Is it a Law Firm?

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Times they are a-changing. Meet the international law firms with hardly any offices, no trainees, and the bare minimum of overheads. Clients are waking up to a very real alternative.

When Ryan Stafford, general counsel (GC) and vice president at $700m-turnover US manufacturer Littelfuse, was looking for a team at short notice to handle a transaction in Scandinavia and the Baltics, he wasn’t afraid to think big. He wanted a firm that could move fast, with people on the ground around the world, and a single contact point that he could speak to pretty quick. The usual suspects dropped the ball.

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Picking up Field Fisher

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After years in the mid-market wilderness, Field Fisher Waterhouse is finally ready for a revolution. It wants to grow internationally and shake up its meandering management. The right suitor might just find a little sweetheart

The last 12 months have not been easy for Field Fisher Waterhouse (FFW). The acrimonious failure of merger talks with LG was followed by discussions with Osborne Clarke (OC) that leaked rather earlier than hoped. Then the firm’s newly appointed managing partner Matthew Lohn, tasked with turning the firm around, suffered a family bereavement that has taken him out of the business for a prolonged leave of absence.

Add to that the departure of the firm’s much-liked chief operating officer Charlie Keeling, a public squabble over the way the LG discussions ended, and a drop in PEP of 20%, and it’s clear this is a firm in need of a boost.

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Clarke Willmott: running to stand still

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Stephen Rosser became Clarke Willmott’s chief executive two years ago as the firm really started to suffer a post-boom hangover. Since then, the bottom line has gone from bad to worse. It’s time for more radical thinking 

Stephen Rosser, Clarke Willmott’s chief executive, ran the London Marathon in 3 hours 59 minutes this year. While there probably aren’t many in law firm management who could run 26.2 miles, let alone in less than four hours, it is perhaps the least of his challenges. Completing a long distance race takes dedication, stamina and the ability to withstand a certain amount of pain – abilities that Rosser will need in abundance if he is to make Clarke Willmott competitive again.

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Know your numbers

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When former Dewey & LeBoeuf partners blamed Citibank for not telling them about the dire state of the firm’s finances, they got short shrift. In today’s legal market, there’s no excuse for not scrutinising the balance sheet. Here’s LB’s definitive guide to all you need to know

When law firms fail, the fallout can be spectacular. Take the case of DLA Piper’s Berge Setrakian, a one-time corporate partner in the New York office of Dewey & LeBoeuf, who now finds himself on the hook for $3.5m that he has agreed to pay in return for being released from liabilities in the largest law firm failure in US history. His former colleague, white-collar defence attorney Ralph Ferrara (now at Proskauer Rose), will stump up $3.7m; M&A supremo Morton Pierce (now at White & Case) is set to pay $1.02m. The lesson: when things go wrong, partners get hit where it hurts. 

To avoid any costly surprises, it pays to know your firm’s balance sheet inside out. But many don’t.

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Paul Hastings: Paul Who?

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Ronan O’Sullivan joined the small London operation of Paul Hastings as a senior associate seven years ago; now he’s running the office. LB meets the man with plans to give the top-30 US firm the success it craves on this side of the pond

Paul Hastings’ Ronan O’Sullivan is an ambitious soul. Described by peers as ‘punchy and hard-charging’, the firm’s slick and charismatic London chair talks confidently about doubling the office’s 50-lawyer headcount in the next five years.

‘I think we’ve got to the stage in London where we are part of the community. We are doing very high-end work. The challenge for us is the next five to seven years,’ says O’Sullivan. ‘Doubling in size; that would be our expectation.’

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Hedge funds: Get debt go

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In the global financial crisis, the hedge fund industry lost about a fifth of its value. Now distressed debt in Europe is seen as the route to renewed wealth, and two law firms look set to dominate, again.

When the dotcom bubble burst at the start of the Noughties and the fantastic bull market of the previous decade shuddered to a halt, two little-known American firms in London cleaned up, big style. Cadwalader, Wickersham & Taft and Bingham McCutchen made hay a decade ago acting for bondholders on a wave of contentious restructurings that pitted American hedge funds against European senior debt holders. Ten years on, and some serious personnel changes later, they’re doing the same again.

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Energy boost

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Other practice areas may be having a tough ride but energy lawyers are flying. LB maps the trends driving the sector

There are many sectors of the economy that governments can afford to scrimp on when times get hard, but luckily for power, oil and gas companies, energy is not one of them.

Power is as vital to economic function as oxygen is to breathing; fuelling transport, communication, defence programmes and health services. In addition, the political and economic instability attached to the supply of oil and gas ensures that energy security continues to dominate national agendas.

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LB100 Scotland – Flying the Saltire

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One firm in particular again stands out from the morass of misery that has beset the Scottish legal market in recent years, as it did last year: Brodies.

Brodies has recorded one of the highest real-term turnover increases this year in the entire LB100: up 16% to £42.8m, leapfrogging Shepherd and Wedderburn, which has remained static. This is no flash in the pan either: Brodies five-year revenue compound annual growth rate (CAGR) is 7%, easily the highest in the peer group and all achieved without a merger.

The firm is also highly profitable. Net income is up 30%, again the highest in the group, putting profit per lawyer (PPL) at a healthy £50,000.

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LB100 North – Northern Soul

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The line-up of North peer group firms has changed again. Following the departures of DWF and Hill Dickinson to the Major UK group last year, Weightmans joins them after 2011’s merger with Mace & Jones and the acquisition of Vizards Wyeth’s insurance team propelled the firm’s revenues into the big league.

Last year Weightmans was already £10m ahead of its nearest rival, Pannone. This year it is over £30m. Keoghs now tops this group with revenues of £47m.

But even without Weightmans, there is still a large gulf between the top firms and those bringing up the rear in this peer group. Dickinson Dees is now the largest firm by fee-earners in the North and its revenues are up by a modest 1% to £46.1m. This means the firm has arrested a three-year slide in revenues but is still some 23% behind its 2008 peak of £60m. Its five-year compound annual growth rate (CAGR) stands at -4% – the worst in the group behind Cobbetts.

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