Bottom Line: Contentious work keeps firms ticking

Elizabeth Fournier

AFTER a busy week for law firms that’s seen all of the traditional magic circle (bar Slaughter and May) plus some key rivals release results, Clifford Chance’s statement yesterday looked all too familiar.

As revenues meandered around last year’s levels, firms were almost unanimous in their assessment of the past 12 months.

The long winter of 2012 was defined by economic uncertainty and sluggish transactional markets – barely offset by the uptick in regulatory and contentious work that the financial crisis and increased scrutiny by watchdogs has made inevitable.

Against such a backdrop the moderate set of results that have flooded in over the last week don’t look so bad, and they certainly make things interesting among the close-knit top firms – Freshfields’ better-than-the-average rise in revenue last week saw it overtake Linklaters in revenue terms, and the gap between the leaders is getting closer every year. But for all their talk of “solid” growth, it’s obvious the City’s best managing partners want more. Some even hinted that early signs of activity had made them more optimistic about the next few months – albeit carefully couched in lawyerly caveats about their lack of crystal balls.

The real problem is that lawyers’ fortunes – like those of all professional services – are inextricably tied to the City. These firms can’t force a recovery, but you can be sure they’ll be ready to jump in with both feet as soon as it comes.