The revelation that partners in a London legal
firm are set to break the £1 million-a-year
salary barrier - with other firms in the "Magic Circle" group of City law firms a mere brief or
two away from similar rewards - reflects a burgeoning new world for the legal profession
At present, only a handful of top lawyers
from one company, the senior partners in
Slaughter and May, have reached such lucrative heights, according to a survey by the legal
newspaper, The Lawyer. But the journal estimates they will soon be joined by many others and the 16 per cent increase in business that has pushed earnings of the leading 100 legal firms through the £5 billion barrier for the first time is set to continue into the next century.
Most of Slaughter and May's success has been
drawn from the familiar world provided by
acquisitions and mergers, the most profitable arm of commercial law, but the Internet,
information technology and the exploding compensation culture is providing fresh fields
to conquer, according the legal observers. The most popular targets are:
The drive to get on the Internet is producing a
flood of work, and both Bird & Bird and
Olswang reaped the benefit in 1998-99. Bird & Bird's turnover rose by almost 27 per cent to
£23.5 million and its profits per partner by almost £40,000 to £384,000. Olswang's
turnover increased by almost 30 per cent. Its profits per partner jumped by £28,000 to
£371,000 and even better times are ahead. Putting your business on the Internet may
increase sales around the world, but it can also leave you open to litigation. There are complex
problems with contracts, negligence, copyright, defamation and crime.
Anyone who fails to provide a proper service
because of a year 2000 computer problem
could be a target for personal liability suits - hardware and software sellers, suppliers,
manufacturers, insurers and so on. One broker, Merrill Lynch, with more than a little touch of
relish, believes the worldwide cost could reach $1 trillion (£600 billion). Millions of pounds are
being invested in providing legal safety nets as insurers, who fear claims which could rival the
asbestos and environmental costs of the late 1980s, add clauses to policies to exclude Y2K
The music business is undergoing revolutionary
changes, few of them within the
industry's control, thanks to advances in Internet technology. Britain's music industry is
worth almost £4 billion a year and almost rivals whisky as our most profitable export.
With so much at stake, the major recording
labels are seeking top legal advice on how to
beat the surfing pirates. The same applies to the film and television industries. The makers
of the cult cartoon series South Park recently engaged London law firm Simmons &
Simmons to combat a massive increase in counterfeit and pirated material.
Licensing characters from films and television
is big business. Deals tied into the latest Star
Wars movie The Phantom Menace are expected to yield about £2.5 billion - more than
twice the expected box-office takings worldwide. Italo Cerullo, a spokesman for
Copyright Promotions, which handles licensing for Star Wars among many others, says
counterfeiting and piracy are an increasing problem. He added that the company will
"come down on the producers of illegal Star Wars merchandise like a ton of bricks".
The copyright laws have also provided rich
pickings for British lawyers engaged by pop
stars like Spandau Ballet. After a 21-day High Court hearing, the singer Tony Hadley, the
drummer John Keeble and the bass player Steve Norman lost their claim against
songwriter Gary Kemp and Reformation, his publishing company, for a share of the
royalties from the band's hits. Other big-name groups who have also gone down the litigation
route include Oasis and The Smiths.
INTELLECTUAL PROPERTY RIGHTS:
Lawyers are benefiting from the Diana industry,
particularly the rash of undesirable mementos
and rip-offs that have followed in the two years since her death. There is also a growing
clamour for increased personal privacy and in particular for protection against media
Another enormous area costing £6 billion a
year in pay-outs and legal fees. A whole new
army of specialist lawyers is now cashing in on highly lucrative High Court damage claims by
people claiming personal injury through negligence, and the explosion of racial and
sexual equality cases, many brought before industrial tribunals on the flimsiest of grounds.
Main targets are the NHS, the armed forces,
and the police. The scale of the awards was
highlighted a few days ago by revelations that a series of compensation cases ranging from sex
discrimination to a farmer whose sheep were scared by low-flying RAF aircraft cost the
Ministry of Defence a record £76 million last year.
There's nothing high-earning lawyers enjoy
more than working out the fine contractual
details for fellow City high-flyers, whose salaries and conditions mirror their own
success. Without their zealous attention to minutiae and knowledge of case histories, there
would be no spectacular golden handshakes.
Ironically, the self-same experts are also
drawing up the defences that have allowed City
bosses to shed hundreds of brokers, analysts and traders over the past year without fighting
industrial tribunal cases. On a broader front, there has been plenty of new work responding
to the dictates of Brussels.
Ever since the BCCI and Barings collapses shook the banking world, insolvency law has been booming. To many, specialists in this field are unsung heroes, who quietly get on with trying to save hundreds, and often thousands, of jobs and help creditors recover their money. With the new emphasis on rescue and restructuring, companies in distress and banks are increasingly hiring these experts.