Senior legal figures provide their take on how the market will shape up over the next 25 years
RISE OF THE ACCOUNTANTS
‘The Big Four are challenging and will be one of the competitive threats over the next five years as they have tremendous resource, access to businesses and more sophisticated models than law firms.’
Roger Parker, EMEA managing partner, Reed Smith
PAY CAN’T KEEP RISING
‘The mid-tier firms are going to struggle to keep their remuneration levels up, which will fuel the frenzied lateral market until something goes wrong at firms which are notorious overpayers. There’s got to be a moment in professional services when you cannot keep going higher and higher – I would have thought we would have passed that already.’
Marco Compagnoni, co-head of private equity, Weil, Gotshal & Manges
WOLVES OF WALL STREET
‘There will be huge shake out – lots of firms will move to the mid-tier. The firms that were a success 25 years ago are still dominating now – Wachtell, Paul Weiss, Sullivan & Cromwell, Cravath – there is a reason these firms are still on top. The US will never do a deal with a big UK firm unless they change the way they compensate their partners. They can’t compete with US firms. This lockstep system may have made sense at one point in time, but the economic reality is that it doesn’t make sense now.’
William Urquhart, partner, Quinn Emanuel Urquhart & Sullivan
KNOW THYSELF
‘There will be an evolution towards clearer profiling of legal service providers. You have to be clear about what you stand for. You may be a legal service provider rather than a law firm, because they represent different things. We try to have an integrated solution where for large and complicated legal projects we are the solution provider, at a level of quality others can’t offer. That’s why we went into Belfast, why we use technology and why we launched Peerpoint.
There is a strategic challenge now – do you want the one-stop-shop approach or offer part of the solution and call on best friends? Within this, we will have middle market players, regional firms, LPOs that will continue to play a role. We will see some interesting developments in the next few years where firms are positioning themselves for this strategic challenge.’
Wim Dejonghe, global managing partner, Allen & Overy
CHINA BLUES
‘There are very few western firms that will make it in China. For every one that is, there are 20 that aren’t. I don’t see that changing in the near future. The legal market in China, where the fees are extremely low, is just not that attractive.’
John Quinn, founder and managing partner, Quinn Emanuel Urquhart & Sullivan
THE PROFESSION NEEDS STABILITY
‘It will be interesting to see how sustainable the eat-what-you-kill model is. If you are going to aim to attract the highest profile work for the highest profile clients, if you are paying every partner to put all their energy into developing primarily what’s on their own desk, you risk inducing your partners to compete with each other. While the model may make partners individually very entrepreneurial, it doesn’t usually produce the most cohesive or most stable structure.’
David Aitman, global managing partner, Freshfields Bruckhaus Deringer
NEW WORLD ORDER
‘All law firms who want to be leading in 25 years’ time will probably have to adjust their focus away from Europe and towards other markets. I expect the US will remain a strong economy – its space and population give it huge advantages over other countries. In 25 years’ time, I doubt whether Europe will enjoy the same relative position in the global economy as it does now. This will impact firms in the UK. You would expect Africa, India, and South-East Asia to gain more importance, to the detriment of Europe’s relative position.’
Oliver Brettle, London managing partner, White & Case
FOLLOW THE MONEY
‘The US law firms are, on the finance side, beginning to outmanoeuvre the Magic Circle firms. The big challenge for the Magic Circle is they are not able to keep up to speed quite so quickly with the developments of the New York market as they come over to Europe. In 25 years, the traditional loan market will be there, but only for small-to-mid-size borrowers, perhaps not even mid-size – there is going to be a great move to capital markets, bond-style financing.’
Mark Darley, co-head of banking, Skadden, Arps, Slate, Meagher & Flom
For further analysis see: Coming Soon – assessing big forces that will be shaping the future of law