With the Clementi Report now published, it is possible to envisage the impact this will have on the legal profession in the medium term. The changes will not be immediate. A White Paper needs to be published by the Government and it will require a major commitment for this to occur before the next General Election. At best, primary legislation will be passed in 2006, with the detailed implementing regulations coming into effect in 2007. Accordingly, the profession has ample time to adapt to the new environment.
However, these changes are likely to come into force at a time of profound change in the legal profession. The magic circle has placed clear blue water between itself and the rest of the UK market. This gap will open further as corporate transactions increase in 2005 and 2006. The more than 100 US firms in London are becoming increasingly serious competitors. Indeed the best US firms are potent competitors to the top UK firms. More US/UK mergers will occur, primarily involving the mid-tier UK firms. Practices in the lower half of the top 100 UK firms will consolidate further, as they increasingly try to gain places on the smaller, but more valuable, corporate legal panels.
