Opinion
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Editor's comment: Something to celebrate
By Alex Novarese | July 21, 2010
Is the legal press too negative? I had that theory expounded to me at length by a managing partner recently over a few too many drinks. We have made increasing efforts at Legal Week in recent years to stamp out a knee-jerk critical tone that it is easy for journalists to default to in favour of what I hope is a more constructive stance. But it is a difficult balance to get right. It doesn't help that the profession isn't the most charitable of places. It's not an industry in which senior lawyers tend to find much constructive to say about rivals, and reader comments on legalweek.com can certainly tilt towards the downright cynical.
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More with less - 2009-10 proves to be a year of ups and downs
By Alex Novarese | July 14, 2010
Challenging? Interesting, perhaps? Pick your recessionary euphemism. Actually, topsy-turvy seems to more accurately reflect the year of highs, lows and contradictions that 2009-10 proved to be. The UK top 50 hit its first absolute contraction in fee income since Legal Week began tracking its results, with total fees falling 4% from £12.3bn to £11.9bn after last year's exchange rate-assisted growth. Yet the group as a whole, having cut hundreds of millions of pounds from its cost base while trimming equity partner ranks, managed a considerable rebound in partner profits.
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Back to reality - law firm confidence adjusts to an austere age
By Alex Novarese | July 7, 2010
"Last year you told me law firms would be okay through the recession. I thought you were mad but maybe you had a point." So said a partner with a New York law firm recently, pointing out an offhand comment I apparently made. Whether it was right is debatable, but the quote is a measure of how rattled some lawyers were last year as the recession bore down on the profession - it's supposed to be the journalists dishing out the apocalyptic doom-mongering, not the industry veterans.
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Uncharted territory - lessons and uncertainties from Halliwells' fate
By Alex Novarese | June 29, 2010
In October 2008 Legal Week carried a story about a property deal by Halliwells that generated a substantial pay-out for the firm's equity partners. It seemed an unusual little story, but scarcely one of dramatic interest. In hindsight it was probably the single event that most directly led the high-profile Manchester firm to last week file a notice of its intention to appoint an administrator, effectively signalling a sale of its assets.
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Risky business - A return on Simmons/Mayer Brown won't come easy
By Alex Novarese | June 22, 2010
If transatlantic merger bids are the current flavour of the month, in one important sense the talks between Simmons & Simmons and Mayer Brown are a break with recent convention. The birth of Hogan Lovells and SNR Denton and the ongoing talks between SJ Berwin and Proskauer Rose all represent deals that come with minimal risks given their strategic importance. Lack of overlap in practices and clear areas of responsibility mean that putting these businesses together will somewhat limit the always daunting challenges of integration.
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Editor's comment: Guts, patience, maturity
By Alex Novarese | June 16, 2010
Everyone has agreed for years that large US law firms should have taken the City by storm. They have the profitability and scale to outmuscle all but a handful of UK practices, strong banking connections and are driven by an impenetrable and huge domestic market. What could possibly go wrong? Quite a lot, as it turned out. US firms have been too unwilling to invest or trust their local lawyers and often greatly overestimated the global power of their brands. Arguably, an even bigger problem has been their sheer naivety about the City legal market, which has led to a series of breathtakingly daft senior recruitment decisions.
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Editor's comment: Fortune favours...
By Alex Novarese | June 3, 2010
"Looks like it's time to outsource the partners as well." Unfair perhaps, but the comment from one reader on Legal Week's story last week regarding CMS Cameron McKenna's financial results does illustrate the extent to which the City firm must tread carefully. Having last month announced a deal with Integreon billed as the largest outsourcing yet seen in law, Camerons was already facing unsettled staff. There is also some evidence that the communication regarding the move made the inevitable internal tension more pronounced than necessary.
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Editor's comment: Back to bulging
By Alex Novarese | May 19, 2010
Well, it looks like the City's largest firms can kiss what little hope they had of securing a deal with a top Wall Street practice goodbye. Based on the 2009 results from The American Lawyer, Manhattan's legal elite have comprehensively disproved the widespread claim that their business model would falter in a recession. Instead, New York's most profitable law firms have emerged as the clear winners in 2009, outperforming the average US top 100 firm by a significant margin. This is the group of firms, typified by Sullivan & Cromwell and Cravath Swaine & Moore, that either exclusively focus on the US or maintain only lean and targeted foreign operations. This club also largely refused to make redundancies or cut associate salaries, a conservatism that earned them the scorn of some rivals and observers who argued they were badly out of step with the Great Reset, the New Normal or whatever it was called that week.
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Editor's comment: That boring revival
By Alex Novarese | May 11, 2010
I'm not planning on writing much about results this year because there isn't much to say that wasn't obvious a long time ago. In the wake of the banking crisis, the 2008-09 year delivered a jolt to law firm finances and led to a string of dramatic restructurings. But it has been apparent for at least six months that major law firms have been hauling themselves into recovery mode, in relative terms at least. The first indications for 2009-10 do nothing to change the sense that law firms have passed the worst, having now stripped down their cost bases for less bountiful years ahead. In essence, the UK's top 25 firms are generally falling into two not-dissimilar camps. On one hand you have practices expected to hold steady or marginally increase their turnover. Probably the larger group, certainly the one that includes more of the largest City and national law firms, is set for marginal falls in revenue against 2008-09.
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Editor's comment: Wag the dog
By Alex Novarese | May 5, 2010
Senior commercial lawyers have deeply contradictory attitudes to salaried partners. On one hand, the growth of this breed is often held up as evidence that law firms are being managed as proper businesses and therefore introducing more tiers of staff. And yet, as can be seen from this week's Big Question, partners are concerned about the implications inherent in the swelling band of non-equity partners at top UK firms. The fear is that continually expanding non-equity partner ranks will store up problems for many practices and inevitably weaken the partnership model. It is one thing to weaken a model if you are transitioning to a replacement, but the cynics would justifiably argue that many firms have little coherent concept of how to replace a partnership structure that has served them so well.
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