It is a legal market with more than 400 firms, 4,000 partners, 9,000 law students and 20,000 support staff. It may sound big enough to support a small country already, but Manchester's growing appetite for legal services shows few signs of slowing down.

The names the city is attracting have got progressively bigger over recent years too, with entrants split across two groups. An influx of firms using the city as a cheap hub for support services has seen Manchester become more than just a competitive regional legal market.

New entrants in this camp include Berwin Leighton Paisner (BLP), which announced a new low-cost 'legal process delivery centre' last March, Latham & Watkins, which set out plans for a small support arm in January, and Freshfields Bruckhaus Deringer, which has its much-anticipated Manchester launch coming up by the end of the year.

Meanwhile, demonstrating the pull of Manchester as a legal hub in its own right are the likes of Nabarro, which raided Addleshaw Goddard's real estate practice to launch its first office there last November, and Fieldfisher, which sealed a merger with local boutique Heatons to kick-start its presence in the city last February.

Established regional players like Addleshaws, Pinsent Masons, DWF and DLA Piper also remain active in the city despite the tendency of market watchers to focus on the mega-deals and partner moves coming out of London and New York.

So, as even firms as large as the magic circle open up in Manchester, how will these new entrants shake up the market? And is the local talent pool deep enough to serve all of the players?

For the firms that have set up offices to compete for legal work in Manchester, deal activity levels are a clear motivator. Although London may have stolen the limelight with blockbuster deals, the city has maintained a consistent flow of work for some years.

Sizable local projects, including a council scheme to redevelop old mills and warehouses into commercial office space as part of a widespread regeneration of the city, have meant that real estate deals have been some of the prime mandates in recent years.

Nabarro's launch was built on the hire of three real estate partners from Addleshaws, but the firm had already done work in Manchester, including advising longstanding client Hermes Real Estate on a joint venture with The Co-operative Group to deliver the UK's biggest regional redevelopment project: the £800m NOMA scheme in Manchester's city centre.

The firm has also worked on real estate projects in St Peter's Square in the city centre, where offices house companies such as KPMG.

"Primarily we see Manchester as a partner-led, client-led offering for high-quality work," says Nabarro senior partner Graham Stedman (pictured, right). "We are looking to play to our corporate and real estate strengths… Different firms are investing in Manchester for different reasons but our approach has been on the high-quality work in the city."

With direct flights to China from Manchester Airport starting in December 2014, market chatter of renewed foreign investment has got lawyers in all practice areas excited. Meanwhile, a proposed station at Manchester Airport for the second phase of the HS2 rail line could provide a further chunk of legal work for the region – even though trains are not due to run until around 2033. The better connectivity could boost activity in all sectors – not just projects and infrastructure.

Following completion of the major projects mandates, there is hope for new lines of work, as Squire Patton Boggs – whose legacy firm Hammonds was a stalwart of the Manchester legal scene – construction head Sean McCay notes: "Long before construction gets up and running there's a lot of work to be in done in terms of planning, joint venture structures and the like. But when that's completed companies are going to need day-to-day support with employment law, financial services, typical stuff."

McCay, who is based in Manchester, adds: "Once the election is out of the way and a lot of these projects can be given the green light we can get on with things and all of our practices will benefit."

While still incomparable in scale to London, the volume of mid-level corporate transactional work managed out of Manchester is on a rapid upward trajectory.

According to the most recent figures from business development organisation pro-Manchester, the total value of deals advised on by Manchester professional service firms jumped by 189% to £1.7bn in the second quarter of 2014 compared with the corresponding period a year earlier, driven by several high-profile mid-market and larger transactions. Notable mandates include boohoo.com's £560m initial public offering, which was led by DLA Piper Manchester partner Elia Montorio in March last year.

DLA's Manchester office managing partner, Liam Cowell, says the firm has more recently started picking up bigger-name clients that are headquartered in the north-west but traditionally thought of as 'City' clients, using the same central pitch team and the same documentation as if the deal was being run from London. One of these clients is understood to be The Co-op Bank, despite the fact that DLA does not have a spot on its main panel.

DLA recently signed a new 15-year lease for office premises in Manchester. The firm will relocate from 101 Barbirolli Square, where it has been based for almost 20 years, to One St Peter's Square as of September 2016. "Looking for new premises was the surest testament we could make that DLA was committed long term to Manchester," explains Cowell. "Our strategy is to move up the food chain rather than trying to fight to remain where we are."

DLA's headcount in the city is now at more than 200.

To date, many of the latest Manchester launches are still small-scale in comparison. BLP's Manchester centre, for example, started with just four qualified lawyers, 12 paralegals and one member of support staff. However, since opening its doors last August, the number of qualified lawyers has tripled, three more paralegals have joined and five support staff have been added.

"People we talked to in the recruitment process thought we had a great story to tell so I don't think our City reputation was an issue," says BLP Manchester head Richard Sawtell. The firm also plans to introduce apprenticeships for the office, but Sawtell says it is "too early to say" how many will arrive and over what timescale.

Addleshaws, leveraging its already strong position in the local market, launched its Manchester transactional services team (TST) in 2011 after a pilot run with just five staff. The headcount target for next financial year is 140, including a dozen new positions for local apprentices.

• Editor's Comment: It's not all grim up north – how Manchester is enticing law firms

Taking the talent
The reasons new entrants have picked Manchester over other cities in the UK or further afield are not always immediately clear. The £2.5m lump sum afforded to Allen & Overy (A&O) for setting up in Belfast, for example, is certainly more eye-catching than what is on offer to open in Manchester.

Nabarro did not cash in on any financial incentive for its launch in the city. The firm can, however, take advantage of grants available for recruiting locally. According to MIDAS, Manchester's inward investment agency, this tends to be around £1,500 per university student taken on.

Technology roles are likely to receive higher levels of funding, the agency says, as they fit in with the city's objectives going forward, though MIDAS still has to proactively pitch Manchester to the majority of firms as opposed to receiving direct enquiries.

MIDAS can also organise recruitment campaigns and advertising free of charge, offer broadband vouchers for small and medium-sized firms and help negotiate that all-important office deal to make sure firms get suitable premises for the best price.

But what has drawn top law firms to the city above all else is the plentiful supply of local talent, and this goes for qualified lawyers, legal services staff and back-office support teams. "If you talk about Manchester you have to talk about the talent pool," comments Sawtell. "It's not just in Manchester though; it's this whole emerging northern hub that's a great pool to fish in."

For BLP's office, 100% of the staff were local hires. Other firms attest to the ability of a Manchester base to pull in capable candidates from surrounding locations like Leeds and Sheffield.

Regardless of where they come from, Manchester is now undoubtedly offering a viable alternative to London for skilled northern lawyers – and for those from further afield.

Relocation, relocation
That talent pool will become invaluable as firms continue to expand in Manchester, particularly if established London staff can't be persuaded to switch offices (inevitably the trend towards 'northshoring' roles to a lower-cost regional office necessitates either relocation or redundancy for existing London staff – no matter how the firms dress it up).

For its part, Freshfields would not been drawn on the redundancies that could result from its plans to set up a support centre in Manchester by the second half of this year.

Sources both inside and outside the firm are optimistic that the power of the local market, as well as an established brand, will be enough to convince people that it's worth upping sticks. "Freshfields will benefit from the name," notes Mike Potter, head of Addleshaws' Manchester-based TST. "People will want to work for them. They'll find it similar to us; they'll get people to relocate. They will attract people in Manchester, but also people from elsewhere who want to move away."

The issue, of course, is not only convincing your own staff to up sticks, but also competing for talent in the local market. A junior lawyer at Addleshaws, for example, takes a salary of £25,000 as a first-year trainee in Manchester versus £37,000 in London. Freshfields has yet to reveal its Manchester pay scale, but pays its London paralegals around £28,000.

It goes without saying that the roles are far from equivalent, but the competition is likely to put renewed pressure on local salaries.

In local firms' favour is the proven possibility of career progression from the junior ranks up to associate level. For example, a number of TST staff have been successful in obtaining training contracts with Addleshaws. The firm's graduate recruitment team is now looking at the performance of candidates who have worked in the TST and proved themselves there, assessing them alongside external candidates for training contracts.

"I'm expecting that as more competition comes to the market there will be more disruption," says Potter. "As with any competition that's going to put pressure on prices and salaries, but we are confident that we can differentiate ourselves."

Jane Townsend, head of A&O's Belfast Legal Service Centre, strikes a similar tone: "I imagine the paralegals at Freshfields in London are already paid more than trainees in some regional firms, but so what? People will be doing a different type of work and will have different aspirations. There's a different range of choices for them there."

Future Manchester
Whichever route they choose it seems opportunities abound for aspiring lawyers and firms in the city. And it is likely that Manchester will continue to be shaped by more firms looking to set up there.

From April 2016 the 116-hectare Manchester Enterprise Zone around the city's airport will be expanded, offering business rate relief and simplified planning processes for more companies. It is understood that no law firms are currently based in this zone or have applied to be, but with an increasing volume of deal work on the horizon too the future options available to legal services providers in Manchester are widening.

Several of the buildings recently taken on by law firms, including DLA and Nabarro, give them significant room to increase headcount. At any rate, the new entrants will need to remain flexible to adapt to a changing investment landscape in the city.

The arrival of more leading firms in Manchester promises a greater sophistication in both legal services purchasing and provision. Many local partners are also predicting a greater move towards high-end work as firms begin to prove that they can get the biggest deals done out of Manchester.

What seems certain is that the increased competition both in the local market and for wider work carried out in the city can only be a good thing for clients. The extent to which the new entrants truly transform the market though will depend entirely on how their practices develop – right now there are few signs of anyone trying to usurp the existing regional powerhouses.

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The Freshfields factor
Make no mistake, the entrance of Freshfields Bruckhaus Deringer will have a significant impact on the local market, by sheer volume of staff if nothing else.

Reports on the potential amount of space the magic circle firm could take out have ranged up to 100,000 sq ft, though the firm denies that it plans to take this much space. Managing partner David Aitman (pictured) says: "We selected Manchester for a variety of reasons: the graduate community, the obvious availability of native English speakers and the number of people coming out of technical colleges for IT support roles," he explains. "It's not a cut-price service; it's about doing everything on a cost-effective basis… If there's a function that can be done remotely it will be done in Manchester."

Using other local examples, TLT says its 22,049 sq ft of office space at 3 Hardman Square is enough to support 150 staff. DLA Piper's 45,000 sq ft in St Peter's Square currently houses only 200, but the firm's office managing partner, Liam Cowell, says there is a "decent amount" of room to expand headcount with that space.

Freshfields will be competing with these firms to recruit back-office staff, as well as relocating existing employees, over the course of the summer before transferring some front-of-house functions. Aitman cites non-disclosure agreements, advice on filing papers in different jurisdictions and "some aspects" of document review as examples of the kind of work the legal services staff will be doing from Manchester.
The firm has taken external advice on the new base, and has already decided who its director will be, with an announcement due soon on the appointment according to Aitman.

A "very small" number of partners will make the move across to Manchester, with one leading the legal side and the other the back-office side of the office. There will also be a team monitoring client feedback as part of what Aitman calls a "user group".

The firm has been running an associate-led trial from London in preparation for opening in Manchester. Aitman says everyone involved in that trial will have the opportunity to relocate. However, departments are unlikely to transfer in their entirety. "You can't say that in a given category we will move everybody," he explains. "We will be doing what services can be sensibly done from Manchester in Manchester."

The local market is still split on exactly how revolutionary a magic circle player will be for Manchester, especially while Freshfields initially sticks to support services in a city that already has multiple providers of low-cost legal services.

"I don't think we really need to plan for them," says DLA's Cowell, echoing the thoughts of others more concerned with high-end work.

Others in the market see a brighter future for the magic circle firm in the city, however, and are making their own strategies as to how to deal with the new competition. "That's a massively significant competitor coming," says Mike Potter, head of Addleshaw Goddard's Manchester-based transactional services team (TST). "We have got our ear to the ground to work out when that is, both in terms of recruitment and our own talent retention."

Freshfields is understood to have collaborated with Addleshaws' TST in Manchester before on joint pitches where the magic circle firm has conducted the high-end portion of the work, approaching Addleshaws for information on the TST to sell its cheaper, volume product as part of the joint pitch.

• For more, see It's not all grim up north – how Manchester is enticing law firms