Herbies’ remedy

Is Herbert Smith finally waking up to itself? Long known for its schizophrenic approach to international expansion, the firm appears to be taking decisive action.

As we reported last week, a high-level delegation has been sent to scope out opportunities in the South Korean market, while a Doha launch is also imminent.

And now, licking its wounds after a ­seemingly endless stream of partner departures, the firm’s ­disputes team is making noises about its hankering for a stateside presence. As the bulk of the ­departures jumped ship to firms with more
joined-up global footprints than Herbies, these transatlantic thoughts are hardly surprising.

But another reason for the exits in recent months could lie closer to home. Rumours abound that Herbies’ fee-earner ­utilisation rates are 30 per cent lower than those of its rivals. With the firm no longer benefiting from a long tail of smaller ­disputes work it was only a ­matter of time before partners voted with their feet. In some respects the firm is a victim of its own success. Its reputation as the litigation firm par excellence has seen it price itself out of all but the biggest-ticket cases.

The result? Less work to go round.

But that’s not the only reason. Herbies suspects that general inefficiencies in the practice are ­distracting its lawyers from client-facing work, so it has called in the big guns, commissioning management consultants at Pricewaterhouse-Coopers (PwC) to do a year-long systems review aimed at cutting out any waste of fee-earner time.

When it comes to calling in the professionals Herbies has form, although it has not proved itself swift to act on advice. A 2000 review by Harvard Business School professor Jack Gabarro found that a firmwide managing partner would be desirable, but it was not until April 2008 that David Willis was installed in the role. Similarly, back in 2007 then senior partner David Gold set out on a path of global domination after putting his faith in consultants. The firm is still taking a scattergun approach to expansion.

With PwC due to report its findings to the firm at the end of the year, the speed with which it acts will be key. Reputation is worth nothing if your lawyers are twiddling their thumbs.

margaret.taylor@thelawyer.com; www.twitter.com/thelawyermag