The Magic Circle. It has a nice ring to it doesn't it? The U.K. legal industry has been largely defined by the existence of the five top firms for decades. But perhaps it is time we reconsidered the term.

Everyone knows what the Magic Circle means. It means Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer, Linklaters and Slaughter and May; it means the dominant firms in the U.K. and Europe and beyond; it means the largest, most profitable, highest-quality institutions outside the United States.

But does it really mean all these things?

For a start, they are not the largest. Slaughter and May's domestic focus makes it much smaller than the rest, and there are other U.K.-heavy firms that bring in more revenue than the remaining four. Nor are they the most profitable. Macfarlanes has the second-highest average partner profits of any firm in the U.K.

Instead, the Magic Circle firms are so called because they operate in a different sphere than the rest of U.K. firms, representing the top blue-chip clients and leading investment banks on their most complex work, or so the mantra goes. That is true, but only to a point. According to the latest rankings, Slaughters, Allen & Overy, Linklaters and Freshfields hold the most relationships with FTSE 100 clients, but Herbert Smith Freehills comes in fifth ahead of Clifford Chance.

Many of the most lucrative clients also aren't listed. Private equity firms have come to dominate corporate dealmaking, comprising about a quarter of the value of all global mergers and acquisitions last year, and those relationships are mostly held by U.S. firms.

The Magic Circle firms may well do the complex, big-ticket work, but do they have a monopoly on it? That is an open question, especially because Kirkland & Ellis advised on the highest total value of European M&A deals in 2019.

Factor in the rest of the world and the picture is even less clear. Globally, Magic Circle firms are not among the top six by revenue, not in the top 12 by head count and not in the top 18 by average partner profits. Many in New York would question whether they are among the world's highest-quality institutions.

Of course, proponents of the moniker admit that it largely relates to the U.K. They argue that the band of five are set apart by something less tangible: brand. Clients using a Magic Circle firm can feel confident they will receive the best advice. And yet this also feels like a self-fulfilling argument, given that the brand rating of these firms is massively enhanced by the Magic Circle tag.

The truth is that the meaning of "Magic Circle" is at best vague. It hearkens back to a bygone era when the U.K. legal industry was more self-contained. Given that firms no longer operate only in the U.K., it seems strange to categorize them in a way that compares them only to U.K. rivals.

Trainees and a few of the leaders in the group still love to use the term. And why not? It signifies that they are in a club that produces excellent lawyers and has something special about it. But most partners at the firms privately admit that they don't really refer to it. Depending on their practice area, many don't even see each other as their main rivals.

Perhaps it would be more helpful to everyone to come up with a grouping of the elite international firms, based on size, geographical spread, partner profits and clients. If it included those with revenues of more than $1.5 billion, average partner profits of $3.5 million or more, and a sizable presence in the U.S., Europe and Asia, that group of five would be Kirkland & Ellis; Latham & Watkins; Skadden, Arps, Slate, Meagher & Flom; Simpson Thacher & Bartlett; and, at a push, Weil, Gotshal & Manges. Since 2007, the combined revenue of these five firms has grown at about twice the rate of the Magic Circle's.

There is something more magical about that group, even though—and I say this sadly as an Englishman—there is not one Magic Circle firm among them.