Truly global footprints, aligned value propositions and strong leadership are driving success for the world’s leading legal brands
Over the last six years, the global legal market has seen many changes. The global recession may have kick-started the process, but clients are keeping it moving. As part of its annual global survey of over 2,300 general counsel, Acritas has been tracking how legal buyers select their firms and analyzing the firms winning – and losing – brand equity.
Acritas’ sixth annual Global Elite Law Firm Brand Index sees Baker & McKenzie preserve its lead at the top of the table for another year. “When looking across each of the individual measures that generate the Index; top of mind awareness, favorability and consideration for multi-jurisdictional litigation and deals - Baker & McKenzie ranks first on each metric. Global coverage and local knowledge are central to this firm’s brand which provides them with the most differentiated brand in the global legal market. However, others are starting to catch up so this firm cannot be complacent” said Lisa Hart Shepherd, CEO of Acritas.
Beyond the top spot, DLA Piper has the second most recognized brand globally and Clifford Chance is the only of the global Magic Circle firms still represented in the top five. Historically all four global Magic Circle firms have been recognized by clients within this top five set.
Reflecting on the factors driving the collective global Magic Circle’s brand equity decline, Lisa Hart Shepherd suggests three main reasons: “Firstly, all four firms had an historic brand profile that far outweighed their size. Now, other firms have raised their games and invested in long-term brand building strategies. Secondly, they have lost international reach as a core differentiator, as the premium US firms and particularly the vereins push this strategy hard. And thirdly, the search for value means clients can’t justify paying premium prices for all of their work anymore”.
Norton Rose Fulbright and Hogan Lovells complete the top five ranked firms in the 2015 Index, with Hogan Lovells rising three places thanks to increased brand and consideration in Africa, Latin America and the US. Common to all top five firms is that each has brand equity in every major region across the world (US, Canada, Latin America, UK, Mainland Europe, Middle East, Africa, Asia Pacific). Just one other firm in the Index has this truly global brand coverage according to clients, Latham & Watkins, whereas the rest of the firms in the 2015 Index are missing presence in one or more markets. Outside of the top ten, most firms’ brand equities are weighted to their home region – US for Skadden, Sidley Austin, Kirkland & Ellis and Morgan Lewis; Europe for Eversheds and CMS and Asia Pacific for King & Wood Mallesons. Exceptions to this are Dentons and Herbert Smith Freehills, who have a broader global brand spread if not comprehensive – and perhaps the ones to watch.
Lisa confirmed: “Firms that are investing in building the most expansive footprints with deep local knowledge, not just a flag in the ground, are winning brand equity in the market. Today’s clients are global and they expect their firms to be moving that way too.”
DLA Piper has had the biggest point increase of all firms in 2015, rising 12 points and two ranks since 2014, having made significant gains in the UK and China, particularly for favorability. In fact, according to Acritas, building strength in China is paying dividends for a number of other firms, most notably Dentons who saw the Index’s second greatest rise this year following its combination with Dacheng. King & Wood Mallesons profile has also grown in China at the same time.
One of the new entrants to this year’s Index is Morgan Lewis, last seen in the top 20 in 2012. According to Acritas, the brand uplift gained in the acquisition of more than 750 Bingham McCutchen lawyers has contributed to returning Morgan Lewis to the Top 20. Like mergers, these combinations can help to draw attention to the firm and bring additional brand strength through a broader base of clients, particularly when the retained brand has a higher profile. Lisa explained: “This is a prime example of when one plus one can equal three.”
Reflecting on the findings overall, Lisa explained that: “Clients need to buy smarter – they tell us they are under more and more pressure to do just that – and law firms must respond to those needs and deliver better value.”
“Difficult economic conditions have meant clients have to spend their money more wisely. Increasingly they are developing more sophisticated and ‘savvy’ buyer power, who know to ask for price reductions, who mix and match the firms they use to the type of work they require, who are growing and upskilling their in-house teams. To reap the benefits of this more efficient buyer behavior, firms must be poised to offer a broader spectrum of work at reflective and appropriate prices.”
Strong leadership within law firms is also a key to navigating these market changes: “We have found that firms with a clear strategy and strong, yet diverse leadership to execute that strategy are on track to become the global leaders of the next generation.
“When I say more diverse leadership I mean in every sense, so the geographic spread of representation on a firm’s Board, across the world not just from one or two key markets, and to ensure diversity in gender, ethnicity, age and professional backgrounds too. Interestingly, the firms that are seeing the largest growth have all engaged non-legal business professionals to help the direction and execution of their strategy. It is this type of firm that we see making the most progress in growing their firm’s brand equity.”