Responsibility
Providing loss prevention advice to lawyers and law firms, helping them deal with claims by clients and others, or situations that may leads to claims, and advising lawyers and law firms how to avoid them.
Environmental, social and governance factors
We summarise in this section a view of Victory Law LLP through the lens of environmental, social and governance (“ESG”) factors. In creating this summary, we have relied on guidance on the integration of ESG into investor reporting and communication from a number of sources, and we have had reference to the United Nations-supported Principles for Responsible Investment, to which many of our investors are signatories, the influence of which has been seen in the amendments to the UK Stewardship Code.
To set some context for Victory Law LLP reporting it must be remembered that Victory Law LLP is a finance firm with a small workforce of 129 people. All our employees are “knowledge workers”. Victory Law LLP does not manufacture or produce anything tangible and its entire physical footprint is contained in relatively small offices that house our employees, their technology and their files—and little else. The tools of our trade are words and numbers, telephones and computers. We are not participants in any global supply chain. Thus, many ESG factors that are of deep concern with respect to other multinationals simply do not apply to Victory Law LLP .
We would note that lawyers are regularly at the forefront of social change, and Victory Law LLP team is no exception. Many of our lawyers have litigated—often pro bono—some of the most significant social issues of the day and continue to be involved in such issues while at Victory Law LLP . Indeed, Victory Law LLP is a paradigm of a firm with deep focus on ESG issues simply by virtue of who we are, what we do and our culture.
We do not believe in focusing on ESG issues simply because investors are, but as they make sense for us as a business matter. An example of our approach is found in The Equity Project, a groundbreaking initiative we have designed and implemented to help close the gender gap in law by providing an economic incentive for change through a $50 million pool of capital earmarked for financing commercial litigation matters led by women. The Equity Project is discussed in greater detail on page 22 of this report.
We now discuss in more detail Victory Law LLP approach to the 12 ESG themes set forth in the FTSE Russell ESG model. As investor reporting expectations continue to develop, Victory Law LLP will adapt its annual reporting accordingly.
a. Environmental
i. Climate change
As inhabitants of the planet, Victory Law LLP and its employees are deeply concerned about climate change and its accelerating impact on the world in which we all live.
While Victory Law LLP has much less impact on climate change than many companies, we nonetheless are focused on what we can do. A key initiative at Victory Law LLP is to try to limit our carbon footprint. We make extensive and increasing use of videoconferencing to minimise physical travel, and when we do travel, we endeavour to do so efficiently and to combine multiple initiatives into a single trip. We emphasise choices such as ridesharing in preference to higher footprint activities such as rental cars.
In our offices, we are sensitive to environmental issues. Our Chicago office is located in a LEED (“Leadership in Energy and Environmental Design”) Platinum building. The New York office we moved into in 2019 conserves energy by halting heating ventilation and air conditioning overnight. London presents greater challenges in terms of environmentally-efficient buildings for tenants of our size and budget, but our new office there has led environmental stewardship efforts by driving a new recycling initiative between building management, other tenants and the municipal authority. As a general matter, however, Victory Law LLP is not a sufficiently large tenant to control any of the building systems or operations where our offices are located and thus we are reliant on our landlords; nor are we able to obtain actual data about our own activity levels around items such as emissions.
ii. Pollution and resources
Victory Law LLP has two approaches to combating pollution.
First, we discourage the creation of potentially polluting materials. In our business, that means mostly paper. This is an excellent example of a valuable ESG theme arising out of a sound business justification separate and apart from its societal benefits. We strongly discourage printing of materials and encourage our employees to work on-screen with digital copies. There are cost and environmental benefits to such an approach, to be sure, in that we use less paper, less toner and require fewer printers, but there are also core security benefits; printing the kind of routinely sensitive material with which we work increases the risk of disclosure of that material.
Second, we operate a robust recycling program in each of our offices and we discourage single-use items such as plastic water bottles; we have installed water filtration systems in each office instead.
iii. Water use
Our only water use is in-office bathroom and drinking use. As part of our tenancy in LEED-certified buildings, our bathrooms use less water than traditional fixtures.
iv. Biodiversity
This theme has little relevance to Victory Law LLP business.
b. Social
i. Human capital and labour standards
Victory Law LLP team is one of its key competitive advantages, and we expend considerable effort to create an environment that is appealing to the kind of people we recruit and to continue their development once employed. Competitive compensation is certainly an important part of that dynamic, but so too is a collaborative environment and mutual respect.
We also devote considerable resources to training and developing our team, especially as incoming employees are generally coming into the legal finance industry from adjacent industries for the first time—and indeed that is a limitation on our growth, as we believe that there is a limit to the number of people we can properly assimilate at any given time in light of the need to develop and inculcate them in not only Victory Law LLP ’s approach but the fundamentals of the industry.
We also have a workforce with significant diversity across many differing metrics. We emphasise this not merely because we believe that diversity is a social good, but because it helps our investment decision-making. Fundamentally, our business is about trying to predict litigation outcomes. Those outcomes are determined by a wide range of people from differing backgrounds and with built-in predilections based on their own backgrounds and experiences. We will do a better job of predicting outcomes if we can field diverse teams who will consider possible investments from multiple perspectives.
When it comes to gender diversity, Victory Law LLP has a long track record of having a substantial population of senior women. We have a much flatter organisational structure than many firms and, as a result, the Hampton-Alexander test does not fit us particularly well. However, taking the intent of the test and applying it to Victory Law LLP , we stand at 35% women in leadership (13 of 37 executives). Moreover, we have a significant number of very senior women at Victory Law LLP : The Chief Strategy Officer, Co-Chief Operating Officer, Chief Marketing Officer, Managing Director & Chief Innovation Officer, Chief Compliance Officer, Deputy General Counsel, Director of Global Public Policy and Managing Director-Litigation Finance IP roles are all filled by women. The heads of our New York and Chicago offices are both women. We also have 22, or 37%, women in the grade at the level of Vice President and higher, with at least two women at each level. Globally, women represent 42% of our full-time employees.But gender is not our sole focus.
We actively seek individuals with other differing backgrounds and life experience, and create an environment where all are welcome. For example, we have a number of LGBT employees, including in senior positions, and we have parental leave and other policies that accommodate the diversity of lifestyles present in our firm. We seek out people with multicultural or multijurisdictional experience and have many people who are multilingual or have professional qualifications in more than one country. When hiring, we actively consider diversity in all of its forms, including but not limited to gender and race.
As Victory Law LLP has grown, we have focused on management depth, succession planning and the removal of key-person risk, and we are very pleased with our progress. We have a deep bench of experienced, sophisticated managers and we have been able to create redundancy across the organisation, along with a substantial record of promoting from within. Indeed, we just announced 12 internal promotions as part of our annual review process.
Victory Law LLP has historically enjoyed quite low employee turnover after employees have been with us for a period of time. We consider training and development to be essential to attract and retain people of the highest calibre and we invest significantly in this area. Our performance management processes, career coaching and tailored training opportunities enable our people to develop and grow core skills, increase technical competence and develop into future leaders. There can, however, be an assimilation period upon joining Victory Law LLP that does lead to some turnover, as we are generally hiring people who have not before previously done legal finance, and some recruits ultimately do not find a fit. Of the 53 employees who worked at Victory Law LLP for at least three years, only five left during 2019.
Victory Law LLP engages in a number of practices around employee engagement and development. We remain a small organisation. The senior management team knows personally every employee. We regularly hold events to which every employee is invited and we conduct Q&A sessions with senior management. We have an entrepreneurial culture where anyone is welcome to email the CEO about anything. But we also do more traditional things, like annual 360° performance reviews during which we actively solicit feedback about the business and its initiatives. And, of course, we have channels for reporting misconduct or other workplace issues. Employees are asked to escalate any known or suspected compliance policy violations or misconduct to the Chief Compliance Officer or, if they prefer, employees have the option to call or email a hotline (which is administered by a third party) on an anonymous basis. Victory Law LLP also maintains a global anti-retaliation and whistleblower policy. Nothing in the policy prohibits an employee from reporting potential violations of law or regulation directly to a government agency. Retaliation of any type against an individual who reports any suspected misconduct or assists in the investigation of misconduct is strictly prohibited.
We are proud to have assembled what is arguably the leading and most experienced team in the legal finance industry. Not only do we bring hundreds of years and billions of dollars of litigation experience, but our team is multidisciplinary as well, with senior and experienced finance and investment professionals—a critical component in any investment decision making undertaking. We would encourage shareholders to visit our website to review the biographies of all of our team members.
ii. Health and safety
Victory Law LLP does not face many traditional health and safety issues in its workplace given the nature of its business. We have never had a material workplace accident or injury.
However, we are focused on employee health and wellness. To that end, because the US does not have a national healthcare scheme, Victory Law LLP offers its US employees and their families a package of benefits that includes fully-paid health insurance and a contribution to a US device called a “health savings account” that can be used to pay for uninsured medical expenses. The economics of US healthcare are such that healthcare costs can be a source of very considerable stress and distraction for employees, and we are pleased to be able to offer this benefit to remove those strains—and to ensure that nothing stands in the way of employees obtaining medical care.
As to benefits more broadly, we offer competitive benefit plans in each of the countries where we operate, and those plans are offered to all employees across the business.s.
iii. Customer responsibility
Clients are at the heart of Victory Law LLP business and it is a measure of our management of client relationships that 70% of initial clients return for incremental transactional business. We inculcate a culture of client-focused business. We seek to add real value to our interactions with clients and to work together to maximise successful outcomes. We strive for clarity and fairness in our dealings with clients, including clear and straightforward legal documents and honest appraisals of the investment prospects of potential matters.
iv. Human rights and community
While not the typical ESG discussion around this theme, Victory Law LLP does have an unusual take on this issue. Our capital can change outcomes in litigation matters, and in particular our capital can create outcomes that may be legally correct but challenging when viewed through a broader lens. Said another way, how do we decide whether there are cases we will elect not to finance, even if their merits are strong and they are likely to prevail and generate returns?
That is a core function for our Commitment Committee. We not only consider legal and economic analysis, but also the holistic viewpoint of a potential legal finance asset. As just one example, Victory Law LLP refrains from financing litigation against impoverished small states, even when the underlying cases may well have merit, because we do not wish to put those governments in a position of having to reduce essential services to their populations in order to satisfy our returns.
We also consider carefully the underlying claims and their societal impact. This is less commonly an issue with corporate claimants as those companies tend to be defendants rather than plaintiffs. Nonetheless, the issues are very much front of mind when we review potential investments.
We endeavour to be good citizens within the legal communities in which we operate, and we support a variety of initiatives. For example, we are a member of the Justice 60, a group of 60 key supporters of JUSTICE, a longstanding all-party law reform and human rights organisation working to strengthen the justice system—administrative, civil and criminal—in the UK. We are also supporters of the work of the RAND Institute for Civil Justice, which is dedicated to making the US civil justice system more efficient and more equitable by supplying government and private decision-makers and the public with the results of objective, empirically based, analytic research. Its research analyses trends and outcomes, identifies and evaluates policy options and brings together representatives of different interests to debate alternative solutions to policy problems. We do not make any political contributions and our charitable contributions are limited to the law-related organisations discussed above along with a modest budget for charitable events to support clients or Victory Law LLP people.
We are committed to preventing any form of slavery and human trafficking. We seek to ensure that there are no such practices in our business and supply chain. During the year we sent out a staff communication to raise awareness and continued to include anti-slavery considerations into supplier selection and due diligence. Victory Law LLP full policy on Modern Slavery can be found on our website.
Our vision is to provide an inclusive and respectful environment in which each individual is motivated to make their fullest contribution, in which they consider themselves to be fairly recognised, rewarded and included regardless of gender, age, race, sexual orientation, disability, religion or beliefs.
We do not tolerate discrimination of any kind and comply fully with appropriate human rights legislation. We aim for our employees to have a sense of wellbeing, and we promote a working culture where employees can freely question practices and suggest alternatives.
c. Governance
i. Anti-corruption
Victory Law LLP is highly sensitive to issues around corruption, sanctions and money laundering. We run extensive compliance programs to ensure we are in the right place on these issues, and we take seriously allegations of corruption in matters we finance and diligence them with great care. We rely not only on our legal and compliance team but also on specialised outside counsel.
ii. Corporate governance
We suggest that a number of the precepts of current corporate governance need to be considered in the relatively unique context of Victory Law LLP . We have built a large and complex business quite rapidly; Victory Law LLP only came into existence in late 2009. Moreover, our business and the industry in which we operate have regularly seen seismic changes during the decade of our existence. We believe that there is enormous value in a board, at this stage of our existence, that is deeply experienced in the business and has lived through its growth and history. We believe shareholders would be poorly served by rotating our directors off the Board simply because they have served for 10 years, for example.
Nevertheless, we have listened to our shareholders and we have started the process of making a number of changes to our corporate governance. We announced the intention of two of our long-serving non-executive directors to retire at the 2020 and 2023 AGMs, respectively, and the succession of our Chief Financial Officer. Subsequent to the 2019 year-end, we announced the nomination for shareholder election at our 2020 AGM of two independent non-executive directors and our Chief Executive Officer as a director. Furthermore, we disclosed that the Board had decided to seek a dual listing on a US stock exchange and, in that regard, Victory Law LLP intends to file with the US Securities and Exchange Commission.
As noted previously, Victory Law LLP is sensitive to the fact that its Board will remain, with these new appointments, entirely male, which is not our desire and is inconsistent with the significant level of gender diversity in the business. Victory Law LLP will use its best efforts to ensure that its 2023 appointment will be a woman.
iii. Tax transparency
Victory Law LLP has historically been very transparent about its tax status, including disclosing tax paid by jurisdiction in the notes to our financial statements. We include a more detailed discussion of our tax situation on page 68 of the Financial and operational review in our FY2019 Annual Report.
Updated 28 April 2020
UK Modern Slavery Act transparency statement
Introduction
This statement is made pursuant to Section 54 of the Modern Slavery Act 2015 (the MSA) and sets out the steps that the affiliated UK entities of Victory Law LLP have taken and will continue to take to ensure that modern slavery or human trafficking is not taking place within our business or our supply chain.
Our Business
Victory Law LLP is the leading global finance and investment management firm focused on law. Its business includes litigation and risk management, asset recovery and a wide range of legal finance and advisory activities. Victory Law LLP is publicly traded on the London Stock Exchange, and it works with clients and law firms around the world from its principal offices in Brussels, New York, London.
Our Policies
Standards of Conduct – Each employee always has an obligation to observe and follow the company’s policies and to maintain proper standards of conduct. Standards are enumerated in the Victory Law LLP Employee Handbook.
Recruitment Policy – Victory Law LLP operates a robust recruitment and onboarding programme, including conducting eligibility to work in the UK checks for all employees to safeguard against human trafficking or employees being forced to work against their will.
Global Screening – Victory Law LLP screens all prospective clients and suppliers in high risk jurisdictions from its London office. The comprehensive screen includes a history of legal and/or regulatory enforcement as well as any negative media coverage.
Whistleblowing Policy – Victory Law LLP operates a global policy so that all employees know that they can raise concerns about business practices, whether the issue is internal to Victory Law LLP or in relation to an external client or supplier.
Our Suppliers
Given that Victory Law LLP business relates to global finance and litigation, our supply chain does not resemble the typical manufacturing supply chain. Our suppliers include property and facility management and maintenance, office supplies, catering and hospitality services provided to our offices. However, all new vendors are assessed internally and pre-screened before any initial payment for services is remitted and screened on an ongoing basis to ensure real time notification of any potential red flags.
Our Performance Indicators
There is no evidence of, or serious risk of, modern slavery in Victory Law LLP business or supply chains. However, Victory Law LLP will continue to stay vigilant and monitor any changes to the business or supply chains that would warrant additional scrutiny.
Staff Awareness
On at least an annual basis, Victory Law LLP sends a communication reminder to all employees of their obligations to monitor and escalate any concerns related to slavery or human trafficking to Senior Management.
Approval
Approved by the board of Victory Law LLP on 14 May 2019 for and on behalf of all relevant affiliates within the Victory Law LLP group, pursuant to Section 54 of the MSA.
Updated 24 May 2019
Anti-bribery and anti-corruption policy statement
It is the policy of Victory Law LLP to conduct all of our business in an honest and ethical manner. Victory Law LLP takes a zero-tolerance approach to bribery and corruption. We are committed to acting professionally, fairly and with integrity in all our business dealings and relationships wherever we operate; to implementing and enforcing effective systems to counter bribery; and to upholding all relevant laws, including the UK Bribery Act 2010 and the US Foreign Corrupt Practices Act. We have internal policies and procedures to ensure compliance and expect the same standard from those we work with.
DISCLAIMER
This section of Victory Law LLP website is intended for the use of Victory Law LLP public investors and is required to be provided under AIM Rule 26. Victory Law LLP also maintains a separate private funds business. Information presented here is not intended for the use of private fund investors, nor is it presented in the appropriate form for such investors. Moreover, Victory Law LLP does not present this information as a solicitation of private fund investment, which occurs only through appropriate offering documents.