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<< Graduate Market | Home | Top UK Firms' Practice Sectors >>

May 23, 2008

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Recent History and the Future

• The top 20 law firms in the UK have remained largely unchanged.
• Reluctant consolidation among smaller firms.
• Legal industry recovering after 3 years of tough conditions.
  • Firms have pruned partners to preserve PEP.
  • But have emerged leaner and in better shape for the future.
  • Legal services will be liberalized by the LLP model.
  • A new phase of growth is anticipated.

• The UK's largest firms have followed a path of international expansion.
  • This has led to an increase in size and revenue but a decrease in profit margin.
  • However, many lessons have been learnt about international strategy and many may continue to aggressively pursue the U.S. market.

What have been the trends in 2007 for each practice area?

Corporate

• M&A market remains buoyant with many large deals.
• However, focus has moved away from highly leveraged (debt funded) buyouts by private equity buyers to corporate-on-corporate deals.

Finance

• Continuing credit crisis and tightening of credit leading to:
• Recent crash in leveraged buy out (LBO) deals.
• An increase in restructuring mandates due to more companies facing financial difficulties because of the drying up of credit.

Real Estate

• Very strong year.
• Profitability is now competing with that of Corporate due to:
  • Increased investment in real estate.
  • Growing complexity of transactions.
  • Blossoming regeneration.
• REITs providing a new source of work.
• Worries about raising interest rates.

Litigation

• A few big cases, but long term trend towards mediation ADR to avoid costly litigation.
• However, fresh hopes bank-on-bank litigation following the credit crisis.