City mid-tier firms face battle for business with regional players
It is no secret that clients are putting pressure on legal advisers for greater value. A growing number of City firms are responding by opening low-cost regional offices. Simmons & Simmons’ decision to open in Bristol is the latest example.
But now a reverse trend is emerging. Several regional firms have expressed a desire to acquire a small firm or bolt-on team in London to win more work from mid-tier City firms. Their biggest advantage, as Ashords chief executive Ian Daniells noted, is being able to offer cheaper rates from their regional bases.
Daniells’ Exeter-based firm merged with small London outfit Rochman Landau in March, adding 35 lawyers and £5.1m in revenues.
“With a credible office in London and lots of work being done in our regional base we save money by not having more people than we need in a place where overheads are so high,” said Daniel, who estimates that his firm can help clients save up to a third of their legal costs.
Regional firms’ London push is partly driven by the arrival of the likes of Co-operative Legal Services, which makes winning certain traditional types of work more difficult for regional players.
“We’re trying to win all the work mid-tier London firms are doing and expect our growth will be largely driven out of London,” asserts Daniells.
His firm is aiming to take a bigger share of the mid-tier legal services market and is budgeting for revenue growth rate of between 7 per cent and 14 per cent for 2012-13 – ambitious in the current climate.
“London is the global legal centre,” said Dickinson Dees managing partner Jonathan Blair. “To deliver our ‘2020 vision’ we have to have a sizeable London office.”
According to the Newcastle-based firm’s plan, it wants to be in the UK top 20 by 2020.
“Mergers or acquisitions will have a London flavour,” Blair confirms.
A managing partner of another regional firm believes mid-tier London firms will suffer most in the years ahead.
It adds a whole new meaning to the phrase ‘squeezed middle’.