Month: September 2013

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LB100 – The top 25: The age of turbulence

It’s been a bumpy ride for many of the UK’s largest firms, fighting battered profits with consolidation and increased global expansion. Welcome to the Legal Business 100, where headline revenue increases hide a tougher reality

When the UK’s 62nd largest law firm by revenue is suddenly wiped off the face of the earth, despite posting a 2% revenue increase in 2011/12, you’d expect a little nervousness within the profession. Cobbetts, which went into administration in March, posted a profit per equity partner (PEP) increase of 16% in its last-ever LB100 appearance, something that many of the firms occupying the list today would gladly take. But, as it would turn out – as has been the case ever since the 2008 collapse of Lehman Brothers – when it comes to law firm financials, all is not what it seems. And, as the demise of Halliwells proved in 2010, it takes more than the collapse of a regional stalwart to seriously unhinge the market.

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LB 100 – The second 50: Scattered in the wind

The gulf between success and failure among the firms occupying the second half of the LB100 is as pronounced as ever. From highly profitable boutiques to ravaged regionals desperate for a merger, we chart the haves and the have-nots

Collectively making up just a tenth of the LB100 firms’ total 2012/13 revenue for 2012/13 of £19.1bn, law firms ranked between 51 to 100 in the table can be polar opposites. The gap between high and low performing firms in these two quartiles is as startling, with profit per lawyer (PPL) varying from £177,000 at ascendant litigation specialist Stewarts Law to just £15,000 at the beleaguered Manches.

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LB 100 – The Five Year View: Riders on the Storm

A five-year view of the LB100 underlines the profound impact globalisation has had on the UK’s top firms but also the soaring success of the best mid-pack players. Legal Business analyses the winners and losers since Lehman unleashed a storm

The five years that have passed since 2008, when the previous year’s credit crunch morphed into full economic meltdown, have been, in relative terms, the bleakest period economically in the UK since the Second World War. Yet despite this, with the exception of 2009/10, when total revenues tumbled 14%, collectively the UK legal profession has grown remarkably during that period. In our 2008 report, total turnover of the top 100 firms was £13.96bn. This year, those top 100 firms have amassed revenues of £19.1bn, an increase of 37%. Continue reading “LB 100 – The Five Year View: Riders on the Storm”

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BPP awarded university status after ‘rigorous’ review

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”

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SJ Berwin’s high stakes tie-up with KWM dares to bring a new equation to global law

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”

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Return of the accountants: KPMG and EY consider ABS

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.

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Redundancy woes: Bond Dickinson and Watson Farley are latest major law firms to review support staff roles

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’.

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European M&A: Big ticket summer mandates scooped by Allen & Overy; Clifford Chance; Freshfields and Macfarlanes

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.

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Outrageous fortune – how Ireland’s legal elite has stood up to five punishing years of austerity

Man shot with arrows on Irish flag

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”

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Known unknowns – is the legal industry ready to repel the growing threat of cyberattacks?

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.

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International rescue – the advisers winning the key work for multi-national clients in Ireland

Dublin

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.

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LB 100 – The Last Word: Eyes on the storm

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

Value for money

‘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

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The lingering enigma of BLP’s bad year

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”

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Dissent: Why the in-house triumph over law firms may prove short-lived

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.

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Life during law: Mark Rawlinson

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.

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The Client: Philip Bramwell – BAE Systems

Caroline Hill talks to the plain-speaking general counsel

When BAE Systems’ group general counsel (GC) Philip Bramwell started out as a lawyer in the pharmaceuticals industry, his mother approved on the basis that ‘everybody gets sick’. But as the assertive corporate veteran set out on the deliberate path to change industry every few years, she was less convinced by his switch from BT to O2 in 2001, observing that mobile phones were somewhere between a brick and a car battery and ‘no-one would be so rude as to walk around talking on them’.

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