Alex Novarese

June 22, 2010 | International Edition

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.

By Alex Novarese

3 minute read

June 16, 2010 | International Edition

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.

By Alex Novarese

3 minute read

June 04, 2010 | International Edition

Well, you win some you lose some. On the day that the Financial Services Authority (FSA) announced its largest-ever civil fine, against JP Morgan, the City watchdog also suffered a defeat in its high-profile attempt to secure an insider trading conviction against three men, two of them former City lawyers. The first case illustrated once more the FSA's sometimes melodramatic determination to reinvent itself as a get-tough enforcer for the post-crunch age, with the regulator seemingly now digging out the grand rhetoric for every fine over fifty quid.

By Alex Novarese

4 minute read

June 03, 2010 | International Edition

"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.

By Alex Novarese

3 minute read

May 26, 2010 | International Edition

Are law firms inherently bad at management? This argument was voiced at a panel debate I attended last week and it's certainly not the first time I have heard such sentiments. The essence of the claim is that even large commercial law firms come up badly when compared to most public companies or other industries. Yet I find myself unconvinced. Not because law firms are beacons of leadership, but because these claims are often made with little to back them up. In addition, I suspect that some are giving rather too much credit to the standard of management outside the legal profession. Having been a business journalist for 14 years I have come to the considered conclusion that there is nothing remotely unusual about poor management in Britain plc. Not only are plenty of companies badly run, the plain fact is that shareholder governance has at best had mixed results at delivering management excellence, including both rewarding genuine performance and punishing executive failure. Indeed, it strikes me that one of the greatest strengths in law firm governance is its avoidance of the separation between ownership and management that in so many cases has failed to deliver at plcs.

By Alex Novarese

3 minute read

May 19, 2010 | International Edition

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.

By Alex Novarese

3 minute read

May 18, 2010 | International Edition

The last few months have been something of a learning experience for me. Having spent a fair few years reporting mainly on the business of law, the launch of Legal Week Law, our new online database of briefings and reports, has given me a chance to look more closely at the practice part of the equation. In terms of reader response so far, the launch has exceeded our expectations with the site already having well over 3,000 registered users, a figure projected to reach nearly 5,000 by the third month of launch. The number of documents downloaded has also risen sharply, up from 500 in the first week to a current average of well over 2,500 a week, a figure we expect to keep growing. At present, we're adding about 50 new briefings a week.

By Alex Novarese

2 minute read

May 11, 2010 | International Edition

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.

By Alex Novarese

3 minute read

May 05, 2010 | International Edition

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.

By Alex Novarese

3 minute read

April 28, 2010 | International Edition

Given that the current Parliament seemed, even at its start, focused on when it would finish, it's understandable that there has been a sense of weariness regarding next month's election - one that has certainly been shared by the legal community. Yet by any objective yardstick - and particularly from the perspective of City professionals - the general election will be one of the most important the country has faced in the last 30 years.

By Alex Novarese

3 minute read