Legal Marketing & PR

Law Job In London? Just Watch The US Firms Carefully

By lawjobspipeline

As the legal business has boomed in the City, the growth of US law firms seeking to expand their ‘franchises’ into London has grown, with a raft of major US practices (and some small ones) seeking to place their stake firmly into the Thames riverbank some place.

But as the subprime mortgage crunch takes its toll on the offices back home, several US firms are now struggling a little over the Atlantic.  Those particularly affected are the firms that haven’t built a strong client base in the UK.  Those particularly affected will be the US firms who have merely set up shop in London for their clients who want to “go shopping” in London, as Michael Herman writes in The Times.

Already, Cadwalader Wickersham & Taft has posted a 6 per cent fall in average profit per equity partner (PEP) for the 2007 financial year, making it the only US firm so far to report a decrease in bottom line figures, as reported by The Lawyer.

Cadwalader’s, you may recall, laid off 35 lawyers last month back home.  The problem that all firms - US-based or otherwise - face is the heavy overheads combined with large salaries being offered to newly-qualified lawyers, which can range from £55,000 to £100,000 (plus bonuses).  As the prospect of partnership diminishes, then so too does the requirement to keep skilled staff by paying them even better money. 

What has tended to happen, frequently with US firms, is the “backfilling” of key partners with younger lawyers who will handle much of the grunt work.  While a lot of the big firms believe they are recession-proof, switching their focus from doing deals to handling insolvency and restructuring work, the proof in this pudding could be a little less rosy than they think.

Full post as published by Lawyer Marketing Blog on February 05, 2008 (boomark / email).