Bangs and whimpers – LB100 performance is a lot weaker than it looks

l b 100 logo

In the wake of the banking crisis, some commentators claimed the legal industry was set for a bloodbath that would sweep away 10,000 solicitors’ jobs from a flabby trade. As so often, the profession defied the critics, handling its post-Lehman reboot with assurance. Now, after posting on the face of it impressive numbers for 2016/17 in the shadow of Brexit and two major electoral upsets, there is talk of the resilience of the industry. The Legal Business 100 (LB100) has, after all, grown from £12.25bn to £22.06bn over the last decade and this year the group at long last surpassed its record PEP of £703,000 set way back in 2008.

And yet scratch the surface and there is much cause for unease. A good chunk of the long-term growth of the UK’s largest firms is due to consolidation, while the 2016/17 results have been hugely flattered by currency movements. Taken as one year, the numbers are respectable, but the long-term view is ominous, particularly for the City’s traditional leaders. Continue reading “Bangs and whimpers – LB100 performance is a lot weaker than it looks”

What ails Freshfields? Time is running out for ‘The Last Champions’

edward braham and chris pugh

The headline of the last lengthy piece Legal Business carried on Freshfields Bruckhaus Deringer said it all: The Last Champions. While there is no doubt that the Magic Circle has faced huge challenges asserting itself since the banking crisis, for many Freshfields was the member of the club with the best prospect of securing its place in the global elite.

But the City giant will be faring much worse on the profession’s saloon bar test if it keeps generating headlines like this summer, notably the news in July that co-managing partner Chris Pugh was stepping down less than halfway through his term. This surprise announcement came in the same month as financial results showed Freshfields being comprehensively outclassed by its City peers. Freshfields’ revenues have grown by just 17% in five years and the firm has been a fitful performer for nearly a decade now. While the metrics look better in profitability and revenue-per-lawyer terms, Freshfields has certainly not outpaced London rivals even on its core targets. Continue reading “What ails Freshfields? Time is running out for ‘The Last Champions’”

Associate pay smoke screen: it’s fooling no-one

Dollars, currency

Associate pay used to be simple. Lockstepped and transparent to the nth degree on both sides of the Atlantic, you knew exactly where you stood and exactly when the legal market was overheating.

There were obvious downsides to such transparency. Back in the late 1990s/2000s boom, a salary war triggered by Palo Alto law firms within weeks translated into huge hikes in New York. Soon enough London followed when SJ Berwin announced 25% pay hikes that spread through the market like wildfire. This was the first age of the online message boards, which further stoked the inflationary pay cycle. Continue reading “Associate pay smoke screen: it’s fooling no-one”

The last word: A period of drama

jeremy hoyland

From living with Brexit to harnessing technology, Legal Business 100 leaders state what must be done to thrive


‘We’ve been building on our strengths and worrying less about the things we don’t do but other firms do. We’ve been forced to make choices that we didn’t have to ten years ago because it isn’t viable anymore to do everything or pretend to do everything. Not even the Magic Circle can do that. It is about identifying where you want to play and focusing on that.’

Jeremy Hoyland, managing partner, Simmons & Simmons Continue reading “The last word: A period of drama”

Magic Circle playbooks in Europe are full of contradictions

To recap as the UK tiptoes towards banana republic territory in the wake of last month’s inconclusive, prediction-defying general election: City professionals face the prospect of an unsteady government negotiating a logistically-epic exit from the EU with an uncertain agenda against a much larger and better prepared counter-party. That is until the next general election in perhaps the autumn.

But let us put politics to one side and assume that a form of substantive Brexit is happening. Where does that leave top London law firms with such ominous clouds hanging over London as a finance and legal services hub?

Continue reading “Magic Circle playbooks in Europe are full of contradictions”

Answer to law firms’ social ills is not another league table

Have we reached peak aspirational employer league table yet? From the perspective of the legal industry we certainly should have, given the trend in recent years for the profession to turn up with improbably high rankings in a proliferating range of ‘best employers for…’ tables.

Were an alien to descend to earth and judge the industry on the basis of these rankings they would conclude that the profession had cracked social mobility, gender diversity, gay-empowerment and quality of life… all the while generating a tonne of money.

Continue reading “Answer to law firms’ social ills is not another league table”

A grinding year for the Global 100 as US leaders assert dominance

Casting an eye over the results for the world’s 100 largest law firms, 2016/17 has been the definition of grinding out a result. Not a pretty result at that.

The group as a whole hiked revenues 3% to $98.82bn, pretty much tracking the increase in lawyer numbers. In part due to the strength of the dollar, there are some surprising results. The number of $2bn-plus law firms has fallen from ten to eight (thanks to Freshfields Bruckhaus Deringer and Linklaters). The number of $1bn-plus firms falls from 35 to 34. Consolidation continues to be a force in the industry but almost exclusively in the global mid-tier, not its upper echelons.

Continue reading “A grinding year for the Global 100 as US leaders assert dominance”

The last word: Global horizons

‘Recent events have not helped the UK’s Brexit negotiating hand – or foot, which now sports a large bullet hole.’

Andy Ryde, Slaughter and May


‘There has been significant M&A slowdown in the first quarter of 2017 – despite pundits commenting positively. There is no empirical survey evidence to show a drop-off in confidence, so we will have to see what happens in the next few quarters. The overall macro predictions continue to be steady but we’re not expecting spectacular growth. I fear the world as a whole is backing away from globalism – that’s bad for M&A activity – and it will disproportionately hit cross-border work.’

Richard Hall, head of M&A EMEA, Cravath, Swaine & Moore

Continue reading “The last word: Global horizons”

The last word: Elite theory

‘I’m very optimistic about our model.’

Jason Mogg, Kinstellar

As part of our annual Euro Elite report, management at independent firms in Europe give their views on market challenges, Brexit and technology


‘Brexit will probably have an impact on UK clients but there is no feeling here that Brexit will harm either the position of the German economy, or German independent firms. However, it is not the time for us to be looking at the UK and saying: “Poor UK firms, you will have a problem and Frankfurt is going to be even stronger.”‘

Alexander Schwarz, managing partner, Gleiss Lutz

Continue reading “The last word: Elite theory”

Royaume-Uni, nil points: why the true Eurovision is independence

Compiling our second annual Euro Elite report this month reminded me of when the late Rodrigo Uría, then managing partner of Spanish leader Uría Menéndez, recounted how he ended a heated meeting with Linklaters’ irascible former managing partner Terence Kyle by pointing out the armed guards at the entrance to his firm’s Madrid office. Back in the late 1990s, the UK elite was desperate to get into Europe. Emotions ran high.

With Brexit, the UK now wants out (the legal profession less so). But in the Continental market you could argue the English firms have been in withdrawal mode for years. Although the buccaneering expansion across the region in the 1990s and early 2000s means firms with Anglo-Saxon origin are ubiquitous, few dominate. With the exception of France, where the locals have potent competition, and the Netherlands, where Allen & Overy became a major force (by force), Global 100 firms rarely compete at the top level. Freshfields Bruckhaus Deringer is a leader in Germany, but by virtue of the only merger of equals between a European and an English firm, and even it is currently looking to strip down its local practice to bolster profitability. The Magic Circle has been on some level of modest reversal in Germany for a decade now.

Continue reading “Royaume-Uni, nil points: why the true Eurovision is independence”