Troubling times for BLG

Barlow Lyde & Gilbert (BLG) has provided more evidence of how tough it is for litigators right now. The firm’s core reinsurance team has started to feel the pinch, with at least two partners being politely asked to move on. It is unlikely they will be the last if the market fails to pick up. At the very least, the lawyers in this team will be feeling vulnerable.

Senior partner Richard Dedman is putting a good gloss on the firm’s string of partner losses, countering with its impending new management structure and LLP conversion. But these changes only highlight the fact that BLG’s average profit per equity partner has stagnated at £380,000 for the past three years.

Flat profit is just one of the issues facing BLG. The firm has invested a lot of time and money in trying to build its non-contentious practice without much of a return. Only a week ago its ambitions took another blow when its remaining technology partners left for Bird & Bird.

The move might not have been curtains for non-contentious as a whole, but it is for IT, no matter what the firm says. Don’t bet against the entire roster of IT assistants following Simon Shooter, Chris Holder and Christian Bartsch to Bird & Bird in the new year.

Coming after the exit of its finance team to Winston & Strawn last year and the loss of corporate head John Longdon in 2004, it’s hard not to draw the conclusion that non-contentious is simply not where it’s at for BLG.

Elsewhere there’s proof that building a non-contentious practice in a litigation-based firm can be achieved. Non-contentious work now accounts for around 40 per cent of Clyde & Co‘s turnover, for example. In contrast, BLG still relies on disputes for around 75 per cent of its revenue.

It’s too early to say what effect the introduction of a chief executive officer (CEO) to BLG will have. But the new arrival will be looking for efficiencies and a way to shift that £380,000 figure northwards. Will non-contentious still fit after 1 May next year?Dedman maintains it will, claiming BLG’s non-contentious practice is “small but successful and profitable”, and adding that the firm is looking for “aggressive growth” in the area.

But persuading those lawyers to join will be a hard sell. That new CEO, whoever he or she is, is certainly going to earn their money.