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The £100m Club may have two new members this year, but significantly both firms, Denton Wilde Sapte and Hammond Suddards Edge, got there by merging. Meanwhile, the gap between the new group of 15 and the rest of the chasing pack continues to grow. A comparison with Legal Week’s table for the 1998-99 financial year proves this. Last year’s figures show the gap between Ashurst Morris Crisp – then the last £100m Club member in 13th place – and 16th-placed Nabarro Nathanson was £30m.On this year’s table Simmons & Simmons is in 15th place, having been overtaken by Ashursts and the two new entrants, if you factor in the probable turnover of the merged firms.But the gap with Nabarros, which has been successfully concentrating on improving its profitability, is now £45m, making Simmons half as large again.While the difference between the £100m Club firms is nowhere near that between the Big Five and other practices in the accountancy market, it is still increasingly significant.There are greater resources to spend on areas such as international reach, marketing, recruitment and, particularly, IT. So as long as the money is spent wisely, it gives those firms an important competitive advantage. That is why the £100m Club continues to pull away, despite operating in a market where profits are rising across the board to record levels.And there is no sign of any complacency setting in or the foot being taken off the pedal within the club itself. If anything, the competition within the £100m Club is getting hotter still – after all, the closer you are to the sun, the more likely you are to get burnt. Last week’s news that Norton Rose and CMS Cameron McKenna had suffered at the hands of Clifford Chance was a reminder that improving profitability is not necessarily a sufficient defence against those with greater financial muscle.Both Norton Rose and Camerons lost two leading partners to Clifford Chance despite average profits per equity partner of £454,000 and £340,000 respectively. Personal bests may be all very well, but as the bar keeps being put higher, the pressure to perform remains.As well as Camerons and Norton Rose, Simmons & Simmons, Ashursts and even Linklaters & Alliance have suffered at the hands of Clifford Chance in the last two years.And Clifford Chance itself has lost partners to Freshfields.The ending of the no-poaching agreement between the ‘Club of Eight’ firms in January is likely to increase the flow of talent between the biggest firms.For the moment, though, it is on the European rather than the domestic level that the competition for talent and marketshare will continue to be intense.The back end of the 1999-2000 financial year and the start of the next has seen firms make tremendous strides to make the concept of offering an integrated European service a reality.Since the January merger between Clifford Chance and Germany’s Puender Volhard Weber & Axster, as well as Rogers & Wells, there has been a stream of mergers, alliances, best-friend relationships and top-level lateral hires (see sidebar, bottom).The frenzy of activity has been at its most furious in Germany, where it was brought to a new level by this month’s merger of Freshfields with Bruckhaus Westrick Heller Loeber. Herbert Smith has now struck an alliance with Stuttgart-based Gleiss Lutz Hootz Hirsch and Linklaters will merge with Alliance member Oppenhoff & Raedler in January.Recent history suggests these firms will shrug off the costs of this expansion to post another record year next year – as long as the global economy continues to boom.But one thing will stay the same: the need to ensure that this investment in strategic expansion is married with steadily improving profitability.With the effect of the recent salary war yet to be felt, the pressure to perform will remain acute.

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