Eversheds: green-eyed or just naive?” />Kevin Wheeler, principal, Wheeler Associates
Over the past couple of weeks, few lawyers can have missed the avalanche of publicity associated with Eversheds’ report The Law Firm of the 21st Century.
Although the report is a noble attempt to forecast what the legal landscape might look like in 10 years’ time, the main problem with the study is the way that the results appear to have been ‘spun’ to create the impression that over the coming years clients will be deserting magic circle firms in their droves to leap into the arms of firms such as Eversheds, and all because the latter provide “better value for money and better client service”.
Now, I don’t want to get into a statistical debate about the robustness of the research, but highlighting under the heading ‘Hegemony of the magic circle dented’, that “34 per cent of clients interviewed specifically mentioned plans to buy legal services from more firms outside the magic circle”, is a bit weak. It is hardly a statistic that is likely to have Slaughter and May partners quaking in their boots.
The main thrust of the Eversheds study, along with the firm’s PR offensive, is the focus on clients’ desire to control their legal costs and to obtain better value for money. This is nothing new. In fact, you could argue that firms such as Eversheds owe their impressive growth over the years to clients’ desire to achieve this aim.
Going back 20 years, clients based in Leeds, Manchester or Birmingham would have had little choice other than to travel down to London to see their City-based lawyers. Eversheds and other regional players such as Hammonds, DLA and Pinsent Masons saw the opportunity to offer high quality, value-for-money legal services to these clients on their own doorsteps and as a result, over the years, a significant volume of legal work has migrated to the provinces from London.
These firms have also stolen work from under the noses of the London lawyers by establishing a presence in the capital.
But there is a limit to how far this migration of work will go. Based on my own studies interviewing users of legal services, I often hear clients using the term ‘horses for courses’. Yes, in many instances a FTSE100 company or a major financial institution may use an Eversheds or similar firm for, among other things, property, employment or IP advice, but often when it comes to a ‘bet the company’ issue, these clients will turn to the magic circle, even when they know this will cost them more.
And why do they do this? They do it because the magic circle firms employ the best legal minds, have lawyers experienced in the largest and most complicated transactions, and have the most extensive global resources at their disposal.
As firms such as Eversheds have encroached on to their patch, magic circle firms have increasingly focused on the top end of the market – M&A, competition, complex litigation etc – including handling cross-border and international work. At this premium end of the market they have been able to generate super-profits, thereby attracting the best talent and the best clients. This has created a virtuous circle, which firms such as Eversheds are extremely envious of.
Can the magic circle firms improve their levels of client service? Of course they can. Should they be more aware of the cost pressures that clients are facing in relation to their legal bills? Absolutely.
But to think that these clients are about to defect in droves to firms such as Eversheds because of these issues is naive beyond belief.