The firms that appear in the LB100 are the top 100 firms in the UK, ranked by gross fee income generated over the financial year 2012/13 – usually 1 May 2012 to 30 April 2013. We call these the 2013 results. Where firms have identical fee incomes, the firms are ranked according to the highest profits per equity partner (PEP). Continue reading “LB 100 – Methodology”
For 20 years now the (mainly) thankless role of the legal PR has put the comms professional between demanding and sometimes deluded partners and a restless media. Legal Business canvasses the men and women trying to bring order to the chaos
He had been pacing the streets for hours, his path taking him from an unglamorous enclave of the City to Farringdon. Not aimless pacing – it was anything but – the PR man knew there was a prominent story appearing the following day regarding the large City law firm that he worked for. Knowing this, he was sick to his stomach about the slant put on the news, and what sort of reception he would get from the many partners he had to answer to. His hope was to locate the journalist that had written the story, buy him a drink and hopefully glean some details on the story to gauge how bad the damage would be.
Continue reading “The thick of it – a brief history of legal PR”
Sarah Downey assesses the much-touted review of legal education
It promised so much and delivered so little. The Legal Education and Training Review (LETR) published its recommendations on 25 June, concluding what was dubbed as the most comprehensive assessment of legal education since the Ormrod report of 1971. Yet the 350-page report has proved an underwhelming end to a process that was supposed to address fundamental problems. Continue reading “LETR of the day: education review opts for mum ‘n’ apple pie over radical change”
LPC provider follows arch rival to win university status
It has been a long time coming, but in August BPP finally succeeded in its long quest to secure full university status, furthering the ambitions of the UK’s top law schools.
The decision by the Department for Business, Innovation & Skills (BIS) to award the university title to BPP – which provides undergraduate and graduate business degrees across law, finance and tax and is the sole provider of the legal practice course (LPC) to many of the top City firms – will elevate its standing globally, dean and chief executive Peter Crisp told Legal Business. ‘Firstly, it’s the recognition, the reputation and the standing it gives us worldwide,’ said Crisp. ‘So obviously in terms of our appeal to students both in this country and internationally. It puts us on a par with other universities who also recruit on to the LLB and the vocational legal training practice. Continue reading “BPP awarded university status after ‘rigorous’ review”
David Stevenson and Alex Novarese assess SJ Berwin’s audacious Asia-Pacific tie-up and ask if the union can truly propel the firm into the global premier league
‘This isn’t about doing anything with our backs against the wall,’ says Jonathan Blake, the former senior partner of SJ Berwin, and one of the architects of his 165-partner firm’s impending tie-up with King & Wood Mallesons (KWM).
Despite some well publicised reverses in recent years for the mid-pack City player, Blake’s comment is undoubtedly true. But as to what the deal that goes live on 1 November does signify, well, opinion is sharply and starkly divided. Continue reading “SJ Berwin’s high stakes tie-up with KWM dares to bring a new equation to global law”
Global accountants including KPMG and EY have the UK’s legal sector firmly in their sights as they consider their options under the Legal Services Act (LSA) in a move said by one tax partner at a leading City law firm to be ‘clearly a threat’.
Last month it emerged that KPMG is looking at an alternative business structure (ABS) conversion in a bid to expand its legal services capability. EY, meanwhile, has the position ‘under review’ and PwC is also understood to be considering its position. Deloitte was the only one of the Big Four accountants to deny any plans to set up an ABS.
Continue reading “Return of the accountants: KPMG and EY consider ABS”
Redundancy consultations continue to dog the City’s top 100 firms as Bond Dickinson and Watson, Farley & Williams last month became the latest to reveal they have placed a number of support roles under review.
In August, Bond Dickinson began a consultation process that will see up to 7% of its support staff made redundant. The newly-merged 700-lawyer firm – a combination of Newcastle-based Dickinson Dees and Bristol-headquartered Bond Pearce that went live on 1 May – said it intends to ‘discuss a proposal to review the support teams and how they should be shaped to best support the needs of Bond Dickinson’.
It added that ‘the proposals, if accepted, would see approximately 7% of support staff roles being made redundant and voluntary redundancy enhancements have been offered to all affected staff’.
Despite corporate partners attesting to a summer lull (if only by their absence from the office), the past month brought with it a number of headline European M&A deals, including a €17bn (including €9.8bn of net debt) bid for Dutch telecoms company Koninklijke KPN (KPN), which turned to Allen & Overy (A&O)’s Netherlands office on the deal.
The bid by Mexican billionaire Carlos Slim’s telecoms company América Móvil for the remaining 70% in KPN saw longstanding adviser A&O field a team led by Dutch corporate partner Jan Louis Burggraaf.
Clifford Chance, led by Amsterdam M&A partner Hans Beerlage, advised América Móvil alongside Cleary Gottlieb Steen & Hamilton, led by New York capital markets partner Nicolas Grabar and corporate partners Neil Whoriskey and Amy Shapiro.
Lawyer count passes 60,000 but profits fall at top UK firms
The latest Legal Business 100 results show the total revenue of the UK’s top 100 law firms has topped £19bn for the first time, while the number of lawyers across those firms has passed the 60,000 mark, also a first. However, this top-line growth is largely the result of another year of fervent merger activity, masking the fact that on a granular level many firms are struggling to achieve revenue and profit growth.
Total revenue for the LB100 for 2012/13 is £19.1bn, an increase of 8%, while total lawyer headcount swelled 10% to 61,299. However, average revenue per lawyer (RPL) is down 2% to £312,000, while profit per lawyer (PPL) and profits per equity partner (PEP) are down 2% and 4% to £95,000 and £622,000 respectively.
The primary cause for this year’s drop in RPL and PPL is the swathe of mergers over the past year, particularly among firms in the top 25.
Continue reading “Merger frenzy hikes LB100 income but growth masks another tough year”
Respectable, yes, but 2012/13 was a tough year, even by the post-Lehman standards law firm leaders have become accustomed to. While a frantic run of consolidation and international expansion pushed revenue up 8% to £19.1bn, like-for-like growth was far more subdued.
On all objective measures of productivity and profitability, there were further slides, even before accounting for inflation. Back-of-the envelope calculations indicate that the UK’s top 100 law firms are about 25-30% off their boom-time highs in real terms underlying profitability.
In trying to respond to that pressure there has been a genuine shift in gravity among the UK’s top 25 over the last half decade, with the group reborn in truly globalised form. When people used to talk about law being global, until recently they really meant six or so firms. Now it’s 20-plus. With SJ Berwin to join King & Wood Mallesons, and Ashurst this autumn to vote on full integration with its Australian partner, this group is to a considerable extent operating in a different space to the rest of the LB100. Average revenue in this group is just short of £600m, against £98m in the second quartile, while underlying profitability is nearly double that of the next 25. Continue reading “The age of turbulence has only just begun for the UK’s top 100 firms”
Bought by the Central Bank in 2012 from lender and toxic loans body the National Asset Management Agency (NAMA) for an estimated €7m (having been valued at €250m in the boom years), plans to use the tower as the now defunct Anglo Irish’s headquarters were abandoned after the company’s collapse. The grey shell of a building standing idle on North Wall Quay is a fitting reminder of the five-year-long turmoil that has battered the Irish economy both in domestic business and international reputation.
It also symbolises what happened to countless properties nationwide, and resonates with the fear felt by many Irish people that the pre-bust Celtic Tiger years will never surface again. Continue reading “Outrageous fortune – how Ireland’s legal elite has stood up to five punishing years of austerity”
Which firms are the most profitable? In this table we blend together all of our profitability measures, including PEP, profit per lawyer and profit margin to discover which of the top 100 firms are the most profitable. The 100 firms have been ranked according to their mean rank across all three measurements.
Combating cyberattacks on law firms is complicated by the lack of hard information and the shadowy nature of perpetrators. But, reports Legal Business, law firm tech chiefs and security specialists agree the threat is rapidly growing.
What is a law firm if not a huge repository of commercially valuable information? On one side, of course, is the vast bank of specialist legal information held by experienced staff and databases of precedents and legal know-how. Yet valuable as that intellectual property (IP) is – it’s very hard to steal legal expertise.
Rescuing Ireland’s banks was a portentous decision in the aftermath of the global financial crisis. It has resulted in crippling consequences for the country, with the Irish government having to receive an €85bn bailout from the EU and the International Monetary Fund in November 2010. However, what the move hasn’t changed is the league of established Irish law firms which have diversified core practices and picked up some hefty post-crisis work at home and abroad.
Pockets of the Irish economy are clearly surviving, as evidenced by the restructuring of distressed assets that has generated unprecedented work for the ‘Big Five’ and those catching up behind. Upon visiting Dublin, the overwhelming consensus among the firms that spoke to Legal Business – including the top and mid-tier players – was that firms specialising in corporate restructuring, insolvency and professional indemnity have held strong in this fiercely competitive market. Foreign direct investment (FDI) has also been a pillar for economic and law firm survival, as attractive tax rates and a lowered cost base maintains global interest from major corporates.
From consolidation to price pressure, to market confidence, leading management figures at Legal Business 100 firms give us their views on the 2012/13 year and the challenges ahead
‘We’re facing fee pressure of course – and it won’t ease – but there is recognition from clients of different levels of service. The key word is not price but value. Finding a pricing structure which works for the client is essential, as well as supporting the legal departments of clients – helping them to frame key issues to management, helping on staffing shortages, training and knowledge management and so on. These are all areas law firms should embrace.’
Paul Olney, practice partner, Slaughter and May
Continue reading “LB 100 – The Last Word: Eyes on the storm”
Success is a mysterious beast. Hard to define, built up over years and often the result of a formula even its creators struggle to understand. But failure, well, that’s simple. When a law firm runs into difficulties you can point to bickering partners, problem offices, a weak client-base or an unworkable strategy. Whatever it is, there’s usually a clear narrative to explain the situation.
As such, the current rough patch at Berwin Leighton Paisner (BLP) is striking less in itself than because the firm seems surprised by – and unable to entirely explain – the situation. When BLP announced in May that it was consulting on deep redundancies, by many accounts even a number of senior partners at the firm were caught unawares. Continue reading “The lingering enigma of BLP’s bad year”
Scott Gibson and Kristi Edwards argue that GCs have secured a short-term advantage over their external advisers at the risk of undermining their own position
In the decade prior to the collapse of Lehman Brothers, an excess of work masked the corrosive effect to law firms from competition with increasingly sophisticated and growing in-house legal departments (C&I teams). Post-Lehman, the economic downturn has exposed significant structural challenges to overstaffed law firms, which have been ruthlessly exploited by C&I to decisively shift the balance of power in favour of clients.
Continue reading “Dissent: Why the in-house triumph over law firms may prove short-lived”
I was in the first ever gender-mixed year at my college in 1976. I got on very well with one particular girl and she was reading law and I developed an interest. I applied to Freshfields, Linklaters, Allen & Overy, Lovell, White & King and Simmons & Simmons. I got five interviews and five offers in 1982 and chose Freshfields. In those days it was a lot easier to get a job.
Regrets? I would have loved to have gone off and done more mountain climbing, but that would have been very selfish as I had a family. Sport has always been a stress buster – I used to work closely with Anthony Salz, when he was co-senior partner at Freshfields, and I used to drive him mad because I’d hit the gym for an hour right in the middle of a deal, but it really helped to refresh me. But there was a tension between being a sportsman and a serious lawyer. But from early on, I wanted to be the best M&A lawyer. My three boys – Max, Tim and Nicky – are all sportsmen and it drives my wife mad as it is one hell of a competitive place at home.
