withdrawal negotiations are complete.’ explains Mr. Ainsworth.

Subscribers can access the report at:

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This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on for the most updated credit rating action information and rating history.

Simon Ainsworth

Senior Vice President

Financial Institutions Group

Moody’s Investors Service Ltd.

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Mark Lamonte

MD-Ratings & Process Oversight

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