As specialists thrive in law’s Darwinian age too many drift on

As specialists thrive in law’s Darwinian age too many drift on

There are times in my career as a legal pundit where I’ve gone against trend to argue the unpopular view. This is not going to be one of those columns. Instead, this is about speaking up for a truism that is unusual for being largely true and one that law firm leaders themselves frequently cite. I am here to sing the praises for law firms being more specialised in the practices and markets they cover.

Radical stuff, eh? And yet despite how easily the benefits of specialism fit the rhetoric of managing partners, is there much evidence to suggest that the commercial legal profession as a whole is moving in that direction? Far less than commonly believed. Continue reading “As specialists thrive in law’s Darwinian age too many drift on”

Profit per partner and other enduring hypocrisies

Profit per partner and other enduring hypocrisies

No-one got into journalism to be consistent, the trade typically being more attractive to trouble-makers than those hunting for enduring responsibility. But while hoping that proud tradition continues, in one area the legal media has pushed its licence for hypocrisy that step too far: the debate around law firm profitability.

This over the years has typically resulted in law firms being entreated to do better on all manner of broader concerns one minute… only for the same publications to turn around and berate such institutions for not driving partner profits up to whatever stratospheric figure is deemed appropriate. Don’t bother to send in examples, LB’s done it with the rest. Woe betide the law firms that try to invest or think imaginatively about retaining profits for the middle term. Continue reading “Profit per partner and other enduring hypocrisies”

Global 100 results show US question looming ever more ominously

Global 100 results show US question looming ever more ominously

Judging the world’s largest law firms, it is becoming a familiar tradition after we unpack the results of the Global 100 to look ahead to a more troubled outlook… which then turns into another year of robust growth.

Take 2019’s results, one of the strongest showings since the banking crisis a decade ago, which have seen the group push revenue up 9% to $113.51bn, while profits per equity partner (PEP) across the 100 increased 7% to an average $1.87m. Over a third of firms saw revenues increase by more than 10%, up from 16 in 2016; just four saw declining turnover. While underlining revenue per lawyer once again barely moved upwards, there are now 19 firms with PEP in excess of $3m, all bar one American, and eight exceeding $4m. Continue reading “Global 100 results show US question looming ever more ominously”

Deal View: A niche within a finance niche gives Simmons that much-needed edge after years of drift

Deal View: A niche within a finance niche gives Simmons that much-needed edge after years of drift

While some law firms claim to be all things to all clients, for almost a decade Simmons & Simmons has focused its efforts with increasing rigour on a select number of sectors. Given its unhappy period of drift as a generalist corporate finance player, recent years have delivered far better results. And nowhere is that more in evidence than in its particular take on financial services.

Its importance is reflected in the numbers. Currently the firm has 117 partners across its financial markets practice, 63 of which are in the UK, while 40% (around £150m) of firm-wide revenue comes from finance. Even here the firm has often avoided too much business-as-usual work for banking clients – a certain route to poor margins – to zero in on funds, asset managers and more esoteric areas of regulation. Continue reading “Deal View: A niche within a finance niche gives Simmons that much-needed edge after years of drift”

The Last Word: New frontiers

The Last Word: New frontiers

Despite Brexit, Trump and trade wars signalling a tentative prognosis from Global 100 leaders for the remainder of the year, many firms entered 2019 with engines blazing

No clarity

‘Volatility, trade wars, Brexit and Trump notwithstanding, it’s been a good financial year. Each of our practice areas are strong in terms of work and economically. Mandates are flowing in, it’s a positive story. Threats are out there. Brexit will be priced into the market for the next eight to ten years. There will be peaks and troughs and no clarity for a while.’ Continue reading “The Last Word: New frontiers”

Paywars III – City elite caught between rock and hard place

Paywars III – City elite caught between rock and hard place

The news last month that Freshfields Bruckhaus Deringer was to push through the highest real-terms pay rises by a major City firm for a decade is a significant moment for the London legal market.

The decision to hike its associate pay scale, raising its benchmark rate for newly-qualified solicitors from £85,000 to £100,000 is a bold and expensive step for the City giant. Back-of-the-envelope calculations suggest such a move, which will put Freshfields well ahead of its Magic Circle peers, comes at an annual cost in the region of £10m. Continue reading “Paywars III – City elite caught between rock and hard place”

The influx of BAME lawyers may yet be squandered

The influx of BAME lawyers may yet be squandered

The good news is that up close the reality turns out to be not as awful as the cynics have feared. After all, for years the profession has avoided a frontal discussion of its record on ethnic diversity, choosing to submerge the topic within the umbrella of diversity and inclusion even as law firms became more intent on selling their progressive credentials.

And in fairness, avoiding that debate has been as much about a general British reticence to tackle issues of race head on with commentators and the media often treading with excessive delicacy in such matters. Still, the end result has been little frank discussion, certainly compared to the increasingly forthright debate on the profession’s record on female representation and retention or tackling social mobility. Continue reading “The influx of BAME lawyers may yet be squandered”

Cross-selling to glory will only get the Big Four so far

Cross-selling to glory will only get the Big Four so far

This title is on the record as having doubts regarding the Big Four’s legal ambitions, at least judged against claims typically made by some outside observers. Readers will all know such assertions: that the group are more sophisticated, slicker and tech-savvy than law firms and set to disrupt law on a global scale.

But while the last 25 years has not yet seen them live up to such claims, the Big Four clearly have formidable assets, contacts and brands and have collectively stepped up their investment in the last three years. Continue reading “Cross-selling to glory will only get the Big Four so far”

Deal View: Despite that late start, Willkie underlines surprisingly forceful City buyout push with hire of GavDav

Deal View: Despite that late start, Willkie underlines surprisingly forceful City buyout push with hire of GavDav

Affectionately known in buyout circles as ‘GavDav’, the long-time duo of private equity specialists Gavin Gordon and David Arnold has finally landed at Willkie Farr & Gallagher from Kirkland & Ellis after months of speculation.

While Kirkland may play down its significance, it is nevertheless a rare and high-profile exit for the Chicago-bred juggernaut and a chance for Willkie – a firm whose progress in the City has been muted compared with many US peers given the quality of its US private equity practice – to finally get its brand on the radar in London. Continue reading “Deal View: Despite that late start, Willkie underlines surprisingly forceful City buyout push with hire of GavDav”

The Last Word: Elite forces

The Last Word: Elite forces

As part of our annual Euro Elite report, management at independent firms in Europe give their views on today’s market challenges

International focus

‘In 2017 we had a record performance. 2018 was a year of big investment to consolidate our development in Africa and the Middle East but we did it halfway through the year. We are going to continue and consolidate our strategy. A lot of attention and energy will be on the international development. Our strategy is still to become a leader in the Mediterranean area, Africa and the Middle East. For now we are optimistic but from the second half of 2018 we have seen a decrease of investment in M&A.’ Continue reading “The Last Word: Elite forces”