From cooling in Asia markets to a resurgence in Europe; from increased deal work to an uptick in banking litigation – Global 100 law firm leaders share their views
A year in two halves
‘It’s been a year of two parts for quite a lot of our practices, with challenging economic conditions in the first half of the year followed by a return of market confidence, and with that the return of transactional activity. That was true across the world.’
Sonya Leydecker, joint chief executive, Herbert Smith Freehills
Worlds to conquer
‘There are tremendous but different opportunities in developing and developed economies. When you look at individual countries, there are very few global firms that are national in that country – the US is a particularly good example. There’s not a single law firm in all markets. That shows you the great opportunities available. Global firms are generally very small compared to big four accountancy firms.’
Elliott Portnoy, global chief executive, Dentons
Emerging trends
‘In the medium to long term, we see developing economies offering a significant amount of opportunity for our firm. We’ve always been a firm that looked to expand in emerging economies – Middle East in the 1970s; Asia in the 1980s; Beijing in 1995. Our most recent expansion has been Indonesia. Certainly looking at what our clients are doing, those trends will continue.’
Malcolm Sweeting, senior partner, Clifford Chance
Asia boost
‘The economic situation in Europe has meant the level of outward activity from Europe, from the UK or elsewhere, is not as strong as it used to be. Meanwhile, Asia’s inward investment has been a significant factor. There has been a relative slowing in China, but it is still producing growth figures that the western world would be delighted to have.’
Sean Connolly, London senior partner, Mayer Brown
China still key
‘The last fiscal year saw us open offices in Shanghai and Seoul. We needed to be in Asia for UK, US and European clients who have interests in the region. The new offices inevitably affected our financials, but these are long-term investments in the firm’s future. Most of our clients are looking to expand their business in China, and with these offices we’re able to provide key support in areas such as public policy, market access, life sciences and anti-corruption matters.’
Timothy Hester, chair of the management and executive committees, Covington & Burling
Meeting expectation
‘What we’re seeing is simply the Hogan Lovells combination delivering. We see the results reflecting what we’ve been feeling for some time, but there’s lots of hard work ahead. Client expectations have changed. They continue to raise the bar. They want law firms to think innovatively in how they provide services. There’s an expectation to deliver on budget and have the intensity of management that allows the clients to understand how the project is proceeding. Law firms will either adapt or suffer.’
Steve Immelt, chief executive, Hogan Lovells
Deal flow
‘Corporates globally have cash hoards after avoiding M&A during the economic uncertainty. We’re seeing a lot more big-ticket acquisitions. That’s the one thing happening right now that differentiates this year from others.’
Creighton Condon, senior partner, Shearman & Sterling
Increased efficiency
‘Allen & Overy has been focused on efficiency and that has led to an increase in profits. Our Belfast office was a two-year project and is now contributing to the bottom line. The first two years were about the basic investment, a work in progress. After two years it has started to deliver its benefits and has improved our margins, helping us achieve £11m in cost savings in London.’
Wim Dejonghe, global managing partner, Allen & Overy
Western rebound
‘No doubt the Asia market is over-lawyered. Firms are not as financially successful in Asia as they hoped so are pulling back, especially given the strength and the rebound of the US and European markets. I’m not surprised there is a lot more focus in the west. Supply and demand is not balanced in Asia – it is more of a problem in China because there is less over-lawyering in other Asia markets.’
Barry Wolf, executive partner and management committee chairman, Weil, Gotshal & Manges
Game face
‘We’ve seen a pick-up in business levels in 2013 and the first quarter of 2014, but work is not back to pre-crisis levels, so you have to be on your game. Our approach is to hunt in packs with teams pitching to clients. We have to be on our toes all the time or other firms will take our clients.’
Drew Scott, London tax head, Sidley Austin
Buyers’ market
‘Clients have always wanted more for less, but now they have the leverage to get it. It’s a buyers’ market for legal services. There are more lawyers around, so they have more choice. There is tremendous pressure on rates – we will continue to see developments in alternative fee arrangements.’
David Chapin, managing partner, Ropes & Gray
Still uncertain
‘Even in those economies which have seen growth in recent times there is a degree of vulnerability. [These are] still very uncertain times, very hard to predict beyond six to 12 months what the market is going to do. There is a lot of competition for the work and we are going to see new entrants coming in. The big four are making noises so I think an already crowded market is going to become more crowded and with some of the new competitors they may come in and do things differently, which means we are going to have to raise our game.’
Bryan Hughes, chief executive, Eversheds
United worldwide
‘We operate a single profit pool – no disincentives, no issues on which office is servicing the client because it is in a separate profit pool. The problem these rapidly globalising firms face is clients don’t want to be dealing with several different firms under one name.’
Peter Hasson, chief executive, Clyde & Co
Bank on it
‘One thing we all know is that big banks will always think of new ways to make money and every once in a while they will cross the line. There will always be opportunities to represent clients against banks, including banks themselves – we have even been doing some bank-on-bank cases.’
John Quinn, managing partner, Quinn Emanuel Urquhart & Sullivan