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Law firm leaders' predictions for 2018

4th 01 2018

 
 
 
'GCs say firms aren't changing quickly enough': law firm leaders on their predictions for 2018
 
 

What does 2018 hold for the leading UK and US law firms? Legal Week asked some key figures in the commercial legal market to look into their crystal balls and make some predictions about the year ahead.

 
Mark Rigotti - chief executive, Herbert Smith Freehills 


“There will be an increasing need to look at how we deliver legal services. Our ALT alternative legal services business will continue to grow and we will continue using project management, and also look at what artificial intelligence we need, and how much do we need to think about outsourcing. There hasn’t been a complete change in how we do things, but the momentum around it has picked up as clients become more aware of how they want work provided, and we have to consider how we respond to them.

“I expect a solid amount of work to come out of continental Europe next year in all areas, as any impact by Brexit isn’t as applicable there. Real estate and energy will continue to be busy and I expect to see a real uptick in regulatory work.”

 
Simon Levine – global co-CEO, DLA Piper
 

“My biggest thought is what will happen with Brexit. It is still dominating the business landscape. On a global basis, what will happen politically and economically? The world is still reliant on what happens with US trade, then trade in Asia, with China, and relations with Russia. These large economic and political issues do still dominate, and law firms don’t make a market – they follow the market, because we are here to service our clients. Anything that allows our clients to grow or do deals allows us to help them and get work; anything that means clients are worried and hold onto their cash and don’t invest will mean there is less work for lawyers to do.

“Having said that, my view of 2018 is a positive one. In any period of disruption there is always work for lawyers to do, and our track record over the last year has been strong across finance, real estate, corporate, IP, litigation, employment, tax and restructuring. I think there is work to be had, if you have the ability to do it on a cross-jurisdictional or a global scale – particularly in the US, Europe and Asia and the emerging markets - then you are in a really good place.

“I feel positive about the firm - we are looking like we are having another good year, at least on budget, if not better. It shows that if you have the right offering and the right brand and you deliver on that you can have a good year.”

 
Lee Ranson – co-CEO, Eversheds Sutherland


“2017 was a surprisingly good year for the legal profession. For 2018, if you look at the projections for growth in economies around the world, they are all strong, and one hopes it will be another strong year for the profession. The caveat is still this huge feeling of uncertainty. I would be very surprised if there isn’t some event or crisis in 2018 that does have an impact on the wider market – I think it is almost inescapable.

“We have all been looking at geographical diversification in recent years - that will continue. This year you will also see law firms significantly investing in technology, leading to real, tangible differences in how some firms deliver legal projects. Coupled with that, we will see clients using technology in a different way - there will be a huge growth in the role of the lawyer in providing some of the technology services our clients need.

“Building on last year’s US merger remains our primary focus - we have a combined global strategy to create the firm we want to create. In the 12 months we have been together, if you asked [co-CEO] Mark Wasserman and I what has changed, it is technology - we will have to make a much more aggressive push around technology.

“Arsenal will finish outside the top four and Nottingham Forest might reach the playoffs.”

 

Andrew Saul – senior partner, Osborne Clarke

“Our transaction teams have had a very busy year and we expect this to continue in 2018. Many organisations believe the economic ingredients are in place for growth to continue for some time to come, and are therefore buyers. In the case of overseas organisations there is the added benefit of the current exchange rates. Businesses are seeking to acquire innovative technologies and expand internationally and our experience is that these factors are helping to stimulate a lot of deal activity.

“On Brexit, given the size of the UK economy, businesses from outside Europe will still want to trade with the UK, however Brexit finally unfolds. We therefore believe that a number of organisations are likely to want two points of entry into Europe, one in the UK and one in the EU. Our network of European offices put us in a good position in this regard.”

 
Ben Tidswell – chairman, Ashurst


“The message from clients is becoming more and more insistent as some firms struggle to keep up with the expectations of in-house teams. Firms are at risk of falling behind the pace and dynamism of the more commercial in-house teams – a lot of general counsel say many firms aren’t changing quickly enough.

“Technology will continue to change the way firms work – the big challenge is how to knit a number of separate solutions together. Meanwhile, firms continue to be under pressure to improve returns and there will be continued focus on costs and equity. There’s still plenty of legal work, but you have to fight really hard for it and clients are more and more focused on value.

“The drive for differentiation between firms will get stronger and stronger. I think we’ll see more mid-market firms looking for combinations as they look for combinations to position themselves differently and to seek scale.”

 
Richard Foley – senior partner, Pinsent Masons
 

“One thing that will not change in 2018 for is the relentless pressure on GCs from their boards to pursue better value out of legal spend. I expect to see conversations and discussions continue to move from ‘more for less’ to ‘more with less’. GCs and procurement teams will ask harder questions of their panel firms in respect of cyber security and gender diversity – particularly after gender pay gap reporting kicks in with regards to the latter.

“AI remains a buzzword in the industry, and 2018 will see a range of professionals – not just lawyers – take a more prominent role in private practice in consequence of that; lawyers will remain core to advisory work but be supplemented by technologists, project managers and others in delivery. We’ll also see technology provide solutions to legal needs that were previously unmet, and so grow the market for legal services overall.

“The Brexit phoney war will end for GCs. Many of the organisations we advise have already adjusted their strategies to identify and capitalise on the challenges and opportunities afforded by change. We’ll increasingly see those strategic shifts having a greater impact on GCs as their boards ask them to engage with the operational consequences of those changes, for instance in people, commercial contracts, data and other areas.”

 
 Jeremy Hoyland – managing partner, Simmons & Simmons


“We’ve seen a tick up in transactional activity in the first half of this financial year and that may continue in early 2018. However, I think it will it will slow down in later 2018 before we leave the EU in 2019.

“We’ve seen an improving transactional picture after many years of disputes leading the way. Is this the beginning of a trend back towards transactional work? Without Brexit, I think there could have been a pendulum swing back to transactional work, but in 12 months’ time there will be less in the run-up to our exit from the EU.”

 Jennie Gubbins – senior partner, Trowers & Hamlins
 

“We are projecting a positive year and we are on track for a 5%-7% increase in revenue by the end of the current financial year. I’m cautiously optimistic – the indicators are that we are winning clients and good mandates in a number of areas, including in real estate. We were pleased to get up to number 41 in the top 50 law firms this year, and we are hoping to be in the thirties next year.

“We want to maintain our culture. If we merged with someone of a similar size or bigger we would be concerned about losing our culture. We are not currently in talks with anyone, but of course it is something management teams look at. We would not want to do a US merger. If we were to hook up with a US firm we would be concerned that it could prejudice the good relationships we have built up including with the 14 different US firms we work with through our membership of InterLaw.”

 
Michael Ward – chief executive, Gateley

“There will be further consolidation in 2018. PwC’s 2017 law firm survey was titled ‘Time for Change’ and I think that is right.
 

“In terms of our own model we always budget on a 7.5% increase in revenue, and we will be aiming to do that again. We are happy with the performance we delivered in line with the pre-IPO plan we went to market with. We are looking to grow organically and then look for opportunities to move into complementary business services as the opportunities present themselves.”

Paul Rawlinson – global chairman, Baker McKenzie

“Overall I am reasonably optimistic as we head into 2018. We expect a modest uptick in corporate activity globally this year across nearly every sector and that has to be good news for the legal profession. We are certainly seeing strong demand for our services across a range of practice and industry groups and throughout the world. Europe, North America and SE Asia are particularly buoyant. 

"As with 2017 we have to keep a close eye not only on the global macro economic and political picture but the latest developments in the legal sector around innovation and client service delivery. Our clients want a new breed of lawyers who are multi-cultural, agile, diverse, comfortable with technology and have a thirst for innovation, and have high emotional intelligence as well as intellectual rigor while being industry experts and comfortable in a business as well as legal environment; global in their perspective but with deep market knowledge.”

 
 
Originally published on 3rd January at LegalWeek.com.lawdbs.law.ac.uk/sites/legalweek/2018/01/03/gcs-say-firms-arent-changing-quickly-enough-law-firm-leaders-on-their-predictions-for-2018/