When we first launched our Euro Elite report in 2016, much of the narrative was that the future of the elite European independent firms as a breed looked assured but individually they faced challenging headwinds and delicate balancing acts to modernise their businesses for a more globalised and networked world. But we were perhaps being charitable to the Anglo-Saxon firms that have striven so hard for decades to dominate Europe and have largely failed. Nobody is drinking that Kool-Aid anymore. The headwinds have come and gone, or at least remain with little of the effects that many anticipated. The 100 firms in 40 jurisdictions that make up this year’s report have taken Brexit, Covid and political turmoil in their stride and are largely going from strength to strength.
It was supposed to be so different; the mostly UK-based firms that threw their weight about in Amsterdam, Brussels, Madrid, Paris and Rome in the late 1990s and early 2000s, acting like bullies, predicted that legal services in those markets would be homogenised and those resisting would suffer. There were casualties – Loyens & Loeff was largely born of the ruins of Loeff Claeys Verbeke after Allen & Overy had picked it over. There were success stories too – Bruckhaus Westrick Heller Löber’s merger of equals with Freshfields was viewed as market defining, although there is an argument that it allowed Hengeler Mueller, Noerr and Gleiss Lutz to bolster their positions in Germany. There are many examples of Euro Elite firms rejecting formal advances from UK firms: Gleiss Lutz and Stibbe told Herbert Smith where to go, as did De Brauw (and others) to Linklaters. Few will have regretted that decision.
The subsequent gradual retrenchment of leading US and UK firms from these markets gave the independents more of the market to dominate, but also allowed them to assuage the price sensitivity of major clients in those jurisdictions who comprehensively rejected Wall Street/City rates for the vast majority of work in those cities and beyond. The bottom line is that independent local firms are still handling vast swathes of work in the European bloc – despite the best efforts of accountancy-tied law firms and global networks. It is clear there are few examples of the one-stop shop thriving in Europe, with clients – in the main – wanting fairly priced legal services that reflect demand in specific jurisdictions, rather than internationally harmonised chargeout rates that have more to do with making a network economically viable than representing fair value.
The arrogant assumption by some international powerhouses that clients were either too lazy or too stupid to handpick their advisers on the ground in key European legal markets and could be hoodwinked into instructing an Anglo-Saxon firm in Paris or Amsterdam because of their delusions over the value of their brands has proven to be a classic misstep.
Twenty to twenty-five years on from the Magic Circle’s assault on the big European centres and not one global firm dominates in any of the Euro Elite regions. The closest they have come is perhaps in Paris, but the efforts of the likes of Allen & Overy, Cleary Gottlieb, Clifford Chance and Latham & Watkins have taken decades to gain recognition and are still not ahead of Bredin Prat, Darrois Villey, De Pardieu or Gide.
And with that, it is finally time to admit that the one-stop shop is largely shut in Europe.