Legal News

A Law Blog Look at London?s Legal Market

By Jamie Heller

It’s been a pretty shaky several months for U.S. law firms. But what about their U.K. sisters? We caught up with Chris Carroll, managing partner of Travers Smith, a 290-lawyer outfit that The Lawyer has described as a “silver circle” firm. Silver Circle? It’s an “oddball set of firms below the magic circle,” he says. Smaller, “but very successful.” (For the fiscal year ending last June, average profits per partner were 815,000 pounds, or about $1.6 million, Carroll says.)

But he isn’t expecting blockbuster results as this fiscal year draws to a close. “There’s no question there has been a slowdown in the rest of the financial services industry in the U.K.,” he says. “That’s just beginning to feed into law firms in the last two or three months.”

He describe Travers Smith as a corporate M&A boutique, with some litigation, noting that in general U.K. corporate firms have smaller litigation practices than U.S. firms. Lawyers in his shop, he says, are still busy, for example working on mid-market deals. But “the problem is turning the business into money.”

“What’s disappeared is big-ticket, multi-billion-pound deals,” he says. “Deals are fewer, they are on the whole smaller in value and they are harder to push over the line to closing,” he says. “You’re having to pedal harder to get to the same distance.”

How about other U.K. firms? Those with offices in emerging markets may be benefiting from robust business there, he says. And even firms with offices throughout Europe may see a boost thanks to the euro’s dominance over the pound. “If you earn 50% of revenues in Europe and 50% in the U.K., and you account for profits in pounds, you’re getting the benefit in conversion,” he says.

So what’s the upshot? Partners will likely make less, “but so what, frankly. They’re all making far too much money anyway,” he says. “If we have a year or two dip no one’s going to starve.”

Full post as published by Law Blog - WSJ.com on June 17, 2008 (boomark / email).