The combined influence of globalization, increasing law firm brand investment and tightening client budgets have led to a shake-up in the traditional hierarchy of US law firm brands.
Acritas’ 2014 US Law Firm Brand Index reveals that where just five years ago, three leading brands dominated in the US, the gap between the front-runners and chasing pack is rapidly narrowing.
The rankings show that while Skadden tops the table for the third consecutive year, the 35.7 point lead it held in 2013 has been eroded by strong performances from second placed Jones Day – now only 16.4 rank points behind following a 19.3 point rise – and Kirkland & Ellis in third position after a 19.1 point rise.
The reasons for the gains and losses are complex. However, among the most powerful factors governing rank change within the top three is top-level brand consideration.
For example, Skadden and Jones Day score similarly on most Index measures (see methodology) but Skadden’s lead is secured through high scores for top level M&A where they are considered more often than other firms. Similarly, Kirkland & Ellis takes third place from Baker & McKenzie in the 2014 rankings as a result of much higher mentions for top-level litigation and M&A.
Analyzing the wider results and further factors driving the movements in rank positions, the strongest 2014 riser, Hogan Lovells, is a good example of a firm which is turning the changes occurring in the US and wider global legal markets to its advantage.
A 23 point increase in the last year has moved Hogan Lovells from 14th to 5th position on the back of a high favorability score relative to its rank. The firm has successfully invested in building its global footprint and brand profile since merger in 2010.
As clients’ needs continue to become increasingly global, the focus of many of the firms who serve them follow suit. However, in a highly competitive marketplace, internationalization is just one route to success.
In the current climate, focusing on the firm’s strengths and clients’ needs and creating a ‘boutique’ offering is proving to be extremely rewarding for some firms. This route generally requires less intensive investment in brand-building and is a smart strategic approach in a market such as the US which is large, fragmented, crowded and diverse. The rapid descent of premium, highly specialized New York firm Wachtell in the Brand Index rankings (from 5th in 2012 to 16th in 2013 and sub-20 in 2014) is a case in point. The firm is top of mind among a much more focused market segment today, aligning with its elite and specialized offering.
Commenting on the findings, Elizabeth Duffy, Acritas’ US Vice President, said: “The Index results confirm the emergence of a larger and stronger group of leading firms. This has become possible because of a significant drop in the supremacy of the top-ranked brand. A great example of a firm thriving in this changing landscape is WilmerHale. Its top of mind awareness level this year is consistent with 2012; however, its overall rank position has changed from 24th to 15th over the same period, in large part due to increased consideration for top level litigation.
“In this increasingly competitive environment, the brand-building process is central to achieving standout and ‘top-of-mind’ status with clients. And it is critical to recognize it is an ongoing process – as we see the factors which affect a firm’s brand evolve year-on-year – not least because it is individual lawyers who are the ‘ambassadors’ of the brand and have greatest influence over the perceptions clients hold of firms.
“Many firms in the US – both home grown and international – are investing significantly in building their brands, understanding the true drivers of value to clients and shaping their efforts around these. The firms ranked in our Brand Index reflect this. Some have the benefit of a strong and historic reputation while others are building their reputation from a lower base. As we continue to measure law firm brands and brand drivers in the US, it becomes apparent which firms really understand the shifts occurring in the legal industry and are responding to clients’ changing needs. These are the firms which will reap the financial rewards in years to come.”
Methodology: The US Law Firm Brand Index 2014 is based on interviews with 581 senior general counsel in US-based organizations with $50 million+ revenue as well as the responses of 123
in-house counsel based outside the US with legal needs in the country. The Index ranks firms according to top-of-mind awareness, favorability, consideration for both major M&A and top-level litigation as well as their overall level of usage.