The Lawyer Global Litigation Top 50 report is the only ranking of international law firms by litigation and arbitration revenue and is essential reading for anyone seeking to benchmark their litigation and dispute resolution practices...
This year, The Lawyer’s annual ranking of the largest UK law firms by turnover is available as an interactive, digital benchmarking tool. For the first time this will allow you to manipulate each data set against the metrics of your choice.
Firms in financial ‘intensive care’ told to merge, divest or restructure as cash dwindles from accounts.
Banks are emerging as key players in reshaping the legal market, stepping in to convince cash-strapped firms of the need to merge, sell off or restructure their businesses.
Around 500 firms have been referred to the so-called intensive care units (ICU) of their banks because they are facing financial difficulties. It is understood that 21 of the UK’s top 150 firms are being treated in Barclays’ ICU, which is known as ‘business banking support’, although the bank refused to confirm this number.
HSBC head of professional propositions Piyali Williams said the legal profession will see its banks taking a more interventionist stance and advising on an increasing number of consolidations. It is likely that demergers will also occur for some firms.
Williams added: “Merging is not an end in itself. Putting two firms together alone isn’t enough as there needs to be a cultural fit, otherwise they’ll still collapse, so firms need to continue to take advice from their bank.”
Williams confirmed that her bank had seen a marked increase in the amount of financial restructuring advice it was giving to its law firm clients due to the economic climate.
“Concerned firms are coming to us, but we closely watch firms’ working capital, and if there’s the potential of any defaults we’ll get involved,” said Williams. “We’d bring in external consultants to assess things like how the firm is operating its work-in-progress, whether it should be outsourcing work, cutting costs in some areas or whether there’s a need to divest.”
Nick Anthony, head of Barclays’ professional and public sector services team, said as yet his bank had not seen a significant increase in firms being referred to banking business support, although he added that Barclays’ ICU only became involved when there had been a breach of covenant.
“It’s not in anyone’s interest for firms to go insolvent and so we want to keep them in business,” said Anthony. “Law firms are falling short of their budgets, so we’re trying to advise where they can cut costs and improve performance.
“Problems will arise, however, where less emphatic firms aren’t willing to pull the levers.”
Anthony added that firms should alert their banks as soon as they suspect that they may breach covenants.