Professional Indemnity – There may be trouble ahead

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It feels like 2014 again as the SRA pushes for an upheaval to the PII market amid benign conditions for insuring law firms. But with negligence claims mounting, how long can the calm last?

In what felt to many in the profession like a bureaucratic version of Groundhog Day, the Solicitors Regulation Authority (SRA) again issued a discussion paper on professional indemnity insurance (PII) in July. Groundhog Day, because the SRA put back on the table many of the proposals it had originally suggested around the same time last year, again suggesting a reduction in the minimum compulsory cover levels for PII from £2m-£3m to £500,000 and the requirement that law firms assess the PII cover level appropriate for their work themselves.

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Case Study: Simmons & Simmons

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Life for a financial services-heavy law firm competing with larger rivals was always going to be challenging after the banking crisis, but Simmons & Simmons suffered more than most as it wrestled with abortive merger talks, plunging turnover and strategic discord.

This makes its revival in the last two years all the more welcome. Following a torrid 2012/13, with memories still fresh from its divisive merger bid with Mayer Brown, the firm was left with revenues £40m below its boom-time peak in 2008 but its previous high has finally been passed with an 8% rise in revenues this year and profits per equity partner (PEP) up 17% to £649,000, making its performance one of the strongest in the UK top 25 this year and by far the best by a ‘chasing pack’ firm. Continue reading “Case Study: Simmons & Simmons”

Case study: Osborne Clarke

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It was another strong performance from Legal Business’ 2015 Law Firm of the Year, Osborne Clarke (OC), which saw revenues grow from £142m to £151m, with profits per equity partner up from £513,000 to £550,000.

‘We had a fantastic year the year before and just to keep that momentum going was key for us,’ says UK managing partner Ray Berg (pictured). ‘There was no complacency. We continue to do well in our core areas and retain a strong sector focus.’ Continue reading “Case study: Osborne Clarke”

Case study: Charles Russell Speechlys

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‘We have worked very hard since the outset to demonstrate that we are not simply a private client firm,’ says James Carter, managing partner of Charles Russell Speechlys (CRS). His comments come nine months after the union of Charles Russell and Speechly Bircham, creating a 530-lawyer practice that moves into the UK top 30 with revenues of £134.5m, slightly ahead of the legacy firms’ combined income for 2013/14.

When Carter says private client, he means old-fashioned trusts and estates work. The firm is looking to position itself as a leading private wealth player, covering the full range of commercial legal services for the privately wealthy, including litigation and corporate. Carter wants CRS to leverage its strong reputation in areas including employment, media, sport and fraud practices, alongside private client in all its guises, including a second-tier family practice. Speechly Bircham, alongside its recognised strength in both contentious trusts, personal tax and probate, had a well-regarded mid-market corporate practice. Continue reading “Case study: Charles Russell Speechlys”

Deal machines – the resilience of Macfarlanes, Travers Smith and the mid-tier deal team

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The forced obsolescence of Macfarlanes and Travers Smith as City-focused M&A teams has been as long predicted as it has failed to materialise. Since 2010, after both firms quickly recovered from a brutal post-Lehman shock, the pair have proved not just resilient but able to thrive.

The pair performed robustly again in 2014/15, with Macfarlanes having been one of the most successful top-100 firms over the last five years with organic revenue growth of 73%. Around 20% of revenue is generated by its corporate department, reflecting the size of its private client practice and a concerted push to broaden its disputes, regulatory and finance teams. Continue reading “Deal machines – the resilience of Macfarlanes, Travers Smith and the mid-tier deal team”

Case study: Allen & Overy

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Amid a challenging year for London’s top firms, Allen & Overy (A&O) managed to hit its stride with revenue growth of 4% to £1.28bn, while profits per equity partner (PEP) came in at £1.21m, a rise of 8%.

The result was significantly ahead of A&O’s London peers, which have also seen their sterling results impacted by weakness in the euro and the inroads of US law firms in City deal work (in constant currency, A&O estimates its revenue growth at 8%). Continue reading “Case study: Allen & Overy”

Global 100 Overview – Heavyweights

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A busy US deal market saw rainmakers pack a bigger punch than ever at the world’s largest law firms but the contest remains tough for aspiring firms. Legal Business separates the champs from the contenders.

Linklaters managing partner Simon Davies chooses his words carefully when describing his partnership’s feelings on the City giant’s performance in 2014/15: ‘they appear content’. The Magic Circle collectively went into the financial year with considerable hopes of rekindling their momentum after a long grind through the post-banking crisis wilderness.

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Global 100 – Market Comment 2015: Word from the World

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From an intensely competitive market in Asia to renewed fears of states breaking from the EU, law firm leaders give us the global perspective.

Done deals

‘It is encouraging that the factors contributing to a high level of dealmaking over the past year remain in place, and we are optimistic that these conditions will sustain robust M&A activity, particularly in the telecoms/media and energy sectors, and consolidating industries, such as pharma and healthcare. We may see increased interest in inbound M&A into Europe as its economic recovery continues.’

Eric Friedman, executive partner, Skadden, Arps, Slate, Meagher & Flom

Asia struggle

‘Most people underestimate how competitive it is in Asia to win work against UK and US firms. Clients are very selective and it’s very price competitive, even for the complex cross-border work. Everyone is competing hard to get to know the client.’

Stuart Fuller, global managing partner, King & Wood Mallesons

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