Riddle of the brands: the secret formula of kudos

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  • I’m afraid the whole thing becomes a laughing stock when it produces the ridiculous result of placing DLA, the largest firm with the least prestige, ahead of Slaughter and May, which to anyone other than a moron in a hurry remains the UK’s premier firm by a considerable margin.

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  • Fundamentally the problem here is dividing general brand awareness from a firm's specific brand value for a client. Everyone's heard of Slaughters and DLA....great, but that tells us very little.
    What matters is where they are placed in the market and who their peers are in relation to that market positioning. I.e. being known for being large and cheap may be a very good thing to some clients, others not. Brand is dependent on the values being sought by the client.
    You can't have DLA and Slaughters in the same branding index unless you're just looking for a blunt input on whether the market has heard of you. Brands operate in discrete market segments, not on a universal index like the FTSE.
    You can compare Slaughters/Davis Polk/Bredin Prat/Cravath and their brands, and DLA versus Eversheds and their brands, but not both groups of firms in the same index because they don't do the same things. Peer brand value is far more important than general brand value.
    Also, the point by Acritas about using financials to give you a brand value is right - it makes no sense at all. It's just a form of City mysticism.

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  • What about perceptions, they count a lot too.

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  • The Brand Finance tool is, like the 39 or so other brand valuation tools offered by ‘brand experts’, a confusing and contradictory bagatelle. You can’t put a number on energy, intelligence and a strong, culture with a cogent vision. And that’s what a client ends up feeling and, predictably, what Managing Partners should really concentrate on.

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  • The point is that there are two elements here. Brand value added in terms of the relative uplift in profits on a given transaction (Slaughters will play very highly here) and total brand value, which is a multiple of the first quantity and the volume of business done. i.e. Rolls Royce probably adds a significant premium per car sold, but the VW badge adds (less) value to many more cars and so in aggregate is worth less.
    You can absolutely include Slaughters and DLA in the same system if you include both these rankings and make some sense of it. To be honest, though, if I were buying a legal business I would get a pretty good idea of the former variable from the profit margin; the latter from overall profit, and benchmark against previous transactions where these figures will be known in setting a price, adjusting for the riskiness of the business in terms of relative partner/client turnover rather than starting with some exotic brand value figure, for which there is no historical data in the sector.

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  • Premier firm but by what measure? The big four of the MC dominate these rankings for good reason. It's their stranglehold on the best work. Freshfields and Linklaters fight for position for the best corporate/ M&A position in the UK & Europe. One only needs look at any UK or even European M&A league table. A&O and CC are pre-eminent in banking.

    The inclusion of DLA seems odd, but I'm not surprised Slaughters isn't up there with the rest of the MC.

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