In November 2013, The American Lawyer published a provocative article by its Chief European Correspondent Chris Johnson entitled “How the Magic Circle Lost the Battle for New York.” In it, Johnson argued that, despite 25 years of work and huge investments, the leading UK law firms had failed to gain any significant share of the New York market.
In the December 2014 issue of The American Lawyer, Johnson turned his gaze on US firms operating in London and concluded that, despite some individual success stories, most have done no better than their UK counterparts in New York. Together, the two articles may create the impression that the prospects for genuine trans-Atlantic competition in the US and UK legal markets are limited at best. In my view, however, that conclusion would ignore several positive trends and seriously underestimate the rapidly changing dynamics in both markets.
…[W]hile it is true that leading UK firms operating in the US have had little success in breaking into US-based corporate M&A and related work, that fact should not obscure the success that they have enjoyed in specialized practices such as aviation finance, real estate funds and international arbitration.
To enhance these established practices and to expand their abilities to compete for a broader range of work in their non-home jurisdictions, both US and UK firms have relied increasingly on lateral partner acquisitions. Up to this point, US firms have enjoyed a substantial advantage in the battle for lateral talent, but there are some indications that may be changing.
For some time, many US firms have been able to lure partners away from even highly profitable UK firms by offering substantially higher compensation packages… acquisitions that over time are likely to make the US firms far more attractive to UK clients.
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