‘I don’t believe there is such a thing as an ESG lawyer’ – the words of one environmental, social and governance (ESG) practice head in an interview for this month’s lead feature aptly sums up one of the key challenges for firms trying to establish themselves at the top of this much-hyped market.

That individual is not alone in this view; it has also been a repeated refrain in the research interviews for the Legal 500’s first UK ESG rankings, which will be published later this year. And it’s not a stretch to see why this opinion persists, given the myriad practice areas that fall under the ESG umbrella – from greenwashing disputes to sustainable finance, and regulatory matters to ESG transactions; not to mention the traditional environment and governance work that make up two letters of the acronym.

As Legal Business’s fourth annual ESG survey finds, more and more top firms are now attempting to put together multidisciplinary practices covering some or all of these areas, and are heavily marketing their expertise in covering the whole piece. Perhaps inevitably, some of these supposedly ‘globally integrated’ practices are little more than loosely connected groupings of lawyers with relevant expertise but shaky claims to being ESG specialists.

However, despite the extremely broad remit required of an ESG adviser, there are some senior lawyers who have successfully transitioned their practices amid ESG’s rise to prominence and made a name for themselves as specialists, as well as an emerging group of up-and-comers who have managed to build strong personal brands as ESG lawyers at earlier stage of their career.

At Latham & Watkins, London-based global ESG co-chair Paul Davies is known for having transformed the firm’s environmental practice into a leading ESG practice and is described as a thought-leader in this space. Meanwhile, at Linklaters, a central figure in the development of ESG at the firm has been practice founder Vanessa Havard-Williams, who cut her teeth as a litigator and environmental lawyer in the 1990s and early 2000s before building a broad practice on the front lines of policy and compliance.

Now a consultant after stepping down from the partnership last year, Havard-Williams has passed the torch to Rachel Barrett, whose background is in advising on the project development and financing aspects of energy transactions, and who now leads on ESG at the firm just six years after making partner.

Other emerging names in the space include Herbert Smith Freehills (HSF) senior associate Jannis Bille, who is now UK head of ESG just five years after qualification, and his former colleague Rebecca Perlman, who was made UK, US and EMEA head of ESG at HSF in 2021, before making partner and then securing a move to Kirkland & Ellis earlier this year – just one of a number of hires by US firms cherry-picking top talent in the sector.

As new regulatory requirements continue to pile up, genuine ESG expertise will be in fierce demand, and so building a practice – and keeping hold of the best talent – is likely to be more of a challenge than ever. Watch this space.

ben.wheway@legalease.co.uk

Go to the ESG Report contents.

The post Making an ESG lawyer – law firms search for the magic formula appeared first on Legal Business.

‘Flexible working is something I hope to see the legal profession increasingly support. I’m a single parent of two five-year-old girls. I couldn’t do this job unless I was more often than not taking them to school.’ Lisa O’Neill, Milbank

As part of our annual ESG report, management at top law firms give their views on ESG’s importance to both lawyers and clients

Dance it out

‘When I was in the middle of negotiating one of my most stressful deals, Beyoncé released a new song, so the only thing to do was download it and have a dance party for one in my study at 2am in the morning. It’s a stress management technique I would highly recommend!’
Nallini Puri, M&A partner, Cleary Gottlieb Steen & Hamilton

Hair today, gone tomorrow

‘There are a few of my male colleagues who I always know have just finished their deal when they turn up with a “signing/completion haircut”. While we do drop everything for the big push, that’s a good sign indicating they’ve probably had time to catch up again with everything else that’s fallen behind, including some proper sleep, and quality time with partner, family and friends, as well as life housekeeping.’
Gavin Davies, head of global M&A, Herbert Smith Freehills

School run

‘Flexible working is something I hope to see the legal profession increasingly support. I’m a single parent of two five-year-old girls. I couldn’t do this job unless I was more often than not taking them to school and putting them to bed at night. At this stage of my career, I’m lucky that I can manage this. For me, that’s enormously important.’
Lisa O’Neill, London corporate team co-head, Milbank

Laughter is the best medicine

‘Of course, laughter is one of the best ways of relieving stress. Sometimes you get an email setting out a ridiculously impossible deadline, but you can just roll your eyes and think, “Yeah, here we go again,” and have a laugh with the team. But if you’re there on your own with the pressure of your inbox constantly filling up with emails, it’s much harder to laugh by yourself and see the funny side of the quirks of our job.’
Penny Angell, UK managing partner, Hogan Lovells

Opportunity knocks

‘What I see among junior team members is a strong focus on wanting to combine interests in specific fields with their careers, and the ESG focus allows for that. It’s rare in the legal space to witness the development of a new area of law. These are massive opportunities for juniors to come in and experience the evolution of a legal space in real time.’
Jannis Bille, UK head of ESG, Herbert Smith Freehills

Working together

‘One thing I’m finding as a sustainability partner is that sharing our journey with clients is powerful. A collaborative approach with clients in this area has been effective. We’re working with them in the same arenas, sometimes moving ahead of them, sometimes behind, but always sharing. This has become a real area of collaboration for the business.’
Caroline May, ESG co-lead, Norton Rose Fulbright

Don’t forget the S and G of ESG

‘There’s a risk at times of overemphasising climate or environmental aspects to the detriment of understanding that these are all interrelated issues. The social risks and opportunities related to corporate governance and corporate activity are intrinsically linked to environmental issues – one can’t address one without the other.’
Michael Watson, head of climate and sustainability advisory, Pinsent Masons

Remember the essentials

‘It’s not just a “nice to have”. ESG is essential to doing business now.’
Alexandra Holsgrove-Jones, partner, knowledge – ESG, TLT

Empathetic leadership

‘We need a compassionate form of leadership. We are all increasingly global, and a good understanding of multiculturalism is crucial. It’s not just “this is how we do things in London; therefore, this is how we will do it everywhere else”. We need to understand our people, our clients, and the environments and cultures in which they operate.’
Farmida Bi, chair, Europe, Middle East and Asia, Norton Rose Fulbright

The post The Last Word: ESG to the fore appeared first on Legal Business.

If you knew nothing about City law and the gender diversity problems it has at senior levels, you certainly wouldn’t think there were any issues when reading our feature on dealmakers and stress.

In our in-depth feature, ‘Stress test’, we quote no fewer than five leading transactional lawyers who happen to be women. And four who happen to be men.

Now – shock publishing revelation here – as journalists we always try to ensure we’re being as diverse as possible in the people we quote, even if this means that the ratios don’t match the reality of the profession.

Feeling the weight of stress at work isn’t weak, it isn’t a personality flaw, and it isn’t incompatible with life as a successful deal lawyer.

In this instance though, we didn’t have to try. Because for this feature, multiple male dealmakers declined to speak to us about the stress of working on deals and how they cope with it. Thanks to HSF’s Gavin Davies, Latham’s Paul Dolman and McDermott’s Aymen Mahmoud and Chris Kandel for bucking the trend.

The line between long hours, stress and mental health is more than a little bit blurry, but it’s important to point out that this article focuses on how to cope with the chronic stress of transactional law across an entire career; not a mental health crisis.

But the latter can follow the former, even if the reasons for a crisis are likely to be far wider, as so tragically demonstrated by the death of Pinsents partner Vanessa Ford after a period of intense work on the Everton sale.

Of course, the adrenaline and excitement are what drive many M&A lawyers, but I just don’t accept that even the biggest deal junkie doesn’t sometimes find it all a little bit much – or at least need to fall back a few personal coping mechanisms.

Which is why, here at LB, we think it’s important to be open about this. Recent years have seen increasing numbers of lawyers bravely opening up about their own mental health struggles to show others that they’re not alone and that it is possible to be a successful lawyer while living with conditions such as depression or anxiety. (In fact two partners share their stories in this issue.)

But in the same way that anyone can experience both good and bad mental health, anyone can feel stressed by work – and, in all likelihood, at some point everyone will. It certainly isn’t more likely to affect any one gender or gender identity more than another.

So let’s not pretend. Feeling the weight of stress at work isn’t weak, it isn’t a personality flaw, and it isn’t incompatible with life as a successful deal lawyer – or indeed success in any other career. And nor is talking about it.

In fact, arguably those that do talk about it, seek help or devise their own coping mechanisms are in a stronger position to keep working under pressure than those that don’t.

Dealmaking at a top commercial law firm isn’t going to be a career path that works for everyone, but it’s a career that attracts huge numbers of new recruits year-after-year, with or without the new Magic Circle standard starting salary of £150k.

The profession owes it to those already working and those yet to start their careers not only to try to change things for the better in terms of client demands, but also to talk openly about what people feel and how to cope.

Only by doing that will lawyers of all levels be able to stop putting so much pressure on themselves to deliver perfectly at any cost.

georgina.stanley@legalease.co.uk

• For more, see Stress test – partners on how they deal with a life under pressure

The post Stressing the positives – why opening up about the demands of City life helps everyone appeared first on Legal Business.

Clandestine conversations, a recruitment strategy on steroids, eye-watering salaries and internal politics galore, the Paul Weiss/Kirkland story has enough drama in it to keep the attention of even those outside the legal market.

For City partners, the interest in what’s going on has been off the scale.

While there had been rumblings of discontent in the Kirkland ranks for some time, Paul Weiss swooping in for one of London’s most high-profile debt partners in Neel Sachdev was a headline move to surprise even the most seasoned City-watcher.

Paul Weiss has managed to out-Kirkland Kirkland with its torrent of targeted investment.

Going on to recruit an entire fantasy football squad from an array of top firms over the next six months – not to mention the very public leaking of the factors that drove Sachdev and M&A partner Roger Johnson into the arms of their elite New York suitor – took interest to a new level.

With its aggressive – and seemingly insatiable – lateral recruitment strategy, Kirkland has long been one of those firms that rivals love to criticise; an outlier in terms of its volumes of talent acquisition, even in busy recruitment markets. Yet after years of speculation, but almost no sign of any action, Paul Weiss has managed to out-Kirkland Kirkland with its torrent of targeted investment in London.

Here’s the thing, though; even with 12 partner departures to Paul Weiss alone, Kirkland was still one of the fastest growing firms by partner count last year, as our Global London survey highlights. And, if anything, its resolve to keep building up around private equity only appears to have been strengthened. No need for rallying the troops or worries about how to rebuild for a firm with the scale, bench strength and, crucially, the profitability of Kirkland – it will no doubt remain as big a draw as ever.

The same is not true of some of the other firms to have been plundered by Paul Weiss, however.

Overall recruitment may have slowed across the Global London firms, but there’s still very much a war for talent at the top end of the market, particularly in areas such as PE. It isn’t so much between Paul Weiss and Kirkland though – it’s between them and everyone else who wants to stay in this game but who doesn’t have the profitability or the partnership buy-in to throw money at the problem. And such a bold play by Paul Weiss means this could now include top US firms in London, as well as the proud but less-profitable UK leaders, which have been the primary target for talent poaching for so long.

But while Kirkland will, of course, be more than just fine after all of this has died down, it has had to face up to an unprecedented level of scrutiny into its culture, including questions about just how involved the London office is in decisions around recruitment and the extent of divisions within its partnership.

You can read both sides of the story in our feature, but there are clearly some very sage lessons for all firms around communication here. Just ask Allen & Overy’s outgoing senior partner Wim Dejonghe (see Life During Law), who learnt some hard lessons about communication during the firm’s failed talks with O’Melveny & Myers – consult too early and too widely and risk a handful of discordant voices scuppering things; or, as with Kirkland, fail to bring everyone along and prepare to deal with the fallout.

georgina.stanley@legalease.co.uk

The post Talk of the town: Why Kirkland/Paul Weiss underlines the value of controlling the management message appeared first on Legal Business.

The easy narrative is that the party is over. After years of rapid expansion by international law firms in London, 2023 saw lawyer headcount at Global London firms inch up by just 1.8% – a figure which appears to provide confirmation that the City interlopers are finally starting to apply the brakes in London as deal volumes dry up.

And that narrative does bear up to scrutiny – to an extent. Last year more than half of the 50 Global London firms saw headcount in the capital flatline or decrease, and across the largest ten, combined headcount fell by 1%, with big firms such as White & Case, Baker McKenzie and Reed Smith all seeing London lawyer count dip.

But while 2023’s relative stagnation is way down on last year’s equivalent overall growth of 9% – not to mention the pre-pandemic highs of 15% – the overall stats do mask the trends within the trends.

Almost a third of the Global London firms still managed to increase London lawyer count by a double-digit percentage last year. The standout among that group is of course Paul Weiss, which announced its long-awaited English law debut last summer, and by 1 January 2024 had already more than doubled partner count on the same date the previous year, with much more growth following since.

Last year more than half of the 50 Global London firms saw headcount in the capital flatline or decrease.

Other firms notably thumbing their noses at the market slowdown include Paul Hastings, which boosted London equity partner count by almost a third during 2023 with hires across finance, funds and infrastructure, including Linklaters duo Jessamy Gallagher and Stuart Rowson.

Elsewhere, Milbank swooped in to complete the long-rumoured acquisition of Dickson Minto’s private equity-focused London office, while Cleary – historically one of the most conservative US players in London – grew its London partnership by 25% with hires in M&A, private equity and restructuring, a move which partners described as ‘a turning point’ for the office.

Such moves point towards a trend of quality over quantity, with US firms increasingly sharpening their focus on narrower, more lucrative areas of expertise and tailoring their recruitment accordingly.

On that point, Paul Weiss chair Brad Karp says his firm had been waiting for some time for ‘partners with the requisite talent and market reputation’, arguing that the legal market has become ‘a star system, with clients increasingly hiring star lawyers, as opposed to law firms’ for their most consequential matters.

And while his firm has delivered on that front by attracting some of the biggest names in the City, what has passed with less fanfare has been the simultaneous arrival of an army of junior lawyers, with the Soho base already close to a headcount of 150 lawyers, and on its way to a target of 200 by the end of 2024 – a number which would place the firm comfortably among the top 20 largest Global London firms.

Such recruitment not only underlines the ambitions of Paul Weiss in London – it also demonstrates the resources required to service premium global clients demanding a broader global platform from their advisers. And so for Global London firms, while the party may have quietened down, the savviest firms are ensuring they are ready for the music to begin again.

ben.wheway@legalease.co.uk

See our full Global London report.

The post After the party – market slowdown pushes US leaders to take stock in London appeared first on Legal Business.

‘Whilst we’re very much plugged into the global firm and there’s lots of synergies and certainly a very clear industry focus, we have a strong domestic client base.’ Ajay Pathak, Goodwin

As part of our annual Global London report, management at US firms in London give their views on today’s market challenges

Power plays

‘We have made transformative investments in our firm over the past year. We have expanded our geographic reach, invested in our strengths and developed new, critically relevant practice areas, adding transcendently talented new partners to our partnership and marquee clients to our client roster. We will continue to adapt our firm to the new competitive realities of the marketplace.’
Brad Karp, chair, Paul Weiss

Centre stage

‘We’ve been in London for 50 years. London has always been an integral part of our core proposition. We have three major offices, and London is part of our core triumvirate, with New York and Washington DC. I expect it to remain so for both the foreseeable and extended future.’
Ashar Qureshi, London managing partner, Fried Frank

Home grown

‘The bulk of our revenue in London comes from matters originated in London. But we’re an integrated firm – we work with all the other offices in Europe, in the United States, and in Asia too.’
Richard Pollack, London managing partner, Sullivan & Cromwell

Paying dividends

‘We are a long-term investor. We don’t get into anything where we don’t have a commitment to the long term and a belief that it’ll work in the long term. We don’t do speculative things. The things we do, we stick at and continue to make a success of. You can see that in the history of what the London office has gone through – from not being heard of and no-one seeing Latham coming.’
Stephen Kensell, London managing partner, Latham & Watkins

Consistency is key

‘The strategy of the London office mirrors the strategy of the firm, it is absolutely consistent with that. What we are doing in London is the same sort of work for the same sort of clients. London is an integral part of the success of the firm.’
Sebastian Rice, partner in charge of London and Geneva, Akin 

Unlocking AI

‘I don’t think we are going to be able to put that genie back in the bottle for sure. There will be some firms that are going to invest a lot of money in it, but the jury is out as to whether every firm will have to invest that type of money or whether it will shake out in a way where costs will decrease dramatically.’
Mary Kuusisto, head of London office, Proskauer

Growth mindset

‘When you look at what is happening in the market, all the top US firms look to be expanding their offering in London. That’s noteworthy and the market share that US firms have keeps growing. That’s the trajectory. I don’t see anything other than that continuing.’
Tom Canning, London co-managing partner, Milbank

Globally integrated

‘A lot of what we do in London is home-grown in that, whilst we’re very much plugged into the global firm and there’s lots of synergies and certainly a very clear industry focus, we have a strong domestic client base. But equally, what we’re seeing is as our platform in the UK is developing and continues to do so, we are well positioned to serve our global clients with their needs.’
Ajay Pathak, co-chair, Goodwin

Return to the Global London contents.

The post The Last Word: Capital call appeared first on Legal Business.

‘AI has not significantly changed the day-to-day operations of law firms. The emphasis is on staying alert and staying informed about ongoing developments.’ Didier Martin, Bredin Prat

As part of our annual Euro Elite report, management at independent firms in Europe give their views on today’s market challenges

Experience matters

‘We expect strong growth again this year. Our corporate and M&A practice will remain the driver and the rising insolvency figures will keep our restructuring practice busy. Transatlantic relations are increasingly coming to the fore. This applies both to takeovers of European, particularly German, companies by US private equity investors and strategic investors and to investment activity by German groups and companies in the US.

IPOs of European companies in the USA will also be in demand. We are well prepared for this, as we have already assisted German companies with their IPOs in New York in
the past.’
Alexander Ritvay, co-managing partner, Noerr

Status quo

‘With AI, we know there will be effects in the future but today it’s a different story – all law firms are starting some pilots or discussing plans with big players. Essentially, as of now, AI has not significantly changed the day-to-day operations of law firms. The emphasis is on staying alert, being agile, and staying informed about ongoing developments in the AI space.’
Didier Martin, partner, Bredin Prat

Happy with their lot

‘Generally, firms are not struggling so much. For international firms, it might be different because they might be trying to overpay people and over invest, but independent firms – they have what they have.’
Paweł Zdort, managing partner, Rymarz Zdort Maruta

Supply and demand

‘The fight for talent is still brutal. Over the last few years, the number of young people going in [to the legal market] hasn’t matched the increase in demand.’
Saulė Dagilytė, managing partner, Sorainen

Shortage of talent

‘Corporate legal departments have grown and become more sophisticated. And then there has been a completely new demand for legal talent in the form of startups and technology startups that we had not really had before. In the previous booms, we had not seen lawyers among the first ten or 20 employees of any startup. Now they seem to be. This could be because many startups are now looking at opportunities in regulated environments, whereas in the previous booms, regulation was less pervasive. The universities are not keeping up, so they are not adding new legal students and we really have a shortage of lawyers in Sweden and in Finland.’
Mikko Manner, managing partner, Roschier

Staying relevant

‘The challenge is to maintain sufficient capacity to manage the regulatory workload and to compensate for lower utilisation in other areas. Boutiques benefit from their specialised expertise but can hardly compensate for reduced demand and retain staff in the long term. Large international firms are struggling with high rates that are no longer suitable for all sectors. Law firms need to stay up to date and invest in their own tools.’
Elizabeth Lepique, managing partner, Luther

Great expectations

‘Clients’ expectations have shifted. They are looking for a more personalised, value-driven service with more transparent pricing and faster turnaround times. Business leaders are operating within an ever-more complex and restrictive environment. They expect their lawyers to deeply understand their business and implement comprehensive solutions that align with best industry practice.’
Jean-François Levraud, managing partner, Gide Loyrette Nouel

Pick and choose

‘In the past five-to-ten years, our clients, especially corporate clients, have changed quite a bit. Many general counsel from top Italian companies are coming from top Italian law firms, so they know what they can get very well. They know exactly where they can push for lower fees and compress law firms’ margins. Sometimes they are only asking for external advice on one piece of a complex transaction because they can do everything else in-house. They are becoming much more sophisticated and much more demanding. They will not come to a firm like ours for routine day-by-day advice. They are really looking for value-added services.’
Eliana Catalano, managing partner, BonelliErede

The post The Last Word: Euro vision appeared first on Legal Business.

Awards season. It should be viewed as a time of joy and anticipation, when law firms clamour to showcase their finest achievements of the last year, whether that’s an especially standout deal or matter, or an extraordinary individual moving the dial for the profession.

Amusingly, one of my colleagues forwarded this message onto me in Teams from a law firm comms person (apparently intent on gaming the system) who will, to save their blushes, remain nameless: ‘Can you ask Nathalie what is an easy category to apply for in the LB Awards?’

While I admire the chutzpah in a way, I want to stress (in case anyone else was wondering similar) that the answer to this question is a hard ‘no’. There is no ‘easy’ awards category, and that is why winning an LB gong is so prestigious.

As firms scramble to complete their submissions by the 15 March deadline, perhaps some timely pointers are in order beyond these top tips.

Anyone who has worked in this industry for any length of time will have an awards submission horror story – from the 132-page magnum opus (TL;DR), to the deal that later got blocked on competition grounds, to the matter that was so completely confidential it could only be named ‘on pain of death’ (calm down, this isn’t MI5!).

Anyone who has worked in this industry for any length of time will have an awards submission horror story.

On the most fundamental of levels, submission success comes down to one thing – knowing your audience. It could be argued that the reason certain firms fail to get shortlisted is the same as why they lose out at pitches – they fail to consider the GC’s love of clarity, brevity and snappiness and think that including everything plus the kitchen sink will win the day. It won’t.

With this in mind, I asked several GC judges: ‘What appeals to you most about how awards submissions are written, and what puts you right off?’ Here are the best responses (in bullet points, because I listened):

• Show that you care about the importance of the deal to society or the law
• Keep it structured – bullet points, sub-heads. If you’re confident you shouldn’t need pages and pages
• Data points are best on things like diversity and inclusion. Show that you’re measuring the impact of your measures, not just describing them
• Some are clearly written by a marketing team that didn’t understand the deal
• Data, data, data. What are the numbers, or geographies, or people or statistics?
• The evidence and addendums are good but don’t rely on a judge getting into them. If it’s important, include it in the main summary
• If what they’re doing goes beyond the legal, include that – it’s interesting
• I love testimonials

On the final point, it is surprising how many submissions we get without a single client testimonial. Think of it this way. If you were buying something online, would you go for the thing with five-star reviews, or the one with none at all? Finally, GCs can always tell whether the submission is written by the partner whose labour of love the deal was for weeks or months, or a person who has never closed a deal in their life. Happy submitting, everyone. And good luck.

nathalie.tidman@legalease.co.uk

For more details on how to enter the Legal Business Awards, please head to legalbusinessawards.com

The post No shoo-ins at the Legal Business Awards, and beware the perils of TL;DR appeared first on Legal Business.

Whether it is the prospect of another few weeks still left of winter, many law firm leaders seem to have started the year under an uncharacteristic cloud of despondency.

Of course, it doesn’t take a genius to work out the other reasons why even the peppiest of senior partners might appear noticeably dispirited. The US contingent at least will be frantically number-crunching ahead of financial results coming out and, after the year that most transactional practices have had, the task will be about as enviable as filling out your tax returns. That said, early indications of double-digit growth from Milbank and Hogan Lovells may well prove those fears unfounded.

Then there is the political upheaval posed by 2024 being the year of the US presidential election and the UK general election (one London managing partner imparts the fun fact that this is the first time the two have coincided in the same year since the 1960s). And these are only the scheduled disruptions that we know about.

In truth, there is more unpredictability in the world now than ever before, so it’s little wonder that lawyers, such risk-averse creatures of order and routine, are paralysed by all the unknowns these days.

Speaking of the unexpected, Linklaters’ surprise investment in a six-strong New York M&A team in January from Shearman & Sterling has got the market chattering, and gone some way to dispel fears of a slow start to the year for legal hacks (the old adage of no news is good news is not true for us).

Indeed, the hire of George Casey, Shearman’s global managing partner and Legal 500 Hall of Famer for $1bn+ megadeals, is a huge coup for Links and its management team, which will no doubt have used it as a golden opportunity to proverbially stick two fingers up at the many detractors who derided Linklaters for having no US strategy to speak of. It will also be a fillip for a firm that ended 2023 somewhat beleaguered after a string of high-profile partner exits, especially to the irresistible lure of Paul Weiss’ high-rolling recruitment drive around the Square Mile.

While some critics question Casey’s recent deal history (and it is true that the firm’s press release trumpets no deals after 2022) amid a no-doubt time-consuming management job, this is still a marquee acquisition in the truest sense of the word.

As one London managing partner puts it: ‘George Casey is quite famous – everybody knows him. When you think of Shearman, you think of George. He is Shearman’s main M&A man so it will be a big loss for Allen & Overy.’

Of course, while the management of A&O will have expected some fallout from executing such a notoriously difficult thing as a law firm takeover, losing one of the target company’s most lucrative assets must have been a bitter pill to have to swallow. And, whoever it was at A&O who thought they could divert the attention away from the unfortunate event with news of the merged firm’s office arrangements and its ‘rapidly advancing’ integration, sadly failed.

How is any of this supposed to help cheer you up? Bear with me a bit longer. An influential partner whose elite firm has so far avoided being ravaged by Paul Weiss in London noted over lunch recently: ‘There has been a lot of schadenfreude over Paul Weiss hiring all those people from Kirkland, which has for so long been the bane of our lives. That is a dangerous attitude.’ That partner worded it a lot more elegantly than I, but the crux of the message was ‘there but for the grace of God go I’.

And that’s exactly the point. There has not been this level of disruption in recent years since Kirkland’s rampage. Now Paul Weiss is winning the awards for most creative destructor and even Linklaters is giving it a go. Managing partners beware – what’s happening now is only the tip of the iceberg. But the good news is, that fear will be great at giving the market back that hustling energy people had in the ‘90s when they had the desire to build business and make it big. There is no time to indulge in the winter blues.

nathalie.tidman@legalease.co.uk

The post Reasons to be cheerful: the hustle is back for 2024 appeared first on Legal Business.

It has long been a peccadillo of business publishers to measure financial performance in five-year increments and for this, our final issue of the year, it seems churlish to break with tradition now.

Revisiting our Global 100 coverage from 2018 calls to mind a time capsule, with some of the contents uncannily familiar and others belonging almost to a bygone era.

Five years ago we assembled a group of senior lawyers at a dinner debate to impart their views on what an elite law firm would look like ten years from then (again with the five-year increments).

On the metric of turnover, the group came to as much of a consensus as it’s possible for a roomful of lawyers to reach and took a punt that a global elite firm in 2028 would generate a minimum of $2bn in revenue and $7bn, perhaps $8bn, at the top end.

At the halfway point in that forecast, assessing the Global 100 now makes for perverse – and unsettling – reading. Back in 2018, Kirkland as the world’s highest-grossing law firm was blazing a trail of creative disruption with revenue of $3.17bn. Since then, the powerhouse has more than doubled its turnover to $6.51bn – in simplistic terms – approaching the zenith the industry was predicted to reach several years ahead of schedule.

And what of the lower end of the elite range? Five years ago, it was a notable observation that the prevalence of US players boosted the band of firms with turnover of more than $2bn by three to 11. Since then, the $2bn+ club has more than doubled to 23 firms, with blue-blood stalwarts Freshfields, Linklaters, Allen & Overy and Clifford Chance now rubbing shoulders with new pretenders such as Goodwin, Cooley and Simpson Thacher.

Now, of course, we have four firms billing more than $3bn a year in the form of DLA Piper, Baker McKenzie, Dentons and Skadden, with Sidley knocking on the door with its 5% revenue increase this year to reach $2.922bn. There are currently no firms in the $4bn bracket at all, with the table progressing upwards to Latham & Watkins’ $5.321bn and, if 2022/23’s inert performance is to be repeated, we probably won’t see any next year either.

We predicted the music would have to stop eventually. However much we were braced for it, the numbers still
hit hard.

Other metrics on a five-year track show the Global 100 in rude health. The group has swelled its collective turnover by 43% to $149.24bn, its total lawyer headcount by 32% to 173,385 and its equity partners by 14% to 28,136.

Profit per equity partner (PEP) has grown 30% in five years to $2.29m and revenue per lawyer (RPL) has increased 20% to 955k. The most accurate measure of success, profit per lawyer (PPL) has also had reasonable double-digit growth over five years, bolstered 18% to 394k.

After last year’s show-stopping performance which saw revenue for the group surge a huge 15% to $147.5bn, doubling the previous year’s 7% turnover increase, a 35% hike in gross profit to $63.44bn and a 19% uptick in PEP to $2.37m, we predicted the music would have to stop eventually, even as the deal market dried up and even before this year’s fresh geopolitical crises reared their heads. However much we were braced for it, the numbers still hit hard.

This year, gross revenue increased by a torpid 2% and PEP dropped by 4% to $2.28m. The figures are depressing across the board, with RPL dropping 3% to $932k and, crucially, PPL declining 5% to $394k.

It is clear that doing nothing is not an option any more. Perhaps consolidation in the lucrative areas of life sciences, technology, energy and infrastructure is the answer, or maybe a return to good old-fashioned hustle.

Whatever fresh reversals mount in the coming year, fire in the belly will be essential.

As Hamid Yunis, managing partner of McDermott’s London office, notes: ‘We’re never comfortable. Our strapline is being ambitious, always better. Our trajectory is about pushing, being dynamic, energetic and always better.’ Words to live by as the record changes.

nathalie.tidman@legalease.co.uk

The post Global 100: When the music stops – it’s time for the global elite to play a different record appeared first on Legal Business.