The Centre for Policy Studies’ ‘The Price of Law’ report caused a minor flurry a few days ago, identifying magic circle partner rates at £775 to £850 per hour, rising to over £1,000 in some circumstances – notably Freshfields’ controversial bill to Eurostar on the Government’s sale of its £757m stake. It’s as if the financial crisis never happened.
Some of its findings were startling in lay terms, but probably less surprising to those within the commercial legal market – although the Freshfields golden grand certainly raised a few eyebrows among general counsel, many of whom must have concluded that the bill was etched on vellum. More generally, though, the report runs counter to what is happening on the ground. The Lawyer breaks panel review stories every week, and rare (and frankly, foolish) is the client who insists on hourly rates.
Firms like Allen & Overy, Eversheds and Pinsent Masons, to take just three random examples, have invested thousands of hours in management time data systems and recalibrating service delivery. At The Lawyer we have an entire strand devoted to tracking these developments. Contrast this with the antediluvian practices of firms in the US, where the hourly rate reigns.
UK law firms are utterly, crashingly useless at collective PR. For all the industry talk about innovation, the public perception of City lawyers stays locked in the 1970s. The City of London Law Society’s (CLLS) reaction to the fees report was lofty to the point of patronising: it’s all fine because it’s a competitive market, was its reaction. It was a genuinely abysmal bit of messaging.
So why aren’t UK firms on the front foot on this issue? Partly because of the difficulties of building quality brand around a costs proposition; price and market status are always going to be entwined to a certain degree, but this is not insurmountable. Furthermore, too many UK firms are worried about ruining their chances with US firms, whose conservatism regularly conflates business-like running of law firms with brand dilution. Listening to some American lawyers, you’d never guess that their nation gave birth to Google, Apple and Uber. Where the report is bang on the money is on the legal industry’s lack of transparency. General counsel need to be a lot more robust in speaking about their own arrangements; they can’t leave it all up to Vodafone’s Rosemary Martin or ex-BT’s Dan Fitz.
The UK, that great global powerhouse of the law, is not just a centre of black-letter brainpower, but of industry-leading ideas in delivery of service. When David Morley leaves A&O, perhaps he could become the profession’s spokesperson. God knows it needs one.