Licence to bill

There is no agreement on what it means, where it came from, or even who is in it. But, at the top of the English legal market, the Magic Circle continues to reign supreme. The term is used as shorthand by general counsel, investment bankers, recruits and out-of-town lawyers as if it were a guarantee of excellence.

Being a member of the Magic Circle delivers almost unlimited kudos and credibility. The current membership has little interest in expanding its number, and would often rather refer work to fellow members than strengthen the practice of an outsider. And those in the so-called chasing pack may seek elevation for themselves, but are reluctant to see others move up or down.

Working out the origin of the term is impossible – academic papers have been written on the subject, but have failed to provide a definitive answer. What is certain is that it emerged in its earliest guises from the ‘gang of nine’ top law firms that shared a no-poaching agreement and information on salaries in the early 1990s. Antitrust concerns put an end to that cartel, but whether the ‘Magic Circle’ was then coined by a Freshfields Bruckhaus Deringer marketeer, a Linklaters branding expert, a management consultant or a journalist – all theories put forward by today’s managing partners – is a secret now confined to history.

What matters today is the power of the brand, which remains incredibly strong despite incessant talk of its demise among both its members and its rivals. David Morley, managing partner of Allen & Overy, says: ‘Over the next ten years, I wouldn’t predict the death of the Magic Circle, but I would predict it becoming of less importance. What will become more important is a global elite of some kind, which will be a combination of US- and UK-originated firms that will start to set themselves apart from everyone else.’

To read the rest of this article subscribe to Legal Business.