London calling

Regional firms have mixed views on the need to set up a base in London and confirm their status as a truly national force.

Grania Langdon-down discovers that the streets of the capital are not always paved in gold

How important is it for a firm to have a London office to raise its national profile? And if a firm has one, should it be a major partner or a 'minnow'?Law firms around the country have emphatic views on the question of having a London office, which range from 'it's an expensive waste of money' to 'it's critical to our central strategy'.And while some firms are beefing up their London presence, another - Amery-Parkes - is pulling out altogether (see [2001] Gazette, 13 September, 9).Michael Taylor, managing partner of Walker Morris in Leeds, does not mince his words.

A London office is an 'expensive waste of money'.

The firm, which has 36 partners, 300 fee-earners and a turnover of 26 million, generates 35% of its fee income from outside the Yorkshire and Humberside area.Mr Taylor explains: 'The investment cost of opening a greenfield site in London would be immense and the only purpose would be to compete with the magic circle firms in the work they are doing, such as global mergers and acquisitions and global capital markets.

'We don't have the skills within Walker Morris to do global capital market work because the entry costs are so high.

What we do is very high-level corporate finance and banking work and we don't see the need to be in London to capture that work.'He adds: 'We also offer clients an on-line service.

As one London-based banking client commented, "there is no point having you round the corner when we have you on the desk".'Another originally Leeds and Manchester-based firm, Addleshaw Booth & Co, on the other hand, took the plunge three years ago.

While a dominating presence in the north, there were questions about establishing an office in the capital.

It has just moved its London office to a prestigious location overlooking St Paul's, so it can double in size to around 150 people over the next few years.Managing partner Mark Jones explains: 'When we created the firm out of the merger in 1997, we drew up a ten-year plan.

The first five years were to be spent making the new firm the dominant firm in northern England, and the second five years were to get on track as a national law firm.

We definitely weren't focusing on London then.'But, in 1998, three of our top ten clients in terms of fee income said: "We like what you are doing, but in order to carry on growing with us, you need a presence in London." And if you have an ounce of sense, you tend to listen to your clients.'The firm opened a London office on a limited basis with three teams tailored to the needs of those clients - in banking, property and corporate finance.

'The clients were as good as their word and we have improved both our relationship with and our workflow from all three of them.'Fee income for the London office reached 4 million in the year to April and the aim is to reach 9 million this year, while Leeds and Manchester each turn over more than 31 million.

While the majority of fee income will continue being derived from the northern offices for the next few years, Mr Jones hopes the firm will eventually reach a point where London, Leeds and Manchester have broadly similar revenues.'Until about a year ago, we described ourselves as a regional firm, but now we describe ourselves as a national firm.

You cannot realistically claim to be national and not have a base in London.

However, the issue of being a national firm isn't necessarily about being everywhere geographically - I don't see the need to have offices in Newcastle, Exeter or Norwich,' he says.For Julian Tonks, senior partner of Pinsent Curtis Biddle, its London strength is critical to the way it wants to grow as a firm.

As Leeds and Birmingham-based Pinsent Curtis, it had a small London office before merging with City firm Biddle in February.

The combined turnover to April was 78.8 million, 39% up on the firm's pre-merger turnover of 56.7 million.Mr Tonks explains that expanding in London is central to the firm's 'chosen markets' strategy, which include targeting practice areas such as private equity, financial institutions, insurance, property, technology and media.

This aims to make the firm a key adviser to an increasing number of major UK plcs and foreign-controlled companies.

'To achieve this and to win the nature and quality of work we are capable of handling, we need a credible and strong City office,' he says.Indeed, one-time regional or national firms such as Eversheds and DLA, which are trying to target a higher end of the market than previously, have assiduously rebranded themselves as City practices in the last couple of years.Wragge & Co, on the other hand, which employs 390 lawyers in its Birmingham office, is happy to keep its London office a 'minnow' with ten lawyers.Managing partner Quentin Poole says: 'We have been late to the party in having a presence in London.

It has been our distinctive approach to have all our people in one place and replicate what the best City firms do, which is serve all their clients from one base.'I am wholly unconvinced that there is a need to be spread around the country to provide a service to UK or international clients.

Any presence we have in London is, and will remain, pretty small - in relative terms, our office, which we opened 18 months ago, is a minnow, turning over about 2 million compared with 100 million for the whole business.'He says the London team consists of intellectual property specialists, who came from a merger last year with London IP firm Needham & Grant.

Mr Poole explains: 'There is a particular nicety about the IP market, which broadly speaking means work comes through and from patent agents who are mostly based in London.

We wanted to get into the UK top-five market position in IP and to achieve that we needed to be in London.'While he acknowledges other sectors also require a London presence, such as capital markets, he says the firm does not aspire to have a top-five position in such fields.

Though Wragges considers itself one of the top five building construction law specialists, the firm does not need a London presence for that, says Mr Poole.'In fact, it would be bad news because the market is so price sensitive.

It would be mad to be in London because clients are very sensitive about what they are paying and it costs roughly 50% more to produce legal advice in London than in Birmingham.'Of course, one size does not fit all, as he acknowledges: 'This is nothing personal against other firms, but the model of Eversheds and Hammond Suddards Edge just isn't for us because of the huge costs of maintaining an infrastructure spread round the country, duplicating resources.'We don't think there is any evidence that clients want that.

The seven or eight most successful law firms in the country only have one office in the UK, which demonstrates clients are happy with one geographical location.'However, Eversheds managing partner David Ansbro says that having 11 offices spread across most major UK cities - with the largest office in London - and five in Europe, suits the firm's client base.

'While each of our offices continues to grow, we do regard London as being very, very important and it is no secret that we have been strengthening our office there.

'Our client base is different from other firms because we came from being a leading firm in each particular region to being a UK/European operation.

I can understand what other firms might say but that is because of the nature of their business.He continues: 'We don't pretend to be a magic circle firm but we are a major presence in the City and throughout the UK and Europe - put together, that is a fairly unique sort of business.

If you call yourself a European firm you have to be in London and it has to be a strong presence and if you want to be a national firm, you also have to be in the economic centre.'For 12-partner firm Amery-Parkes, which first set up off Fleet Street in 1892, its increasing concentration on specialist litigation means it no longer needs a London office.

Managing partner Steven Slough explains: 'All our continuing work can be efficiently carried out in our three regional offices in Birmingham, Basingstoke and Bristol and, as we had the opportunity to vacate the offices in Chancery Lane, it was a logical step to save the overhead of central London premises.

We have also relocated to larger premises in central Birmingham, so that we have space for expansion in addition to accommodating work transferred from London.'Peter Black, partner in the conveyancing department of London firm Payne Hicks Beach, experienced the London/regional divide after leaving Amery-Parkes earlier this year.He says: 'Amery-Parkes has built up a specialist niche personal injury practice and it can just as easily do that sort of high-volume work from its regional offices where the overheads are so much lower.

The same would apply for volume, cut-price conveyancing work.'But for more high-value private and commercial conveyancing where the work, for instance, in country house conveyancing or landed estates, is that much more specialist, it needs the expertise of a London practice.

Clients also definitely want you in London.'The needs of London clients prompted two-partner Marlow-based DMA Legal, which specialises in corporate, property, IP, media and fashion, to open an office in Savile Row this summer.

With turnover of more than 1 million, the firm is doing more business from the London office.But marketing and public relations manager Brenda Bennett says: 'We have no intention of moving completely to London as we also have very good clients in Buckinghamshire and Berkshire.'When Dick Whittington left Gloucestershire for London in the late 14th century to find his fortune, he achieved just that.

It was hard work, but when he died in 1423, he left a legacy of 7,000 - making him the medieval equivalent of a multi-millionaire - which through brilliant investment by his executors still today provides millions of pounds for charity.

It is an example that many a law firm can only hope to emulate.Grania Langdon-Down is a freelance journalist