The post-banking crisis boom in litigation has put disputes work back at the centre of global law. As the economy recovers, can it last?
Six years on from the financial crash and at least four years since many of the City’s leading litigation departments began giving their transactional counterparts a run for their money, one could be forgiven for wondering if doubts are creeping in over the sustainability of that progress.
At Freshfields Bruckhaus Deringer, litigation work now accounts for nearly a third of the Magic Circle firm’s revenue, while the litigation department at Allen & Overy (A&O) had a ‘record year’ in 2013/14, up over 10% on 2012 and last year contributing 15% of its £1.23bn global revenue, with a new target of around 20%.
Having been run down during the boom at major firms, these days most leading practices are attempting to increase the proportion of litigation and arbitration work they handle.
While most litigators deny they have ever benefited from a tsunami of post-crash work in the way that was originally anticipated, crisis work stemming directly from major failures such as the collapse of Lehman Brothers and the knock on regulatory crackdown has nonetheless flowed. As Simmons & Simmons UK dispute resolution head Ian Hammond observes: ‘It’s made for a strong dispute resolution market since then.’
If anything, litigators have more recently benefited from losses stemming back to 2008, with Clifford Chance (CC) senior commercial litigator Simon Davis commenting: ‘Investors and shareholders took their time to work out if they had suffered loss. Some people decided on balance: “I’ve suffered loss and I don’t have an ongoing relationship and I’m going to make a claim.”’
At Herbert Smith Freehills (HSF), head of disputes for the UK and US Mark Shillito adds: ‘Funnily enough we’ve seen a lot more claims recently as people come up against the Limitation Act in 2014 – if people are going to bring a claim, now is the time.’
HSF’s flagship litigation department last year enjoyed its most profitable year, while at Freshfields, global head of litigation Christopher Pugh comments: ‘Last year major court hearings, arbitrations and investigations helped a very strong performance, with revenues increasing by over 20% globally and significant growth in Asia and MENA, each up by over 40%.’
The bigger question is if this is the new normal or a belated counter-cyclical spike that will stabilise as the market continues to recover. Litigators remain bullish, with Linklaters’ commercial litigation partner Christa Band commenting: ‘I’m intrigued by the suggestion it’s counter-cyclical, we’ve been busy since long before 2008.’
Instead, litigators point to the growth of international arbitration, London’s resilient position as a leading disputes hub, the globalisation of the leading UK litigation shops and the explosion of contentious regulatory work that has seen top international domestic firms and newer US entrants scramble to ramp up their contentious capability.
The rise and rise of the disputes boutique
There has been no trend that has more clearly demonstrated the post-Lehman swagger of the commercial litigator than the dramatic rise of the highly profitable disputes-only boutique.
And just consider the growth such outfits, unencumbered by the overheads and conflicts of corporate law firms, have achieved. Most dramatically the US litigation über-boutique Quinn Emanuel Urquhart & Sullivan has over the last five years risen from relative global obscurity to become one of the most profitable and financially successful practices in the world.
On a smaller scale – growth has nevertheless been striking in the UK, where Stewarts Law has grown its revenues from around £3m in 2000 to £46.4m in 2013/14 without the aid of a substantial merger. The firm is one of only eight Legal Business 100 firms to currently achieve profits per equity partner (PEP) of over £1m.
Stewarts Law, led by Clive Zietman, has been in the headlines again in 2014 for leading institutional investors in multibillion-pound disputes, such as a High Court claim against The Royal Bank of Scotland (RBS) for an allegedly misleading 2008 rights issue.
Although Bird & Bird is acting for the largest group of shareholders claiming against RBS, Quinn Emanuel is acting for the second largest – reflecting the ability of such boutiques to take cases against major banks.
Having originally played the will-sue-banks card for all its worth, boutiques have capitalised on their lack of conflicts and lower overheads to take full advantage of the rising tide of disputes work.
Big-name hires have included the move last year to Quinn Emanuel by top Herbert Smith Freehills litigator Ted Greeno, following in the footsteps of high-profile Allen & Overy arbitrator Stephen Jagusch and fellow partner Anthony Sinclair.
Other recent boutique entrants include Signature Litigation, launched in 2012 by former Hogan Lovells head of investment banking and funds litigation Graham Huntley and fellow partner Helen Brannigan. Signature has seen a rapid increase in revenue, rising from £4.82m to £8.17m in year two – a striking growth rate. The launch of Signature followed that of Enyo Law, formed at the end of 2010 by an 11-strong team from Addleshaw Goddard led by Simon Twigden, described by one rival as ‘making good progress’.
Another elite US disputes specialist Boies, Schiller & Flexner also launched in London in the spring with the hire of Bingham McCutchen partner Natasha Harrison. The firm last month followed this with the hire of Wilmer Cutler Pickering Hale and Dorr partner Wendy Miles to launch a London arbitration practice.
This is to say nothing of the newest breakaway, arbitration boutique Three Crowns, which to much fanfare launched in March this year led by Freshfields Bruckhaus Deringer’s London arbitration head Constantine Partasides QC alongside former colleague Jan Paulsson and Paris arbitration head Georgios Petrochilos. One litigation head comments: ‘Their market reputation is special – their heritage is so strong.’
While mainstream advisers typically claim these new entrants lack the bench strength to be viewed as direct competitors, an increase in third-party litigation funding is to an extent changing the rules, meaning that boutiques are able to take on David and Goliath high-value, high-profile cases and bulk up with paralegals on a case-by-case basis.
The last few years have also seen litigation boutiques diversify and expand, with Stewarts Law this autumn launching a tax litigation practice, having launched an arbitration practice in February 2013 with the hire of Mayer Brown’s Philippa Charles. The 49-partner firm launched its first international offices in 2012, opening in New York and Delaware.
Zietman comments: ‘There is a risk to being too specialist; if you’re focusing on one area of law you need to diversify.’
Of all the boutiques creating waves it is the brash Quinn Emanuel that is described by one litigation partner at a Magic Circle firm as a ‘phenomenon’, though the firm’s robust style continues to divide peers between staunch admirers and cynical detractors. Critics typically contend that the firm is over-reliant in London on shipping in armies of temporary lawyers for major cases.
However, the strength of the brand means that when a major litigation mandate comes to town, increasingly the leading players would expect to see the US firm invited to pitch for it.
A glance at Quinn Emanuel’s client list shows that it is making inroads with FTSE 100 corporates, including energy giants, insurers and financial institutions, with London founder Richard East’s ‘representative client’ list including Aon, KPMG, Morgan Stanley and UniCredit.
One litigation team head comments: ‘The strength of some of their people means they have the capability to play in the corporate space,’ but adds: ‘The quality can be quite patchy, they’ve expanded very quickly in London, Paris and Hong Kong and I’m not sure how consistent their brand is.’
The litigation powerhouse is expecting healthy results this year after its City office in 2013 saw its first decline in profit and revenue since launching in 2008, with net profit down by one third to £12.4m, as City revenues also dropped 28% to £19.8m.
However, firm-wide profitability has continued to surge at Quinn Emanuel – with revenues up 14% to $972.7m in 2013 and PEP of $4.48m being the second highest in the Global 100. Its London office remains one of the most profitable UK operations of a US firm. Current indications are that the City arm is set for a rebound in 2014 – a year that is expected to demonstrate if the firm can sustain its success after the end of a number of major cases in the 2013 financial year.
With the dramatic rise in litigation boutiques, the question now is if the market has reached a saturation point or if talented litigators will continue to flock to disputes-led firms. Ashurst litigation head Simon Bromwich says that the risks and challenges in a successful launch will deter many.
Perhaps, surprisingly, Zietman agrees: ‘It’s very expensive and insurance is even more difficult to get. I don’t think we’ll see a proliferation of litigation boutiques.’
London calling
The enduring reputation of the English courts and the prevalence and exportability of English law means that London continues to benefit from an influx of foreign disputes, both litigation and arbitration, with Clyde & Co’s global head of dispute resolution and international arbitration Ben Knowles commenting: ‘I see London becoming the headquarters of global dispute resolution as globalisation continues.’
Shillito adds: ‘In my view London remains at the forefront of the global disputes hubs.’
While the Rolls Building in 2012 brought the Chancery Division, Admiralty and Commercial Court and the Technology and Construction Court under one roof, its impact has been more one of comfort than substance, though on balance the site is seen as having had a positive effect.
Linklaters London litigation head Michael Bennett observes: ‘We’ve grown up sitting on church pews between the hours of 10.30am and 4.30pm so finally having mod cons is nonetheless a material impact.’
London, meanwhile, continues to benefit from an increase in inbound international arbitration, a trend that has seen the practice area gain heavy investment from international law firms.
Clydes’ disputes practice, for example, is now 70% arbitration-focused, with that proportion expected to increase. At A&O, arbitration now accounts for around a third of dispute resolution work and the firm is projecting growth as it aims to challenge European leaders such as Freshfields; Skadden, Arps, Slate, Meagher & Flom; and Wilmer Cutler Pickering Hale and Dorr. Arbitration also saw the launch of this year’s most closely watched boutique, Three Crowns, with a breakaway team of senior practitioners from leading US and UK firms.
The London Court of International Arbitration (LCIA) is perceived to have taken back some ground lost to hubs such as Paris, with the latest figures showing there were 10% more referrals to the LCIA in 2013 than 2012.
Knowles sums up a common view: ‘I sense there has been a drift back from Paris to London.’
Ashurst litigation head Simon Bromwich adds: ‘London continues to benefit from its status as a strong arbitration centre. Disputes work is shifting towards arbitration, which is becoming increasingly sophisticated and specialised.’
Oligarchs and sanctions
One class of litigation that has notably kept many of the City’s biggest practices busy is the raft of multibillion-pound disputes between some of Russia’s best-known oligarchs. Still proceeding through the courts – gifting Freshfields and Hogan Lovells with what one litigation partner describes as the ‘fraud case of the century’ – is the long-running BTA v Ablyazov, in which Freshfields is acting for the court-appointed receiver of assets held by Mukhtar Ablyazov, who faces charges of stealing $6bn from Kazakh bank BTA, represented by Hogan Lovells.
The French courts ruled at the start of 2014 that Ablyazov, who was arrested in a villa in Cannes after a European manhunt, should be extradited to Russia or Ukraine to face charges. Having instructed Clydes and then Stephenson Harwood, Ablyazov is now represented by Addleshaw Goddard, led by Ian Hargreaves and Richard Leedham.
Opinions vary as to whether such work is coming to an end. However at Freshfields, which is also advising Igor Kolomoisky against a $2bn claim by Ukrainian industrialist Victor Pinchuk, commercial litigation partner James Kennedy comments: ‘My own view is that it hasn’t run its course.’
Notably, Stephenson Harwood was this year instructed on a new case by Russian tycoon Sergei Pugachev. In July Pugachev was served with a UK freezing order over $2bn of his assets by the Russian Deposit Insurance Agency, led by Hogan Lovells, following the liquidation of Mezhprombank. The instruction to Stephenson Harwood came from a recommendation by a barrister.
John Fordham, Stephenson Harwood’s head of commercial litigation said: ‘Some thought Liz Gloster’s ruling in Berezovsky v Abramovich would have a dampening effect, but if the oligarchs sue they are doing it in London. It can be expensive, but they are turning to the best legal system in the world with the best judges.’
One global litigation head comments: ‘I don’t see why it’s going to stop. It’s part of the business model in Russia. What you tend to get are a lot of joint ventures between partners, natural resources being shipped in a market where price is sensitive, plus at the top of companies are very strong individuals taking a very direct personal interest.’
What is less clear is the impact of the introduction and tightening of sanctions on Russia in response to the country’s activities in Ukraine. With no end to the standoff between the West and Russia in sight, the likelihood is that such sanctions will be widened.
Bromwich comments: ‘We’ve been looking a lot at Russian sanctions and many of our clients are very affected.’ However, Shillito adds: ‘It’s something of a moveable feast as to whether there will be less or more work. But we’re certainly being asked to advise in the sanctions area.’
Fees: finding the profitable, flexible approach
For even the most storied litigation firm, gone are the days when they charged purely by the billable hour and refused to give clients so much as an estimate as to how much a piece of litigation would cost.
At Herbert Smith Freehills Mark Shillito says: ‘The key is flexibility and communication with the client. We do all sorts of fee structures. We still do a lot of work on hourly rates, which is what a lot of clients want, but for the right cases, we’ve done [conditional fee agreements (CFAs)] and will look at [damages-based agreements (DBAs)]. We’ll also give a fixed price for a scoped task or phase of work, breaking a case up into bite-sized chunks.
‘The advantage with that is that in-house counsel has a clear idea of what to expect, because no-one likes to be surprised. If things change and scope creeps, then you need to have that conversation but with the appropriate caveats and regular updates it works for us and the clients.’
Hogan Lovells has now set up a project management team to decide fee structures on a case-by-case basis, overseeing a dedicated fees database. The firm’s litigation head, Michael Davison, says: ‘There is far greater creativity being deployed by big corporates in how they manage and pay for big litigation but I like to think there are also far more sophisticated processes in place within law firms to analyse the litigation risk.’
Davison agrees that many clients still want to be charged by the hour but Hogan Lovells does offer fixed fees in some circumstances. Davison adds: ‘Litigators have got to get better at explaining what they are going to do and when they are going to do it.’
Clyde & Co takes a similarly flexible approach to fees, with the finance department in charge of managing fee structures ‘so its profile sits well with the whole practice, not just that case or partner’, says global practice head Ben Knowles, adding: ‘If there’s too much risk and not enough upside we don’t do it.’
Within the Magic Circle there is more reticence to stray from more conventional billing, and at Linklaters Christa Band says: ‘Any sort of contingency produces stress and tension. It might sound like a great idea but is the relationship completely objective?’
Examples of firms that have been burned on CFAs – such as Addleshaw Goddard in bringing a claim for the late Russian oligarch Boris Berezovsky against former business partner Roman Abramovich – have not helped their popularity among the biggest law firms.
Freshfields Bruckhaus Deringer, meanwhile, uses estimates and works with the client on the structuring of the team to get a satisfactory rate but steers clear of discounted rates.
In contrast, among the litigation boutiques, which leverage off their flexibility on fees, Quinn Emanuel Urquhart & Sullivan has used a number of CFAs and is prepared to take on DBAs, the US-style model that allows litigators to claim a proportion of damages if successful. London head Richard East says: ‘If we get the right case we’ll definitely do it.’
Stewarts Law has already handled a case using a DBA – though most litigators remain wary of the model given uncertainty about the status of partial DBAs, but commercial litigation head Clive Zietman describes the firm’s approach as ‘very picky’ and warned: ‘I think one or two smaller firms are going to get caught out.’
New frontiers
Whether Russian work is sustainable, litigators agree that the truly global nature of their work means the next wave of inbound litigation or arbitration is likely to come from emerging economies.
Disruption in the Middle East and the opening up of Africa are already generating work for UK-headquartered practices, with Knowles commenting: ‘All the upheaval in the Middle East is going to give rise to litigation and arbitration as contracts are broken, property is destroyed and people can’t operate their businesses.’
Clyde & Co has already seen arbitration from Africa, while Hogan Lovells is advising Shell in claims brought in the English courts by members of the Bodo community over two operational spills in the Niger Delta – the largest class action in the UK.
Work stemming from the oil and gas sector has included Ashurst’s July Court of Appeal victory for Tullow Oil and its Ugandan subsidiary Tullow Uganda led by Ashurst litigation partner Ronnie King, after Heritage Oil and Gas sought to overturn a High Court judgment that it pay Tullow $345.8m in a dispute over liability for a capital gains tax payment made to the Uganda Revenue Authority.
A number of international firms are also working on high-value claims against states under investment treaties, a ‘big source of income’ according to Tim House, global dispute resolution head at A&O, which has acted on over 40 such cases, and similarly for Ashurst, where Bromwich says there is ‘more activity’.
Elsewhere, pharmaceutical and intellectual property (IP) litigation, including a further wave of ‘phone wars’ between mobile phone companies, is expected to generate more international disputes, and Clydes is now acting in relation to the three largest global aviation disasters, having bolstered its practice with the hire of Kennedys’ heavyweight partner David Johnston. The firm is advising on both Malaysia Airlines crashes (MH370 and MH17) and the crash of a TransAsia Airways passenger plane carrying 48 people in Taiwan’s Penghu archipelago.
More commonly than not, the major litigation teams say that their international networks mean they are gaining market share as clients increasingly favour one firm for global disputes, echoing a trend that was in evidence over a decade ago in transactional work. While the one-stop-shop versus the network-of-independents debate has rumbled on since the early days of law firm globalisation, one head of an international firm said: ‘We don’t see Cravath or Paul Weiss on international litigation around the world, they don’t have the reach.’
In London, US advisers such as White & Case, Debevoise & Plimpton and Gibson, Dunn & Crutcher are singled out for winning some significant instructions. Skadden Arps, likewise, punches its weight with its London litigation practice representing Kolomoisky’s co-defendant Gennadiy Bogolyubov and is praised for its oligarch work, while Cleary Gottlieb Steen & Hamilton, Sidley Austin, Covington & Burling and Dechert have all been investing heavily in disputes.
Globally, firms such as DLA Piper and Baker & McKenzie are perceived as having gained traction due to their brand recognition, despite criticism from rivals that the quality of advice can be patchy.
Meanwhile, arbitration clients now often expect their advisers to have a physical presence in established centres such as Paris, Hong Kong, and, increasingly, Singapore.
At US litigation leader Quinn Emanuel Urquhart & Sullivan, which this year opened its tenth office outside of the US in Brussels and has an office in Paris and Hong Kong, London office founder and co-managing partner Richard East comments: ‘Sophisticated users of arbitration like you to have a presence in Asia. There are places you need to be.’
The Major Disputes Teams (alphabetical)
ALLEN & OVERY
Partners in the UK: 23 Worldwide: 76
% of global revenue derived from disputes: 15%
Headline cases: Advising Dexia Crediop in its Italian and English litigation against Italian local authorities over interest rate swaps.
Representing Nokia on a potential claim against India (reported to be in excess of $1bn) due to retroactive tax assessments made by the Indian tax authorities.
ASHURST
Partners in the UK: 11 Worldwide: 50
% of global revenue derived from disputes: 15%
Headline cases: Successfully defending Tullow Oil and its Ugandan subsidiary Tullow Uganda against a $345.8m Court of Appeal challenge by Heritage Oil and Gas.
Advising the supervisors of Cattles and Welcome Financial Services in a £1.6bn audit professional negligence claim against PwC.
CLIFFORD CHANCE
Partners in the UK: 26 Worldwide: 90
% of global revenue derived from disputes: 18%
Headline cases: Representing US defence company Raytheon in a circa £500m LCIA arbitration against the UK Government over the termination of the e-Borders programme.
Advising Autonomy founder Mike Lynch (and other former management) on allegations of financial impropriety and misrepresentation made by Hewlett Packard.
CLYDE & CO
Partners in the UK: 104 Worldwide: 225
% of global revenue derived from disputes: 72%
Headline cases: Representing U&M Mining Zambia on the attainment of a London Court of International Arbitration (LCIA) award of $90m against Konkola Copper Mines and defending a subsequent challenge on the basis of lack of jurisdiction.
Advising Gulmar Offshore Middle East in obtaining a $644m LCIA award against PDVSA.
FRESHFIELDS BRUCKHAUS DERINGER
Partners in the UK: 37 Worldwide: 100
% of global revenue derived from disputes: 25-30%
Headline cases: Advising Deutsche Bank in enforcing a payment of $243m against Sebastian Holdings after defending an $8bn counter-claim.
Advising Mukhtar Ablyazov in his long-running defence against a multibillion fraud claim by BTA Bank.
HERBERT SMITH FREEHILLS
Partners in the UK: 51 Worldwide: 139
% of global revenue derived from disputes: 40%
Headline cases: Advising Apple in the Apple/Samsung ‘tablet war’ in Australia.
Defending Bharti Airtel against a claim in excess of $1bn relating to its business in Nigeria.
HOGAN LOVELLS
Partners in the UK: 41 Worldwide: 247
% of global revenue derived from disputes: 36%
Headline cases: Representing BTA Bank in asset recovery litigation concerning fraudulent transactions of more than $6bn allegedly entered into by Mukhtar Ablyazov.
Defending TÜV Rheinland and affiliated companies against liability claims resulting from the allegedly inappropriate certification of French breast implant manufacturer PIP.
LINKLATERS
Partners in the UK: 23 Worldwide: 50
% of global revenue derived from disputes: 15%
Headline cases: Advising News Corporation’s independent management and standards committee on investigations and enquiries into the News of the World phone-hacking case, police payments and all other connected issues across News International.
Defending Dow Deutschland against a claim in excess of £200m against Dow and others by Cooper Tire & Rubber Company after Dow was fined by the European Commission for being part of a cartel.
NORTON ROSE FULBRIGHT
Partners in the UK: 29 Worldwide: 384
% of global revenue derived from disputes: 40%
Headline cases: Successfully representing Victor Dahdaleh in his defence of a criminal prosecution brought by the Serious Fraud Office and other national anti-corruption agencies.
Advising Benjamin Fok Chun-yue as an executor of the circa $4bn estate of his father, Henry Fok Ying-tung, who died in 2006, advising on a settlement agreement and implementation issues.
SIMMONS & SIMMONS
Partners in the UK: 33 Worldwide: 69
% of global revenue derived from disputes: 31%
Headline cases: Advising Schlumberger on the merger control aspects of the creation of its OneSubsea joint venture with Cameron to manufacture and develop products, systems and services for the subsea oil and gas market. Acting for Vladimir Kekhman on a substantial fraud/conspiracy claim brought by the Bank of Moscow.
SLAUGHTER AND MAY
Partners in London: 11 Worldwide: 12
Headline cases: Representing the SFO on its defence against claims brought by the Tchenguiz brothers for alleged trespass, false imprisonment, malicious prosecution and misfeasance in public office.
Advising Deutsche Bank on numerous simultaneous regulatory investigations in multiple jurisdictions into the fixing of the Libor benchmark rate.
STEPHENSON HARWOOD
Partners in London: 36 Worldwide: 47
% of global revenue derived from disputes: 44%
Headline cases: Representing Fiona Trust in an eight-year dispute against Russian state-owned shipping monolith Sovcomflot, ending in a Court of Appeal victory.
Advising Westbrook Dolphin Square in the largest-ever leasehold enfranchisement claim against Friends Life.
The follow on effect
Closer to home, particularly for bank-focused practices, it is the explosion of contentious regulatory work that is driving the agenda and changing the shape of litigation practices as they expand to cater for the resource-intensive demands of financial institutions who are paying big money for high-stakes matters.
Bromwich reflects: ‘A lot of litigators are doing very good work but are not in court all the time. Litigation is not necessarily what worries the banks. What does keep them awake at night is the proliferation of regulatory investigations.’
Contentious regulatory work now accounts for 15-20% of Ashurst’s litigation practice and, according to Bromwich, and that may increase ‘a bit more’. At A&O it constitutes a third of the disputes practice, while at Stephenson Harwood it is a quarter.
A&O, Freshfields, Linklaters, Slaughter and May and Hogan Lovells are among the many instructed on major regulatory enquiries, such as Libor activity and the UK’s Financial Conduct Authority’s investigation into the conspiracy to manipulate the $5.3trn-a-day foreign exchange market.
Meanwhile, the Serious Fraud Office has begun to make good on its promise to redefine itself by focusing on higher profile complex fraud, bribery and corruption, despite a highly-criticised 2011 dawn raid on the Tchenguiz brothers, both of whom subsequently instructed Stephenson Harwood’s Sean Jeffrey in litigation.
Regulator-led investigations have seen the demand for white-collar fraud advice escalate dramatically, clearly underwritten in part by the UK’s Bribery Act 2010 and this year’s introduction of US-style plea bargaining, which is expected to be a powerful tool for prosecutors.
Davis comments: ‘Not only does the financial institution need advice but its senior executives need different representation.’
UK and US entrants alike are attempting to ramp up their capability in London, with US advisers in particular demand for their expertise in Washington and New York.
Firms to have raised their profile in the area include Milbank, Tweed, Hadley & McCloy, following the hire of Charles Evans from Norton Rose in 2012.
Thanks in no small part to Debevoise & Plimpton’s 2007 hire of former Attorney General Lord Goldsmith QC, one UK litigation partner describes the firm as ‘brilliant’, but as other US firms attempt to emulate its performance the partner adds: ‘Lord Goldsmiths don’t grow on trees.’
Notable contentious regulatory hires among leading UK litigation firms, meanwhile, include CC’s hire in March last year of Norton Rose white-collar partner Dorian Drew, while in the same month HSF announced the hire of Deutsche Bank financial regulatory lawyer Andrew Procter and in July 2014 hired John O’Donnell from the Securities and Exchange Commission in New York.
Linklaters, meanwhile, brought in HSF London financial regulatory partner Martyn Hopper in 2012, followed by fellow HSF partner Nikunj Kiri in September 2013.
Such is the growth of the regulation-driven discipline, not all disputes partners believe regulatory work should be classed as litigation, with one partner commenting: ‘Niche banking practices are a joke, banks don’t usually fight.’ Some other seasoned litigators fret that the pressure to take on such work is blunting the training and development of young litigators, who often resent the mind-numbing detail and document management inherent to the work. It is some distance from the classic view of the individualistic trial lawyer most litigators aspire to.
What remains unclear is whether the momentum that has driven dispute teams over the last six years can be sustained or whether it has reached a new plateau. Unlike conventional litigation, the regulatory work that is continuing to surge sits more naturally within large, broad-service law firms that need to be able to deploy substantial teams.
It may be that arbitration – following the example of Three Crowns – is most ripe for further breakaways, not only due to the sustained global arbitration boom but because such work revolves around a relatively small groups of mobile veterans rather than armies of junior lawyers and paralegals.
With US law firms now increasingly pushing UK practices into mainstream disputes work and many top City advisers still hunting for growth on the disputes side to hedge their deal teams – demand for commercial litigators has never been so strong.
Amid a revival in M&A, securities and banking work that remains patchy and uncertain for the foreseeable future, litigators are unlikely to easily surrender the confidence and self-determination that they clawed back over the last six years. For all the slick polish of the globalised law firms – the litigation boom is a reminder that there are still plenty of able and individualistic lawyers who relish a good fight. LB
caroline.hill@legalease.co.uk