As the market expands again, UK cities are grabbing a piece of the action
The UK legal market is worth an annual £26.1bn to UK plc. The largest slice of that pie goes to London. With the profession in growth mode at home and as an exportable product, it is little wonder that major cities are looking for a chunk of the market. Cardiff has followed Belfast and Glasgow in trying to attract firms to set up home in their city.
The Welsh capital has set aside £50m to fund projects in Wales in 2014/15, aiming to become the UK’s most competitive centre for professional services outside London by 2021. With Cardiff already home to Morgan Cole, Eversheds and Geldards, news of the cash injection had pulled in 300 enquiries at the time of writing.
The promise of taxpayer funding, however, is not the only draw for top City firms. Last week Hogan Lovells unveiled plans to open an onshore centre in Birmingham, where it intends to house a 20-lawyer hub.
The financial benefits are obvious – a 4-year PQE associate will earn an average of £43,000 in the Midlands (see box), compared with £78,000 at a silver circle firm in London.
“We considered a range of locations in the UK, but chose Birmingham because of lower real estate and employment costs,” UK head Susan Bright confirms. “We also chose it because of the large talent pool and accessibility from London.”
The firm’s Birmingham model – of having a centre focused purely on legal services as opposed to business support – is similar to Simmons & Simmons’ initial Bristol strategy. The firm opened the office two years ago with 15 lawyers, but has since shifted the offering from a solely fee-earner one to a hybrid of business and legal support – it now has 23 business service staff and 23 lawyers.
There is no telling whether Hogan Lovells will follow suit in Birmingham.
“The office was about creating a new model that would help us undertake current work more efficiently,” explains Simmons’ managing partner Jeremy Hoyland. “We opened with partner-led teams in projects, real estate and litigation, and have since added employment and banking. We’ll be opening a regulated funds practice shortly.”
It is not the only support base to have grown faster than expected.
Ashurst, which opened a support centre in Glasgow last June after being handed £2.4m of funding from the Scottish Development International, is planning to more than quadruple the number of legal analysts based in Glasgow in the next 12 months, with 30 expected to join by mid-summer. If all goes to plan it will become the fourth largest in Ashurst’s global network, behind London, Sydney and Melbourne.
It will also branch out further across the firm’s various geographies. The Glaswegian outpost took on its first project for Ashurst’s Paris office last month, and is in talks with Frankfurt regarding dealing with some of its legal work.
The same trend can be seen in Belfast, where Allen & Overy and Herbert Smith Freehills (HSF) support arms are hiring rapidly. Having both received a cash boost from Invest Northern Ireland to open in the region three years ago, HSF’s Belfast team has grown from 26 to 125, while A&O’s headcount has grown from around 150 to 350, with 43 support jobs in London, Europe and the US transferred to the Belfast base last year.
Herbies is also considering making the services offered by its Belfast office available to its Australia network. A decision will be made on that next month.
With price pressure continuing even as growth returns to the legal market, the UK regions could prove a vital ingredient in the future.