Onwards and upwards
30 November 2009 | By James Swift
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Yorkshire’s investment in technology and manufacturing means the region’s law firms are escaping the worst effects of the recession. By James Swift
Things are looking good in God’s own country. No one is pretending that it is all coming up (white) roses - the demise of Fox Hayes and Bradford & Bingley was sobering - but there are more than a few reasons for Yorkshire’s lawyers to get excited.
“Yorkshire is a prime example of a place where organisations have held up really well,” says Eversheds senior partner Keith Froud. “Things like Bradford & Bingley were a blow, but the solid infrastructure here has made it attractive to companies wanting to move out of London.”
Lawyers in Sheffield in particular are optimistic after the success of the Advanced Manufacturing Park and the installation of a super-fast broadband network, which have given the city the reputation of a high-tech hub.
“There’s a momentum here that’s been present in the past six months,” says DLA Piper’s Sheffield office managing partner Stephen Sly. “The recognition that manufacturing matters to the economy and the refocusing on the capacity and capability of manufacturers in the region is really welcome for the sector, which has been through some tough times. And there are businesses that are very fit and will look to take advantage of a broader position that includes a weaker sterling [to work internationally].”
Nabarro partner Mark Rocca says his firm’s regional offices seem to be holding their own compared with the London branch.
“The work’s still slowed down but we’re not far off our targets. Sheffield’s got a great industry sector, and these companies are either doing acquisitions or being bought out, so things are quite busy.”
Lawyers at Lupton Fawcett have gone further than just talking up the city, acquiring Sheffield tax specialist Hackett Windle in July. “The acquisition gives us a toehold in fastest-growing market in the country,” touts managing director Richard Marshall.
Taylor & Emmet commercial litigation partner Paul Clarke echoes the positive sentiments but laments the city’s lack of recognition.
“It’s notable that we haven’t seen an influx of big firms into the local market, but there are constant rumours,” Clarke says. “Sheffield is a foothold into the Yorkshire market and some firms may be put off Leeds because the market is so cramped. Firms there know they’re wanted, so they can demand more.”
Although a new entrant into the market is unlikely, change is not. Sheffield is known for having strong second-tier firms, and after the big three - DLA Piper, Nabarro and Irwin Mitchell - there is a large group of players competing for work. Any upheaval will happen in this space alone.
“You have some good-calibre firms here wedded to the city such as Taylor & Emmet and Keeble Hawson,” says Rocca. “And I think there’ll be some mergers. I can see these firms getting together to get some critical mass.”
Addleshaw Goddard partner Simon Pilling confirms: “Sheffield, from a legal perspective, is less well-served by large firms than in other areas, and it represents more of a challenge if you’re not present in the local market - I would add Newcastle and Hull into the same category. And these are areas that represent some good opportunities.”
Leeds, the region’s financial capital, has been affected more obviously by the downturn. Jonathan Proctor, head of corporate at DLA Piper’s Leeds office, says the banking crash highlighted the benefits of not being homegrown.
“The people here tend to be very proud of where they’re from,” he says. “But Yorkshire Bank is very proud to be Australian-owned because it didn’t get involved with all the toxic assets and so it’s quite healthy and funding small- to mid-size transactions.”
Others take a more sober perspective on the future of law firms in the region, saying the ripple effect of the recession could be felt next year.
“The Leeds market has generally been as badly affected by the credit crunch as you’d expect from a city that’s the biggest legal centre outside London,” says Lupton Fawcett’s Marshall. “Firms have had to make decisions and respond quickly. Not every firm is reacting though, and there are some firms left to fail in Leeds.”
In Sheffield too there is an expectation of further upheaval. “We’re not immune from changes to the economy,” says DLA Piper’s Sly. “So I foresee two trends: along with the development of the hi-tech digital industry sector, there are going to be other businesses that will struggle in the first and second quarters next year - and I include law firms in that.”