Following the important success of the financial markets in 1999, the French legal market as a whole, and the business lawyer market in particular, has been going through major restructuring and reorganisation.
In the past few years, several City law firms have established new offices in Paris, and those already in place have strongly increased their capacities by massive lateral hires from French law firms. Curiously enough, such moves have not increased the number of players in the French legal market, since many French firms have consolidated in an attempt to face the ever-increasing competition imposed by the Anglo-Saxons. The recent consolidation of the financial markets, together with the forewarnings of economic slowdown, have not stopped the trend.
French traditional firms are facing a situation where some of their recognised corporate partners (junior or senior) are leaving them to join Anglo-Saxon partnerships. The consequence is that US or UK firms in Paris, which were originally staffed with expatriate lawyers mainly assisting their home clients in France, are now predominantly staffed with French lawyers developing a strong local clientele. The Paris business law market has even gone a step further, with partners deciding to leave their US or UK firms to join another competitor. Competition among law firms is booming.
The past has shown that it is a lot easier for an Anglo-Saxon firm to hire a partner and their team of associates than to merge with a French firm, which explains the cherry-picking strategy developed by some Anglo-Saxon firms. The ever-increasing competition has led the small minority of leading French firms that were showing their intention to develop an independent international network of offices around the world, such as Moquet Borde, Gide Loyrette Nouel or, more recently, Bureau Françis Lefebvre, to reschedule their priorities and refocus their strengths on the domestic market. Another notable trend is that many French firms have entered into different types of cooperation agreements with other Continental European law firms. Those agreements range from loose and informal cooperation with the setting up of European networks based on “best friends” policies, to full-blown mergers between European firms. However, it remains to be seen whether such networks will constitute and offer adequate responses to the competition of the Anglo-Saxon firms.
UK firms – those which took the lead and started the hunt to become global law firms in Europe – now seem to be seeking an alliance with top Wall Street firms in order to offer worldwide practices to their clients. US firms, however, seem to be more keen to concentrate on their fruitful home market, although acknowledging the tremendous potential of the European market. In that respect, several US firms with an established presence in France have opened other European offices in the last 12 months, such as Willkie Farr & Gallagher, which opened an office in Frankfurt and two Italian offices in Rome and Milan.
Facing up to competition is the key. In order to position themselves as leaders in the market, law firms have started hiring marketing and communication directors, a move that French law firms were reluctant to make not so long ago. This position, often occupied by non-lawyers, is now seen as an essential tool to keep the firm in the media, thus positioning itself favourably in the market for existing and potential clients. Although French avocats observe a strict code of ethics, proper disclosure is often possible with the prior approval of the parties at stake, and is even necessary considering the accrued competition, so long as it is done according to the standards of the profession.
Laurent Faugérolas is a partner at Willkie Farr & Gallagher in Paris