What does 2016 hold for the leading UK and US law firms? Legal Week asked some key figures in the commercial legal market to look into their crystal balls and make some predictions about the year ahead.

Eduardo Leite – chairman, Baker & McKenzie

"The only confident prediction I can make is that there will be more change and more competition.

I believe the next decade will see even more disruption as more and more of what we think of as traditional legal services are supplemented or indeed supplanted by technology. And that war for talent will intensify as well.

Firms like ours have to get even better at understanding what our people want from their careers. Our new recruits have radically changed expectations. And yes they probably are less tolerant of inertia and like to see quicker change.

We expect a good year of revenue and PEP growth particularly on a like-for-like currency basis. We also intend to make significant investments around the world, particularly in London, New York and China. New York is a key focus for growth." 

Richard Foley – senior partner, Pinsent Masons

"The main challenge facing us all is maintaining momentum. Our industry continues to change and evolve at a fast pace and those that do not keep up risk falling behind so quickly that the regaining of lost ground will be very difficult.

We have developed a number of great new products and approaches to respond to our clients' challenges. Our priority moving into next year is to further institutionalise those innovations so that more clients benefit from them."

Wim Dejonghe – managing partner, Allen & Overy

"The ripple effect of the mega deals of 2015 will lead to an increase in mid-size M&A as businesses reshape their portfolios and dispose of non-core assets. Private equity will be a major buyer as these divestments come onto the market.

We anticipate that M&A will continue to be strong in Western regions for the next six to 12 months because the deals are strategic and not just finance driven.

Banking, finance and regulatory litigation is set to continue at the current level. However, banks will see increased capital regulation requirements such as ring-fencing continuing to affect their businesses.

The falling commodities' prices will continue to pose a threat to many sectors and regions. Some companies are already in trouble, but due to attractive pricing, they are managing to do refinancings on good terms. I'm not sure how long that trend will last, so we could see a lot more insolvencies and restructurings in 2016."

The combination of US fiscal policy tightening and EU loosening may be beneficial to the European financial markets as US issuers, largely driven by pricing, will look this way for their financing requirements.

David Hudd – deputy chief executive, Hogan Lovells

"There's going to be an increased pressure on firms to work closely with companies' in-house legal teams, so firms will need to focus on specialisation.

There will be a greater requirement for on demand lawyers to cover surges in work, and I expect to see an increase in both out – and in – sourcing.

Lawyers must also understand what technology has to offer, as the more routine aspects of what lawyers have done in the past will increasingly be capable of being done by technology.

As a firm operating at the crossroads of business and government, the areas we see as being particularly active in 2016 are contentious and transactional work in highly regulated areas such as financial services and life sciences."

 Mark Rigotti – joint chief executive, Herbert Smith Freehills

"2016 is difficult to predict. We live in a tumultuous world, what with the Chinese market fluctuations, oil price drops, the increased threat of terrorism and the issue of the Brexit.

All of these issues will make things difficult for clients and therefore firms. Within the instability, I think there are opportunities.

One bright spot for the UK is that Chinese and Middle Eastern capital investment into the UK will continue.

Financing work for non-traditional lenders will also feature and it's likely that major strategic clients will buy into oil and gas.

One of our particular focuses during the next year will be to continue strengthening our infrastructure practice as well as real estate.

Following a busy market for both in 2015 I expect these areas to continue providing work for us and other firms."

Simon Bromwich – global head of disputes, Ashurst

"There has been and will continue to be a shift to arbitration work. The courts are relatively quiet compared to five or 10 years ago.

You'll continue to see the rise of the boutique disputes firms because they have a lack of conflicts and if they are set up with strong partners from major firms, they tend to do well.

I think we'll continue to see more commoditisation across the market but at the premium end of the market, firms do best when they are focused and able to differentiate themselves so there will be a continued impetus to achieve that."

Ray Berg – UK managing partner, Osborne Clarke

"We expect to see a real battle between firms to attract and retain the best talent. Heightened market competition will put recruitment and retention at the heart of success stories in 2016.

Clients' successes increasingly depend on their online presence and nearly 50% of searches in the UK now come from mobile devices such as smartphones and tablets. So why aren't law firms getting clever with their online approaches? Mobile-friendly websites and clever SEO strategies should be the norm in 2016.

Diversity and inclusion has always been a prominent issue in the law but I think it will be and should be at the forefront of everyone's agenda.

It is as important for our clients as it is for our people, whether it's social mobility or flexible working. I would like to see law firms collaborate on this issue – there is no silver bullet and it will be an on-going mission, but as a profession it's really important for us all to improve our record in this area.

We at Osborne Clarke cannot be complacent in any respect. It's all about horizon spotting for our clients. By identifying future business opportunities for our clients, we're already ensuring their success in tomorrow's world."

Sean Connolly – London senior partner, Mayer Brown

"During 2015 we saw an increase in transactional work and our contentious teams remained busy. The work that we have undertaken globally to instil a culture of listening to our clients and responding to their needs is bearing fruit but the market will of course continue to be demanding, both domestically and internationally.

At a macro level I think uncertainty over the EU referendum and challenges arising from the emerging markets and other geopolitical issues may well affect business confidence and therefore activity levels.

Clients want value for money and I think the dominance of fixed or capped fee arrangements will continue to drive significant change in how professional advisers deliver services."

Joe Andrew – global chairman, Dentons

"Firms of all types and all sizes, often with diametrically opposed strategies, have done well in 2015 and will continue to do so. Different firms will have different challenges but most will succeed, so a dose of humility in 2016 would benefit all law firm leaders."

Elliott Portnoy – global CEO, Dentons

"Our priorities will continue to flow from the three pillars of our strategy: reinvention, integration and growth. Dentons now has more than twice the number of lawyers and professionals than at the start of 2015, making integration key to who we are-not a moment in time or finite initiative-and it will be for years to come. And while growth is just a by-product of our strategy, we will need to continue to grow in key markets such as the US in order to deliver specific practice and sector experience everywhere our clients want to be."

 

Charles Martin – senior partner, Macfarlanes

"The pace of change in our industry is forcing law firms to be much more straightforward and transparent with clients about what they really offer. So a key priority for law firms in 2016 is to understand themselves and their clients better, to give up the comfort blanket of the work that they shouldn't be doing and to re-double their efforts and investment in those areas that their clients are interested in and where they excel. Opportunities will open up for those that do that successfully.

Attracting and motivating the talent that will make a difference as the market shakes out is both a huge issue and an exciting opportunity for the legal profession as a whole and for individual firms. Firms are having to refine and reposition their thinking and culture to make sure that they don't lose out.

We will be focusing on getting even closer to really understanding clients' needs and collaborating across our practice groups. We will also be concentrating on continuing to adapt and change both internally and in the way that we interact with clients.

One of the main challenges of law firm leadership these days is to maintain energy and excitement in response to change. We, along with the vast majority of firms, fully recognise that we need to change to ensure that we are giving our clients what they want from us. For individual lawyers that often means working on new skills and expertise. Lawyers sometimes need convincing that this is as great a thing as management think it is!"

Bryan Hughes – chief executive, Eversheds

"The 'challenging' market conditions which everyone has been talking about for a number of years are now the new norm.

I could quote one or two chapters from business manuals but the reality is that ours is a relatively straightforward business model based around what our clients need to thrive, often in an ever-shifting environment.

We may see a curve ball out of left field – but we are equipped to deal with it when it happens.

We have a strategy, we have a game plan and we are simply focused on executing it as effectively and as quickly as we can."

 

David Patient – managing partner, Travers Smith

"The challenges will, inevitably, be different for different types of firm. Keeping nimble, having a strong and recognisable brand and differentiating ourselves from the pack will, we believe, allow us to continue to play to our strengths, and after a very successful 2015 we are cautiously optimistic for 2016, notwithstanding the fact that uncertainties clearly abound.

A slowing global economy, concerns over Chinese growth, geopolitical risks, in particular developments in the Middle East, are all very good reasons not to be complacent, and nearer to home, while it is probably too early to judge how the Brexit referendum will affect a law firm such as ours, it will add to the uncertainties facing all businesses.

One of the main challenges I see for many firms is the ever increasing competition from a variety of sources, including US firms and the various other non-legal entrants and service providers, all of whom are targeting increased UK market share and inevitably impacting the recruitment market and the profitability of some firms."