This year, we asked in-house counsel to name the best law firms across three core yardsticks. Amid pressure on budgets, we chart the advisers whose time is worth clients’ money
Asking law firms to rate their peers objectively is like nailing jelly to a wall — they are often either evasive or delusional. Researchers at The Legal 500 seek peer feedback as part of the process when ranking firms, but nothing beats considered feedback from the clients themselves, which is why we took the opportunity to ask a large in-house audience to single out individual firms for the quality of their service as part of our survey this year.
BEST FIRMS: STRATEGIC HIGH-QUALITY LEGAL WORK |
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| Rank | Firm | % of votes |
|---|---|---|
| 1 | Freshfields Bruckhaus Deringer | 7.3% |
| 2 | Eversheds | 5.6% |
| =3 | Clifford Chance | 5.3% |
| =3 | Slaughter and May | 5.3% |
| 5 | Allen & Overy | 4.3% |
| 6 | Linklaters | 4% |
| 7 | DLA Piper | 3.6% |
| 8 | Pinsent Masons | 3.3% |
| =9 | Herbert Smith Freehills | 2.6% |
| =9 | Norton Rose Fulbright | 2.6% |
The survey asked respondents to choose three firms for strategic high-quality legal advice; three for pragmatic commercial advice and strong service delivery; and three for value for money. Ultimately — and good news for the UK legal market as a whole — the votes were spread very widely, with only a small number of firms collecting a significant number of votes in each category.
However, one clear winner emerged. Eversheds took 7% of the total of 829 nominations across all categories, receiving the highest proportion of votes, 9%, for ‘value for money’ and also emerged as the most popular for ‘pragmatic commercial advice’ (taking 6% of the vote). It also came second in the ‘strategic high-quality legal advice’ category (with 6% of the overall vote).
In second place overall was Freshfields Bruckhaus Deringer, the only Magic Circle firm among the top-three most highly ranked firms overall, just behind Eversheds, with 6% of the vote across all categories. It was voted as the top firm for strategic high-quality legal advice with 7% of votes overall, second for pragmatic commercial advice (6%) and joint third in terms of value for money, with 4% of the vote.
The world’s largest firm by revenue, DLA Piper, is the third choice, ranking second for value for money, joint fourth for pragmatic commercial advice and seventh for quality.
Undoubtedly the most important reason to choose a law firm according to our survey is quality of legal advice, with 84% saying this is ‘very important’, more than any other criteria (see graph on page 62). With this in mind, all five of the Magic Circle firms were named among the top ten firms for strategic high-quality advice — although not all were ranked in the top five, with Eversheds proving more popular in that regard and Linklaters in sixth place.
‘For the bet-the-ranch stuff, Magic Circle firms provide certainty of service,’ says head of legal services transformation at PwC Legal, Stephen Allen. ‘For a massive, complex international service transaction, they can throw the resource at it on Monday and they’ve done five of them before.’
With a ‘firm’s experience in similar matters’, garnering the second highest proportion of ‘very important’ votes, it’s perhaps unsurprising that Magic Circle firms remain high on the list of go-to firms for assurance of quality. ‘[They] still have top-quality brand appeal,’ one survey respondent comments.
For pragmatic commercial advice, all five of the Magic Circle appear again in the top ten, with Freshfields and Slaughter and May in the top five, taking second and joint fourth place, but challenger firms Eversheds, Pinsent Masons and DLA Piper all take prime positions, ranking first, third and joint fourth respectively.
Price level is the third most important factor for choosing a law firm, with 43% of those surveyed finding it ‘important’, while 27% consider it to be ‘very important’. Inevitably, ‘value for money’ is one category where the Magic Circle fares less well, with Freshfields being the only firm to rank among the top five alongside firms with lower national cost bases — DLA, Eversheds, Pinsent Masons and Osborne Clarke.
BEST FIRMS: PRAGMATIC COMMERCIAL LEGAL ADVICE |
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| Rank | Firm | % of votes |
|---|---|---|
| 1 | Eversheds | 6.3% |
| 2 | Freshfields Bruckhaus Deringer | 5.6% |
| 3 | Pinsent Masons | 3.7% |
| =4 | DLA Piper | 3.4% |
| =4 | Slaughter and May | 3.4% |
| 6 | Linklaters | 3% |
| 7 | Baker & McKenzie | 2.6% |
| =8 | Allen & Overy | 2.2% |
| =8 | Hogan Lovells | 2.2% |
| =10 | Addleshaw Goddard | 1.9% |
| =10 | Clifford Chance | 1.9% |
However, the fact remains that some clients consider the quality and certainty of outcome that Magic Circle firms afford them as reason enough to consider them good value for money. Others noted improved innovative solutions and valuable add-ons as a reason to go Magic Circle.
‘Historically we have worked with Clifford Chance and Slaughter and May, and when we commenced the Aviva plc panel review process, we were pleasantly surprised to see that several firms offered lots of innovative value-adds in addition to traditional hourly rate discounts,’ says GC for Aviva Group Monica Risam. ‘Prior to the panel review, I had challenged Slaughters by asking what more they could do for us and they proposed that they would set up a helpline. The feedback we have had is that some of the questions they have received from our lawyers are quite esoteric, things that partners at the firm might not have actually thought about before, so they find it quite interesting to see what comes in!’
Head of M&A legal at Barclays, Khasruz Zaman, observes that a difficult legal market makes for increased leverage among clients with Magic Circle firms: ‘In terms of the market at the moment, there is plenty of choice for the provision of legal services and as a consequence I think we are in a position where, with the quality and volume of deals that we do, we can effectively ensure that law firms provide value for money.’
BEST FIRMS: ALL CATEGORIES |
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| Rank | Firm | % of votes |
|---|---|---|
| 1 | Eversheds | 6.9% |
| 2 | Freshfields Bruckhaus Deringer | 5.7% |
| 3 | DLA Piper | 4% |
| =4 | Pinsent Masons | 3.6% |
| =4 | Slaughter and May | 3.6% |
| 6 | Clifford Chance | 3% |
| 7 | Linklaters | 2.4% |
| 8 | Allen & Overy | 2.3% |
| 9 | Baker & McKenzie | 1.8% |
| 10 | Herbert Smith Freehills | 1.4% |
But the presence of firms such as DLA, Eversheds and Pinsent Masons in these tables — not just in terms of value for money, but also for strategic high-quality and pragmatic advice — underline that the default belief that the Magic Circle is always first choice for work, regardless of price, has been somewhat eroded. In addition, the lack of a significant presence from second-tier City-based international firms in these tables suggests that clients are buying into the full-service coverage provided by firms such as DLA and Eversheds, and do not perceive a significant loss of quality as a result.
Nonetheless, it is fair to assume that with only 7% of respondents to this survey having an annual legal spend of over £10m, a sizeable chunk of our 347 respondents would be outside the core target of top City firms.
‘Many national and regional firms actually provide a better, more tailored, service,’ one survey respondent comments. ‘You feel more valued because non-Magic Circle firms seem to care about losing you as a client.’
There is an undoubted waning of interest among clients regarding elite London firms, reflected by responses to our question: ‘What single option best describes your feelings about the quality and value added to clients by Magic Circle law firms?’ Forty per cent were neutral, with only 8% ‘strongly positive’ and 5% ‘strongly negative’.
BEST FIRMS: VALUE FOR MONEY |
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| Rank | Firm | % of votes |
|---|---|---|
| 1 | Eversheds | 8.8% |
| 2 | DLA Piper | 5% |
| =3 | Pinsent Masons | 3.8% |
| =3 | Freshfields Bruckhaus Deringer | 3.8% |
| 5 | Osborne Clarke | 2.3% |
Comments provided anonymously by in-house teams were broadly negative, with one respondent saying: ‘Large bills accompanied by positive market perception but little evidence of better quality advice’; while another comments: ‘Magic Circle firms are very good, but they don’t add value to every transaction… no one gets fired for instructing Links and for some it is an ego trip to engage the Magic Circle.’
However, the sense is that although clients will rail against the Magic Circle’s ‘horrendously overpriced’ fees, many accept that in an emergency they are the best option. ‘We would use them where the transaction is particularly large/complex (eg significant M&A),’ says one in-house lawyer, while another adds: ‘MC firms have their role on massive, global mandates’.
Ultimately, this feedback resembles antipathy towards any prestige brand. Some consumers may bemoan the dominance of Apple in the technology market, but who doesn’t own an iPhone? LB
francesca.fanshawe@legalease.co.uk