It is a recurring theme in Legal Business commentary that the received wisdom and forecasting for the profession do not age like fine wine and 2016 is proof once more that no one knows anything. Take the Bar, which has supposedly been in the last-chance saloon for a generation and yet in the commercial sector keeps thriving.
Looking back at a piece I wrote back in 2012 called ‘The Burberry Bar’, at best I’d be able to give myself a B minus for prognostication. The article argued the Bar would continue to thrive on the foundation of two factors: firstly, being advocacy specialists, a niche that is not realistic for law firms to build, and, secondly, attracting better candidates than leading law firms. The passages about quality and specialism stand up fine – as does the argument that the clerking model of motivated and well-paid staff is a key part of chambers’ success. But the assumption that chambers would evolve further into fully fledged commercial entities more comparable to a boutique law firm and increasingly deploy alternative business models proved well wide of the mark (the piece was written as full implementation of the Legal Services Act dawned). The logic that entity-driven policing of the Bar and the steady increase of direct access would support that shift seemed logical, particularly in the case of the latter, which has continued its steady march. But it was just wrong. As we explore this month, the traditional sets at the top of the City disputes market have instead been tightening their grip. In an age in which elite sets can generate £60m a year and charge out top silks for more than £1,000-an-hour, far from increasing chambers’ contributions to fund slicker infra and marketing support, the best sets can hold down their dues. And the clerking model, which ten to 15 years ago, looked to be on the way out has instead reasserted itself.
The arbitration boom and the increasing unwillingness of senior silks to go to the bench has further strengthened London’s top sets.
The exception to this rosy picture is mid-tier sets, which are struggling to retain their position in a soft disputes market in which top sets are taking a bigger share of the cake (many of London’s elite sets now generate twice the turnover they managed a decade ago) and nervous silks are increasingly likely to set out to another home. 11 Stone Buildings dissolved last year, and on current form several sets are under significant pressure.
Meanwhile, as traditional models confound the critics, the last 18 months have been a poor run for the New Law brigade. Parabis, the first legal player to secure substantial private equity investment, last year crashed into administration, Slater and Gordon’s impressive momentum has been halted by regulatory upheaval and the troubled acquisition of Quindell, while two other standard bearers, Co-op and QualitySolicitors, have faltered. True, the contract lawyering and managed services pioneers of Axiom, Lawyers On Demand and Riverview Law have gone some way to justifying the rhetoric but overall the brave new world of law looks eerily familiar. There has been some innovation in law, but much of what is being touted currently looks increasingly, well, old. Given how well tradition has been faring against the shiny new, it’s not hard to see why.
For more analysis of the Bar, see ‘Set in stone – testing time for mid-tier sets as elite London sets tighten their grip’