The just-released annual Acritas 2020 Global Elite Brand Index underscores how clients’ needs have become increasingly global over the last decade and how top law firms are willing to commit themselves to a strategy that is increasingly global to serve these clients.
As more clients show an increasing need for legal services with an international reach across a broader set of countries — and have allocated a larger share of their legal spend internationally — large law firms have responded by broadening their own base and brand.
The Acritas Global Elite Brand Index measures those law firms that are seen as most favored by large corporate clients (those with more than US $1 billion in global revenues), and the firms that are most considered for multi-jurisdictional deals and litigation. As the results show, clients are looking for advisors who can provide multi-jurisdictional support across a range of different practice areas in a consistent and coordinated manner.
“Clients segment firms in much simpler ways today,” said Lisa Hart Shepherd, vice president of Research and Advisory Services at Thomson Reuters. “They are either looking for a value choice, premium reputation, or global coverage, depending on the needs at the time — but quality can be found in all three segments.” For law firms, she added, this makes choosing an overarching focus and committing to it critical for developing a brand that stands out in clients’ minds.
A full copy of the 2020 Acritas Global Elite Brand Index can be downloaded here.
In the latest research released by Acritas, now part of Thomson Reuters, the firm Baker McKenzie again leads this year’s index, consistently increasing its lead over the last seven years. DLA Piper and Clifford Chance swapped positions from last year’s index, with DLA Piper moving up to number two and Clifford Chance slipping to third. And although many other large law firms moved up or down within the top 20 of the index this year, only four firms closed the gap on Baker McKenzie based on points: White & Case, CMS, Morgan Lewis, and Kirkland & Ellis.
“Baker McKenzie has shown that commitment to a long-term strategy that is in line with evolving client needs will deliver financial success,” Hart Shepherd explained. “This strategic focus on global reach makes for a clear purpose that its people can get behind and that its clients can easily understand.” While early on, the firm’s global focus may have been a struggle financially, now its long-term commitment is paying big financial dividends, she said, adding that Baker McKenzie has posted year-on-year rises in revenue and profits-per-equity-partner for the past three years.
Beyond the top firms, Dentons is the biggest riser in the index over the last decade, closing the gap on Baker McKenzie by 16 points. Over this period, the firm increased its global coverage to 73 countries. King & Wood Mallesons, the second-biggest riser over the same time period, has particularly benefited from its dominance in China, especially as the country has gained significant global power and has closed the gap on the U.S. in terms of GDP. China also has become home to many of the world’s largest companies’ headquarters.
Next Up: Acritas Prestige Law Firm Brand Index
In February, Acritas will release its inaugural Prestige Law Firm Brand Index, which will be a mix of both best-in-class domestic and international law firms. The Prestige Law Firm Brand Index will focus on consideration for top-level work, highlighting those firms that are seen as having boardroom credibility and have a higher proportion of their partners nominated as stand-outs.
“Many large firms are at a crossroads,” Hart Shepherd said. “Seeking a full-service, broader, and deeper global capability takes huge investment and management focus.” These law firms will need to make large tech investments to stay continually innovative and defend against the Big Four and other disrupters encroaching into the legal space, she explained, adding that this long-term play doesn’t usually maximize profits in the short- or medium-term, and therefore, many firms instead seek to move to the premium end of the market by trying to replicate their expertise at one or two niches over the entire firm, often with limited success.
“But, being prestigious, by definition, is limited to the few,” she said. “To succeed in an increasingly dynamic and diverse competitive marketplace, firms need to make realistic strategic choices that stretch the firm but are achievable, and then focus.”
Listen to Lisa Hart Shepherd, vice president of Research and Advisory Services at Thomson Reuters, describe how global brands require long-term investment and strategic focus to be recognized as a globally committed firm.