Silver Circle? Hmm, has a ring to it…

Last month saw The Lawyer magazine gamely reviewing its 2005 decision to endow a small group of elite UK law firms with the title ‘Silver Circle’, a term which achieved immediate market recognition upon its unveiling.

You’d think The Lawyer’s joy at being feted as kingmaker would be unalloyed, but alas, the actual market stole its carefully-crafted ‘silver circle’ [sic]* at birth and ran away with it to beat it into a shape more pleasing to its eye. No point being kingmaker if just anyone is going to start creating more kings now, is there?

In advance of its attempt to regain taxonomic control, The Lawyer craftily surveyed 1,133 readers and found that the market ennobles at least 15 firms, in contrast to its own original four choices.

Such heresy! Cue much wailing and gnashing of teeth in Soho

“As the term gained popularity recruiters would commonly ascribe silver circle status to any largish City firm outside the magic circle,” explains The Lawyer, before continuing, primly: “In fact, that was never the thinking behind the term. The silver circle was intended to define a category of firms with a similar approach.”

Its latest redrawing of the diminishing UK legal landscape sees a muddle of UK and hybrid UK-US firms in a series of five interlocking rings, with four apparent outliers The Lawyer just can’t seem to squeeze into any of the ‘pure’ circles or their four interstices.

Complexity, she is a demanding beast.

The Lawyer’s attempt to make sense of an increasingly complex and dynamic market is admirable on the one hand, but – to my mind – fails to acknowledge what is really going on here. The answer, I think, is to be found in the language, not the numbers, structures or strategies.

Why magic? Why silver?

Magic, you’d think, is pretty obvious, but nobody really knows definitively whence this comes.

The Magic Circle, according to the Law Society’s Gazette, evolved out of the rather more prosaic-sounding ‘Club of Nine’, an informal group of top law firms – Clifford Chance, Linklaters, Slaughter and May, Freshfields and Allen & Overy, plus four others deemed to be rivals for the best talent – who all agreed cosily, back in the 1980s, not to poach from one another. Alas the other four – Lovells, Herbert Smith, Norton Rose and Stephenson Harwood – fell away after SH hit a patch of black ice in the mid-1990s, and the deal ended in 2000 leaving just the original Famous Five with the ‘magic’ tag.

The choice of ‘Magic Circle’ lies, according to some theorists, in its allusion to the secret/not-secret society of magicians founded in 1905, into whose hallowed ranks, rather like the Masons, one has to be invited; the price of entry being purely and simply talent, after which one is inducted into the secrets of sawing a woman in half or pulling a rabbit out of a hat.

Personally, I prefer a more lyrical explanation; that the term refers to a group of firms whose ability to attract and transact the best work, whose allure is – simply – magical. Entry to the circle, rather like a faerie ring, is forbidden to mere mortals. It is a signifier of being part of a singular class.

And so it is with silver also.

Silver – since ages-past humanity’s second-favoured trading metal – is laden with class resonance on this side of the Atlantic.

It is only the English** Middle Class which could afford ‘family silver’, a liquid asset useful in times of last-ditch economic desperation (“selling off the family silver”), whose offspring benefited from a jump-start in life (“born with a silver spoon in his mouth”) or unearned privilege (“handed to him on a silver platter”).

Silver, for the English, bespeaks wealth, but in a modest, prudent way. The more valuable gold is seen as being too flashy, too nouveau-venu. Silver is classy, gold is not.

The Lawyer coyly notes that ‘silver’ is meant to give a sense of “elite”, but fails to acknowledge that you cannot – just cannot – use the word ‘elite’ in England without talking about social class, and that has little to do with money or intelligence even, but everything to do with birth.

As the strategies of the five Magic Circle firms began to diverge after 2000, Slaughter and May fell behind in size, international spread and some other measures – but crucially not profits, or perceived capability – and the legal press felt it needed to redefine the market as it saw it.

The Lawyer’s own attempt involved ejecting Slaughter and May from the MC, while Legal Business thumbed its nose at such crude surgery and not only did not eject the country’s most profitable law firm as its rival had done, but added one firm: Herbert Smith.

The fact that the UK’s two most prestigious and thoughtful legal organs – both of which I love and respect, by the way – can’t decide on a single taxonomy neatly illustrates the problem. We are not talking about facts and figures, we are talking about look-and-feel. We are talking about class.

The Lawyer’s editor, Catrin Griffiths, says of Slaughters, that “an assessment of its true model is not served by misplaced deference, and we’re talking about business model here, not its M&A brand”.

That “misplaced deference” is the key phrase here. We Brits tug our forelocks to monarchy and the aristocracy, not Johnny-come-lately property tycoons or genius entrepreneurs, and this continues to irritate everyone – liberal media in particular – who believe in a more egalitarian, rational and meritocratic way of thinking.

The truth of the Magic (and Silver) Circle(s) is that try as you might, just as with the English class system, it doesn’t matter how much money you have or how much money you make, if you’re not of the right stock, have gone to the right schools, the right colleges or know the right people, you’re never going to be ‘in the club’, either figuratively or literally.

The reason recruiters – and the market – ran away with Silver Circle and made it their own is because of the immediate resonance they knew it would have with candidates for very particular reasons relating not to size, strategy or any other measure.

I love the chutzpah of The Lawyer including Mishcon de Reya – deserving no doubt – in its latest redrawing of the Silver Circle, but I fear the market will not easily accept its entry alongside the doyens of the argent hoop: Macfarlanes, Ashurst and Travers Smith.

All it would take is a couple of years where Mishcon’s PEP slumps to half where it is now, and the reclassification will look as daft as Legal Business’ choice to insert Herbert Smith into the Magic Circle, a choice the market thought questionable at the time and one which has not stuck…

As one recruiter said to me yesterday: “It’s ridiculous…Mishcon are just not.”

So beware, ye taxonomers. In this Britain of Brexit, the old power-lines run deep and are newly thrumming with class-prejudice.

If you want a term which, as Catrin Griffiths put it in 2005, is shorthand for firms “content to advise a premium UK client base rather than service global institutions”, I have another suggestion: ‘The English, Patient’.

Away from this Madding Crowd, London continues to be taken apart and reformed by the increasingly-dominant US firms. The Colonials Will Inherit Blighty, and neither Boudicca’s Magic nor the flash of good old-fashioned Sterling Silver will prevent that.

The Americans – a classless society, they like to claim, though that’s another story – could care less*** about such intangible piffle.

So why, in the 21st Century, should we?

 

*I’ve never quite understood The Lawyer’s steadfast refusal to award Silver Circle and Magic Circle the capital letters they deserve as proper nouns…

**Note: I use ‘England’ and ‘English’ here advisedly, and interchange between UK, England, English and British deliberately depending on the context. The Scots have their own social class system which has similarities, but which is distinct, from the English (and Welsh) one, as is its legal system. I am, proudly, of mainly Scottish heritage myself. This, by the way, stands in direct contrast to the American term ‘middle class’, which in English terms would cover a broad spread of society from working families through white collar and some professionals.

***I use here the US form “could care less”, whereas we Brits would of course say “couldn’t care less”. No prizes for guessing which one I prefer!

 

London

Is there any value in a law firm brand?

After the recent spate of mergers and the odd brand relaunch – the most recent being the relaunch of CMS, following the combination with Nabarro and Olswang – I’m left wondering whether there is any value in a law firm brand.

I say this only because the consistent pattern has been to subsume a firm or firm into a larger firm and then dump the legacy name or names.

This is what CMS has chosen to do, with CMS managing partner Stephen Millar telling Legal Business: “It’s been very much agreed from the outset that we go to market as a CMS brand. CMS is the bigger brand, it’s an international brand. Nabarro and Olswang are great brands, particularly in their sector areas, but when you bring three firms together you very much have to go with one, particularly when there’s different parts of CMS.”

Do you though? “…very much have to go with one”?

Well, in point of fact, you don’t have to do anything at all, in particular. The fact that everyone else seems to do it is neither here nor there (as my mother might say “if everyone else jumped off a cliff, does that mean you would do it too?”)

But I think it’s worth reflecting on what might be inferred from such a choice.

Certainly, outside the service industry, this doesn’t happen for the most part where a brand is a successful one. BMW didn’t dump the Mini name when it took over the company, reasoning that there was a positive brand-association with the Mini name that it could exploit to sell more small cars. Kraft didn’t dump the Cadbury name for its chocolate bars. Dell didn’t get rid of the Alienware name when it bought the niche PC manufacturer. Tesco didn’t suddenly rebrand Giraffe ‘Tesco Café’ when it bought the chain it later decided to sell.

So what does CMS’ decision – and I’m not saying it’s the wrong decision, by the way, nor a unique one in the legal profession – say about the value of the brands it has chosen to leave by the wayside (ie Olswang and Nabarro).

Now, Olswang and Nabarro had both spent a lot of time and money on their brands. Olswang operated in a universe of clients whose main assets are intellectual property, and who are, consequently, very brand-conscious, so you could say the firm was operating right at the sharp end of law firm branding. Nabarro, meanwhile, had become practically synonymous with real estate in the UK, in an industry where your name is often as good as your word.

Both firms, I think it’s fair to say, had built up considerable brand value in their key client sectors.

CMS itself had established a brand presence in particular industries and across the legal profession in general, but was several rungs beneath the firms it has acquired in some of their respective key service offerings.

Looking at the current edition of The Legal 500, for instance, it’s notable that while CMS and Olswang are ranked similarly for ‘IT & Telecoms’ and ‘Pharmaceutical & Biotechnology’ (in London), Olswang is two rungs above CMS in ‘Intellectual Property’ and first-ranked in ‘Media & Entertainment’ where CMS does not feature.

In the directory’s highly-contentious (I should know, I used to edit it) Real Estate section, Nabarro is in the first tier, CMS the second for ‘Commercial Property’, while in the crucial ‘Property Finance’ table, Nabarro is again a rung above CMS, and the two are ranked similarly for ‘Construction’ and ‘Planning’.

Now, I don’t want to get into the vagaries of how directories are compiled, but I think these particular rankings are pretty accurate, and what that says to me is that there is a degree of explaining to do – more so in some market segments than others – about why a brand might choose to defer to a lesser or, in a few cases, broadly equal one.

In this case, the names ‘Nabarro’ and ‘Olswang’ have consigned themselves to history.

So what, you might say, but I think this decision has deeper ramifications in the short term.

In other complex mergers/reorganisations in other sectors, companies sometimes decide on an entirely new brand name to give something of a fresh start, and to be able to have a conversation with clients of all the legacy parties about what’s new. Think of Aviva or Centrica, for instance, but there are plenty of examples.

CMS could have done that, but chose not to, and in so doing revealed that somewhere, at some point, it was decided that the CMS name had value and, by inference, those of Nabarro and Olswang did not. You can dress this up however you like, but it’s just plain logic.

Practically-speaking, subsuming Nabarro and Olswang partners into CMS does not require legacy CMS partners to say anything other than “meet my new colleagues” (if indeed they are required to say anything at all) whereas every Nabarro and Olswang legacy partner has a whole story to tell to clients, some – I would hazard – rather more complicated a story than others.

I can’t think that new pitches for work by CMS will spend a lot of time mentioning the legacy names, and I would have to surmise that the new branding strategy will be going in the opposite direction – why beg the question at all, instead focus on the new, strong CMS brand. Within a year, the merger will feel quite historical and thus the legacy names will become irrelevant at best.

New recruits, meanwhile, will not look at the positions of Nabarro and Olswang in the directories, or read articles by partners at Nabarro and Olswang, because only CMS is now relevant, and when the directories complete their annual cycle this September, Nabarro and Olswang will simply be footnotes.

In effect, everything that Nabarro and Olswang stood for has now disappeared, replaced by everything CMS stands for (whatever that may be). That is wiping the slate clean of years of carefully-lodged brand messaging in every client segment where Nabarro and Olswang held some kind of sway, and replacing it with something else entirely.

Is that always a good thing, I wonder, especially if – for some clients – the name that replaces the one you’re used to doesn’t have quite the cachet?

I was once part of a company which was a leader in its field and which was taken over by another company, and the name changed, despite the new parent having a very much lower standing in the market. Two years after the takeover, I was one of only four people – out of about 150 – from the old company, and I left the year after. It struck me at the time that all the brand value built up in my old company over nearly 20 years had simply dissolved, vanished into the ether, and the new company had not gained ‘market-leader’ status either.

I am not suggesting that will happen at CMS – or indeed any other firm which takes over another only for the legacy name to disappear (for instance Chadbourne & Park, following its folding into Norton Rose Fulbright) – but I think it raises a legitimate question for lawyers.

Is there any real brand value in a law firm name, or is a firm simply a convenient shell, a name to put on the door of what noted US legal market observer Bruce MacEwen once termed “a hotel for lawyers”?