From retaining talent to going public, LB100 leaders give their take on how to survive in an age of disruption
Go big
‘The markets are pretty buoyant in terms of legal services despite all the economic and political disruption out there. It was a particularly good year if you are global and full service. Anecdotally, I talk to lots of managing partners and the firms that have had a harder time I tend to think of as being quite niche or quite local to a particular country or market. The broader you can be geographically and from a service point of view, the better you’ve done.’
Simon Levine, global co-chief executive and managing partner, DLA Piper
Nationwide
‘If you went back five years and asked someone at Clifford Chance if they were going to have an office in Newcastle, they would have thought you were bonkers. “We are Magic Circle; we are going to have offices in New York.” Now we are beginning to see more and more of that. Meanwhile, firms like ours, who have as part of their offering strong regional offices in the UK, have become more attractive than firms that historically have been only London-centric. Clients are telling us they want a more effective and process-driven offering.’
David Pollitt, managing partner, DAC Beachcroft
Talent vacuum
‘The biggest challenge is people. It’s the age-old thing of the City hoovering up people by throwing money at them, which no doubt they’ll spit out at the other end. Despite the fact there are more people becoming lawyers, we are told, the amount of good junior lawyers out there is very limited and we are competing with London. We have to offer a lifestyle alternative – we’re looking to pay as well as we possibly can but provide a work-life balance. They’ll be earning a bit less money, but they’re living in a fantastic part of the world.’
Gavin Tyler, managing partner, Cripps
The price gap
‘Corporate for us has been slow for 18 months. It’s quite significant, probably 18-19% down on the previous year’s activity. It’s trite to say Brexit is the reason, but there’s a tension with people wanting to sell before Brexit and before any potential calamity associated with it. But the price that they’re expecting for their business – they haven’t modified their stance on the price and purchasers are looking at it thinking: “Am I going to buy this cheaper in 12 months’ time?” I’m surprised, given the amount of high-level M&A stuff happening out of London. Normally you get a ripple, but we haven’t seen that at all.’
Jeff Pearson, chief executive, Geldards
Gloves are off
‘Our whole focus is on how we win more market share. Quite a few of our competitors are struggling. On tenders we’re asking ourselves whether it is worth going in on work, but making a loss, because we know those people are key clients of other firms. It’s like bare-knuckle boxing or UFC – the gloves are off; this is not a nice game. But the gloves have always been off for me and that’s why we’re doing alright.’
Martin Darroch (pictured), chief executive, Harper Macleod
‘Quite a few of our competitors are struggling, but the gloves have always been off for me and that’s why we’re doing alright.’
Martin Darroch, Harper Macleod
Squeeze?
‘I’d love to say we’re bucking the trend, but the market overall in the mid-tier is good. You keep hearing about the mid-market squeeze, but the players in that space aren’t feeling it to the extent people keep talking about. But you are seeing more firms under financial stress. The problem with that is they’re spending more time focusing on internals and not externals. There will be more consolidation on the back of it, because it’s perceived as a fix.’
Garry Mackay, chief executive, Ashfords
Tide is high
‘The last financial year, the market was definitely more buoyant than we’ve seen in previous years. I’m not sure anyone fully understands why. The availability of finance has made a difference – that’s certainly got better. The private equity market now, particularly in Manchester, is pretty buoyant – there are a decent number of providers and London is no longer the only option. To see decent private equity money filter through to Liverpool is a bit of a game-changer really.’
Nik White, managing partner, Brabners
Hope floats
‘You have to work out what you are going to do with the funds that are raised from the listing. If any of those funds are being used to pay out the existing equity, it’s absolutely the wrong driver. If, however, you are looking to use those funds for investment that is well defined, it could work. The biggest problem I have with listing is: how can the investors realise their return and at the same time the firm, in the long run, retain and recruit talent?’
Chris Lowe, co-managing partner, Watson Farley & Williams
Cash is king
‘A lot of firms seem to be focusing on top line, with not much being given away about profitability. Likewise, I haven’t seen anyone reporting on their cash position yet. We were very keen to make it clear we have a good cash position. We also reduced our total borrowings again. It’s an important thing – it gives us that solid base to move from.’
Peter Jackson, chief executive, Hill Dickinson
Perfect balance
‘I’m not sure you will find many firms as well balanced as us. Some of the large-volume, commoditised practices in terms of insurance or personal injury are more at risk. If there’s a change and you have an over-reliance on a small number of big clients or certain business lines, then that does lead to large swings in your turnover and profitability.’
Neil Smith, finance director, Gateley