Regional law firms are set to reap the benefit of the economic slowdown as clients start to shift their legal spending away from the elite London firms, according to new research.
Legal sector researcher Acritas says that more than a quarter of legal buyers surveyed intend to increase their spending with regional firms as they look for better value outside the so-called ‘Magic Circle’ of top London firms.
The survey, which included banks, financial services companies and other FTSE 500 members, asked companies to set out how they planned to allocate their legal spending over the next year in light of the current downturn.
Twenty-six percent said they would increase spending with regional firms, compared to just eight percent with the London elite. The survey found that Magic Circle fees per partner per hour could be as much as three times those in the regions.
Andy Steele, chief executive of South West regional law firm Stephens Scown, which has offices in Exeter, Truro and St Austell, said he was not surprised by the results.
“This survey shows what we in the regions have known for years – you don’t have to go to London and pay top-whack London prices to get excellent legal advice. As an example, we have a national reputation for our mining and minerals work and act for some of the UK’s top extractive industries from here in the South West.
“I also think that it’s not just the Magic Circle that will suffer. We’re picking up work from clients who have traditionally used national firms outside of London because even their rates are becoming unpalatable.
“And it’s not just limited to corporate and commercial work. Our family and private client teams regularly receive instructions from individuals who may have used a London-based firm in the past but have realised that they can access the same quality advice on their doorstep, at much reduced cost.
“It also comes down to the experience the client receives. We’ve geared our whole business to ensure that we offer a great customer experience by breaking down the traditional barriers between legal teams and restructuring the firm around our clients’ requirements.”
Stephens Scown, which employs 240 staff, saw a 16% increase in turnover last year to £16 million and expects to increase this to £20 million by 2011 through organic growth and acquisition, with Dorset and Somerset both identified as areas for expansion.