However upbeat partners were feeling last week at the firm’s 125-year anniversary celebration, the reality is it has been an awkward year for Herbert Smith. After all, 2007 ends with its international strategy no further on than before, while several benchmark rivals have outgunned it. Likewise, the slow process of modernising its partnership culture is moving, but painstakingly.
First, let’s address that international strategy – or strategies, since the firm still operates two just-about-complementary approaches. The more successful strategy has been the development of its own network with an emphasis on emerging markets. The other side is the formal alliance with Gleiss Lutz in Germany and Benelux giant Stibbe. The latter arrangement has worked better than expected, largely by letting the firm concentrate its limited resources, but it is hard to escape the feeling it is a dead-end. That sense has been reinforced by this year’s alliance review, which has ended in some tinkering toward integration. But how else could it conclude? The ideal solution would be a Herbert Smith/Gleiss merger but the German firm remains obsessively committed to independence. Likewise, attempts to expand the alliance have yet to yield results, with Cuatrecasas continuing to bluster. This is all very well in the short term, but is no real solution. Every year the magic circle polish up their global networks, inevitably making it harder to sell the Herbert Smith alliance to clients.
