All about America - Manhattan still looms over London's finest
As this week's analysis reminds us, for all the intense focus on cracking the key emerging economies, it's the vast US legal market that remains the prize London's elite can neither ignore nor seize. After all, despite high growth and large economies, the increasingly heavily lawyered legal markets of some of the most touted Asian jurisdictions are still currently worth about as much as Belgium's professional services sector. I exaggerate, but not by that much. The pull of the US' $250bn (£158bn) market, by some estimates constituting half of the global value of legal services, means that building a credible US practice is still the overriding strategic issue for London's big four. And don't think the current frenzy in Asia is unconnected. Many City firms have concluded that a quality US union is their ideal endgame, but can probably only be secured with the additional leverage of a commanding global network.
March 01, 2012 at 07:03 PM
3 minute read
As this week's analysis reminds us, for all the intense focus on cracking the key emerging economies, it's the vast US legal market that remains the prize London's elite can neither ignore nor seize. After all, despite high growth and large economies, the increasingly heavily lawyered legal markets of some of the most touted Asian jurisdictions are still currently worth about as much as Belgium's professional services sector. I exaggerate, but not by that much.
The pull of the US' $250bn (£158bn) market, by some estimates constituting half of the global value of legal services, means that building a credible US practice is still the overriding strategic issue for London's big four. And don't think the current frenzy in Asia is unconnected. Many City firms have concluded that a quality US union is their ideal endgame, but can probably only be secured with the additional leverage of a commanding global network.
So how is the magic circle doing on Wall Street? Talk to the average Manhattan partner and you'd think it has been a total disaster, with no progress being made over the last five years. The slow pace is hardly surprising, as it's the one jurisdiction in which scale, profitability and trade flows go against the magic circle and where the exportability of English law is of limited use. But on closer inspection, it's not that hopeless – not quite.
Clifford Chance says it has turned the corner after much publicised problems and a fair chunk of bad luck did it major damage during the 2000s. That may be true but, as the firm has made such claims previously, neutral observers will wait a while longer before entirely accepting that. Linklaters, meanwhile, has achieved considerable growth, despite being quiet on the hiring front in recent years, but will definitely want to improve the quality of work it is handling on Wall Street.
Allen & Overy and Freshfields Bruckhaus Deringer, however, are widely regarded to have made more ground, thanks in part to some astute litigation and arbitration appointments. Despite magic circle firms' traditional obsession with hiring marquee M&A partners, it seems it has been well-targeted contentious hires that have unflashily delivered.
The group is still a long way from a real breakthrough, but some distance has been travelled, suggesting a top-tier UK firm that can sustain global momentum and is prepared to invest in the US for a decade or two has a decent shot at getting somewhere credible. No pressure, then.
As an aside, you have to wonder how much longer London's big four can keep using lockstep pay models, which are struggling to cope with the double whammy of weak sterling and the soaring market rate for star US laterals. Something to mull, since the prospects for a top-tier US/UK merger look as poor as ever.
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