In litigation, there is no magic circle

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Our annual Top 20 cases feature this week unveils the biggest forthcoming cases of the year, the ones every advocate at the commercial bar wants to be involved in. This year, big beasts like Herbert Smith Freehills and Linklaters are on the roster along with stalwarts such as Eversheds. But the firm making the most waves in 2016 – and which had an exceptionally busy 2015 – is Mishcon de Reya, which has put litigation at the heart of its strategy. And as Lawyer Market Intelligence (LMI) data shows, also featured in this week’s issue, it’s forging strong relationships with One Essex Court and Blackstone Chambers – the sort of relationship that other sets might covet.

This picks up on the LMI findings that were published last week, which reveal that the firm with the biggest number of recorded cases over three years for the FTSE 100 is Herbert Smith Freehills with 11. Next is Hogan Lovells with seven, while Addleshaw Goddard, Berwin Leighton Paisner, Clyde & Co, DLA Piper and Norton Rose Fulbright each have five. Magic circle firms are barely present for FTSE 100 clients in cases that have gone to court. Freshfields and Linklaters managed to muster four appearances each.

Magic circle branding is based on the claim that they specialise in bet-the-company mandates, such as a big-ticket financing or hostile takeovers. But this claim falters dramatically when it comes to disputes work.

The magic circle is not a magic circle in litigation; they’re on a level playing field with Herbert Smith Freehills, Hogan Lovells, Clyde & Co and Addleshaws, plus the emerging litigation boutiques and US firms that have changed the disputes market. Neither are these challengers sitting on their laurels when it comes to other international centres. Linklaters, Freshfields and co. are inevitably drafted in on major investigations, particularly in the financial sector. They will say that their work is confidential and much of it settlements, but that applies equally to Herbies, Hogan Lovells and Clyde & Co.

The top sets, which for years were happy to spend time on their relationships with a number of City firms, have realised that M&A prestige simply doesn’t translate into the most demanding or lucrative cases – and they’re losing confidence in the magic circle. Many are now looking closely at their workflows and are actively researching who can bring them the best possible referrals. And on that basis, the magic circle are also-rans.