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Converging on boom-time profits without a boom – the big four now and then

They say averages lie, though in my experience not as much as people, but producing an annual report with 2,000 data points as we do with this month’s LB100 means it can be hard even for professional anoraks such as myself to find the nuggets of meaning in the thickets of information.

Well, when in doubt I start with the market leaders, so I dug up the numbers on London’s big four in their peak of 2008 to compare against this year’s results to see how they have changed. Continue reading “Converging on boom-time profits without a boom – the big four now and then”

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Women in law – A belated bandwagon, but still welcome

Rarely, even in the conservative game of law, has so necessary a measure been so long avoided until the status quo became laughably, farcically, untenable. The move is for major law firms to start articulating public benchmarks for their proportion of female partners – corporate speak for the series of concrete targets announced this year to stem the huge outflow of talented women from the profession.

For years the profession had claimed that meritocracy and changing attitudes would feed through into higher than the circa-20% female partnerships currently at most firms; over the last five years it has become apparent how baseless that conventional wisdom was as gender diversity has barely budged. Indeed, there is some evidence that the two primary tools by which law firms increasingly manage their partnerships – lateral hiring and partner exits – are both favouring male lawyers over women and offsetting any number of women’s networks and mentoring schemes.

Continue reading “Women in law – A belated bandwagon, but still welcome”

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LB100 2014: Statistically speaking, you may not need a bigger boat

Last year delivering our annual results issue Legal Business remarked that the age of turbulence facing law firms since the 2008 banking crisis was far from over. And so it has proved. Despite all the talk of returning confidence, and clear evidence of recovery in the UK economy, it’s still choppy out there. Stripping out another year of consolidation, the numbers are a little better than 2013 but that’s about it. Mergers have driven the market to nearly £21bn in revenues but average partner profit of £640,000 across the top 100 is still a way off the all-time peak of £703,000 recorded in 2008. The world’s second largest legal market is tracking inflation.

Continue reading “LB100 2014: Statistically speaking, you may not need a bigger boat”

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Bakers’ Leite set for second term leading world’s largest law firm

Eduardo Leite looks set to be re-appointed as chairman of Baker & McKenzie shortly after it regained its position as the world’s largest law firm. Leite, who took charge of the US-bred practice in 2010, has faced no opposition for the post and partners at the firm understand his re-election will be a formality.

His next term is expected to be confirmed by partners during the firm’s upcoming annual meeting in London in October. Bakers typically looks to extend leadership positions on a rolling basis, with Leite set to stay on as chairman for between two and four further years.

Continue reading “Bakers’ Leite set for second term leading world’s largest law firm”

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Reviving deal market lifts LB100 as top UK firms edge up profits and fees

While the headline Legal Business 100 (LB100) results are once again inflated by significant merger activity at every level, there is evidence that many of the top 100 grossing firms in the UK are enjoying organic growth again.

Total revenue for the LB100 for 2013/14 is £20.82bn, an increase of 9%, while lawyer headcount swelled 6% to 65,111. With revenue growth slightly faster than 2012/13 but headcount growth slower, average revenue per lawyer (RPL), profit per lawyer (PPL) and profit per equity partner (PEP) were all up by 3% to £320,000, £98,000 and £640,000 respectively.

Continue reading “Reviving deal market lifts LB100 as top UK firms edge up profits and fees”

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Weil, Gotshal & Manges settles multimillion-pound negligence claim with private equity house

Weil, Gotshal & Manges has paid over £3m to settle a professional negligence claim made against it in late 2013 by private equity house Bancroft.

The case was set to be heard before the commercial court in July but the US law firm agreed a confidential settlement that Legal Business understands to be between £3m and £5m.

Continue reading “Weil, Gotshal & Manges settles multimillion-pound negligence claim with private equity house”

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LB100: The Top 25 – Wind in their Sails

Consolidating firms are jostling for position in the race to dominate international and UK markets. But even amid fairer conditions, the course to victory is uncertain.

‘To reach a port we must set sail –
Sail, not tie at anchor
Sail, not drift.’

Franklin D Roosevelt, 1938

‘One feels from the body language out there that firms which have come through the recession successfully are beginning to unwind, beginning to stretch a bit, beginning to feel as though more business is coming back – particularly in the corporate market. The corporate partners who had to lay low for some years are starting to unfurl their wings a little bit and ruffle their feathers.’

Continue reading “LB100: The Top 25 – Wind in their Sails”

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Accounts show fee and profits slide at Edwards Wildman in London as partner departures pile up

Having endured a difficult time in recent months with an exodus of partners from its London office, US law firm Edwards Wildman Palmer published its UK limited liability partnership (LLP) accounts in August, which recorded a 10% drop in UK turnover, alongside a 21% drop in profit.

The LLP accounts, dated to 31 December 2013, show revenue fell to £25.1m from £27.8m, operating profit decreased to £8m from £10.1m and net debt rose to £323,827 from £54,952.

Continue reading “Accounts show fee and profits slide at Edwards Wildman in London as partner departures pile up”

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‘Clifford Chance is brave to be looking at these things’: City giant mulls move towards all-equity

Latest proposed changes by Magic Circle firm after recent overhaul of governance structure

Having taken the summer to vote through a substantive overhaul of its governance structure, the autumn agenda of Clifford Chance (CC) will see the partnership consider whether the firm should move to an all-equity model.

The Magic Circle firm currently deploys a single profit pool, lockstep system and partners spend three years as juniors before progressing onto the equity, which ranges between 40 and 100 units.

Continue reading “‘Clifford Chance is brave to be looking at these things’: City giant mulls move towards all-equity”

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Hong Kong Law Society president forced to go amid row over independence from China

Ambrose Lam, president of the Hong Kong Law Society since May last year, was forced to resign on 19 August after a vote of no confidence was issued in response to his recent support of a Beijing white paper that raised issues over Hong Kong’s judicial independence. Hong Kong lawyers turned out in force on 14 August to an extraordinary general meeting (EGM), where 2,392 lawyers cast a vote of no confidence in the president. Just 1,478 lawyers voted against the motion, despite law firms reporting pressure from clients on the mainland not to pass the motion.

Continue reading “Hong Kong Law Society president forced to go amid row over independence from China”

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Mishcons set to move to full-equity LLP in 2015

Mishcon de Reya is set to bring all partners into the equity and convert to a limited liability partnership at the end of autumn 2015. The proposed new model will constitute a marked shift from the firm’s current structure, which consists of legal directors, junior (or fixed-share) partners and senior (equity) partners.

The transformation will see every partner become a form of equity partner, the current 37 become ‘senior equity partners’ and junior partners will be ‘junior equity partners’.

Continue reading “Mishcons set to move to full-equity LLP in 2015”

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Short-term boom but long-term questions loom for lawyers if Scotland votes to go it alone

Michael West finds mixed feelings on independence from Scotland’s bloodied legal profession

It’s long been a hoary cliché to say that uncertainty is good news for the legal profession but it is hard to escape the conclusion that the uncertain prospect of a momentous vote on Scottish independence this month would be very good news for local lawyers… in the short term.

Continue reading “Short-term boom but long-term questions loom for lawyers if Scotland votes to go it alone”

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Will $50bn Yukos award lead states to pull out of international arbitration treaties?

The landmark Yukos decision has forced governments to consider the consequences of entering into international treaties that allow foreign investors to take disputes to arbitration. With the likes of Indonesia and South Africa having already torn up agreements, Russia having withdrawn from the Energy Charter Treaty that gave the Yukos shareholders jurisdiction and India mulling an exit from bilateral investment treaties, could the $50bn award lead more states to withdraw their consent to arbitration?

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Ireland: Tracking Dublin’s Young Tigers

Man walking upstairs with Irish flag printed on

Ireland is breathing a little easier again. With more than five years of economic turbulence battering both businesses and reputations, the nation has finally managed to hoist itself out of recession. Having officially exited its €67.5bn bailout programme in December 2013 – a move described by finance minister Michael Noonan as Ireland being ‘handed back her purse’ – this summer also saw the Central Statistics Office announce economic growth of 2.7% for the first quarter of 2014.

While the situation is still deemed perilous in many parts, with a mammoth public deficit, a woeful property market and high unemployment, a sense of confidence is returning to Ireland’s legal elite. And such is the battle-hardened resilience of the young lawyers that made partner around the time the economy crumbled – including those at Arthur Cox, McCann FitzGerald, A&L Goodbody, William Fry, Matheson and others – that a crop of up-and-coming individuals are emerging as the next generation of stars to define Ireland’s legal market in the years ahead. Continue reading “Ireland: Tracking Dublin’s Young Tigers”

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After a patchy 2013 and a high-profile finance departure, can Weil sustain its City momentum?

Tom Moore assesses the recent upheaval at Weil and talks to City head Francies about its ambitions

Life has never been dull at the City arm of Weil, Gotshal & Manges, but even those familiar with the firm’s eventful run since its launch in the mid-1990s turned their heads at the departure this summer of Stephen Lucas for Kirkland & Ellis. The former Linklaters partner, whose exit came shortly before his three-year guaranteed pay package expired, had been regarded as highly successful at building a deal finance team at Weil.

Continue reading “After a patchy 2013 and a high-profile finance departure, can Weil sustain its City momentum?”

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Protection rackets – behind the controversy of looming reforms on insuring law firms

The insurance regime for law firms faces more upheaval amid reforms to rules on minimum cover. Legal Business assesses the latest controversy

In July, following a short consultation earlier this summer, the board of the Solicitors Regulation Authority (SRA) announced a number of reforms, including proposals to reduce the minimum compulsory cover levels for professional indemnity insurance (PII) from £2m to £500,000 and the requirement that law firms assess the PII cover level appropriate for their work themselves.

Continue reading “Protection rackets – behind the controversy of looming reforms on insuring law firms”

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A&O joins US firms on Walgreens’ acquisition of Alliance Boots

US advisers take the lead on £5.6bn takeover of UK institution

The Walgreen Company has instructed New York law firm Wachtell, Lipton, Rosen & Katz and Allen & Overy (A&O) to handle its acquisition of the remaining 55% of Nottingham-based chemist Alliance Boots in a £5.6bn deal.

The pharmacy giant already has a 45% stake in the group, which owns UK high-street favourite Boots, which it acquired in August 2012. This new deal will create the combined entity of Walgreens Boots Alliance, with more than 11,000 stores in ten countries and a portfolio of retail and business brands.

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Dechert gains Singapore licence after eight-month wait as PwC completes local tie-up

Dechert and PwC step into Singapore as global players sustain push into key Asian hub

This summer saw continued interest by advisers in the Asian legal market, as top-50 US firm Dechert finally received the green light to open an office in Singapore eight months after applying for a Foreign Legal Practice licence. Meanwhile, Big Four accountancy giant PwC made a move to enhance its legal offering in the Asia-Pacific region, having entered into a tie-up in Singapore with local firm Camford Law.

Continue reading “Dechert gains Singapore licence after eight-month wait as PwC completes local tie-up”

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Chadbourne closes Kiev arm as Freshfields duo set up in Barcelona

Political tension and economic turbulence have seen more law firms retrench in the wider European region, with Chadbourne & Parke and Freshfields Bruckhaus Deringer both confirming office closures. US firm Chadbourne last month confirmed that it was closing its Kiev office, a move which saw Dentons benefit as it snapped up Kiev-based corporate partner Adam Mycyk. Meanwhile, a pair of Freshfields lawyers have established an IP/IT specialist boutique following the closure of the Magic Circle firm’s Barcelona office in April this year.

Mycyk, who is also the former managing partner for CMS Cameron McKenna’s Kiev office, will join Dentons as a partner in its corporate practice just 18 months after moving to Chadbourne.

Continue reading “Chadbourne closes Kiev arm as Freshfields duo set up in Barcelona”

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A chance to turn the corner for the SFO but a high-stakes test on ‘blockbuster’ cases could define its fate

Michael West assesses the prospects for the agency after settlement of the Tchenguiz claims

He was always going to have a painfully full in-tray on taking over as head of the troubled Serious Fraud Office (SFO) a little over two years ago, but even against that context, the previous 12 months must have looked something like an annus horribilis to David Green QC. Lows during this period saw the Public Accounts Committee issue trenchant criticism of the body, important investigation documents misplaced and the chaotic collapse of the trial against Victor Dahdaleh.

Continue reading “A chance to turn the corner for the SFO but a high-stakes test on ‘blockbuster’ cases could define its fate”