Out-of-London is the new London

Catrin Griffiths

Our analysis this week is on how major City firms have adopted the practice of disaggregation in their quest for greater efficiency (see cover story, page 10). Ashurst, Allen & Overy, Herbert Smith Freehills and most recently, Hogan Lovells, have all opened regional offshoots to handle lower value and support work rather than packaging it all out to India or South Africa – a practice modishly known as ‘insourcing’.

What’s of real interest is how the original ideas have morphed in practice. Allen & Overy began with only support staff, then brought in 20 associates and paralegals, working on due diligence and dispute resolution. Ashurst will be following the same trajectory, getting two associates into its Glasgow base. So we’re seeing the beginnings of an alternative talent pool of solicitors with its attendant requirements in terms of career paths and professional development.

City firms are increasingly interested the regional option, and it doesn’t have to be process-driven, either. Just look at what Simmons & Simmons and RPC are doing in Bristol. They’re building add-ons to their City practices and are able to charge London financial services clients lower rates for partner-led services. Nabarro is doing the same in Manchester, targeting property.

The chase for efficiency is adding to the regional hubs because City firms are following the quality employees. The talent pool is the attraction of Bristol for London firms – as it is with Birmingham which, before Hogan Lovells’ opening, had never seen a City incursion. Belfast is overrun with alternative sourcers; not only are Allen & Overy and Herbert Smith Freehills there, but in 2012 Axiom launched in the Northern Irish capital with 15 lawyers.

But the daddy is Manchester. BLP decided earlier this year to launch its low-cost hub there, and its entry confirmed the city’s status as biggest legal magnet outside London. It joins Clyde & Co and Nabarro in an increasingly crowded North West talent market. 

There’s one city missing from this roll-call. Whatever happened to Leeds? Fifteen years ago it was a legal powerhouse that helped spawn DLA Piper, Eversheds, Pinsent Masons, Hammonds (now Squire Sanders) and Addleshaw Goddard. But as Manchester’s star has risen, so Leeds’ has fallen, despite the presence of the University of Law and BPP – a guarantee of a junior talent pool. Is it time for Yorkshire’s development agency to step in with some juicy carrots?