Legal Awareness Newsletter - Edition 11
March 13th 2025
Hello everyone! Welcome to the penultimate edition of the LAN. This year has flown by and I do hope you’ve enjoyed the LAN.
As usual, we have six articles for you. This includes an exploration of the recent Bulgarian spy trial, looking at the opportunities in space and discussing the benefits of non-equity partners.
We have a lovely graphic from Ethan - thank you!
Please do enjoy!
All the best,
Jago Cahill-Patten
Publications Officer
General Section
Trials and tribulations in transition - One month since first batch of EU AI Act compliance regulations in place
Walter Cheung
Prohibitionary and AI Literacy regulations in the EU AI Act have come into force since 2 February this year. They constitute the first batch of regulations in the wider rules set out in the Act, which were passed in August 2024.
What’s new?
The new regulations primarily concern Articles 4 and 5 of the Act. Most notably, Article 5 of the Act prohibits use of AI tools classified as posing an ‘unacceptable risk’ — tools considered a ‘clear threat to the safety, livelihoods and rights of people’. This concerns AI tools with functions such as deception, social scoring, predictive policing, emotional recognition and facial recognition. Additionally, Article 4 requires AI providers to take measures to develop ‘AI literacy’ amongst employees and other individuals involved in their operations. This was clarified to demand continuous training as opposed to one-off written instructions. It aims to ensure that employees can account for risks and make decisions on AI use accordingly. Breach of these regulations can incur fines up to €35M or 7% of the company's annual turnover.
Difficulties in transition
Tech giants have raised criticism on the uncertainty and lack of clarity of the EU regulations. Despite the EU’s structured plan for AI regulation, their focus appears to pertain to their goals more than the process of transition. Clarifications for interpreting provisions are mostly added after the Act’s enactment. To tech companies, this poses uncertainty as to what steps they should be taking to comply with EU regulations. For instance, Meta Director of Public Policy Chris Yiu voiced concerns with the ‘unpredictable’ and ‘complex’ system, claiming that Meta’s new AI Ray-Ban glasses were ‘slow to arrive in Europe because of the issues… around regulation’.
Surrounding regulatory tensions
The new regulations were launched in light of backlash towards other EU tech regulations like the Digital Services Act and Digital Markets Act. In particular, President Trump is threatening retaliatory tariffs in response to EU probes to American companies like Apple, Meta and Google. Indeed, Tech companies based outside the EU can risk consequences for breaching EU regulatory provisions, so long as their services are used within the EU. This marks a notable instance of the ‘Brussels Effect’, the phenomenon of foreign companies outside EU borders complying with EU law, often for expanding their reach to its member states. In a similar vein, the EU’s AI regulations could find themselves at odds with Trump’s revocation of the Biden Administration’s AI policies and calls to loosen governmental oversight.
What lies ahead?
For the remaining provisions of the AI Act, governance rules and obligations for general-purpose AI models such as GPT-3 will come into force on 2 August 2025. The rest of the provisions would then be fully incorporated on 2 August 2026. Meanwhile, regulations for high-risk AI systems in regulated products have an extended compliance deadline of 2 August 2027. In the meantime, the EU is expected to finalise their code of practice on general-purpose AI models by August 2025.
Evident by their ‘stepped approach’ to establishing their regulatory framework, the EU clearly acknowledges the need to facilitate a smooth transition. However, superimposing a regulatory ‘timeline’ without clear clarification at the outset will likely complicate developers’ progress than aid their transition. It is imperative that the measures to come are enacted with clarity, and at a pace contemporaneous with new innovations and compliance efforts.
Analysis of Recent Bulgarian Spy Trial in the UK
Aykhan Allahveranov
In a recent legal proceeding at London’s Old Bailey, three Bulgarian nationals—Katrin Ivanova, Vanya Gaberova, and Tihomir Ivanchev—were convicted of espionage activities conducted on behalf of Russian intelligence services between 2020 and 2023. The espionage network was orchestrated by Jan Marsalek, the former Chief Operating Officer of the defunct German payments company Wirecard, who has been a fugitive since 2020 and is believed to be residing in Moscow under the protection of Russian intelligence agencies.
Legal Framework and Charges
The defendants were charged under the UK’s Official Secrets Act, accused of conspiring to collect information intended to be directly or indirectly useful to an enemy, specifically the Russian state. The statute criminalizes the obtaining or communicating of information that could be detrimental to national security. The prosecution presented evidence that the accused engaged in surveillance operations targeting individuals and entities considered adversarial by Russia, thereby compromising the security interests of the United Kingdom and its allies.
Operational Scope and Methods
The espionage activities were extensive and sophisticated, involving the use of advanced surveillance equipment and tactics. The group conducted operations across Europe, including surveillance of Ukrainian soldiers training at a U.S. military base in Germany. They also targeted journalists and dissidents critical of the Kremlin, employing methods such as ‘honey traps,’ bribery, and the use of covert recording devices, including video-recording glasses. These actions were aimed at gathering intelligence and potentially facilitating kidnappings or assassinations, thereby posing significant threats to individual safety and national security.
Legal Proceedings and Sentencing
During the trial, the defendants denied knowledge of the true nature of their activities, claiming they were misled into believing they were working for legitimate organizations. However, the jury found these assertions unconvincing, leading to their conviction. The court has scheduled sentencing for a later date, with the defendants facing substantial custodial sentences, reflecting the severity of their offenses under the Official Secrets Act.
In conclusion, the trial and subsequent convictions of the Bulgarian nationals underscore the critical importance of robust legal mechanisms and vigilant security measures in countering espionage activities that threaten national and international security.
Opportunities in Orbit: Developments in Space
Davon Pung
On 2 March 2025, Firefly Aerospace’s Blue Ghost Lander successfully touched down on the Moon, marking the second commercial lunar landing. The spacecraft remained fully intact and responsive post-landing, conducting ten experiments, including lunar soil analysis and subsurface temperature measurements.
Private Space Entities and Governmental Collaboration
The emergence of private companies such as SpaceX (Elon Musk), Blue Origin (Jeff Bezos) and Virgin Galactic (Richard Branson) has redefined the dynamics of space exploration. From pioneering reusable rocket technologies to enabling commercial space travel, private enterprises have driven significant progress in the industry.
The prestigious research journal Science recently crowned SpaceX’s Starship flight in October 2024 as one of its Breakthroughs of the Year, remarking that it ‘heralds a new era of affordable heavy-lift rockets that could slash the cost of doing science in space’. SpaceX has already reduced the cost of launching cargo into orbit by a factor of 10. Once Starship achieves full operational capability, scheduled for late 2025, further reductions of a similar magnitude can be expected.
The private sector has also ushered in an era of commercial space tourism. Virgin Galactic conducted the first commercial suborbital flight in 2023. This was followed by a collaboration between Axiom Space and SpaceX on the Polaris Dawn mission that achieved the first commercial spacewalk by a private crew—a notoriously difficult feat previously exclusive to well-funded government agencies.
In view of the planned decommissioning of the International Space Station in 2030, NASA introduced the Commercial Low Earth Orbit (LEO) Development Program. This initiative fosters a public/private partnership to develop, privately-owned, commercial space stations (CSS). A transition of NASA’s current role in designing, building and operating stations to that of a customer.
Technological advancements
Artificial intelligence (AI) is as crucial in space as it is on Earth, enhancing efficiency across multiple domains:
Onboard Data Processing
The European Space Agency’s (ESA) OPS-SAT was the first mission to deploy neural networks for on-board AI, enabling in-orbit training of supervised and unsupervised models that integrate live in-flight data.
Separately, ESA’s Phi-Sat-1 represents Europe’s early foray into AI-driven space experiments. It was designed to filter cloud-covered images before transmission to Earth, optimising data quality and delivery efficiency.
Autonomous Navigation
NASA's upcoming Lunar Terrain Vehicles for the Artemis missions will incorporate AI to aid in navigation of the Moon's challenging environment, reducing reliance on human intervention.
The proliferation of small satellites is also revolutionising the space industry. Weighing less than 500kg on average, they are versatile and cost-effective solutions, enhancing global communication networks and access to space for education and research.
Legal developments
The Artemis Accords, led by NASA, continue to gain international traction. Finland’s entry on 21 January makes a total of 53 signatories. These agreements, although not legally-binding, outline common principles, guidelines, and best practices for peaceful and cooperative international space exploration. It reinforces commitments to treaties such as the:
1967 Outer Space Treaty
1968 Rescue and Return Agreement
1972 Liability Convention
1975 Registration Convention
As space-based manufacturing, such as 3D printing in microgravity, advances, new legal questions regarding patent infringement in space arise. While the U.S. Patent Act (35 U.S.C. § 105) extends patent protection to objects in space under U.S. jurisdiction, other countries have yet to institute similar provisions. This leaves a potentially contentious grey area in law.
Conclusion
The convergence of international and commercial efforts holds promise for unprecedented opportunities and challenges in space travel and exploration. In the words of iconic space ranger Buzz Lightyear, I look forward to these ventures taking us ‘To infinity and beyond!’
No More Playing With Fire (and Jobs)
Jenn Tan
Employment rights have been a significant issue in recent years, particularly due to changing work practices, economic pressures, and legal gaps. In responding to this issue, the government introduced the Employment Rights Bill in October 2024, aiming to strengthen employee rights, increase employer accountability, and close loopholes that have allowed businesses to sidestep proper consultation processes. This marks a significant shift in the UK’s approach to workplace protections, especially with regards to the rise in fire-and-rehire practices, as well as the vulnerability of zero-hour workers. A week ago, the Government announced over 200 pages of amendments to the Bill, following early consultations. These are a step toward greater job security and greater protection for workers in general, reshaping what the future of employment law could look like in the UK.
Fire-and-Rehire
The practice of firing and rehiring involves employers forcing their staff to accept worse contract terms, by dismissing them and re-engaging them on what is often a lower salary, or reduced terms and conditions. To tackle such a controversial practice, the Bill proposes bigger compensation for unfair redundancies, and a wider scope of application for collective consultation rules.
According to the Trade Union and Labour Relations (Consolidation) Act 1992, a collective redundancy consultation is mandatory for employers, when they plan to make 20 or more employees redundant within a 90-day period. This ensures that workers and their representatives have a say in the process and can explore ways to reduce job losses or to improve redundancy terms.
The Bill provides that if an employer breaks the rules on such consultations, employees can now receive up to 180 days of pay, instead of the previous 90 days. This acts as a strong deterrent for employers, making it financially riskier for them to defy due process, firing and rehiring staff just to impose worse terms. If the employer also ignores the Code of Practice on Dismissal and Re-engagement, they could have to pay an extra 45 days of wages.
Further amendments to the Bill also widen the scope for collective consultation. Previously, the rule stipulating that 20 employees being made redundant would trigger a consultation was taken advantage of. Businesses simply made small redundancies in different locations, bypassing workers’ rights laws. With the recent changes, this rule now applies across the business, not just in one location. The government will also have the power to increase the number of redundancies needed to trigger consultation if layoffs happen in multiple locations.
These changes make fire-and-rehire much harder and riskier, strengthening workers’ legal protections against being dismissed unfairly, and acting as stronger deterrents for employers against unfair exploitation. This shifts the balance of power back toward workers, significantly increasing the consequences for employers who try to force worse contract terms on their staff.
Zero-hours Contracts
Zero-hours workers have no guaranteed hours, agreeing to be available for work on an ad-hoc basis. These contracts are favoured by companies seeking labour flexibility, as well as by workers seeking flexibility around their other commitments. However, they have also been widely criticised for leaving workers in precarious positions, with their lack of guaranteed work, limited employment rights, and thus potential for exploitation.
Zero-hours workers are not guaranteed any minimum hours, leading to dramatic fluctuations in their incomes. Employees can reduce or cancel shifts at short notice, leaving workers struggling to pay bills without any legal recourse or compensation. Additionally, workers on these contracts have drastically fewer protections compared to full-time or even part-time employees – they are often not eligible for unfair dismissal protection, and exempt from statutory sick pay, since eligibility is tied to earning a minimum weekly amount.
To combat this, the Bill proposes provisions requiring employers to:
Offer guaranteed hours to zero-hours workers and low-hours workers,
Provide reasonable notice for shifts, and
Compensation for short-notice cancellations or changes.
The proposed changes directly target the key vulnerabilities of zero-hours workers. A minimum number of guaranteed hours would reduce income instability, ensuring workers have a basic level of financial security, and allowing them to better plan their finances. Additionally, many zero-hours workers receive last-minute shift notifications, making it hard to plan their personal lives, childcare, or other jobs. If they decline, they may lose future work opportunities with the company. As such, mandatory advance notice for shifts would give workers time to plan their schedules, reducing the stress of sudden, unpredictable work patterns, ensuring that they are not penalised for lacking instant availability. Compensation for cancelled shifts would also deter employers from cutting hours recklessly, acting as income protection for workers – even if their employer changes their schedule unexpectedly, they would be duly compensated.
Overall, these changes would significantly reduce income insecurity, unfair treatment, and exploitation of zero-hours workers. Introducing basic employment protections enables workers to plan their finances and personal lives more effectively, while still benefiting from the flexibility that zero-hours contracts can offer. These measures place more accountability on employers, ensuring that they treat workers more fairly and responsibly.
The recent Employment Rights Bill represents a shift in the UK’s labour laws, aiming to curb exploitative practices and strengthen protection for workers. These changes create a more structured and fair process for workplace negotiations. As the Government continues to refine these measures, their long-term effectiveness will depend on how well they are implemented and whether they successfully deter unfair employment practices while maintaining economic stability.
Commercial Section:
Non-equity partners:
Non-equity partners help bridge the gap between associates and full equity partners. They hold the title of ‘partner’ but do not have an ownership stake in the firm. Non-equity partners typically have extensive legal experience and play key roles in client management and business development. Standardising their role helps create clear expectations, defining career progression, compensation, and the path toward equity partnership.
Jessica Li
Partnership Reimagined – The Strategic Value of Non-Equity Tiers
Adrien Charles
The once-standard partnership framework has been overwhelmingly supplanted across the legal sector, with 87 out of the 100 largest law firms by revenue now operating a two-tier model. In 2024, Cleary Gottlieb and Paul, Weiss became the latest firms to make the strategic move of integrating a non-equity rank within their organisational structure. This continued transformation invites scrutiny of both why firms are making the change and what risks it poses to the profession.
What is the Case for Adopting Non-Equity Partnership?
In broad terms, a non-equity partner is a senior lawyer with the partner title, but unlike an equity partner has little to no ownership stake in the firm. Overlooking the general prestige associated with the partner title, the non-equity tier has several advantages for both lawyer and firm.
Firstly, bestowing the prestigious title enables firms to bill out these lawyers at higher rates, creating a lucrative revenue stream. Kirkland & Ellis – a pioneer in the non-equity structure – exemplifies this financial advantage with each of its non-equity partners generating close to £1,6 million ($2 million) above their compensation package.
Secondly, non-equity partnership can serve as a strategic transitional phase, allowing associates to present themselves as partners externally while receiving guided mentorship in client development. This structure creates a mutually beneficial runway: non-equity partners hone their business development skills while firms gain additional time to determine if that lawyer should earn equity.
Lastly, the non-equity tier functions as a valuable testing ground for lateral partner hires. This arrangement allows firms to elevate promising candidates to equity status if they succeed, while maintaining the flexibility to separate from underperformers without navigating the complex dismissal procedure often required for equity partners.
Potential Drawbacks
A small contingent of firms remain committed to single-partnership model. Notably, when Allen & Overy and Shearman & Sterling finalised their merger in May 2024, the newly formed entity decided to retain A&O’s all-equity partnership structure, signalling a countermovement to the prevailing tide.
Indeed, beyond the surface criticism that a non-equity tier ‘cheapens’ the brand of being a partner, there are several potential drawbacks from integrating non-equity partnership within a firm’s organisational structure. The main danger is that firms fail to manage their non-equity tier properly, allowing it to become a permanent holding pattern rather than a stepping stone. This mismanagement can lead to bloated non-equity ranks, diminished morale and the perception that the tier serves primarily as a profitability mechanism rather than a legitimate career development stage.
Another issue is law firms potentially using the non-equity tier to make themselves look more diverse than they are. A 2023 report by the National Association for Law Placement on the diversity in US law firms revealed that only 23.7 percent of equity partners at two-tier firms were women and just 9.6 percent were BME. In contrast, 33.3 percent of non-equity partners were women and 14 percent were BME. This statistical gap raises concerns that two-tier systems may be creating an illusion of progress while actually entrenching a new form of hierarchy that keeps women and minority lawyers from accessing full partnership benefits.
Antitrust:
Laws and regulations designed to promote fair competition and prevent monopolistic behaviour. These laws ensure that no single company dominates a market unfairly and restrict mergers and acquisitions that could reduce competition. The Sherman Act, Federal Trade Commission Act, and Clayton Act form the foundation of antitrust regulation. Before the Sherman Act, the Interstate Commerce Act also contributed to early antitrust efforts, though it had a lesser impact compared to these key laws. The Federal Trade Commission and the U.S. Department of Justice enforce federal antitrust laws.
Jessica Li
DOJ v Google – Goliath and Goliath?
Navika Jangra
The United States Department of Justice (DOJ) isn’t backing down in its high-stakes antitrust dispute against Google. While branding Google an "economic Goliath," recent developments suggest the DOJ is proving to be somewhat of a ‘legal Goliath’ in its own right.
The Lawsuit
In 2020, the DOJ filed suit against Google, alleging the tech firm had deployed anticompetitive tactics to dominate the search engine market. In August 2024, District Judge Amit Mehta ruled that Google’s 90% market share was indeed an illegal monopoly.
The focus then shifted to potential remedies. In November 2024, the DOJ proposed a suite of heavy-handed measures: forcing Google to divest Chrome and Android, sever its search partnership with Apple’s Safari, and grant competitors access to its data.
With President Trump’s return to office, many expected the DOJ to retreat from these proposals, perhaps preferring soft touch fines and regulatory oversight mechanisms. Last Friday, those hopes were dashed. While the DOJ dropped demands for Google to divest from AI and Android or end its Apple partnership, it remains firm on forcing Google to relinquish Chrome, revise its Android business model, and notify state officials before making future AI investments.
Shifting Political Winds?
This tougher-than-expected stance raises questions about the coherence of the Trump administration’s approach to Big Tech.
At an AI Conference in Paris last month, Vice President JD Vance slammed the EU’s “massive” tech regulations as “authoritarian censorship”. President Trump himself previously opposed breaking up Google, warning it would be “dangerous…because we want to have great companies… we don’t want China to have these companies.”
On the other hand, Vance has also stated “Big Tech has too much power” and wields a “monopoly over free speech.” Coupled with this latest move by the DOJ, it appears the administration is not as averse to regulating tech as some had assumed.
The Saga Continues
In response to the DOJ’s proposals, Google has offered a more modest package of remedies, suggesting restrictions on future Google deals and partnerships.
A hearing on these competing plans is scheduled for April. Yet, with Google poised to appeal any unfavourable ruling, even if the DOJ wins this battle, the war will not be over.
Links:
US Law firms’ London expansion drives record number of job moves
A record 155 senior lawyers switched firms in London in early 2025, a 49% increase from last year, as US law firms aggressively expanded. This hiring spree, driven by private equity work, has sparked a pay war. However, with fewer elite partners left to poach, some US firms are questioning the sustainability of soaring recruitment costs.
Commercial lawsuits launched in England’s High Court reach 6-year low
Commercial lawsuits in England’s High Court fell to a six-year low in 2024, with 3,380 cases, down 10% from 2023. The decline is linked to cautious litigation funders after the Paccar ruling and a shift toward arbitration. The Paccar ruling stopped litigation funders from taking a share of damages in some cases, making it harder for them to fund lawsuits. Despite this, London remains a top global dispute resolution hub - especially for complex or high-value cases.
The ‘anti-Trump’ numbers man who may force the UK to take a side
Mark Carney, Canada’s new Prime Minister, takes a strong stance against Donald Trump, vowing to maintain retaliatory tariffs and resist U.S. economic pressure. He advocates for international alliances to capture the attention of Congress and persuade tariff sceptics within the Trump administration. As well, he advocates for trade diversification toward Europe and defending Canadian sovereignty. His leadership signals a shift from Trudeau’s approach, with potential global economic and diplomatic implications.