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US firms' City bases outstrip UK firms' RPL by 50 per cent

A bit harsh on the London firms. They tend to be weighted down with PSLs & trainees who amount to 30% of lawyers in some firms. Plus the London firms tend to have lots more non-economic full service practice components & higher rental costs because of uncommercial overstaffing. And many US firms are servicing Europe rather than a declining domestic practice & cherry picking inbound from US deals which UK firms just cannot get. Admittedly, the UK firms should address these things but it is not a like for like comparison & in some ways US firms have it easier so should be doing better unless & until they seek to replicate the UK firms (which would not be a good idea as the UK firms need to row back from where they are in the main). The probability is that talent will walk the way of the US firms because money talks, this increasing the squeeze on the UK firms, particularly the domestic focussed & particularly badly run & flabby ones who have not yet got to grips with the deadwood of partners made up in the past who would get nowhere near it today. In turn this should result in a shakedown & rightsizing. I suspect we'll see a lot of focussed boutique start-ups & some/several law firm failures in the middle market maybe as far up as just outside the MC. Outside the equity in the MC it is probably very worrying unless you have a USP or a loyal following.

8-Oct-2012

8:02 pm