Memo: Under Scrutiny (again)

Hi ZipLawyer! Shein faces more scrutiny over its IPO, UK joins trade partnership, and why law firms are hiring restructuring partners.

Today's top stories

🛍️ Shein’s IPO Drama: Shein’s $66bn IPO is stuck in the FCA’s fitting room as regulators inspect its supply chain amid Uyghur labour allegations. NGOs and officials have raised concerns, complicating the retailer's $66bn valuation and its bid to navigate global regulatory pressures.

📱 TikTok Ban Goes Viral: An appeals court backed Biden’s TikTok ban, citing national security concerns over Chinese data access. TikTok’s cries of free speech fell flat, while Trump vows to wade into the fight.

📊 Google Privacy Suit Hits a Wall: The Court of Appeal unplugged a group lawsuit over Google’s alleged misuse of medical data, ruling claimants lacked a “same interest.” Legal experts say UK courts are wary of giving mass data privacy claims a green light.

🌏 UK’s Trade Glow-Up: The UK is now in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Post-Brexit, it’s a major trade flex, slashing tariffs with Japan, Australia, and more. The acronym “CPTPP” just rolls off the tongue.

Why are law firms boosting their Restructuring teams?

Law firms are hiring more restructuring partners, with lateral recruitment in this area up nearly 20% this year. While insolvency rates in the UK haven’t exploded as some expected, law firms seem to be bracing for turbulent times ahead.

What does this mean?

The numbers tell a mixed story. High interest rates and economic pressures are squeezing businesses, but official insolvency figures have actually dropped compared to last year. That said, law firms are clearly betting on restructuring expertise becoming crucial. Big players like Davis Polk and Paul Weiss have been snapping up talent, while others like DLA Piper and Kirkland & Ellis are quietly bolstering their teams.

Restructuring lawyers do more than just handle insolvencies—they help businesses avoid them (shock!). Whether it’s renegotiating debt or advising on mergers, these lawyers are called in to fix financial messes before they spiral. And with geopolitical tensions, inflation, and lingering pandemic fallout still in play, the demand for such expertise seems set to grow.

On the flip side, firms may be overestimating the boom in restructuring work. Insolvency rates remain lower than expected, partly because businesses are finding creative ways to stay afloat—delaying exits or restructuring debts without going under. For now, law firms are hedging their bets, preparing for the worst but waiting to see if the storm really hits.

How Does This Impact Law Firms?

Corporate and Commercial Law: The uptick in restructuring activity highlights a broader opportunity for corporate lawyers to play a critical role in safeguarding businesses during turbulent economic times. Restructuring doesn’t always mean insolvency—lawyers are instrumental in helping companies renegotiate contracts, streamline operations, or explore mergers and acquisitions to stay afloat. The challenge lies in managing complex negotiations across multiple jurisdictions and industries.

Restructuring and Insolvency Law: The economic pressures caused by high interest rates, inflation, and geopolitical uncertainty present a clear opening for law firms to expand their restructuring and insolvency practices. Lawyers can capitalise on growing demand for expertise in administration, creditor negotiations, and contingency planning. However, the challenge is anticipating demand in a market where insolvencies have not surged as expected. Firms must balance investing in this area with the risk that restructuring work may not materialise at the predicted scale.

Employment Law: Workforce changes are an inevitable consequence of economic instability and restructuring efforts, making employment law a key growth area. Law firms have the opportunity to support businesses through redundancy processes, workforce reorganisations, and compliance with evolving regulations. Law firms want the agility to handle high volumes of employment matters while keeping costs manageable for clients, particularly as businesses look to cut spending across the board.

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