Vale of mid-tiers

City mid-tier firms face battle for business with regional players

It is no secret that clients are putting pressure on legal advisers for greater value. A growing number of City firms are responding by opening low-cost regional offices. Simmons & Simmons’ decision to open in Bristol is the latest example.

But now a reverse trend is emerging. Several regional firms have expressed a desire to acquire a small firm or bolt-on team in London to win more work from mid-tier City firms. Their biggest advantage, as Ashords chief executive Ian Daniells noted, is being able to offer cheaper rates from their regional bases.

Daniells’ Exeter-based firm merged with small London outfit Rochman Landau in March, adding 35 lawyers and £5.1m in revenues.

“With a credible office in London and lots of work being done in our regional base we save money by not having more people than we need in a place where overheads are so high,” said Daniel, who estimates that his firm can help clients save up to a third of their legal costs.

Regional firms’ London push is partly driven by the arrival of the likes of Co-operative Legal Services, which makes winning certain traditional types of work more difficult for regional players.
“We’re trying to win all the work mid-tier London firms are doing and expect our growth will be largely driven out of London,” asserts Daniells.

His firm is aiming to take a bigger share of the mid-tier legal services market and is budgeting for revenue growth rate of between 7 per cent and 14 per cent for 2012-13 – ambitious in the current climate.

Thomas Eggar and Dickinson Dees are two other regional firms planning to acquire or merge with London firms.

“London is the global legal centre,” said Dickinson Dees managing partner Jonathan Blair. “To deliver our ‘2020 vision’ we have to have a sizeable London office.”

According to the Newcastle-based firm’s plan, it wants to be in the UK top 20 by 2020.

“Mergers or acquisitions will have a London flavour,” Blair confirms.

A managing partner of another regional firm believes mid-tier London firms will suffer most in the years ahead.

It adds a whole new meaning to the phrase ‘squeezed middle’.

Yun Kriegler