Swings and roundabouts

Since 2003, Birmingham has been besieged by an onslaught of mid-tier firms looking to cement their national ambitions through a base in the UK’s second city. In the past three years alone, Harvey Ingram, BPE Solicitors, Freeth Cartwright and Capsticks have set up shop, while Clarke Willmott, Shoosmiths and Mills & Reeve have all made Birmingham a national priority. Well, it seemed like a good idea at the time.

For the past decade, the traditional Big Five firms (Wragge & Co, DLA Piper, Eversheds, Pinsent Masons and Hammonds) have been using the lower overheads of Birmingham as an important aspect of their national strategies. For the smaller firms, it was like shooting fish in a barrel. Medium-sized corporate clients were looking for more locally rooted practices that would give them a partner-led service at a reasonable rate. Now work is drying up, the mid-tier is finding it a real struggle.

Birmingham’s confidence has been knocked badly over the past six months. In January 2009, Ernst & Young published a report revealing that 60% of the Automobiles & Parts FTSE sector issued profit warnings in 2008. The majority of them came from the West Midlands. It’s no secret that manufacturing, the bread and butter of Midlands-based firms, has suffered over the past few months, with JCB and Waterford Wedgwood being prominent examples. Also, according to the latest CorpfinWorldwide figures, the volume of corporate transactions in the West Midlands fell from 413 in 2007 to 305 in 2008, a 26% drop, while the total corporate deal value for the same period drastically plummeted by 79% to £4bn. ‘The corporate market has changed,’ says Stephen Kitts, head of corporate at the Birmingham office of Eversheds. ‘It’s no longer a merry-go-round where you just line up and wait your turn.’

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