Cracking Wall St is the prize of the decade for City leaders

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Cracking Wall St is the prize of the decade for City leaders

If much of the commentary in this issue focuses on what has gone awry for major UK law firms in the previous decade, this column will tackle one big opportunity ahead and there is no bigger opportunity for City firms than the US.

Now for many, the received wisdom is that the London elite have wasted their chance, leaving the vast US legal market effectively closed to them. There is much to that argument. Had the group built on their initial beachheads in the early 2000s, the picture would be very different now. Clifford Chance (CC) partners still lament the Rogers & Wells tie-up, a mis-sold marriage that nonetheless offered a basis for growth that CC instead spent the next 15 years squandering. Had it achieved a conservative 3-5% annual growth at this practice after the deal, it would be generating over $600m stateside now. Continue reading “Cracking Wall St is the prize of the decade for City leaders”

2020 forecast: City giants forced to offer flexible partnership

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2020 forecast: City giants forced to offer flexible partnership

I’m going to resist the urge to bang on about the year in review, Brexit or even offer a 2010s retrospective. Not much changed in the profession during the decade – apart from the much-documented onslaught of US law firms – and one way or another we will still be facing another Brexit cliff edge next year.

So we turn instead to something that touches the industry where it lives and breathes: partnership. It defines those who hold it, elevating some while corrupting others, shapes a huge global industry and remains the dominant motivational tool for the profession. The second most-read commentary I ever wrote at Legal Business was a piece earlier this year noting that major law firms have broken their social contract by pushing partnership promotions ridiculously late (the most read was a 2016 piece saying Ashurst needed to pull itself together). Continue reading “2020 forecast: City giants forced to offer flexible partnership”

Comment: Whatever happened to the PR as managing partner consigliere?

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Comment: Whatever happened to the PR as managing partner consigliere?

For a pundit often claimed to be dismissive of the PR community, the subject of this leader may surprise. The reputation was never that accurate – I’ve always said skilled comms professionals are an asset to major law firms – but let’s put that to one side for now. The topic is something I’ve been noticing for some time: the slow decline of the PR professional as consigliere to law firm leaders. While the breed was never plentiful, it wasn’t that long ago that there was a sizeable group of battle-hardened comms hands that had judgement, integrity, long contact lists and who were effective as support and sources of information to managing partners. Plenty had worked outside the legal industry – indeed, they were usually more adept if they had in their junior years – but they had built strong knowledge of the dynamics of the profession and the realities of working for partnerships. They could make things happen and tell partners what they didn’t want to hear.

At their best they were a useful bridge to the outside world and there to help the firm push the message outwards, ever outwards, be that to clients, potential clients, or the wider industry. The best were also facilitators, focused on hooking up management and a Praetorian guard of headline-friendly partners with the better, relevant journalists and helping relationships flourish. Continue reading “Comment: Whatever happened to the PR as managing partner consigliere?”

Whatever happened to the PR as managing partner consigliere?

Posted on |
Whatever happened to the PR as managing partner consigliere?

For a pundit often claimed to be dismissive of the PR community, the subject of this leader may surprise. The reputation was never that accurate – I’ve always said skilled comms professionals are an asset to major law firms – but let’s put that to one side for now. The topic is something I’ve been noticing for some time: the slow decline of the PR professional as consigliere to law firm leaders. While the breed was never plentiful, it wasn’t that long ago that there was a sizeable group of battle-hardened comms hands that had judgement, integrity, long contact lists and who were effective as support and sources of information to managing partners. Plenty had worked outside the legal industry – indeed, they were usually more adept if they had in their junior years – but they had built strong knowledge of the dynamics of the profession and the realities of working for partnerships. They could make things happen and tell partners what they didn’t want to hear.

At their best they were a useful bridge to the outside world and there to help the firm push the message outwards, ever outwards, be that to clients, potential clients, or the wider industry. The best were also facilitators, focused on hooking up management and a Praetorian guard of headline-friendly partners with the better, relevant journalists and helping relationships flourish. Continue reading “Whatever happened to the PR as managing partner consigliere?”

Comment: A no-deal outlook and the law – time for pragmatic pessimism

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Comment: A no-deal outlook and the law – time for pragmatic pessimism

We go to press with Parliament locked in battle with the Government over threats to take the UK into a ‘no-deal’ exit from the European Union (EU). I’m not going to offer political predictions but we are clearly at the point where a disorderly exit from the EU is a very real prospect for the country and the profession.

The good news is that the largest UK law firms feel confident they can largely mitigate the immediate impact of no-deal, even with the abrupt end of EU rights to practise that have been such a boon. This is because potentially obstructive Bars in key markets in France and Germany have been kept onside and UK lawyers feel that other decent workaround options are available (see pages 12-13). With leading UK firms also having substantial foreign operations, including the Legal Business 100 having 19% of their lawyers in mainland Europe, and rapidly increasing their ranks of Irish-registered solicitors, the large outfits at least are braced. The Law Society recently issued research arguing a no-deal would knock 10% off the value of the UK legal market, equivalent to more than £3bn, and costing 10,000 jobs. Most law firm leaders see such predictions as excessive – a scepticism I share – though the industry does believe such an exit would be damaging. Continue reading “Comment: A no-deal outlook and the law – time for pragmatic pessimism”

A no-deal outlook and the law – time for pragmatic pessimism

Posted on |
A no-deal outlook and the law – time for pragmatic pessimism

We go to press with Parliament locked in battle with the Government over threats to take the UK into a ‘no-deal’ exit from the European Union (EU). I’m not going to offer political predictions but we are clearly at the point where a disorderly exit from the EU is a very real prospect for the country and the profession.

The good news is that the largest UK law firms feel confident they can largely mitigate the immediate impact of no-deal, even with the abrupt end of EU rights to practise that have been such a boon. This is because potentially obstructive Bars in key markets in France and Germany have been kept onside and UK lawyers feel that other decent workaround options are available (see pages 12-13). With leading UK firms also having substantial foreign operations, including the Legal Business 100 having 19% of their lawyers in mainland Europe, and rapidly increasing their ranks of Irish-registered solicitors, the large outfits at least are braced. The Law Society recently issued research arguing a no-deal would knock 10% off the value of the UK legal market, equivalent to more than £3bn, and costing 10,000 jobs. Most law firm leaders see such predictions as excessive – a scepticism I share – though the industry does believe such an exit would be damaging. Continue reading “A no-deal outlook and the law – time for pragmatic pessimism”

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

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Comment: 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 “Comment: As specialists thrive in law’s Darwinian age too many drift on”

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

Posted 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”

Paywars III – City elite caught between rock and hard place

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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”

Being most things to most clients just isn’t sustainable

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Being most things to most clients just isn’t sustainable

Years ago, in the immediate wake of the banking crisis, I wrote a column on the notion that top London law firms, having pursued consolidation and growth for the preceding quarter century, had fallen out of love with being big. The argument was that they were increasingly focused on segmentation – meaning tighter focus on their core markets – than consolidation. I have made duffer calls over the years, but in retrospect only one of those points, on losing faith with growth, was substantively borne out. The second observation about a more clearly-segmented legal industry emerging has largely not come to pass. Major London firms have consistently eschewed growth strategies with generally poor results. But no matter the structural pressures building on the legal industry, they have yet to get used to the idea of being more rigorously focused on core markets. Incremental chipping – ditching a bit of structured finance here, a little employment disputes there – is about as good as it got.

Yet there is an increasingly salient argument to be made that major law firms have two broad approaches that look sustainable if they wish to be major forces in high-end law. The first is to operate closer to the classic partner-driven model – a simplified regime based on low leverage, partner-heavy service, and being focused in a relatively small number of markets and geographies. This is a stance successfully applied by many of the more potent US-bred law firms expanding in Europe. Continue reading “Being most things to most clients just isn’t sustainable”