The Lawyer Managing Partners dinner: welcome to the Billion Dollar Club

The billion dollar club is growing. Five years ago just five firms grossed more than $2bn. Now 35 turn over $1bn (soon to be 36 when CMS, Nabarro and Olswang merge), and they are closing the gap fast. Some of their leaders were sitting around the table at The Lawyer’s Managing Partners’ ­Dinner last month.

Around 20 managing partners and global leaders from UK and international firms gathered in London for an exclusive session with The Lawyer. Guests included Berwin Leighton Paisner (BLP) managing partner Lisa Mayhew, Bird & Bird CEO David Kerr, Eversheds managing partner Lee Ranson, Fried Frank global chair David Greenwald and Osborne Clarke managing partner Ray Berg.

During the event The Lawyer editor Catrin Griffiths and deputy editor Matt Byrne presented exclusive figures from two reports, The Lawyer’s recent Global 200 and The Lawyer UK 200 Workspace Trends.

Data shows that UK Top 100 firms are on the move. The group opened a total of 230 offices in the past five years.

Law firms spend an average of 7 per cent of their annual revenue on real estate – paying over £2.6m per year for space at an average cost of
£41 per sq ft while generating, on average, £645 per sq ft. Although prices are climbing for space, the good news is that they are climbing more slowly than in previous years.

Firm leaders were also given headline figures on savings from open-plan office investments and details of how law firms are innovating to save money, win clients and attract Millennials.

Answering some big questions

The data also answered many of the market’s burning questions. Will a dozen firms dominate the global legal market in 10 years? Not likely. The Global 200 is split between 144 US firms, 31 UK firms and 25 firms from other jurisdictions. The opportunities presented by the potential introduction of further UK firms into the mix, new markets opening up and the renewed focus on mid-tier work as well as top-tier means there is enough work to go around.

To extrapolate the ‘dozen firms’ prediction from what happened to investment banks and the big accountancies it is too simplistic, given the varied sectors that make up the global legal market.

Is London under threat from the Americans? According to data from the UK Market Register, part of the UK 200 series, UK firms continue to dominate the tables for UK-generated revenue, with Addleshaw Goddard, Ashurst, BLP and DAC Beachcroft still higher than the top-placed US firm, which is White & Case in 19th.

Will UK firm consolidation see the mid-tier disappear? Not entirely – despite the three-way deal between CMS Cameron McKenna, Nabarro and Olswang. Since 2011 the three significant mergers in the large London category have been international – Herbert Smith, Norton Rose and SJ Berwin.