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Misleading? Study Suggests U.S. Law Firms Lag Behind Merged UK Law Firm Conglomerates, perhaps? Ignoring Formal Law Firm Alliances and Cooperations

By Andis Kaulins

Via David Hechler at Corporate Counsel in Who's Afraid of U.S. Litigation? (Almost Everyone), Ashby Jones at the Wall Street Journal WSJ Law Blog points to a telephone survey study of 1000 corporate in-house lawyers by Acritas (a UK based firm !) to be released in a week which suggests that Internationally, U.S. Law Firms are Lagging Behind law firms in other countries, primarily those in the United Kingdom (UK), in terms of in-house lawyer preference. Obviously, in-house lawyer preference is an important criteria.
But let us look at the issue from a larger, less subjective perspective.

We were skeptical of the alleged results because of possible UK research bias and because a more detailed view of international law firms and attendant statistics does not necessarily support the conclusions of the study.

We previously posted about The Global Top 100 Law Firms for the year 2008 : Profits per Partner : Most Lawyers : Most Revenue, and Law.com has updated figures now for 2009 at The Global 100 2009, ranking the world's highest grossing law firms (where my former law firm, Paul, Weiss, Rifkind, Wharton & Garrison (Paul Weiss), an international firm headquartered in New York City, ranked 6th in the world in profits per partner
-- in a Top 10 list consisting of 5 law firms headquartered in New York City, one in Los Angeles, three in London (UK) and one in Chicago.)

Where the UK law firms stand out is in the number of lawyers outside the country of their headquarters -- see the Law.com Leaderboard, so that the number of lawyers outside the country is a potentially misleading statistic that reflects economies of scale achieved by formally merging law firms in the same or different countries, especially in the European Union (EU). See e.g. Freshfields Bruckhaus Deringer, a law firm conglomerate of three previous firms, Freshfields in London, Bruckhaus in Hamburg and Deringer in Cologne (Köln), or Clifford Chance, a law firm conglomerate similarly formed by law firm mergers of UK and German law firms.

One has to be careful not to view the EU or other "mergers" of law firms as providing some added quality element for legal services that normal transatlantic or legal alliances or cooperations among law firms do not have.

For example, as far as Europe is concerned, it is interesting to note that the Chambers Europe Awards 2010 did not select any of the big formally merged conglomerate law firms but rather chose Gleiss Lutz, headquartered in Stuttgart, Germany (with worldwide offices) as German Law Firm of the Year, and that the International Tax Review Awards 2010 selected Gleiss Lutz as European Tax Team of the Year.

Gleiss Lutz has a formal alliance with Herbert Smith LLP in England and Stibbe in Benelux (headquartered in Amsterdam), and cooperates with three firms in the USA, of which Paul Weiss is one. The other two are Cravath, Swaine & Moore and Simpson Thacher & Bartlett, all three headquartered in New York City and all ranking in the top global 10 list of law firms by profits per partner.

A truly accurate study of "international" law firms can thus not merely look at formally merged conglomerate law firms but must also consider formal law firm alliances and cooperations, which go to the heart of the provision of the high quality legal services that clients require.

In any case, we shall have to await the publication of the study to see what the actual methodology was, including the kinds of questions that were asked by phone, not to mention the SIZE of the companies to whom the enquiries were addressed. We remain very skeptical about the thus far pre-released results. Subjective phone surveys are one thing, whereas the actual earnings figures are another.

Full post as published by LawPundit on August 13, 2010 (boomark / email).