It’s common in the legal industry to talk about unprecedented change but there are many rules of professional gravity unchanged for 20 years to keep feet on the ground and most lawyers in their place. For one: top-tier City firms were far larger, more international and at least twice as profitable as their mid-tier and smaller London cousins. They also generally outgrew the also-rans, carried on winds of transactional booms. These rules couldn’t be challenged. Except, for the first time in recent memory, such notions are being challenged, and with an intensity that few in the profession have fully grasped.
There have been many years in which major UK firms have been predicted to post disastrous results only to collectively grind out perfectly respectable numbers. This year, with a reviving domestic economy, busy deal markets and plenty of regulatory and disputes activity, larger UK firms have unveiled numbers that are at best disappointing. London’s Big Four City firms are barely tracking inflation over five years (a time horizon that takes out the reset year of 2009/10).