Legal market overview
The mood is grey in the City of Light these days despite most law firms reporting a small rise in turnover for 2013. Transactional activity is in steady decline and some believe the French market will never be the same again; it is now accepted that overseas deals – notably the African market – are the new transactional drivers for French law firms.
Anxiety in the market has, however, created a high demand for non-transactional advice. Restructuring and insolvency work have become the bread and butter of a majority of law firms as cases become larger each year. Litigation is also growing as large corporations are ensnared in major proceedings and banks are being called to account before courts, while global investigations are also increasingly common. White-collar crime is another concern across all disciplines and many companies are implementing compliance programmes.
Employment advice is absolutely thriving – one major player in that area reported a 40% increase in 2013 from an already high base – as the country debates the possibility of Sunday and late evening work. Tax law also hit the headlines in 2013 – one famous casualty being former budget minister Jérôme Cahuzac, who lost his government position following revelations of tax evasion. In arbitration, Linklaters LLP and Clifford Chance – two firms that had a relatively low profile in the field in France – considerably boosted their practice with major hires, moves which confirmed the reputation of Paris as a major international arbitration platform.
The continuous transactional decline is a challenge to the business model of many law firms as clients have adapted and increased their resources in-house. Fees and remuneration are major issues as panels and flat fees are becoming the rule. Two senior figures at the Paris Bar commented: the ‘lawyer profession is suffering: we work more to earn less’; the ‘real challenge now is to survive’.
As a result, some law firms are shrinking to specialise and move away from a commoditised market with high levels of competition. Regulatory law is becoming a major trend as regulatory activity has intensified across the EU and globally. Chasing growth in emerging markets such as Africa has become an alternative strategy for some.
Gide, the leading French law firm internationally in terms of lawyer numbers, lost many high-profile figures in 2013 including its top corporate teams – with one group creating its own boutique, BDGS Associés AARPI, and another joining Lacourte Raquin Tatar. Gide responded by hiring a 19-lawyer team from Morgan Lewis LLP.
There were also a number of very significant individual moves such as the high-profile Dominique Bompoint leaving Sullivan & Cromwell LLP to join Cabinet Bompoint and Maurice Lantourne quitting Willkie Farr & Gallagher LLP to create Lantourne & Associés.
Linklaters LLP also lost its leading 15-lawyer capital markets team to White & Case LLP, which has emerged as arguably the most dynamic player currently in France – appointing 11 partners over a 12-month period. DLA Piper and King & Spalding LLP are also among the up-and-coming players, with both firms again making major hires in 2013.
A number of international firms also recently opened offices in Paris including Pinsent Masons LLP, Osborne Clarke and Brown Rudnick LLP. Risk specialised and boutique firms are also a major trend, while medium-sized French law firms are increasingly opening offices in the regions and overseas.
Global mergers have also impacted the French market: recent examples include Dentons and King & Wood Mallesons SJ Berwin, which both have offices in France.
The podium of law firms in France is made up of the following: French law firms Bredin Prat, Darrois Villey Maillot Brochier, Gide – which remains the largest French law firm internationally with some 600 hundred lawyers worldwide – and De Pardieu Brocas Maffei A.A.R.P.I; UK firms Allen & Overy LLP, Clifford Chance, Freshfields Bruckhaus Deringer LLP, and Linklaters LLP; and US firms Cleary Gottlieb Steen & Hamilton LLP – which is widely regarded as the top US firm in France – along with Davis Polk & Wardwell LLP, Sullivan & Cromwell LLP, Weil, Gotshal & Manges, and White & Case LLP.
France also has a large and expanding market of high calibre medium-sized firms and boutiques, which addresses ‘a real need’, according to clients. Among these, the following are particularly noteworthy: Cotty Vivant Marchisio & Lauzeral, Franklin, De Gaulle Fleurance & Associés, Scemla Loizon Veverka & de Fontmichel (SLVF) are very good firms while newly created BDGS Associés AARPI, Cabinet Bompoint and Dethomas Peltier Kopf Juvigny also stand out, giving high-end advice.