LB100 Overview: Apocalypse soon?

red sky

As Legal Business was unpacking the 2018/19 financial results of the UK’s top 100 law firms, the Office for National Statistics reported that Britain’s economy had shrunk for the first time since 2012. The 0.2% fall in output in the second quarter of 2019 was the latest in a series of ominous signs for a nation that appears, at the time of writing, on course for a cliff-edge exit from the European Union amid a chaotic political landscape and falling currency.

As Legal Business went to press, a row was raging over government moves to prorogue Parliament in the run-up to the 31 October deadline to exit the EU, threatening constitutional wrangles and a no-deal Brexit. A nation famed for exporting democracy, its strong institutions and a stable business environment is looking more Banana Republic than Britannia resurgent by the day. Continue reading “LB100 Overview: Apocalypse soon?”

LB100 Second 25: A brooding gloom in sunshine

Heart of Darkness-style Thames

On paper, an 11% jump in average revenue to £135.5m for the second 25 looks like a great leap forward from last year’s 5% increase to £122.6m, and this rate of growth compares favourably to the top quartile’s 9% hike to £830.7m. But as usual the figure must be taken with a pinch of salt.

Tempering excitement that the group is outstripping the top 25, Womble Bond Dickinson (WBD)’s transatlantic merger has inflated revenue and catapulted it into the top tier, squeezing out last year’s top-25 entrant Fieldfisher. Swapping WBD for Fieldfisher means that around £140m is artificially added to the £3.39bn total revenue of the group. Without it, average turnover would be around £130m – a more muted 6% increase. Continue reading “LB100 Second 25: A brooding gloom in sunshine”

LB100 Second 50 – City and Boutique: The adventurers and the settlers

Cuban-style City

While the UK lurches through a Brexit drama entirely of its own making, mid-market and boutique London-based firms have focused on diversifying their services or using their unique offerings to differentiate themselves from the pack.

The combined turnover for the 18 City firms that sit in the second 50 of this year’s Legal Business 100 (LB100) is £839.7m, an increase of 8%. Average revenue increased 15%, reaching £46.7m. But, inevitably, the top-line growth of the firms in this group is distorted by some sizeable merger activity. Two of those firms have seen large jumps in revenue and headcount: Gordon Dadds, which after acquiring a large chunk of Ince & Co in 2018 and following its initial public offering (IPO) in 2017 – has seen turnover jump 68% from £31.2m to £52.6m under its new Ince branding (see case study). Bircham Dyson Bell, which merged with Reading stalwart Pitmans in December 2018, saw turnover climb from £33.7m to £52m as a result – a spike of 54%. With that level of artificial top-line growth, profit levels are hard to sustain. A 4% growth in the number of equity partners across the group has contributed to average profit per equity partner (PEP) only moving up 3% from £416,000 to £427,000. Continue reading “LB100 Second 50 – City and Boutique: The adventurers and the settlers”

LB100 Second 50 – Regional focus: Crawling on a razor

Cuban-style Birmingham

Smaller regional and national firms have gained ground on their London rivals in this year’s Legal Business 100 (LB100) after years of the productivity gap widening in favour of the City. And, as some of the strongest performers from the 32 regional firms in the 51-100 bracket have shown, a big part of the shift has come from a growing trend of partnering up with law’s global elite to effectively provide northshoring outposts for blue-chip clients.

Following a muted period and just 1% growth last year, the group’s collective revenue rose a solid 7% to £1.36bn in 2018/19, for an average revenue of £42.4m. The productivity per capita at regional firms, traditionally weaker than London counterparts, also grew where City firms lagged this year, closing a gap that had been steadily widening. Revenue per lawyer climbed 9% to £197,000, compared to an almost flat £267,000 in London. Profit per lawyer stayed flat at £38,000, against £78,000 in the City, which was down 6%. Profit per equity partner (PEP), however, slid 5% to £339,000. Continue reading “LB100 Second 50 – Regional focus: Crawling on a razor”

Nice problems to have – Where now for Stephenson Harwood as veteran chief hands over?

Sharon White

With longstanding chief executive Sharon White bowing out, Stephenson Harwood can look back on a strong ten years. Thomas Alan assesses its record and prospects

‘My understanding is the Stephenson Harwood of 2002 needed a new strategy because it was doing very badly,’ reflects corporate head Andrew Edge, looking back on the City thoroughbred’s much-publicised problems. ‘It was losing people and the finances were extremely precarious.’ Continue reading “Nice problems to have – Where now for Stephenson Harwood as veteran chief hands over?”

The Bar – Happy when it rains

Sonya Tolaney QC

Like the rest of Britain, barristers at the commercial Bar are impatiently waiting for some clarity over Brexit: it is a paramount concern because they want London to retain its position as the premier location for international business disputes. But more than three years on from the referendum result, the much-debated uncertainty has not yet had a significant impact on the volume or value of their work.

‘The commercial Bar is thriving at the moment and I expect it to continue to thrive,’ says Sonia Tolaney QC, chair of The Commercial Bar Association. ‘Dealing with the still-unknown consequences of Brexit presents a challenge. But although there has been a period of real uncertainty, the truth is that the health of the commercial Bar is very strong.’ Continue reading “The Bar – Happy when it rains”

The in-house debate: Run the risk

Manu Chopra

Is the job of the legal function to be the ringmaster and cheerleader, managing risk and compliance effectively within an organisation? Should it have to win over the hearts and minds of the board just as much as those on the front line? These were the main discussion points of a recent panel debate between nearly 20 in-house lawyers and private practice risk management specialists gathered at Mayer Brown’s London offices this summer.

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David Harrison, Mayer Brown: A common challenge across practice areas is how to move away from historical perceptions of compliance and risk – that this is for the lawyers and could get in the way of the business, with the result that it’s underfunded. It often takes a crisis, typically an investigation or a major breach, for significant resources to be deployed. Continue reading “The in-house debate: Run the risk”

New players and funding prompt evolution of disputes but City leaders adapt well

Damien Byrne Hill

‘We’ve disrupted the market – everybody knows about us now,’ says Quinn Emanuel Urquhart & Sullivan London co-managing partner Ted Greeno of the US firm’s inexorable rise in the City.

The ex-Herbert Smith Freehills (HSF) partner, himself one of a string of high-profile recruits Quinn Emanuel made since its London launch in 2008, has a point. The disputes-only powerhouse now counts some 85 full-time partners and associates in London – a larger team than Slaughter and May’s litigation offering and not far off the size of Clifford Chance (CC)’s muscular City practice (see below). Continue reading “New players and funding prompt evolution of disputes but City leaders adapt well”