‘Anyone who says they’re not struggling would be lying,’ says Tim Pearce, global managing partner of Bedell Cristin, referring to the Jersey market. ‘Every sector of the economy and every business has struggled or suffered as a result of Covid, though businesses have struggled in different ways. Some financially, others socially. Others are struggling in terms of pure management. But for us, and indeed for the offshore industry as a whole, we’ve weathered the storm OK so far.’
Pearce’s cautiously optimistic outlook reverberates throughout the discussions with partners across the Bailiwicks of Jersey and Guernsey in the Channel Islands archipelago and the Isle of Man in the Irish Sea to the north – the jurisdictions collectively known as the Crown Dependencies. Unlike the UK, domestic property is booming, buoyed by numerous factors. ‘In times of crisis, people invest in what they know,’ says Pearce. ‘People are looking for safe havens right now and property in all of our offshore jurisdictions is benefiting from that.’ Continue reading “UK offshore report: Staying afloat”
The Caribbean’s offshore financial centres have faced their fair share of challenges in recent years thanks to the increased international scrutiny of the tax haven environments, the impact of falling oil prices and the business interruption caused by the seemingly endless cycle of hurricanes, which sees the region bear the brunt of the ever-pervasive impact of climate change. Add to that a global pandemic, and there’s certainly the potential for a substantial economic disaster.
While the Covid-19 infection numbers for the Caribbean as a whole have remained low thanks to quick action by the local governments to close borders, enact temporary lockdowns and implement testing and contact tracing methods, the primary impact of the coronavirus pandemic on the Caribbean is undoubtedly on tourism. For Bermuda, the British Virgin Islands (BVI) and the Cayman Islands (Cayman), the tourism industry contributes 28%, 52% and 70% of the average GDP respectively and figures suggest that, at worst, 2020 could see a 71% reduction in the number of international visitors. Continue reading “Caribbean offshore report: End of the storm?”
The back-to-school feel in the City is unmistakable, not least because the actual schools are back, as major law firms attempt to find something like normality in an environment that remains a few standard deviations from the norm.
In some ways it was ever thus come the end of August. As one law firm leader remarks: ‘I said to our FD: “September will be crucial,” and was swiftly was reminded I’ve said that for the last five years.’ This has always been the defining period for law firms’ financial year, just more so now. So, how’s it looking out there? Continue reading “‘The top firms can hardly believe it’ – City law firms are quietly gathering momentum amid the uncertainty”
Everybody likes to go along with the crowd, in business as much as life. So as the global economy is battered by the coronavirus fallout and many business sectors are on their knees, it’s inevitable that the legal industry has adopted a subdued tone focusing on the existential challenge it too faces. After all, official figures this week showed that the UK, home to probably still the world’s second largest legal market, saw its sharpest economic contraction since records began in the second quarter of 2020, falling 20.4%, one of the worst downturns in Europe.
The only issue with the profession’s stance is that the emerging facts are establishing this position as entirely unrepresentative of the outlook for major commercial law firms. Legal Business recently highlighted the robust showing in the face of Covid-19 judged from a dozen early results from top-50 UK law firms. The second-wave set of numbers from another group of firms in the same peer group doesn’t just support that picture of remarkable resilience, it materially strengthens it. These results are extraordinary! Continue reading “Comment: City law shows remarkable crisis immunity (but managing partners aren’t ready to spread that message)”
The other day we were presenting a webinar on ‘The Lawyer of the Future’ to a firm’s summer associate class, now in the midst of their remote June and July programme, and the question came up, ‘What do associates need to know?’
Here’s where I suspect many were anticipating we would have headed straight to, ‘Technology’ or ‘IT’ or even ‘How to code.’ Continue reading “Build Back Better: Two things associates need to know (and neither is ‘how to code’)”
More than a decade after the 2008 global financial crisis, the world finds itself gripped by a pandemic and the resulting economic turmoil. As we saw in 2008, law firms won’t escape the impact of the recession, particularly as clients trim budgets and reduce demand for legal services. But unlike companies with diverse sources of capital, law firms, still predominantly structured as partnerships, will more acutely feel the cash crunch as they grapple with this outdated ownership model.
Already firms have begun to reduce salaries, hold back partner distributions and furlough employees to combat declines in revenue. In the short term, partners are expected to earn materially less income while firm growth and associate development are paused; in the long term, firms may need to draw down on lines of credit, lay off employees or, in extreme cases, dissolve. Continue reading “Guest comment: An argument for outside investment in law firms for the post-Covid era”
The Covid-19 crisis is creating a lot of learning and insight across the legal sector and the wider communities in which we work and live. Much of this revolves around actions that organisations and their leaders are taking to navigate the crisis – including what leaders should do to manage uncertainty.
A key feature of law firms is that many people are leaders – not just those in formal senior leadership roles. A high degree of distributed management serves a range of teams. That is a real strength of our industry. Empowering those leaders to act in a way that helps their teams and drives the wider business forward is key. Continue reading “Leadership in a crisis (or how to build the ship while sailing it)”
While it’s surprising in some regards that it took this long, Allen & Overy has done the UK legal market a favour by substantially re-setting compensation bands for its junior lawyers. The move, confirmed on Monday (22 June), will see starting salaries and bonuses for newly-qualified lawyers in London fall from the current benchmark of £100,000 to £90,000 for the intake starting in September.
Clifford Chance later that week announced more modest cuts from £100,000 to £94,500 for salary and bonus, while Slaughter and May had already pushed down its starting base salary to £87,000 for autumn starters, from £92,000. Continue reading “Resetting associate comp – Better to bend than break but a rethink is still overdue”
For journalists, ill winds usually bring a few benefits, not least that readers have greater interest in what we’re churning out. But while it’s a good time for industry anoraks to get the attention they crave, it’s not the pieces I’ve done in 2020 on crisis, coronavirus or even Black Lives Matter that have attracted the biggest audience. The most read was an article from March focused on the two-horse race between the world’s largest law firms, Kirkland & Ellis and Latham & Watkins, and its wider relevance for the high-end legal market.
That speaks to the extraordinary interest among peers in Kirkland, which has defied expectations to batter its way to the top of the global market in the last decade, much to the startled unease of traditional elites in New York and London. Continue reading “Kirkland vs Covid-19 – How the world’s largest law firm handles this crisis will define it… and the global elite”
Regular readers are familiar with our custom of penning ‘Letters from…’ when we’ve spent time in a major city and want to offer some observations and commentary on that legal market. We’re not travelling. That can mean only one thing: Time for us to compose a ‘Letter from New York.’
Let’s start with some data, shall we? Continue reading “Comment: Letter from New York – Assessing the world’s top law hub now and after the crisis”