Originally published in Legal Business’ 25 year anniversary edition – December 2014
How have commercial dynamics in law firms changed?
I was practising in the mid-80s when law firm commercial dynamics really changed, the time of Big Bang. I remember having a more than slightly heated discussion with a then senior partner of my firm about whether a law firm’s purpose was to service its clients or make profits for the partners. He was from the old school, and he had gone within 12 months.
What has most defined the legal landscape in the last 25 years?
The rise in prominence of the US firms is the single most important feature that has defined the legal landscape over the last 25 years. When the majority started to open in London in the mid-1990s, they often set up in the West End (as near as possible to Lady Diana), and also thought Brussels would be the next DC. It was quite quaint back then. How times have changed. Alongside this, the demise of lockstep has been a central theme.
How has law firm competition changed?
It is impossible to underestimate the influence of the legal directories in opening up financial transparency amongst law firms. Once upon a time there was no such thing as law firm financial tables. In their infancy, some refused to comply, but they quickly changed their attitude when the numbers were reported to be lower than those of their competitors. There also used to be ‘no poach’ agreements between some law firms, now long gone.
How have partner earnings progressed?
I was peripherally involved in the first advertisement for a partner earning £100k pa (1989) and centrally involved in the first advertisement for a partner earning £1m pa (1998). Both stories made the national press, and the latter also got onto radio/TV, with me being interviewed for Sky by a junior Emily Maitlis. Given these metrics, the £10m partner is not as far away as some might think.
Have accountants been genuine competitors?
Everyone was expecting these goliaths to take legal services by storm in the late 1990s. To begin with they did, hiring some very substantial teams to start up their practices (remember Garrett & Co.?). It quickly stalled. Interestingly, only PwC stuck to their guns, who have a much larger international legal practice today than many might expect.
Is there a trend towards more team moves?
Definitely. 25 years ago there were hardly any. Today they are prevalent. Interestingly, where the US goes, we often follow a few years later. Team moves in the US were common-place well before they were in the UK. Our own involvement in the move of the TMT team from Dentons to DLA Piper, was the largest ever London team hire, and I am pleased we are associated with that.
How has the perception of the role of the GC evolved?
25 years ago the role of the in-house lawyer was considered something you only did if you had not made it in a law firm. This was never actually true, but that was the perception. Today it is dramatically different. The influence, importance and credibility of GCs is self-evident, and moving to a corporate environment is seen as a very attractive career.
What is London’s place in globalisation?
I remember when Clifford Chance started to internationalise seriously, it cost them a lot, and many others wondered what on earth they were doing. All firms have had to adapt to clients’ global needs since then. London remains in a very fortunate position as a major international hub with global spokes.
Will we see more mergers?
Once a rarity all those years ago, mergers have become common-place. Very often they have occurred when one party is in a position of weakness, and rarely when both are in positions of strength. If you are in a major UK firm, there is likely to be a US firm coming to get you. Most senior management of larger independent UK firms believe there is a creeping realisation of the inevitable.
How often are law firms now conducting independent checks on lateral hires?
The rise of formal, objective, third party due diligence of lateral partners has been very interesting to witness. Believe it or not, there was a time when, if a partner simply said they had ‘a following of £1m’, everyone just believed them. It is only in the last three years however that we have been conducting due diligence for a much broader range of firms who have truly embraced the concept.
How have the aspirations of junior lawyers changed?
Over 25 years ago it was the aspiration of all juniors to make partner. From a distance, partners were god-like figures who had reached the Holy Grail. No longer quite so true with subsequent generations x, y and z. All these years later firms have still not fully got to grips with truly aspirational alternatives to partnership.
How successful has UK law become?
I think many people forget how successful UK legal services are when looked at as an exported commodity. UK law offers certainty, and is the law of choice or default in so many places. The growth in legal services over the last 25 years is a remarkable feature of the UK economy, something of which we should be proud.
The next 25 years?
Expect more of the same. It’s a glacial, Darwinian process. That is the law!