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According to the latest data from Hemscott, DLA Piper, which was previously ranked second, has lost three clients over the past three months, while Norton Rose has lost two. LG, which gained one new client over the quarter, has leapfrogged the pair into second position.
Pinsents, which overtook Norton Rose and DLA Piper in the previous quarter to take the number one spot, is now far ahead of its rivals with a total of 61 clients, having added two more since the last data was published. That said, while Pinsents has won private equity house Lupus Capital and property developer West-city as clients, the market for new IPOs is proving particularly difficult.
Jon Harris, a corporate partner at Pinsents, said: “We do regard finding IPO candidates as a bit like cod fishing – you have to go further and further afield to find any.”
He added that Brazil, China and Asia are currently interesting, but pointed out that deals are simply not completing – even from these regions.
Memery Crystal dropped one place in the client number rankings, down from sixth to seventh. The firm’s head of AIM Lesley Gregory agreed with Harris that the market remains difficult, saying: “There’s still a lot of interest from international companies, but it all depends on the markets, frankly.”
She added that she hoped IPOs would begin to kick off in the third quarter of 2009. “It’s going to be a tough first six months,” she concluded.
DLA Piper European M&A head Bob Bishop was similarly downbeat, saying: “As far as IPO targets are concerned, no market in the world is buoyant right now. We’re winning lots of pitches but all transactions are either being put on hold or taken out of the market completely.”
In addition, many long-standing AIM clients of firms are disappearing fast. Bishop commented: “The past few months have seen some AIM-listed clients getting taken over and going private. There’ll be more market consolidation and, while the equity capital markets remain closed, there’s no way to supplement that in a meaningful way.”
For example, DLA Piper recently lost its AIM client Civica when it was taken over by private equity firm 3i. Bishop, who advised on the transaction, said: “We may have lost an AIM-listed client, but we retain a private equity client. The figures don’t tell the whole story.”
Generally, AIM partners hoped that the difficult times would lead to a flight to quality rather than AIM companies abandoning the pricier firms for cheaper regional rivals.
In terms of figures, the number of AIM companies represented by the top 10 firms on the list fell from 488 to 475. The value of those companies has also plummeted in the past three months.
The market capitalisation of LG’s 54 clients dropped by more than £1bn, from £5.4bn to £3.9bn, as the economic crisis took its toll on London’s junior market.
In total, AIM clients for the top 10 firms have seen nearly £12bn slashed off their market value during the past three months.