Major City law firms see a recovery within 18 months
A story from the UK Lawyer magazine, which interviewed managing and senior partners from major City law firms, said they uniformly saw a recovery underway within 18 months.
The report said the firms are preparing their staff for financials at 2003 levels, but are uniformly predicting a recovery in 18 months.
The lawyers interviewed by the magazine are envisaging dips in revenues and/or profits this year and next, particularly as costs continue to rise, despite pay freezes. However, all predict a medium-term recovery, suggesting that business confidence is higher than the raft of redundancies would initially suggest.
“We’re committed to the pyramid stucture for the next four years,” said Travers Smith managing partner Chris Carroll. “Deciding on changing it in five years is a pretty brave thingto do - in fact, it’s barking mad.”
Ashurst senior partner Charlie Geffen said: “It’s clear that at the moment clients are demanding a lot of senior time, but it isn’t always going to be like this.”
“It still seems as though we have a long way to go before we see a return to normal levels of transactional activity, and of course we don’t know what ‘normality’ will look like,” saidFreshfields Bruckhaus Deringer chief executive Ted Burke. “But there are enough positive signs out there to suggest that we have at least seen the end of the beginning.”
“It became rather cool to be apocalyptic,” said Denton Wilde Sapte chief executive Howard Morris. “Everyone’s terrified of being ridiculed for talking about green shoots. Theuniverse has shrunk, but within that universe there are some bright stars.”
Nabarro senior partner Simon Johnston said: “Inherently I’m an optimist. I don’t think it will be that significant a change. Yes, there is a new morality in the City, and that will run across into law firms. It will pretty much be the same shape of the industry with a little bit more realism.
“I wouldn’t say our shape is perfect right now, but with a little bit of an increase in activity we’d be back up to 100 per cent.”
According to The Lawyer UK 200 Annual Report 2008, the partner-associate ratio across the top 20 is only slightly higher than five years ago (see chart). There had been speculation that this gearing model would collapse, but all the major law firms are still wedded to the pyramid structure, which shores up associate career opportunities.
“We’re a little puzzled by the intensity of discussion over leverage ratio,” said Lovells senior partner John Young. “A lot of it comes from the US and is based on this concept of law firms abusing the system and that you throw jobs to vast amounts of associates. It doesn’t strike me that clients are pushing against it.”
Oops, That's My Coke. It's Paris Again.
Ditzy Paris is in trouble all over again as her coke fell out of her handbag when she was only reaching for her lippy. What does a girl have to do to...
Tiger's Divorce - How Did This Firm Get To Do it?
So how did a button-down commercial firm like McGuireWoods get to act on the TW divorce? Yesterday AboveTheLaw covered the divorce of golf sensation ...
Power Off, For Now
Simon Power’s planned speech to outline his ongoing quest to rebuild a broken justice system was delayed by the funeral of the young soldier killed ...
