In our continuing series of regional focuses, Jon Robins assesses Manchester and Liverpool

There was no let-up last month in the juggernaut-like progress of the north-west firm Halliwells. This time it was the insurance practice of Manchester firm James Chapman & Co that was swallowed whole by the region’s most acquisitive legal practice, making the firm (on its own reckoning) ‘the largest law firm in the north-west’ with a fee income of £75 million and 1,000-plus staff. That came fast on the heels of a succession of high-profile partner-recruits from DLA Piper Rudnick Gray Cary, plus the takeover of Liverpool stalwart Cuff Roberts early last year.


‘We are firing on all cylinders at the moment and Liverpool is key to our plans,’ proclaims managing partner Ian Austin. He says the firm is committed to doubling the size of its Liverpool office over the next three years. ‘We’re moving forward with confidence across the firm,’ he continues. ‘We’re not in Liverpool to tread water.’


No one could ever accuse Halliwells of treading water. Making waves, perhaps. ‘Liverpool is a small and pretty tight market,’ reckons Stephen Benson, senior partner at national firm Cobbetts, which has 450 staff in Manchester (compared to 200 in Birmingham and 180 in Leeds). ‘A lot of the market looked on a bit askance when Halliwells decided to move in. You have your indigenous firms, and it can be very much a village atmosphere which is difficult to penetrate.’ There is a strong contrast between the cosmopolitan Manchester market, second to London and Birmingham in value and well-served by a big national law firm presence (Addleshaw Goddard, Eversheds and DLA Piper Rudnick Gray Cary), and Liverpool, where DLA dominated the scene up until recently, with local heavyweights such as Brabners Chaffe Street and DWF taking some market share, and defendant insurance firms Hill Dickinson and Weightmans also being strong. Other commentators talk about the lack of a ‘cultural fit’ between an aggressive Manchester firm on the rise and Cuff Roberts.


The north-west is a hugely important region and its legal market is much fought over, underlined by the concentration of national firms in Manchester. ‘There are 6.9 million people [in the north-west], making it larger than many European countries and covering 12% of the population,’ comments Mr Benson. ‘Liverpool is going to be the 2008 European Capital of Culture and remains one of the country’s bigger ports, with £3.3 billion turnover from its maritime sector. In Manchester, the airport has 95 carriers where you can get almost anywhere in the world. All the economic indicators are there and they show that the north-west is a place to do business.’


Cobbetts aims to become ‘the dominant law firm in the regions’, and its Manchester base is the springboard for this. Mr Benson says: ‘We started off with that ambition four years ago when we were just a Manchester practice with a turnover of £23 million. I am hoping that turnover will be around £58 million this year.’ The rationale behind the firm’s plan is that the legal services market in the north-west is ‘pretty mature’. He explains: ‘We wanted to expand our business and the way to do that was to go into other regions, and so we chose west Yorkshire first and then the midlands.’ The solicitor reckons that the other national firms which dominate the Manchester market manage their practices from London. ‘We felt that left a vacuum in the regional market,’ he says.


One legal magazine characterised Mr Austin as ‘a direct, aggressive northerner’ in a recent profile. ‘I am not very keen on being labelled for any one particular reason,’ he responds. He stresses that both he and his firm are far from parochial in their aspirations. ‘We have clients across the UK and our focus is across all of our offices in Manchester, Sheffield, Liverpool and London,’ he says. ‘It just happens that Manchester has been our headquarters.’


So why is Liverpool important to the firm? Mr Austin went to Liverpool University in the early 1980s ‘when it was probably at its lowest ebb’. He says: ‘Over the last three years, signs of prosperity are coming back to the city and from a strategic viewpoint it helps to tie up the north-west.’ Although he thinks that the Manchester office, where the firm has 500 people (compared to 110 in Liverpool and 90 in Sheffield) is roughly about the right size, he considers there is room for expansion in both Liverpool and London.


Halliwells’ expansion has been at DLA’s expense. It has snatched a series of partners, including Jonathan Brown and Paul Jefferson (corporate), Richard Capper and Beverley Bentley (banking) and Colin Gibbons (litigation) from the firm. Philip Rooney, a Liverpool partner at DLA, is stoical. He says: ‘Halliwells are the new kids on the block and some of our people decided that they wanted to look elsewhere. These things happen.’ DLA has 165 staff in its Liverpool and Manchester offices, including 61 partners, one-third of whom are based in Liverpool. He says the Liverpool office’s financial contribution is ‘right up there with the rest of the firm’ and, for example, recently acted for Virgin Megastore when it introduced its Internet download service.


The other major recipient of the James Chapman split was Brabners Chaffe Street, which took on the 28-strong commercial and sports law team headed by Manchester United director Maurice Watkins. The firm claims the union has added £2 million to the 46-partner north-west firm’s £20 million turnover. Brabners has a presence across the region with offices in Manchester, Liverpool and Preston.


Robert Street, senior partner in the Manchester office, sees the addition of the sports team as ‘a tremendous coup’ for the practice. ‘We share the same culture,’ he says. There is ‘an excellent synergy between the teams… they strengthen our practice in sports and other areas, while at the same time we will be able to support their lawyers and clients with our strengths in the deals, corporate finance, property and private client sectors’. He is unconvinced about Halliwells’ ability to make its presence felt in the smaller legal market of Liverpool. He says: ‘It is obviously a large industrial town but there is not a big financial community in terms of accountants, banks and corporate financiers. Nor is there a big legal market to serve them.’


While a cynical national press has been quick to run down the opportunities flowing from Liverpool being designated 2008 European capital of culture as a ‘damp squib’ in the making, the city’s legal profession is optimistic. ‘It will provide a real uplift for Liverpool,’ says Andrew Leaitherland, managing partner of DWF. ‘You can’t get a parking space in Liverpool these days, because every public car park is being built upon. The city is a major construction site at the moment. It is fantastic news…. [and] it is a fundamentally different city to what it was 12 to 18 months ago.’


DWF has more than 350 legal advisers and 66 partners split between Liverpool and Manchester. It closed down its Warrington office, which handled volume remortgaging, last year, and 40 of its 72 staff were redeployed.


‘In Manchester, there has always been a lot of financial services activity, which perhaps we have not had here, but the capital of culture is certainly proving to be a catalyst to change within the city,’ says Mr Rooney. ‘It isn’t the be-all and end-all, but it has helped create a centre where people want to work, shop and live.’


However, the national firms have largely stuck to Manchester. Eversheds has 400 lawyers, based in 70,000 square feet of office space on Great Bridgewater Street. ‘It is a significant office that does not only cover the north-west,’ says Stephen Hopkins, managing partner of the Manchester, Leeds and Newcastle offices. ‘But there is a lot of work, both national and international, which feeds in from offices around the country and from Europe.’ The solicitor acknowledges that Manchester is ‘a very competitive market’. In March, Eversheds took on Pinsent Masons’ entire Manchester corporate team. Indeed, the week before, Cobbetts hired private equity partner Paul Johnson and three lawyers from Pinsent Masons. There has been some fall-out from the Pinsents/Masons merger in 2004, says Mr Hopkins, and his firm has been the ‘beneficiary of that to a large extent’.


‘Most of the firms here are also represented in Leeds, and that city is equally, if not more, competitive,’ Mr Hopkins continues. Is there a business case for a national firm to have a presence in Merseyside? It is a move that is ‘constantly under review’, he says. ‘But where a firm is based is becoming less and less important to clients and we are able to service Liverpool pretty effectively from Manchester,’ he adds.


Paul Devitt is the managing partner of Addleshaw Goddard’s corporate practice and has been based in Manchester for 13 years. The firm has been in the city ‘forever’, he jokes. The last 12 months have been particularly ‘buoyant’, he claims, ‘with lots of locally originated deals and much of it serviced from within the region… it feels a really positive place to be doing business at the moment’. Addleshaws’ corporate team in Manchester has 12 partners and 45 fee-earners, which is broadly similar in size to its Leeds office. What is the main difference between the Manchester and Leeds markets? The former continues to benefit from a large number of financial intermediaries, such as private equity houses, he replies. ‘In Manchester are 11 or 12 private equity houses, whereas in Leeds there are considerably fewer than that.’


Mr Rooney reckons it is wrong to analyse the local scene only in relation to the regional competition. ‘You can’t limit your market-place to, say, just Liverpool,’ he says. ‘We don’t. We are out hunting for business wherever it is.’


Jon Robins is a freelance journalist