Pretenders to the throne – the regional players with national ambition

While national leaders have lavished attention on their international and City practices in recent years, a handful of mid-market regional players have made a dramatic attempt to seize chunks of their ill-defended domestic empires. Legal Business looks at five of the most likely challengers

Let’s be plain – these law firms had been written off. Regionally-driven, stuck in back-waters and unglamorous, commoditised areas of law such as insurance and employment – there was a sizeable band of firms left behind by the emerging national and international forces of DLA Piper and Eversheds and with little apparent chance of bettering their fortunes.

DWF, Shoosmiths, Bond Pearce, Dickinson Dees, Weightmans, Mills & Reeve – the names were once viewed as a roll call of also-rans, firms that may have had a solid but unexciting future if they stuck in discrete regional arenas but not much else and almost certainly a declining impact on the evolving national legal market. Such firms rarely received calls from the media – they rarely had much to talk about, truth be told. They had neither the flair or drive of a Halliwells, the class of a Wragge & Co or the scale, ambition and expenses budget of an Eversheds. They were nowhere. Or Liverpool.

Except it hasn’t quite worked out that way over the last five years. With national leaders turning their attentions increasingly towards securing cross-border credibility, the UK market under intense pressure and many mid-tier City firms in a drift, this band have become some of the most active and daring players in the UK.

This has seen them push through a period of aggressive expansion and a string of high-stakes deals as they move to stake out domestic space vacated by larger rivals. Last month saw renewed evidence of this dynamic, with the creation of Bond Dickinson – a combination of Newcastle-based Dickinson Dees with Bristol-headquartered Bond Pearce, while Mills & Reeve announced the acquisition of Manchester stalwart George Davies Solicitors.

But such developments are nothing compared to DWF – the poster-child for the hungry regional challenger. It has completed five acquisitions in the last 18 months alone, culminating this year in its takeover of stricken Cobbetts, creating a £200m, top 25 practice. Ten years previously, the firm generated revenues of less than £25m.

The logic behind the recent spate of moves is understandable. Despite globalisation, the UK at around £25bn remains a huge commercial market to be exploited and the gloomy economy has created new opportunities for advisers with lower cost-bases and an affinity for the commoditised, volume services that still make up large parts of bluechips’ legal procurement.

This point is conceded by Eversheds managing partner Lee Ranson. ‘There are a number of firms such as Eversheds, DLA Piper and Pinsent Masons which come from that national heritage and are moving more internationally and offering a global package,’ he says. ‘While the UK is still a very important market for us, which we’re not ignoring, clients are looking more internationally.’

But to assume that firms such as Eversheds are happy to give up sovereignty in core UK markets would be a mistake. ‘None of us have abandoned the national UK legal market. We’re still one, two and three in the key centres and we’re not going to relinquish that,’ argues Ranson.

If challenging larger players won’t be easy – though not impossible – there is another dimension at play. In a fragmented and turbulent market, the sustained run of deals in the lower mid-tier reflects a belief that size and the related brand reach and economies of scale will increasingly be vital if top 100 law firms are to survive, let alone thrive. Ambition and fear – two powerful motivating forces for change – are at play.

‘There’s a massively more competitive landscape and firms are generally feeling like they need to be bigger, more robust, have better services, and deeper pockets,’ says one managing partner of an international firm. ‘Scale gives them protection. It also gives them the opportunity to make more choices of where they are in the market. This gives rise to mergers.’

And whatever critics say about these uppity wannabes – it is beyond dispute that this band has become a far more influential force in the world’s second largest legal market. Here we look at five firms that have been making substantive steps to become major national players – Bond Dickinson, DWF, Weightmans, Mills & Reeve and Shoosmiths – and assess their relative progress and prospects.

When news broke last autumn that Bond Pearce and Dickinson Dees had agreed to create a £90m national firm, questions about the union came quickly.

‘What is the logic of a Bristol firm and a Newcastle law firm coming together?’ asks one managing partner at an international firm. ‘It can’t be in the combination of these places – it must be what they’re trying to build for the future. It means they’ve got double the investment and double the size, so bumps in the road are easier to take. Scale gives them a bit more buying power. Day one doesn’t achieve much, it’s what they do from that platform.’

The scale point is conceded by managing partner Jonathan Blair and in truth both firms have struggled to sustain growth over the last decade. Certainly, a deal was needed if the legacy firms were going to have any hope of achieving their goals. Dickinson Dees had in place its ‘20:20 Vision’, a strategy that stated that the firm wanted to be among the top 20 firms by 2020, while Bond Pearce had a ‘Green Arrow’ plan to target major growth.

‘If we wanted to be a top 20 firm we were not going to achieve that organically,’ says Blair. ‘After Lehman [collapsed in 2008], the legal market changed quite dramatically. If a law firm was going to succeed it would have to move up the pecking order quickly; you have to do something like what we ended up doing and our partners were very clear about that with us.’

Dickinson Dees came to the merger after a troubled recent period for a firm that was once established as regional royalty alongside Wragge & Co in Birmingham and Bristol’s Burges Salmon. Ten years ago, ‘Dickie Dees’ cast a long shadow over the North East thanks to a strong partnership and enviable client base. In the late 1990s it had easily repelled Eversheds’ attempt to challenge it on its Newcastle home turf.

Things started to go wrong with the 2007 collapse of Northern Rock – one of the firm’s largest clients. Despite being best known for high-end work, Dickinson Dees had built up a sizeable bulk arm handling mortgage-related work that was savaged by the credit crunch. Having rapidly grown revenue to £60m in 2008, nearly doubling income over five years, Dickinson Dees faced a long-term decline in turnover, posting £46.1m in 2012. By 2010 the firm had announced its fourth redundancy consultation since the credit crunch gripped the market, taking a major toll on the North East economy.

Of all of the elite regional players, Dickinson Dees fell the most through the 2000s, even by the yardstick of a difficult period for such firms. The status quo must have looked strategically unappealing.

Of course, the £90m question is whether a union with Bond Pearce was the right answer to Dickinson Dees’ dilemma. One management figure at a national firm says: ‘Dickinson Dees and Bond Pearce are both good firms but it seems they have gone to opposite ends of the earth to expand. They need to fill the gap in the middle – perhaps a strong Midlands-based firm like Gateley would be a nice addition.’

The point is understandable – Bond Dickinson now has offices in Aberdeen, Bristol, Leeds, London, Newcastle, Plymouth, Southampton and Tees Valley – nothing in the Midlands and the North West. The suggestion of adding Gateley to the mix is an interesting proposition – the combination would add a credible collection of over 450 fee-earners in the Midlands and Scotland, adding to Bond Dickinson’s existing Aberdeen arm. The combined revenues of Bond Dickinson with Gateley would be around £150m, taking it much closer to the coveted top 20 spot.

Bond Pearce had positioned itself far from its Plymouth roots, bringing in the majority of its revenue from all over the country. The firm has been no stranger to high-profile merger discussions: in 2012 the firm had negotiations over a tie-up with Scots leader Maclay Murray & Spens that ultimately fizzled out. Given the current pressure on Scotland’s leading firms and the added complication of Anglo-Scots mergers, a union with Dickinson Dees looks a more promising move in the short-to-medium term.

But reprising those discussions could be an option for Bond Dickinson and Maclays now that the firm is in a stronger negotiating position and Maclays continues to feel the pressure in its own market, particularly now that its arch Glasgow rival McGrigors is part of Pinsent Masons.

One obvious factor in favour of the Bond Dickinson tie-up was comparable financial performance, with profit per equity partner (PEP) of £226,000 at Bond Pearce, against £298,000 at Dickinson Dees. Both also have similar turnover and (relatively thin) profit margins in the last few years, with Bond Pearce’s hovering around 15% while Dickinson Dees’ has remained static at 18%.

However, while profitability is hardly impressive, Blair argues that the firm is well placed financially. ‘In terms of profitability we’re at a good level and want to be better,’ he says. ‘The obvious area is around top-line growth but this is a client-driven exercise.’

Certainly if the merger equals better instructions the logic of the union becomes more compelling. That point is inevitably as yet unproven, though the firm makes much of winning a place on Network Rail’s significantly reduced legal panel in April (Bond Pearce was effectively retained, having been on the panel previously).

Blair adds that the firm’s focus will be on a sector-driven strategy looking at seven key sectors at the core of the UK economy. These are energy; transport and infrastructure; retail and fast-moving consumer goods; chemicals and manufacturing; private wealth; real estate; and financial institutions. Looking at the latest Legal 500 rankings for both firms, Dickinson Dees has top-tier rankings across most of these sectors in the North chapter, while Bond Pearce has a strong showing in most sectors, with the exception of private client, in the South.

The firm is currently working on integration, with former Bond Pearce managing partner Victor Tettmar taking on a new executive partner role to oversee the process. (The firm had already drawn up a new ‘constitution’ ahead of the union’s formal launch by Dickinson Dees partner Jamie Pass and Bond Pearce projects specialist Nick Barwood.) The firm wins some praise for swiftly moving towards a unified management structure, an issue that bedevils merger-of-equal deals. The firm will look to integrate their varying partnership models later this year.

Bond Dickinson has also just signed a deal to take on 20,000 sq ft of space in Lawrence Graham’s More London office to combine their local operations – giving the firm a high-profile focal point for its City practice.

Given some defined and related areas of sector strength in transport, energy and infrastructure and strong reputations in respective regional markets in which they face only modest competition, the deal looks promising. Certainly, both firms needed scale to have much prospect of building a genuinely national practice and a legacy of poor growth at both firms suggests it was high time to try something substantive.

The biggest question will be whether two legacy firms with quality practices and some genuine sector clout but limited momentum can effectively reboot their business. The next two years will be critical and likely unforgiving.

If there is one firm that has come to define the new breed of aspirational regional challenger, DWF is it. Even the name (it ditched the brand Davies Wallis Foyster in 2000), recalls the thrusting style of the firm it is increasingly compared to, DLA Piper. Whether the North West-bred firm – originally known for unglamorous areas like volume insurance and employment – can really replicate DLA’s dramatic 1990s ascent is open to debate but that the question would even be raised speaks to the change in DWF’s fortunes.

Even before its latest wave of mergers, DWF had pulled off a dramatic expansion under the leadership of Andrew Leaitherland, who was elected managing partner in 2006. Leaitherland had moved to streamline decision-making and harnessed his greater executive freedom to push forward an aggressive growth drive fuelled by lateral recruitment and bolt-ons.

It looked like the firm was finally pausing for breath in January 2012 when it walked away from what would have been its most ambitious deal yet – a merger with Manchester-based practice Cobbetts.

Instead, DWF was to embark on a five-firm acquisition spree, acquiring in a matter of months Newcastle’s Crutes, Midlands firm Buller Jeffries, Scots mid-tier Biggart Baillie and professional indemnity specialist Fishburns. As if this wasn’t enough, DWF returned to the now-failing Cobbetts this February to secure a take-over of the bulk of the firm and 419 staff in a pre-pack deal – the largest merger yet by DWF and one that would secure it an extra £40m in revenue. The net result is a firm with revenues in the region of £200m, enough to put it in the top 25 of the Legal Business 100. In 2001/02, DWF generated just £22.7m, the smallest of the firms we profile in this article. More impressively than just scale, DWF has with unprecedented speed absorbed five firms whose brands and client bases all had genuine regional clout.

As if to prove the firm is challenging the established UK players in key markets, it announced the hire of five new partners in real estate and social housing from Eversheds in Newcastle and Manchester in May.

No-one can deny that DWF has made huge progress but critics typically contend its practice is too focused on low-margin areas like insurance, has grown too quickly and that the firm is carrying too much debt.

Neutral observers would probably agree there is something to claims that DWF has not moved comparably up the food chain as it has swelled – though the Cobbetts and Biggart Baillie deals will bring better commercial and real estate practices. The firm expects post-merger debt to rise to £20m, which certainly still looks manageable. But given that the firm retains a tight equity and high practice leverage, it won’t have that much more room to run up debts.

‘It looks like Cobbetts in the sense that it has bitten off more than it can chew,’ says one managing partner of a national firm. ‘But if the market picks up then it could do well.’

Leaitherland bluntly shrugs off such criticism: ‘I couldn’t give a monkey’s. The execution of our strategy is an important differentiator – we don’t spend a lot of time standing around talking about things. We obviously think things through first but we get things done and build a lot of consensus by getting lots of people involved to get it over the line quickly.’

‘There’s been a strategic move towards a more international platform by the major UK firms,’ he continues. ‘There is a view that there is a greater level of return that can be generated through these international offices than possibly in mainland UK and that may reflect the level of investment firms have put into their infrastructure. As we have grown through lean times, we are in a good position in that we don’t have the same level of investment that we need to seek a return on, so we don’t have to just target the high-end work, we can also target the process-driven work that a few years ago all the larger now-international firms would have seen as their bread and butter.’

Leaitherland also recognises the importance of London and international expansion to the firm but says that getting its strategy right in London will require significant investment and needs to be done right. Wisely, there seems no rush to expand its 130-lawyer London arm.

‘There’s not much in London that ticks all the boxes, to be honest,’ he says. ‘Our strategy meeting coming up is going to be looking at how you do London and international properly, learning from the lessons of others and doing it in a way that you don’t dilute profitability.’

Of all the deals that Leaitherland has pulled off to date, Cobbetts was the most significant, giving DWF a cheap way of picking up some recognised talent in critical commercial practice areas, particularly real estate. There is consensus that the terms DWF secured thanks to the Cobbetts collapse – none of its partners have yet moved into DWF’s equity – make it a hugely promising acquisition (DWF paid £3.8m for Cobbetts’ work in progress to administrators KPMG while avoiding the firm’s liabilities).

‘The merger with Cobbetts was designed to push them more into the business law market,’ says one admiring rival managing partner. ‘To me, it’s a strategic business law play and it’s going to give them strength and depth.’

Leaitherland is keen to dispel the belief that DWF is all about insurance, pointing out that the firm’s three growth areas are real estate, insurance and financial services. That is where the significant investment will go, he says, be it through a merger, acquisition, lateral hire, organic growth or all of the above. ‘It’s not just about insurance,’ he insists.

That said, the Crutes, Buller Jeffries and Biggart Baillie acquisitions were very much about deepening national coverage for demanding insurance clients and, along with Leaitherland’s own practice area of employment, insurance remains DWF’s strong suit.

He concedes insurance clients push the boundaries of service delivery much harder than many other industries in terms of extracting value from legal spend. ‘Insurance clients led the way four or five years ago, maybe a little bit longer, in terms of procurement changes. It means you’ve got to work harder and smarter to compete in that sector,’ says Leaitherland.

There are signs of the firm moving to digest its run of expansion, with DWF last month announcing a redundancy consultation in Scotland affecting 12 fee-earners and secretaries. In March, the firm also cut 38 staff in its central services team after a post-Cobbetts redundancy consultation affecting 140 staff. But even if it must pause to integrate its prizes, the drive to grow seems undiminished.

What is interesting about DWF is the extent to which it has single-mindedly pursued the kind of expansion that worked well for DLA and backfired so disastrously for Halliwells and Cobbetts. It may be an inherently risky strategy but it can deliver in spades, especially for firms that can sustain the growth. In many ways, the firm looks well positioned for a turbulent, cost-conscious UK legal market.

Weightmans – Legal Business’s National/Regional Law Firm of the Year 2012 – is another practice that has expanded dramatically in the last couple of years, again driven by insurance as well as public sector.

‘Twelve months ago I would have said “definitely no” to more mergers,’ said then managing partner Patrick Gaul last autumn. ‘But we’ve got to start looking again. DWF has been grabbing things along the way. We’ve got to make sure we’re not left behind. There’s a lot going on.’

Those comments came after the firm saw revenues leap by 33% to £77m in 2011/12 after adding around 50 partners through its acquisitions of Vizards Wyeth’s insurance practice in April 2011 and Mace & Jones in Liverpool one month later. The firm has also just announced its results for 2012/13, with revenues now at £82m, up 6% on last year. But DWF has more than matched this ambition: its projected revenues now are well over twice that of Weightmans.

On 1 May, Gaul and senior partner Ian Evans were replaced by new managing partner John Schorah and senior partner Dan Cutts. The new executive is clear what needs to be done to build on the momentum of the previous few years.

‘We have a full-service commercial law firm with a strong presence in the insurance sector, which we will be continuing with,’ says Cutts. ‘Having successfully done two mergers, one commercial and one insurance, we are looking at all avenues to grow the business.’

However, Weightmans faces the much more difficult challenge of establishing greater strength in its commercial practice to ensure that it does not rely too heavily on the demanding, fee-sensitive insurance and public sector service lines. This is something that Schorah, who is a corporate and commercial partner, will look to address. Weightmans is eclipsed by smaller rivals in the North West for commercial work, such as Brabners Chaffe Street.

In March the firm announced that it would acquire the Manchester office and a small construction team in Glasgow from Semple Fraser, which entered into administration. While the scale of growth at Weightmans has been less impressive than DWF, Schorah argues that growing the business is not about attaining a certain scale.

‘Our focus is not that we want to be a certain size,’ he says. ‘Yes, there are target areas that we want to grow in, there are regions where we want to do that and that growth has to fit in with enhancing the client experience, improving the profile of the firm and making it better for stakeholders.’

However, a problem that plagues the expansion of any insurance-driven business, particularly through lateral hires, are thin margins: Weightmans’ profit margin was an unimpressive 12% last year, with profit per lawyer (PPL) standing at £20,000. DWF’s performance was not a great deal better: a 14% profit margin and a PPL of £30,000, although the firm’s tightly held equity means that any rewards for top partners coming into the equity are considerably higher (£408,000 to Weightmans’ £297,000). Gaul acknowledged last year that Weightmans needed to work on improving profitability and the new management team have noted this as a key priority.

‘The building blocks are already in place, the first year after the mergers was difficult but now we are coming out of that and we’re starting to see the return on investment,’ says Schorah.

Back in 2000, Weightmans was reported to be briefly in merger discussions with Hill Dickinson, a local rival in Liverpool. Hill Dickinson is now a well-established £110m firm and a dominant player in Liverpool but a merger of two North West heavyweights would create a £200m firm that can seriously challenge the national elite.

Mills & Reeve hasn’t struggled with national recognition in commercial practice areas, picking up Real Estate Team of the Year at this year’s Legal Business Awards for its work advising Trinity College on its landmark investment in a portfolio of 11 Tesco stores across the UK. The firm also maintains a commanding reputation for high-end work in its East Anglia turf and has built on its strength again in insurance, public sector and private client as well as deepening ability in corporate and real estate.

The firm first expanded beyond Cambridge, Norwich and London into Birmingham in 1998, before adding Manchester and Leeds simultaneously in 2008. Speaking to Legal Business in 2011, managing partner Guy Hinchley said: ‘The challenge for us in our forthcoming business planning cycle is to push on and further our scale and reputation in our newer offices.’ It’s taken its time, but the acquisition of George Davies Solicitors on 1 May is in line with that strategy, according to Hinchley.

‘We are really keen to strengthen our position as one of those big national firms,’ he says. ‘Given the expansion of other firms at the moment, we probably need to be bigger in two or three years’ time. We felt very specifically we wanted to consolidate around major centres, like Manchester, where we have a small office.’

The addition of Manchester stalwart George Davies adds round £7m in revenue to Mills & Reeve’s £69.4m, based on 2011/12 results, consolidating its position in the Legal Business 100 rankings, where it currently sits at position 47.

George Davies is a quality addition, a 75-year-old firm with particular strengths in private client, media and sport. This was no rescue package either: Hinchley says he had to work hard to convince George Davies to agree to the deal, noting that the smaller practice had rejected a previous approach from Mills & Reeve.

However, the pace of change for Mills & Reeve is arguably not fast enough. In 2008, the firm said it wanted to become a major national player with revenues of over £100m. While all ambitious forecasts have needed to be revised in the last five years, clearly more radical steps are required. In 1999, the firm flirted with a tie-up with Birmingham’s Martineau Johnson but in a rapidly consolidating regional market it faces a challenge to gain the scale to turn the firm from regional leader to genuine national contender.

‘We would consider a merger with a firm of the same scale but so far it hasn’t been right for various reasons, perhaps because the strategies don’t coincide or there’s a mismatch in culture,’ says Hinchley. ‘It is absolutely something we would consider in the future, but equally, we may well not. We’re not going to go headlong into finding multiple acquisitions, we want to do a really good job of consolidating with our colleagues first.’

The desire to challenge the major firms, offset by a reluctance to over-stretch, is a slightly contradictory strategy. ‘There is an opportunity for a national law firm that is very high quality and that hasn’t moved its attention to an international base or to a London base,’ he says. This is probably true but Mills & Reeve will come under pressure to pursue a more aggressive strategy if it is to truly move beyond its heartlands. The wait-and-see strategy is less viable now than only a few years back.

While Shoosmiths has had a difficult recent period, it wasn’t that long ago the firm occupied pretty much the space that DWF has so emphatically occupied – the ambitious national practice moving to use consolidation and tightly-run volume businesses to forge a nationally potent business.

Under previous chief executive Paul Stothard, the firm had expanded dramatically and successfully through the boom, only to see its practice badly hit during the downturn by its reliance on volume work and its high partner/fee-earner leverage. Stothard stood down early in his third term and the firm was to make around 100 staff redundant and push through a pay cut during 2009.

Veteran litigator Claire Rowe stepped into the breach in August 2009 as chief executive and by consensus is viewed as steadying the ship. The firm has avoided expansion since launching in Manchester in early 2009 but last year spread north of the border through a tie-up with 13-partner Archibald Campbell & Harley that went live on 1 October.

Rowe says that the Scots deal was a response to client request and won’t be repeated: ‘Those clients who we are on panels for said: “We like what you’re doing in England, it’s a shame you can’t do it for us in Scotland.” We would not be looking to do the same anywhere else in the UK because there isn’t that dynamic elsewhere.’

But with revenues of £84m last year – the fourth successive year of declining turnover – Rowe says that the focus is on consolidating existing offices rather than building new ones.

‘Our focus at the moment is getting to the right strength and depth in those locations. We’re not looking at other locations because our expansion is very specifically client driven and none of our clients wants it at the moment,’ she adds.

As for a full-scale merger similar to that of Bond Dickinson, she says: ‘If an opportunity arose where two plus two equals five, then it’s something that I would consider but clients are more interested in strength and expertise in these areas rather than size.’

If anything, Shoosmiths might need to look at reconfiguring its office line-up rather than adding to it. The firm’s roots lie in a strong volume debt recovery and insurance litigation business run out of low-cost locations such as Northampton and Basingstoke. Over the years, the firm has moved away from the volume business and more into mainstream corporate and property work, bundling the commoditised volume work into its Access Legal brand in 2010 and completing a total rebrand last summer, where it made a clear move to position itself as a heavyweight commercial law firm.

In July last year the firm made a further 86 staff redundancies, mostly affecting its motor claims team in Basingstoke. But while most of its more obscure offices are making money, strategically the firm needs to highlight its strengths in its main commercial centres – Birmingham, Manchester and London – if it is to be viewed as a major national player.

‘We will look to review other locations – we will always look at productivity – but Basingstoke was a very specific decision that we made to review our business and the personal injury practice,’ says Rowe. ‘We just wanted to focus on commercial and move away from the volume area.’

In an interview with Legal Business in 2010, a year after becoming chief executive, Rowe said the aim by the end of her first term in 2012 would be to establish Shoosmiths as ‘a leading UK national law firm’. It’s still an opportunity that she believes is there for the taking, because other firms have taken their eye off the ball.

‘Being a major UK national law firm – the words are important – focused on the UK market, is a significant opportunity,’ she says. ‘We are picking up real estate and commercial work from UK businesses who are looking at their options. These clients feel they’re not being as well looked after by other firms who are more concerned with international opportunities. That’s the space we are looking to occupy.’

As yet there is little sign of Shoosmiths regaining its expansionary form, a shame for a firm that once seemed set to harness the Legal Services Act landscape to build a national retail brand via Access Legal while expanding its institutional client base. The firm’s current struggles are a reminder that the constraints of the national model – which relies often on leverage and tightly controlled cost bases – can easily tip from driving a firm through high growth towards holding it back.

Heavy hangs the crown

Each of the aspirant firms mentioned in this article are, to varying degrees, hunting for scale and market share. It may not be a clever strategy but the logic remains hard to refute. There is mounting evidence judged by the performance of the legal market over the last decade that there is substantial commercial advantage to national UK practices in pushing revenues past £100m.

Such growth provides economies of scale, a cushion against market shocks and makes it easier to back strategic expansion. It also makes it easier to project the brand to corporate clients in an industry in which plcs are slowly but surely shifting towards smaller and more process-driven panels. Scale doesn’t in itself guarantee momentum or strategic clarity but, all things being equal, it provides an edge over smaller competitors. In a highly fragmented industry such advantages can eventually make a big difference; neither Eversheds nor Pinsent Masons can be said to have entirely hit their stride in recent years but they have progressed in part on the back of size and reach.

And in essence, the basic analysis of this group: that there is a compelling place in the market for large, domestically-focused advisers as large national leaders focus on the City and globally, is a rare case of a truism that appears to be actually true. A valid criticism of national leaders is that they have often failed to reconcile how their regional cash cows would strategically sit alongside more expensive investments. Too often they have failed to imaginatively use their own lower cost bases to their full commercial advantage, instead aping the models of City rivals. If the original ‘disruptive’ pitch of the national law firms has been lost, it looks entirely possible that a DWF or two will succeed in putting on that (very lucrative) crown.

As such, it appears an astute move that firms like DWF and Bond Dickinson have been conservative about London growth, being wary of the problems that beset their larger rivals.

Ranson at Eversheds concedes that DWF has captured the imagination by emerging from the pack and pursuing an aggressive growth strategy. ‘Provided it’s quite ruthless with that approach, in terms of putting its own personality on the new offices, then it should be successful,’ he says. ‘But this strategy will eventually hit a glass ceiling; it will have to take market share from firms, those that have been less successful in the current climate.’

The path walked by such regional challengers can be risky (at least it is if it is pursued with enough drive to get anywhere). It is surely not a coincidence that the two largest legal collapses the UK has ever seen were both ambitious firms from this camp that over-reached. But the same market also in DLA Piper bred by some measures the largest law firm in the world and the biggest single transformation in the global legal market over the last 20 years.

There will likely be one or two more failures over the years – but quite possibly one or two more transformational successes. That’s not a claim you can make of many City mid-tiers these days. However this ultimately plays out, that such ‘lowly’ firms could reshape this legal empire seems a very considerable achievement. LB

francesca.fanshawe@legalease.co.uk

mark.mcateer@legalease.co.uk