Leading the market in the North
30 August 1999
When it comes to the regions, it is difficult to imagine a more competitive marketplace than Leeds.
Yet not content to simply defend their regional turf, the major Leeds firms are setting their sights on the City and Europe.
It is generally acknowledged that there are six main players in the Leeds market: Addleshaw Booth & Co, Dibb Lupton Alsop, Eversheds, Hammond Suddards, Pinsent Curtis and Walker Morris.
After them come some pretty impressive names - such as Irwin Mitchell, Garretts and Masons - along with new firms that are trying to move in on the market. Insurance firm Weightmans, for example, is due to open a Leeds office by the end of next year.
Leeds can support these big hitters because it is one of the fastest growing cities in the UK and the largest legal and financial service centre outside of London. Up to 60,000 people are employed in financial services in Leeds city centre alone.
Jonathan Fox, national client relationship manager at Dibbs, says new companies such as insurance giant Direct Line are moving to the city and they all need firms to do legal work. There are many law firms in Leeds but, he says, the feeling is that the market can hold them.
Martin Shaw, head of corporate at Pinsent Curtis' Leeds office, says commercial activity is increasing. "A year ago economists were pronouncing a slowdown or recession which just has not happened. People are really going into growth mode and, as a spin off from that, people are better off. Leeds has become a cafe society; it has every conceivable shop you can think of," he says.
Most observers agree that the firm to have made the most noticeable progress in Leeds this year is Addleshaw Booth & Co, this year's Law Firm of the Year in The Lawyer Awards. As one London lawyer puts it, "Addleshaws is the cock of the North".
Addleshaws' senior partner Paul Lee makes no bones about where he sees his firm in the pecking order of things. "We believe we are the top firm in the North. We are doing better each year," he says.
Addleshaws says it is focusing on three core areas: corporate finance, banking and property, and has been busy recruiting to this end.
Earlier this year, in a move Lee describes as a "huge coup", the firm raided Garretts' Leeds office, recruiting senior partner Sean Lippell, head of corporate Andrew Kay and corporate finance partner Simon Pilling.
The firm advised Stadium Group on what is believed to be one of the UK's largest deals - the proposed sale of Sheffield's Meadowhall shopping centre for £1.2bn - and added British Telecom and Standard Life Assurance Company to its growing client list.
"Our ambition is to dominate in the North, rather than to lead in it," Lee says. "It is well known that our profitability was not as good as we would like it to be or that it should have been, but we have made significant progress. Last year we improved by 20 per cent and this year we expect to improve by at least that amount."
But most commentators agree that each one of the big six has its strengths and no one firm leads in all areas of work in the region. For example, Eversheds is dominant in construction work, Hammond Suddards and Dibbs are rated very highly for insolvency and corporate finance, and Irwin Mitchell has a growing reputation for intellectual property and IT.
Michael Henley, partner in charge of Hammond Suddards' Leeds office, says: "There are some very good firms in Leeds and the strength of these firms means that the market is very, very competitive. People in these firms are hungry for the work."
Not surprisingly, the question on everybody's lips is: how long is this boom going to last?
Lee believes the Leeds economy has a good medium to long-term future. Shaw agrees: "Some people say there are too many law firms in Leeds, but we are all growing and we are all trying to leapfrog everybody else."
But Henley is not so optimistic and says there are "signs that a number of companies are moving away and the market may not be able to support the amount of law firms in the area".
Hammond Suddards' aim is to "be number one in Leeds". The firm, he says, is determined to expand its presence in the city and has stepped up its lateral recruitment.
The firm created a stir earlier this year when it recruited Dibbs' former managing partner Paul Rhodes to run its insolvency department in Leeds. It also scooped Dibbs' Leeds and Manchester professional indemnity teams for its London office, and Eversheds' head of employment at Leeds, Catherine Prest.
In fact, recruitment is a key issue for all the major Leeds firms. Not that it is hard getting lawyers to move to the city. Shaw says Leeds is attractive to lawyers because "we are paying not quite London rates but very, very high rates and have as high quality work as London. And the quality of life is much better".
But, he says, "the real problem we have all got in common is recruitment, getting the right newer lawyers coming in".
Another key issue for the leading Leeds firms is winning work away from City firms. Although their client base is national and international, there is still a perception that the regional giants have yet to break into the most lucrative City work.
Fox says: "Some Leeds-based plcs still feel the need to get City firms involved for certain types of work such as mergers and acquisitions."
Asda for example, which until its recent merger with US retail giant Wal-Mart was a Yorkshire company with its head office in Leeds, uses a combination of provincial and City-based firms.
And if you look at the number of deals carried out over the last 12 months in Yorkshire, says Fox, most would have been done by Leeds-based firms.
However, about 12 or so would have been worked on by City firms and in terms of value these would probably be worth more than all the others put together.
"The key is making sure that firms like ours get a crack at the City work being done by Magic Circle firms," Fox says.
As part of this strategy, the large Leeds firms are keen to emphasise that they are national firms with London offices.
Pinsent Curtis, for example, is set to appoint its first national managing partner and says it is focusing on strengthening its London office. "We regard ourselves as a national firm," says Shaw. "We want to get our London office to be as strong as Birmingham and Leeds."
The firms have also established, or are in the process of looking for, European links. Most recently, Hammond Suddards joined the 200-firm international network known as Commercial Law Affiliates.
"We don't anticipate being a firm like Clifford Chance, with offices in every country," says Shaw, "but we are coming under pressure from clients to be more closely focused in Europe, so we are looking for closer alliances or associations."
Bucking this trend is Walker Morris, a single-office Leeds firm. Undoubtedly a leader in Yorkshire, it has no intention of opening other UK offices.
Instead it is concentrating on developing its service through the use of IT. The firm recently launched Reach, an internet service that gives in-house clients access to the firm's know-how. So far 10 of its major plc clients have plugged into the service and another dozen plan to in the immediate future.
Chairman Christopher Caisley, an insurance litigation partner, says: "Our strategy at the moment is to focus on what we have already got, such as IT. We can help our clients run their businesses better."
The firm also aims to raise its profile through marketing, with the aim of being "the Man U of the legal world".
Caisley sums up the firm's thinking: "When the majority of your competition is moving towards globalisation, can you remain as a regional player with the ability to act on the international stage?
"We felt that IT offers such an opportunity that distance is no longer a problem."