Coming off the back of a 2015 that saw a more robust deal market and greater levels of activity in the real estate sector, the 2016 edition of The Legal 500 UK reflects a legal market which has not experienced this level of growth since 2008.
Our coverage of the UK regions illustrates the divergent approaches firms have taken to achieve that growth. Firms with a broad national reach sit hand-in-hand with advisers that have chosen to focus on a single-site approach in many areas.
Consolidation has also been a pervasive theme across the UK legal industry; at the time of writing, the ink on the merger deal between CMS Cameron McKenna, Nabarro and Olswang has barely dried. Once the union completes, the combined practice will be the world’s sixth largest by lawyer headcount if you count the wider CMS grouping and the sixth largest in the UK by revenue.
The key for successful law firms has always been to balance expansion with profitability. Glance at the latest edition of The Legal 500 UK and it is easy to see the increased competition among firms in London and nationally: US law firms continue to enter the London market at a competitive pace, with Cooley and Jenner & Block two of the latest to feature in our UK edition. Brexit may ultimately recast the strategies of US law firms, but for now their aggressive City hiring policies, particularly in the private equity and leveraged finance arenas, have already reshaped the world’s second-largest legal market.
The Legal 500 UK rankings are driven by strategically important areas for clients and how law firms react to those concerns. Anticipating and mitigating risk in all areas of business has been a core focus – globalisation drives more complex supply chains and the pervasiveness of digital communication means misuse of information is harder to control. Reputations are harder to protect. Our data protection and reputation management sections are designed to reflect the growth of client demand for these disciplines. In future editions, we will be looking to introduce new sections to further address concerns over risk management and corporate governance.
Once seen as lacking the sophistication of law firms, the UK Bar continues to modernise, with chambers investing in branding, business development and technology in recent years. More chambers have introduced intranets to improve internal communication, while externally, sets have been using novel marketing initiatives to promote their wares. For example, in September, Matrix Chambers launched a podcast series on international arbitration, and earlier in the year Fountain Court Chambers launched a much-touted cyber fraud video, promoting expertise in one of the fastest-growing disputes disciplines.
As chambers identify emerging product lines, risk and regulation is the common thread; financial services cases and their increasing crossover with criminal law have provided fertile ground for instructions. As a result, many criminal chambers have diversified into this area, as well as health and safety regulation, proving to be more lucrative options for those hit by legal aid cuts. Data protection is another growth market for the Bar, and The Legal 500 UK 2016 London rankings in this segment were larger than ever before, now featuring seven chambers. Although 11KBW continues to dominate the field, barristers with expertise in defamation and privacy law have been working hard to build reputations in this area since the drop-off in libel trials.
As chambers grow in size, mergers remain a key feature of the UK Bar. In 2016, 3 Stone Buildings merged with Thirteen Old Square to form Three Stone, a commercial chancery set in London. Shortly after, regional leader St Philips Chambers and London and Singapore shipping set Stone Chambers joined forces to create St Philips Stone Chambers, the second-largest set in the UK. Despite pressure on mid-tier and publicly funded sets, the Bar continues to defy predictions of its decline.
The battle goes on.
Alexander Boyes is UK solicitors editor, and Hayley Eustace is UK Bar and Asia-Pacific editor for The Legal 500.
