Aside from bad knitwear and excessive alcohol consumption, Christmas is a time for reflection as well as looking ahead. With this in mind, we asked some senior law firm figures for their thoughts. Rose-tinted spectacles are optional.
Striking the balance
‘Much of our focus this year has inevitably been on integration and on being instructed because of capabilities created as a result of our merger. We have done very well in both areas and the sheer number of so-called synergy mandates has been a real highlight. Against an improving but still uncertain economic backdrop in 2013, our financial performance has been satisfactory.
The continuing internationalisation of the legal market will lead to further consolidation and the demand for premium legal services will become more competitive as a result. The successful firms will be those that have the correct balance in practice and geographical focus, are innovative in adapting to client needs around service delivery and pricing, and match supply to emerging demand by predicting and responding to global investment trends.’
Jonathan Scott, senior partner, Herbert Smith Freehills
Upward trend
‘I am confident that the firm is well-positioned for 2014. London activity levels are healthy and our other offices are busy and growing. We are seeing a more visible pipeline of future activity and a clearer return on our investment in the firm over the last few years. In the market generally, I expect the trend of consolidation to continue during 2014 as well as firms continuing to explore ways of improving the efficiency of service delivery.’
Neville Eisenberg, managing partner, Berwin Leighton Paisner
Seeing results
‘We’re very encouraged by our performance so far this year, with growth in our UK business now well into double digits. Strong flows of new work are being generated across the firm as a direct result of the combination that formed Dentons earlier this year. On the legal market generally, we’ll see more consolidation, but it’s going to be interesting to see what the expected economic upturn will mean for law firm strategy. Have the important lessons learned from the challenges and seismic shifts of the last few years become truly embedded or will they be forgotten as better times return?’
Matthew Jones, UKMEA chief executive, Dentons
Value for money
‘The market remains demanding and competitive, but we see clients continuing to turn to those firms who can provide the highest quality legal service across a wide bandwidth. We think the volume of work in litigation and global investigations will continue and we are cautiously optimistic that the M&A market will see further activity in 2014. Overall, fee pressure remains significant, but we are seeing a wider emphasis placed on value rather than price alone.’
Richard Clark, executive partner, Slaughter and May
Gathering pace
‘As we near the end of 2013, the market feels kinder to a law firm like us – probably the kindest since I started as managing partner in January 2010, and it’s felt pretty tough going during much of that time.
There’s been no wind in your sails for free, so you’ve had to turn over every last stone for work. Now, all of a sudden, it feels a little more benign. So we end the calendar year feeling better than we have done for quite some time.
I’m hoping the encouraging signs we’ve seen over recent months will be sustained – the order books are in good shape, which is nice to see and there’s a momentum now in all areas of the firm.’
Andrew Lilley, managing partner, Travers Smith
Too much regulation
‘This is one lawyer who would like Santa to bring him for Christmas a nicely wrapped gift with the words “regulatory certainty” stamped on it, providing some kind of secure foundation for the UK’s institutions, while allowing the regulators to know exactly what they need to do, without clients spending so much time guessing what the regulatory requirements are going to be over the next few years.
While at times you are seeing a move towards de-globalisation, where countries look inwards in terms of liquidity buffers and regulation, much of our work with disputes and transactions spans the globe. Law firms are at the forefront of ensuring that the benefits of globalisation are actually realised for the UK.’
Simon Davis, London commercial litigation head, Clifford Chance
Rise of the mid-market firms
‘Our performance has been strong in 2013, but the market remains very tough with the influence of procurement creating increasing pressure on rates in our three principal sectors of insurance, health and real estate. Wider trends are likely to be a series of law firm consolidations brought on by market forces, which will reshape the market outside the top ten firms, and attempts by those mid-market firms to build up credible international footprints.’
Paul Murray, managing partner, DAC Beachcroft
Double-edged sword
‘The end of the second quarter has been our busiest since 2008 and what’s different now compared to any time since 2008 is that there are pipeline transactions in the system.
Next year, the market’s going to change. We’ve been in an era of everyone hunkering down against the storm, so as we get a bit more optimistic economically, we’ll see firms open up a bit again. However, as you come out of a difficult market and everything goes up in price, and you have to pay your people more, you try to expand more, you get a bit more work, so you have to finance a bit more work in progress. That, in some ways, is the worst time in terms of financial stress for some firms, so we’re not out of the woods for at least another six to nine months.’
Quentin Poole, senior partner, Wragge & Co