Economic storm to blow law business north

Jul 16 2008 by Peter McCusker, The Journal

CENTRAL London’s elite commercial law firms are to receive a strong challenge from regional rivals as corporate buyers at the UK’s largest companies become highly price-conscious because of economic turbulence.

The Sharp Legal Brands survey found large regional and national law firms would see the biggest gains in the next year, 26% of UK legal buyers questioned expecting to increase spending with regional firms and 20% with national ones. Only 15% expect to increase spending with City firms. The survey also revealed what firms pay for legal services (as opposed to what law firms say they charge). Buyers pay an average £328 an hour for a law firm partner.

The findings also highlight the difference between bills in the different regions of Britain, with clients in the North East paying 25% less on average than their South East counterparts.

Lisa Hart, CEO of Acritas, which conducted the survey, said: “While the level of spending on legal services is holding up at the current very high level, large companies are shifting their spending away from the City to the larger national and regional firms.

“Complex financial and international work will continue to stay in the City, but there will be a strong movement of day-to-day work to firms such as Eversheds, Wragges and Pinsent Mason.

“This movement is to save cost. Corporates are also reducing the size of the ‘panels’ of law firms they use. In terms of which law firms will do well from this, the main criterion of legal buyers is they want to use a firm with which they already have some sort of relationship.

“Our research found the firms to particularly watch are Eversheds and DLA Piper. National firm Eversheds has both strong name awareness and very strong favourability with a very wide range of buyers in the UK, and its marketing seems to be particularly effective.”