Baker & McKenzie has retained its crown as the top law firm brand as the magic circle comes under pressure from global players like DLA Piper and Norton Rose.
According to a survey by legal researcher Acritas, Baker & McKenzie has kept its position as the leading law firm brand among in-house counsel, chiefly through its strength in Asia and South America. Baker & McKenzie has been top of the index since 2009, when the survey first began (4 October 2011).
Meanwhile, firms like DLA Piper and Norton Rose have enjoyed the biggest increases in index rank and value since 2010, threatening the dominance of the magic circle. Freshfields Bruckhaus Deringer, Linklaters, Clifford Chance and Allen & Overy still occupy positions two, three, four and six in the Acritas table, however.
A statement contained within the Acritas survey said: “The figures reveal that [the magic circle’s] grip is weakening relative to their positions in previous years. This is perhaps due to their greater focus on the largest clients and because of increasing competition. Nevertheless, the magic circle firms compensate for lower favorability levels with their strength in multi-jurisdictional consideration for top-level work.”
Other factors weakening the grip of the magic circle and other prestigious firms include the economic slowdown, which has led to greater price sensitivity, clients’ dissatisfaction with the hourly billing model and increasing demand for international legal advice.
Lisa Hart Shepherd, CEO of Acritas, said in a statement: “Our research suggests a changing future distribution of global law firm brands, leading to a structure more akin to the international accountancy market, but with a big-15 group of law firms, as opposed to a ‘big four’.
“In light of this, the top law firms face a fundamental strategic decision between working to secure a position as one of these dominant global players and reacting according to market forces, or choosing a more specialist role, and becoming more ‘boutique’ as a result.
“Certainly to achieve a dominant global position, PEP [average profit per equity partner] will have to be sacrificed and long-term investment will be crucial to the successful execution of such an ambitious strategy. For most, this will be too large a sacrifice.”
This year is also the first year that King & Wood Mallesons makes an appearance, debuting at number 16. According to Acritas, the firm has the strongest brand in China “by some margin”.
Skadden Arps Slate Meagher & Flom is the only firm in the top 10 whose position is driven by its strength in the US. According to Acritas, US firms find it difficult to gain global recognition.
“The US is a very crowded market leading to a lower awareness share to leverage into the global mix.” said Acritas in a statement. “This means that outside the domestic market, it’s harder for US firms to gain traction due to a relative lack of awareness and strong competition from long-established international players such as the magic circle and Baker & McKenzie.”
The Sharplegal Global Elite Brand Index compiled by Acritas is based on an extract of data from interviews with 1,001 senior general counsel in multinationals with revenue higher than $1bn. Respondents are asked to name the first law firms that come to mind, the firms they feel most favourable towards, the firms most considered for multi-jurisdictional deals and the firms most considered for multi-jurisdictional litigation.
Leading law firm brands according to Acritas survey.
|Baker & McKenzie||100|
|Allen & Overy||40.7|
|White & Case||28.6|
|Herbert Smith (the survey predated the merger with Freehills)||24.3|
|Latham & Watkins||17.6|
|King & Wood Mallesons||16.7|