‘The US firms don’t have any magic formula – it’s just that they have a very large economic driver behind them, which is the US economy.’ Simon Levine, DLA Piper
Global 100 leaders review the past 12 months and give their prognosis on how the market will shape up in 2024
Real question
‘It’s no secret that across the industry there has been a sustained decline in demand. Some firms assumed that Covid levels of demand were the new normal. But there’s been a change in circumstances that has led to a softening of demand. I’d be an idiot if I wasn’t concerned about things like the Russia-Ukraine situation, rising interest rates, and inflation. Inflation is here to stay for a while. The real question is whether law firms are willing to pass on the effect of that to clients who are trying to deal with that themselves.’
Gregor Pryor, managing partner for Europe and the Middle East, Reed Smith
Sitting uncomfortably
‘We’re never comfortable. Our strapline is being ambitious, always better. So, there’s a dynamic in there which is to say “look, we’ve done well, but let’s go again”. Comfortable can sometimes be a negative word that you’re just going to rest on your laurels, but our trajectory is about pushing, being dynamic, energetic and always better.’
Hamid Yunis, London managing partner, McDermott
Hearts and minds
‘The energy transition is probably the biggest opportunity. There will continue to be tremendous amounts of capital invested around the move to a lower-carbon economy. The threat is the culture within law firms and whether or not they remain attractive places for the next generation of talent to work and it’s something we worked very hard on here to make sure that we’re winning the hearts and minds of our newest lawyers.’
Keith Fullenweider, chair, Vinson & Elkins
Moving too fast
‘AI presents both a challenge and an opportunity. We spoke to a client of ours, talking about some products they’d developed. They went to an AI forum and had to throw all the products in a bin, as they were already out of date. It’s so live. Everybody is finding that it is hard to put your foot on a ball that’s moving so quickly.’
Rich Youle, head of London office, Skadden
Future proof
‘The choice between increasing profit or boosting investment is an interesting one. Law firms try to increase profit each year to retain and attract talent, and we need to be competitive. Being profitable is part of being a leading law firm. But we have an eye on the future as well. We don’t take a short-term view; we try to achieve a balance. It’s a bit like running a country – you have to plan for the future. We try to build the firm to continue to service our clients, so that the next generation can inherit a firm that they’re proud of – an enduring institution.’
Mark Rowley, partner-in-charge – Dubai, London and Riyadh, Baker Botts
Time is right
‘There are always boom years where the market is very strong. But it’s especially good when markets are turbulent and people still do well. Transactional lawyers are not quite as busy right now, but that could be an issue of market timing rather than market turmoil. They’re all saying there’s a huge amount of capital out there to be invested, but everyone is ultra-cautious at the moment.’
Tom Sprange KC, London managing partner, King & Spalding
Greater value
‘The latest inflation numbers from the States and the UK have been okay, which is a good sign. There’s no question that interest rates in particular have affected M&A globally, particularly in the private equity space. There hasn’t been a significant shift this year in the approach to value for money. Clients are very careful and cautious on fees generally. That’s understandable. Times are tough and companies have to be careful about legal spend.’
Justin Stock, London managing partner, Cooley
Looking up
‘The economic environment and constraints that arise with the higher interest rates and inflation means expectations had a somewhat damping effect on the transactional side but ultimately that leads to some pent-up demand. As the interest rate appears to stabilising, we’re seeing greater levels of activity now as our strategic and private capital clients are looking to continue their strategic growth.’
Tom Thesing, London managing partner, Sidley
European evolution
‘In the space of three decades or so, infrastructure in Europe has transitioned from being mainly owned and operated by parts of the public sector to being classes of assets increasingly in the private sector. Private equity and infrastructure funds have played a leading role in this evolution drawn by the attractive levered returns their downside-protected revenues offer investors.’
Justin D’Agostino, chief executive, Herbert Smith Freehills
Building out
‘During Covid, the bigger global clients turned to law firms for a full range of services across a wide range of practices and jurisdictions, because, in difficult times, it’s a lot easier to do it that way. Some of the narrower international firms are building out because they feel potentially susceptible to challenges from US firms. The US firms don’t have any magic formula – it’s just that they have a very large economic driver behind them, which is the US economy.’
Simon Levine, global co-chief executive, DLA Piper