Editor's Comment: The Midas touch
The top three firms have reaped the most rewards from a gilt-edged year
July 19, 2006 at 08:03 PM
3 minute read
They sometimes say that today's newspaper is tomorrow's chip paper. Given the content of this week's special issue, we think we are dealing with paper of the gilt-edged variety. The UK top 50 has had a cracking year off the back of the booming M&A and capital markets. And sitting pretty at the top of the pile is (most of) the magic circle, which has enjoyed its strongest year since the dotcom boom.
Particularly impressive has been Linklaters. For two years running the firm has recorded strong growth against an even steeper rises in profits. This has seen the firm surge past Freshfields Bruckhaus Deringer on profits and turnover to the point where it is in touching distance of becoming the UK's largest firm and is closing in on Slaughter and May-level profits. This performance directly influenced Freshfields' landmark decision to ditch its long-cherished all-equity partnership structure.
Current market conditions should also have favoured the chasing pack, but the group's performance remains patchy, despite Simmons & Simmons' rebound off the back of some meaty European mandates. The favourable European M&A market has also re-opened the debate over the need for an international network after several years that favoured the London-centric.
It is no coincidence that the conservative/indecisive Herbert Smith has just kicked off a major strategy review. But London remains the ultimate prize, as Lovells has come to realise, notwithstanding a strong performance from parts of its international network. Throw in the strongest of the national firms and the leading US City practices and what you get is an intense battle for the City's upper mid-market.
Is the magic circle above the fray? Here subtle forces are at play. Strip out Slaughters, which is less than half the size of Allen & Overy (A&O), and you get a 'Big Four' grouping of international giants. But within the crucial arena of European M&A, three of these firms – Freshfields, Linklaters and Clifford Chance (CC) – are pulling significantly away from the fourth, and smallest member, A&O. CC has muscled into cross-border M&A off the back of its European network and has much integration pain behind it. Imagine a quality but domestically driven 'league' headed by Slaughters and A&O and stretching through Lovells, Ashurst all the way to Travers Smith. Current trends suggest this may not be as fanciful an idea as it at first seems. It is no longer a question of who you add to the magic circle, the question may be who you take out.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllSkadden to Close in Shanghai and Make Cuts to China Corporate Practice
DWF Group's Canadian Firm Set to Add Fourth Office With 16-Lawyer Montreal Team
UK Law Firms Face £75M Money Laundering Investigations Alongside Russia Scrutiny
3 minute readTrending Stories
- 1The Law Firm Disrupted: Playing the Talent Game to Win
- 2A&O Shearman Adopts 3-Level Lockstep Pay Model Amid Shift to All-Equity Partnership
- 3Preparing Your Law Firm for 2025: Smart Ways to Embrace AI & Other Technologies
- 4BD Settles Thousands of Bard Hernia Mesh Lawsuits
- 5A RICO Surge Is Underway: Here's How the Allstate Push Might Play Out
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250