With business in Britain still in the doldrums, the City’s biggest law firms are increasingly looking to Asia and other developing markets to fuel growth.
This is highlighted by Allen & Overy and Clifford Chance’s full-year results yesterday: more than 60 per cent of both firms’ turnover now comes from outside Britain. Cast your eye down the list of both firms’ biggest deals over the past year and it’s striking how few have any connection to the City.
This, they claim, is evidence of a British success story. The top City law firms, already dominant in Europe, are leading the charge into China, Australia and the Middle East.
But the “magic circle” British firms are some way off building genuinely global businesses. In many key markets, their ambitions are kept in check by protectionism — as in India, where foreign firms are banned from operating. There’s also a long-term threat from the Chinese firms, which are growing rapidly.
Moreover, the City firms have barely made a dent in the US — by far the world’s biggest legal market. Most observers now believe that a British firm would have to merge with a top American firm to break the stranglehold of the elite Wall Street practices. Yet none appears to be close to completing a deal.