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Norton Rose seals $1.9bn merger with America's Fulbright & Jaworski

The winners in the future legal market appear to be shaping up as: 1. Magic Circle/White Shoe, who can say, "we are the best". Their 'niche' or perhaps better described as 'space' is the very top end clients and transactions. 2. Global Service Firms which start to look like the big 4 accountants. DLA Piper, K&L Gates, now Norton Rose. For international clients whose transactions are 'only' in the £100's of millions in deal value, the proposition that "we can do everything which you the client do, everywhere you do it" is a compelling pitch. NR's project lawyers in Perth should be cross-selling their capital markets capability in Toronto and London, and vice versa, and that is frankly a scary thought for their competitors in the natural resources space. 3. True niche firms/offices/teams. Recall at one point Proskauer Rose (?) saying something along the lines of, in London we're going to do funds work, and in London funds work we're going to be bigger than our Magic Circle competitors. A firm or office which can achieve a position like that has a compelling pitch to a client in the relevant space. For the rest, the world is looking bleaker. There must be at least 20 odd mid-market full service firms that, as hard as they try, don't look any different to each other from a client's perspective. There are then perhaps 50+ other firms/offices which can do much of what the mid-market full service firms can do equally as well as they can. We all have pretty much the same overheads, the same access to practicallaw.com, loan market association etc. and other know-how, the same back office support, etc. So not only do these firms look the same from the outside in, in reality they are in fact pretty much indistiguisable. Partners in the bleak middle are left to build personal relationships backed by an 'ok brand'. Clients become personal clients and a true 'following' should the Partner cross the street. This is a terrible long term business model. In summary, Norton Rose, and DLA Piper and K&L Gates for that matter, should be applauded for leading the changing shape of the legal market. Other firms which were the natural competitors 10 years ago of their constituent/legacy firms, and which have not been so bold, are much more likely to fail than they are.

14-Nov-2012

3:57 pm