2Birds enjoys massive international upsurge – but US still on backburner
Last month Bird & Bird chief executive David Kerr rebuffed criticism levelled at the firm that it was becoming all but impossible for London-based associates to make partner at the firm.
David Kerr
“Partners would love to see the right candidates coming through to back up the growth we’ve been experiencing,” Kerr said (The Lawyer, 5 October). “Because of our growth in London during one of the toughest periods in the market I can remember, the door’s still wide open for candidates.”
The firm’s growth has certainly been spectacular, even more so when set in the context of the disastrous couple of years that many firms have endured since 2007.
Since 2007 Bird & Bird has expanded with offices in Helsinki, following its merger with Fennica, as well as in Prague, Warsaw, Budapest, Bratislava and Singapore. And in the past financial year alone the firm posted a 29.7 per cent increase in gross revenue to £186m.
That kind of growth brings its own set of challenges, not least integration. But Kerr believes the growth his firm has seen over the past decade, during the past two years in particular, puts it in a different league.
“We’ve found that the geographic reach now puts us in a much more competitive position for the multiple-country mandates that clients are now very keen to approach us on,” Kerr says.
Kerr believes a surprising feature of the current market is the increased number of clients wanting to reduce the number of panel firms or relationship firms they use internationally - a trend highlighted by BT’s recent panel review on which Bird & Bird retained its place (30 September).
The logic, of course, is to strike closer relationships with fewer firms that can then provide a better, more efficient level of service.
“I think there’s some significant change going on in the market,” argues Kerr. “I think it comes back to client service and what a client wants from a firm. They want to be more in control of the work being done around the world, they want greater access, more innovative use of technology that puts them in a better position to manage mandates, and they want the law firms to give more back to them. That’s much harder to do if the network of firms you’re using in multiple countries is fragmented.”
This is the age-old argument about whether a client is best served by a firm that is free to work with the best-in-class local partners it chooses, or one with its own network of offices.
Kerr has no doubt which is in the client’s best interests and why.
He says: “If a client has a small number of firms globally, it can impose the management administration burden and risk on that small number of relationship firms.
“And I think it’s a trend we’re seeing - the number of clients cutting the number of firms they work with.
I think the number of companies doing it is remarkable. I’ve never seen anything like it in my career.
“You might say that’s because we’ve only become bigger recently, but I don’t think it is. I think there’s been a bit of a step change.”
This amounts to a defence of Bird & Bird’s decade-long strategy of international expansion - one that is inescapably linked to its chief executive of 13 years, Kerr.
But with the results the firm posted this year, arguably that strategy does not need much defending, and Kerr shows no sign of either stepping aside or changing direction.
“It’s great fun seeing the business grow and expand; and it’s particularly good seeing the internationalisation of the firm and it becoming a truly global firm. I get huge enjoyment from that,” he enthuses.
Of course, Bird & Bird is not truly global yet. For years in the early 1990s the firm looked at a number of options in relation to the US and rejected them in the end.
“I think we were right to reject them at that time because I think we’d have missed out on the opportunities we were able to capitalise on,” says Kerr. “However, I think the market’s changing and client demands are changing. So we need to keep a careful eye on it. I think we’re openminded about America.”
The firm clearly has many relationships with US firms, and Kerr admits that “it would be crazy for me to say that one day we wouldn’t be interested in being in America”.
So it certainly remains a possibility.
“But I’ll be very open with you - it’s not something that’s currently on my agenda, or very high on anyone else’s agenda [at the firm],” he adds. “The Middle East, Asia and Europe - that’s our primary focus. But it’s certainly likely to become an issue.
“It will be interesting to see what happens over the next two or three years in the US. I think there will be a period of great change there.”
As for the over-tight equity in London, Kerr maintains that this is a “bizarre” assertion.
“We’re very committed to bringing in more partners in London. I don’t think there are any arbitrary limits being imposed by anyone,” he insists. “Least of all me.”
