GLAS Website Presentation.ppt1

7/31/2019 GLAS Website Presentation.ppt1

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Legal Futures: The Challenge of Change

The Changing law market- the

opportunities and challenges

Paul Browne, Greenings International

May 2012


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Law firm market: Overview

Key issues

London a world centre for law firms,worth 23.1 bn, 1.8% of UK GDP

Market changing radically partiallydriven by Legal Services Actregulation changes

Falling margins, and clients wantingmore for less

Losers risk collapse e.g. Halliwells

No dominant market leader inconsultancy/ advisory

Accelerating M&A in fragmentedmarket

Major opportunities, major challenges


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The Changing Market

The legal market , 1980- when many present day Senior and ManagingPartners began their legal career

Most firms small, domestic, and undifferentiated,with significantly lower PEP


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The Changing Market

Emerging strategies and challenges- mid tier particularly under pressure

Scale,International

Niche,High PEP

Where tofocus?

In a few years, there will be sevenor eight global practise firms at thetop end. Our strategy is to lead thatgroup. David Childs, CliffordChance


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Law firm market: 2012 Acceleratingacquisitions

Reported M&A to date (May 2012)

Pinsent Masons/ McGrigors

Wedlake Bell/ Cumberland Ellis

Ashurst/ Blake Dawson (JV 2012,merger 2014)

SNR Denton / Salans (unconfirmed)Osbourne Clarke (Italy & Spain)

Linlaters/ Allens Arthur Robinson

Ashfords/ Rochman Landau

Herbert Smith/ FreehillsDWF/ Cobbetts (abandoned)

DAC/ Beachcroft

Source: The Lawyer


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YOUR LOGO

Example: New major competitors couldemerge ifSalans Denton were to merge

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Salans Denton income compared to top UK Legal firms

Source: Legal Business, Companies House, Richmond Browne


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Increasingly internationalised competition egif Salans Denton were to merge

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Salans Locations


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Acquisition Dangers & Opportunity

Lack of strategic clarity

- Why are we merging?- Where will the value come from?

Poor due diligence- Example- Dewey LeBoeuf

- Rushed merger of Dewey Ballantine and LeBoeuf Lamb Greene & MacRae - Followed failed engagement with Orrick Herrington & Sutcliffe - Unfunded retirement scheme left unresolved

- Will a UK firm be the next Deweys? Times, 10/5/2012

Poor post merger integration- Few firms have (or need) permanent staff with post merger integration

experience- Key to a successful merger

But if successfully done, can enable a quantum leap

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Key drivers of change& Law Firm response

Slow growth

Imperative to improve cash flow and improve costs

Identify new sources of income through better strategic planning Avoid doom loop, with lower PEP losing top revenue earners

Clients wantmore for less

Reduce costs and restructureLPO/ BPO/ deconstructing transactionsDifferentiate and demonstrate value to clientsIncrease internationalisation

Legal ServicesAct

Deregulation- new business models and entrantsExternal investment including IPOBarristers- respond to clients direct access to bar

SRA riskmanagement

Manage increased cost of risk functionMinimise risk of SRA action

Fragmentedmarket

Investigate and respond to M&A opportunities/ competitor mergersEffective post merger integrationNeed to effectively finance M&A/new business models


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Clients want more for less:Deconstructing a transaction

Partner- complex , challenging, gravitasand innovative thinking required.

Magic / Silver Circle dominated.

Get the work done at the right level, at the right cost

Strategic,Board level

Standard Legal worke.g. Contract drafting

Legal queries

Directors/ Associates at Magic/ SilverCircle firm.

Junior Associates have done this

historically- but can be outsourced tocheaper operations, either in UK oroverseas eg A&O Belfast, AGManchester, Simmons & SimmonsMumbai.

Commodity legal work e.g.Due diligence, deeds verification,

Bulk property transfer


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The Changing Legal Market:Key segments

Magic/ Silver Circle

Will keep their pre-eminent position as Board advisorsRespond to price pressures by deconstructing transactions/ improvedprocessesStruggle to deliver seamlessly internationally?

BarMoving slowly towards more corporate-style govenance

Some new business models emerging e.g. RiverviewSeeing reduced income levels in public sector chambersSome will struggle with direct access from clients

Mid marketNeed to improve financial performance/ cost/ cash improvmentAre experiencing more M&A /consolidationMany reviewing new structures/ process deconstructionHow to achieve genuine differentiation?

High StreetNational brands emerging e.g. Quality SolicitorsNew online entrants with lower delivery costsConsolidation is continuing


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Conclusion

No one size fits all solution A complex strategic outlook- important to have :-a clear position on major external movesA clear view on the competitive position of each firm-its client and market focus, how it delivers, and how itis differentiated

Implementation key to successExample: Post merger integrationUse of programme officeEstablished methodologiesClarity vitalComplement internal strength & external firepower

Major changes, and not all firms will be winners


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Next Steps: Contact me if you would like aconfidential meeting to discuss the issuesin this presentation

[email protected]

07775 928624

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mailto:[email protected]:[email protected]


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Paul Browne, Managing Partner,Greenings International: Background

PersonalEducationManchester /HEC MBAHarvard Executive EducationTrinity College, Oxford:

Personal Background

Rugby: Coach, London WelshBoardEditing wifes novels Military history/ archaeology

Banking20 years internationalexperienceStandard CharteredBank senior executive:set strategic focus onAsia in 1995Director, GroupStrategy, Barclays

ConsultancyConsultant, Bain &CompanyDirector, KPMG:

Internal consultant/trouble-shooting withincompanies

Legal ServicesRan two 70m income divisions

28% overheads reduction, 20%working capital improvementProfitable growth- targetted keyaccounts grew 30% in three years

Refocussed strategy e.g.Government,, Energy,Infrastructure & Turn-rounds- e.gPrivate Capital

Paul Browne gets things done

Chairman/ CEO, Major International Bank

Documents

GLAS Website Presentation.ppt1