Prior to the financial crisis of the late 2000s, the main revenue drivers for the elite law firms in the City of London were the Corporate M&A and finance practices. In the wake of the recession, established corporate and finance firms had to rapidly diversify and re-strategise in order to capitalise on the opportunities that were now presenting themselves across restructuring, regulatory investigations, litigation, international arbitration and so on. Dispute resolution became very hot, very quickly!
The nature and volume of litigation that spun out from the financial crisis created a feeding frenzy for some of the City’s best litigation partners, with elite US firms such as Skadden, White & Case and Latham & Watkins attracting some of the biggest names. At the same time there were new disruptive entrants to market such as Quinn Emanuel, Stewarts Law, Signature Litigation, Enyo, etc. whose strategy was to provide a “conflict free” litigation service, enabling them to act for individuals, private equity houses and hedge funds in major pieces of litigation against the banks, work that the established elite firms in London could not touch. These firms have grown rapidly and have been able to attract leading partners across financial services litigation, competition litigation, international arbitration and white collar investigations.
The market is becoming more and more fragmented. The bigger firms are generally pursuing “catch all” strategies whereby they seek to provide a one-stop-shop to key clients. This is generally a corporate / transactional led strategy. The knock-on effect of this is that it leads to numerous conflicts for litigation and international arbitration practices, who are, as result, either moving to other firms or setting up as independent boutiques. This was best evidenced when Graham Huntley set up Signature Litigation in the wake of Lovells’ merger with Hogan & Hartson or more recently when Constantine Partisides and Jan Paulsson left Freshfields to set up 3 Crowns.
The litigation market remains buoyant. As regulators compete with each other and look to exercise their powers there is a growing demand in private practice law firms for White Collar Crime specialists. This has led to many litigators, who have acted on ad hoc investigations, re-positioning themselves as white collar crime specialists, a similar trend to how the international arbitration market boomed in the 2000s. The litigation funding market in the UK is becoming increasingly sophisticated also, with claimants looking to de-risk and improve their cashflow positions by using the funders. This is another factor that is driving London’s booming litigation market.
Demand for top quality litigators across various disciplines in London shows no sign of abating. It will remain a highly competitive market in which the more nimble, flexible and profitable firms will come out on top in the battle for the best partner talent.
For more information please contact Jonathan Fort.