We recently conducted a survey of US firms to look behind the statistics of a developing market. Around 50 UK partners who had moved to US firms were asked to grade their firm's performance and to comment on certain aspects of their careers. Overall, the survey reflected well on US firms and more than 62 per cent found management was “good” to “excellent”. Accordingly, more than 95 per cent of respondents said they were minded to stay put for the next 5 years, and of the 7 per cent contemplating a move, most saw themselves moving to another US firm. Not one was considering a move back to a UK firm.
This says as much about successful partner retention rates in the US firms as it does about their successful management, and the latest rash of moves from magic circle firms to US firms confirms this. A couple of years ago, it would have been unthinkable to prise a single heavy-hitting partner out of the magic circle, yet lately, they seem to be queuing up: Euan Gorrie and Nick Segal from Allen & Overy have moved to Simpson Thacher and Davis Polk respectively; Tim Emmerson has gone from Freshfields to Milbank Tweed; and Peter King has left Linklaters for Shearman & Sterling.
The survey found that more than 66 per cent of the partners thought that their firm's profitability was “good” to “excellent” and a little under 70 per cent awarded similar marks for remuneration. Many UK firms saw their profitability drop by up to 20 per cent in the last financial year, compared with US firms such as Latham & Watkins which saw an increase of more than 20 per cent in profits last year. While money itself is not enough to make a magic circle partner move across to a US firm, the financial growth of US firms must surely hold some appeal.
In addition, the survey revealed that, contrary to popular belief, US firms are not all sweatshops: only 10 per cent more work 50-60 hours per week and another extra 10 per cent work 60-plus hours per week.
But there are so many moves, it is hard to attribute it solely to the success of US firms. One could argue that it is due to a combination of individual personal circumstances (Segal had wanted to go to New York for some time) and serendipity (Gorrie's joining Simpson Thacher had much to do with commonality of clients) but I believe the moves signal a much deeper shift in the legal market, not just in the UK, but globally.
More than 83 per cent of respondents thought that their firm's brand in the US was “good” to “excellent”, while just under 60 per cent thought their firm's brand in the UK was “average” to “poor”. There is no shortage of examples of US firms that have failed to capitalise on their brand strength in the US. The survey showed that where partners had more than 35 per cent of their work referred from the US, their firm also showed the highest discrepancy between its brand in the UK and the US. While cross-referral of work between offices is clearly a good thing, a strong dependence on referral work from the US means that some firms cannot, or do not need to, increase their profile locally.
We live in an era of increasingly globalised markets. Being global is more about branding than about geographical reach. It is about corporate cohesion, having similar messages underpinning the brand name over all its offices. I believe that we are witnessing the emergence of a new firm, the global firm, and it is no coincidence that recent moves have been to firms with a global aspect. It is likely that it is not a case of UK to US or US to US, but anywhere to global. It is no coincidence that those US firms that have successfully attracted the magic circle partners all have a strong brand name. They are truly global, rather than international, law firms.
And yes, the quote at the start of the article was indeed by the English prime minister Benjamin Disraeli. The American Mark Twain 'lifted' the quote to great effect and forever takes the credit for it. Now I wonder what that tells us?