City firms must reinvent themselves to keep pace with the changing corporate sector over the next decade, according to a report published last week.

Legal consultancy Jomati, run by Tony Williams, former managing partner of magic circle firm Clifford Chance, said firms will need a new focus on emerging markets, such as renewable energy, container shipping and pharmaceuticals, in order to bring in clients.

The report said law firms will have to decide where future profitable markets will be based, whether it be in the US, the BRIC nations (Brazil, India and China), or other developing nations.

The conclusions are included in the second part of Jomati’s report on new frontiers in the legal sector.

‘Many aspects of bread-and-butter domestic corporate and real estate work will come back with time,’ suggested the report.

‘But, they may come back with lower levels of profitability.

'Also, "waiting it out" may mean missing huge areas of potential growth in revenues and profits as the world moves on.’

Jomati, which has advised a number of the UK’s biggest firms in recent years, said some law firms are still structured around a world view that has expired, while rivals evolve.

Those firms now need to take a view on important issues to dictate their future policy, such as whether the Chinese economy is a long-term challenge to the US.

The report also discussed whether firms should start downsizing their practices in areas such as tobacco and oil where there is a long-term decline, even though significant change may not happen until after 2020.

It said: ‘Such long timescales may feel beyond the scope of law firms, and yet the future challenges and opportunities clients in the above industries face are rooted in decisions that CEOs will need to make now.

‘Understanding the long-term significance of decisions that could be monumentally important is necessary if law firms are to give the best advice to their clients.’