12 March 2001
Gobsmacked" was the reaction of one senior litigator when informed of the poor showing of the UK's magic circle law firms in the first ever comprehensive survey of performance in the Court of Appeal. This first-ever survey of its kind, conducted by The Lawyer, reveals a set of statistics that throw up some extraordinary revelations. Not least of which is that only one of the UK's magic circle, Clifford Chance (in sixth place), makes an entrance in the top 10 law firms, ranked by number of appearances. Freshfields Bruckhaus Deringer is a creditable eleventh place, but Slaughter and May and Linklaters & Alliance fall outside the top 20 and Allen & Overy (A&O), with a meagre three appearances, is not even ranked.
The fact that the table is topped by Herbert Smith with Lovells in third place comes as no surprise. The two are widely recognised as the market leaders for litigation and are rivalled only by Clifford Chance and insurance specialists Berrymans Lace Mawer, Kennedys and Beachcroft Wansbroughs.
A&O's litigation group managing partner Andrew Clark puts his firm's poor showing down to the practice's predisposition towards international work. He says that UK court litigation accounts for only 20 per cent of the firm's litigation practice. "There's an increasing amount of investigation and public inquiry work, which includes handling and managing risk," he says. "This is coupled with the fact that we're in a boom period, so banks and big insurance companies are not litigating. It may be different next year."
But this explains only part of it. The growth of arbitration and particularly mediation may also have contributed, as would the firm's success in settling disputes before they reach trial. However, the fact that A&O is in such good company at the bottom of the pile begs the question: are the magic circle's litigation departments simply not as busy as they claim to be? After all, while Clifford Chance fared much better than its closest rivals, it does have the world's largest litigation and dispute resolution practice and might therefore expect to finish higher up the table. In London alone the team comprises 45 partners, which far exceeds A&O's 17-partner team and is only one fewer than Herbert Smith.
But they can surely not be as in demand as the litigators at Herbert Smith; the survey results confirm its untouchable reputation for possessing the premier litigation practice. What sets this firm apart from its competitors? Now with 17 qualified solicitor advocates, it handles a lot of its own interlocutory work, with lawyers being responsible for drafting their own defences on small and medium-sized cases.
Herbert Smith litigation head Harry Anderson says: "We may not have a dedicated advocacy unit, but we do have a one-stop shop. It's part of the ethos of the firm, and a lot of our clients, especially those from the US, expect it."
Some of the biggest areas of litigation are insurance, construction and shipping, and as cases at the Court of Appeal often establish a point of law that will affect a whole industry, the law of averages guarantees that firms specialising in these areas will appear more often. So it is hardly surprising that the likes of Kennedys, Beachcroft Wansbroughs, Barlow Lyde & Gilbert, Irwin Mitchell, Ince & Co and Reynolds Porter Chamberlain all feature prominently in the survey.
In fact, a lower position for some of these firms could indicate a problem. After all, litigation contributes to 75 per cent of Barlows' turnover, while Reynolds Porter Chamberlain has a substantial professional indemnity practice and Ince & Co has a large insurance and shipping practice. So these firms rely heavily on the strengths of these areas.
CMS Cameron McKenna, Freshfields Bruckhaus Deringer, Norton Rose, Simmons & Simmons, Richards Butler and Slaughter and May are all placed more or less relative to their reputations. But Denton Wilde Sapte is conspicuous by its absence.
DLA, which has been named by some as an up-and-coming litigation practice and which went to the Court of Appeal eight times last year, is beginning to make a mark. Hammond Suddards Edge, which is building a reputation for its ADR practice, is also worth mentioning. Pre-merger, Hammonds had a stronger litigation practice than Edge Ellison, but together the two firms have made 12 appearances in the last year. Another good performer is Masons, which made 10 appearances, mainly as a result of its pre-eminence in construction.
The Lawyer's research also reveals how many Court of Appeal cases each firm has won. The most impressive result was achieved by Clifford Chance, which won 12 out of 13 appeals.
Clifford Chance litigation partner Roger Baggallay says: "We want to be involved in cases before the notices of appeals are finalised. In a recent case we used a well-known QC, but the solicitor here did all the preparation, which was then approved by the QC. It was more thorough than the preparation on the other side."
But he goes on to say that he does not think that the success of a firm can be judged by the number of cases it wins at appeal. Barlows head of construction Richard Dedman agrees, claiming that the reverse is true. He says that although at first instance the quality of preparation is hugely important and can increase a client's chance of winning by up to 20 per cent, the result at the Court of Appeal is more directly related to the legal points. "You could argue that firms which lose on appeal are best because they win more at first instance," he says.
But Herbert Smith's performance will remind its competitors that they still have some way to go to catch the UK's pre-eminent litigation practice. The magic circle firms in particular should be concerned by their poor showing, save for the ever-present Clifford Chance. Perhaps they can no longer expect to build a first rate litigation practice on the back of their highflying corporate and banking departments. But if it is simply that domestic litigation no longer interests these global firms then there are plenty of able understudies, such as the always eager DLA, Eversheds and Barlows, ready to take centre stage. n
In next week's issue, The Lawyer analyses the performance of the bar in the Court of Appeal. See also The Lawyer on 2 April for a detailed analysis of the magic circle firms' litigation practices