The pharmaceuticals sector has experienced a period of unprecedented consolidation which has impacted on the demands it makes of its external legal advisers. In January, SmithKline Beecham and Glaxo Wellcome began to arrange a £114bn merger, just weeks before Pfizer and Warner-Lambert announced their £52.1bn merger.

This consolidation has led to an increased demand for corporate and M&A advice. Most companies are seeking a good relationship with recognised City players because of their ability to operate in banking and financial circles. But a lot of these relationships are dependant on individual contacts, especially in the more sector-specific practice areas, such as patent and healthcare work.

While cost is an important issue, it is knowledge and experience of the industry that are vital for a company when choosing a firm. Most pharmaceutical companies do not use the staple methods for choosing their law firms such as beauty parades and directories. In-house lawyers prefer to rely on more informal methods, such as recommendations, sector-specific literature and online offerings that firms provide, because it is believed that they are a far more accurate way of gauging a firm’s knowledge and experience.

Because of the global nature of the industry, knowledge of US law is also important and a wide range of US firms are used for patent and class action litigation.

Despite the growing need for a City firm’s corporate and M&A expertise, global firms are not highly sought after because, according to one insider, they “don’t pay enough attention to their clients”.