Fee enterprise

It’s always been odd that the hordes of City lawyers and consultants bemoaning the relative lack of profitability of UK firms compared with that of their US rivals forget the existence of the bar.

It’s always been odd that the hordes of City lawyers and consultants bemoaning the relative lack of profitability of UK firms compared with that of their US rivals forget the existence of the bar.

If you were to sketch out one of those pyramids so beloved of consultants – you know, the ones with the rarer, more valuable work at the top and the commoditised work at the bottom – the assumption has always been that you put certain types of solicitors’ work at the apex, such as tax and strategic M&A advice. And yet what also belongs there is the bet-the-farm litigation work that in the US belongs to the likes of Wachtell, Cravath and Paul Weiss, but here is the preserve of the elite chambers.

As we explore in our feature on page 22, three sets have been dominant in oligarch litigation, easily the most remunerative work in London at the moment. They are One Essex Court, Fountain Court and most of all Brick Court. Any thoughts that there might have been a succession problem at Brick Court after Jonathan Sumption left for
the bench have been dispelled by the set’s nimble positioning of Mark Hapgood QC and Mark Howard QC as the next go-to silks for oligarch bust-ups. Howard is on for Cherney against Deripaska, while Hapgood has hit the big time, leading for Berezovsky against Abramovich.

And the brief fees sure as hell reflect this: a down payment of £3m plus £1,500 per hour per super-silk is nearer the Wachtell league than anything Linklaters could dream of. (The rumoured £10m that Sumption got is more likely to have been a fee for the team, split among counsel.) The outrage of some instructing solicitors, by the way, is hard to fathom. It’s called a market, chaps.

The wider question is whether the Russians’ willingness to pay whatever it takes will produce fee inflation across the bar. On current evidence I’d say no; such are the political peculiarities of Russian litigation that the oligarch cases form a special bubble. But the fact remains that the elite of the commercial bar are higher up the value pyramid than law firms, and no amount of bellyaching is going to change that.