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‘Outcome still satisfactory’: revenue, profit and PEP drop at Macfarlanes as Mishcon continues growth

Macfarlanes has posted results that show declines in turnover, profit, and PEP for the past financial year. Turnover dropped 2% to £296.6m, while operating profit fell 6% to £151.4m. The decline in PEP was steepest: a fall of 16% took it to £2.1m.

The results mean an end to a  12-year streak of growth that saw its PEP surge past its rivals, with last year’s £2.49m placing it behind just Slaughter and May and Stewarts in the list of firms with the fastest-growing PEP in our 2022 LB100.

‘The 2022/23 financial year proved a more challenging year for our firm due to difficult market conditions although the outcome was still satisfactory,’ said senior partner Sebastian Prichard Jones in a statement.

‘After the exceptional impact of the pandemic, which had a positive effect on our financial performance, in a number of respects this was a year of consolidation. This included an increase in our equity partnership by 10%, which had what we anticipate to be a short-term impact on our PEP figure. This is an investment we were pleased to make. After taking a pause for breath in 2022/23, we remain in a strong position and are confident we will move forward again this year.’

The increase in equity partner numbers offsets the drop in PEP somewhat. And the reference to a difficult 2022 after an exceptional 2021 is well taken: there are few firms who have made similar claims as they announce their latest sets of financial results, with Allen & Overy, Clifford Chance, and Ashurst all recording dips in PEP. Macfarlanes is not the only firm to record a dip in turnover over the past financial year, with Hogan Lovells posting a 7% decline in February.

The picture painted by Mishcon de Reya was more positive. The firm posted financial results that saw total revenue increase by 10% to £255m. While slower than last year’s 23% increase, this continues a positive trend that has seen the firm continue to grow despite setbacks including a Solicitors Regulation Authority (SRA) fine and a failed IPO.

Overall profit has increased  22% to £93m, though the firm notes that the increase in profit was a much more modest 6% if IPO costs were excluded from the previous year’s figures.

Mishcon reported overall profit as a lone metric for the first time this year, describing profit per equity partner (PEP) as ‘too narrow, short term and misleading as a metric for a business as diverse as the MDR Group, which now accommodates both a traditional law firm and many start-ups.’

Group chief financial officer Matt Hotson explained further: ‘Our goal is create long term value – for our clients, our people and the society in which we operate. PEP is not a metric which is helpful in this context nor is it useful for a business like ours with a diversified offering of legal and non-legal services.’

The completion of Mishcon’s merger with Taylor Vinters in January 2023 brought it to a total of more than 220 partners. The firm reported around 80 equity partners, which would place  PEP at £1.16m – up almost 11% on last year’s £1.05m, and above its previous high-water mark of £1.1m, set in 2017.

Mishcon showed another year of impressive growth in its consultancy and advisory work, reporting an 81% growth in non-legal revenue. The firm was keen to stress, though, that the overwhelming majority of its revenue still came from its core legal services. Performance across practice areas was ‘pretty even across the firm’, said managing partner James Libson. ‘Even though one may have expected real estate to slow down, it kept its momentum all the way through to year-end. Corporate suffered a little in Q4, but the rest were solid.

‘One sees dispute resolution do better, or at least act as a hedge, in recessionary times. But there’s been a real lag in that this time around, as so much protection has been put into the system. Still, we’re seeing an increase coming through, and we expect that to accelerate over the next year.’

The firm’s strategic focus will be on bedding in its merger. ‘The innovation and early-stage market in Oxford and Cambridge is very important to us’, said Libson. The firm will also continue to extend its Asian offering, including building out its Singapore office and continuing its association with Karas So  in Hong Kong. ‘At the moment it’s a litigation offering,’ said Libson. We’ve brought in three private client partners, one in family and two in tax. Our aim is for that office to reflect the balance of our overall Asia offering, which will focus on litigation, private client, and corporate restructuring for family-owned businesses.’

More broadly, Mishcon also intends to explore options to raise capital. ‘The IPO market remains pretty closed’, explained Hotson. ‘It’s not something we’re actively looking at right now. But we have a strategic view to increasing our access to capital. We would potentially do more deals like we did with Taylor Vinters, which sometimes need more capital to make work. And we need to invest in other things like tech as well.’

Hotson also pointed to the increased availability of litigation funding as an area of opportunity for the firm: ‘We have a medium-term need for increased capital. How we resolve that need is something we debate from time to time, though there’s not  a huge amount of urgency. It’s not constraining our ability to grow now.

‘We explored the IPO as an enabling strategy to allow us to deliver growth. The listed law firm market is a very limited market. Even the private equity law firm market is not very mature. But we think we’ll see more firms take capital in, because there are things they can do with that capital. We may well be one of those.’

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‘Improving growth has not been an easy task’: HSF posts record financials amid challenging conditions

Herbert Smith Freehills has marked a decade of consecutive annual growth with its latest financial results, posting the highest revenue, profit and PEP in the firm’s history.

Revenue has increased by 8% from £1.103bn to £1.186bn, while net profit and PEP are up by a more modest 2% and 1% respectively. PEP moved from £1,163,000 to £1,173,000 for 2022/23.

Speaking with Legal Business, CEO Justin D’Agostino (pictured), said: ‘We are particularly proud of the results this year, especially because there were some significant challenges in all of our markets, including rising costs and tougher trading conditions.’

D’Agostino explained why the firm has fared so well despite the less-than-ideal market conditions: ‘Our clients come from  strong sectors, such as energy, infrastructure, technology and banking. We are also focused on the twin engines of our contentious and transactional practices. That mix results in a very well-hedged global business.’

On the firm’s strategy, D’Agostino elaborated: ‘We launched our new strategy in November 2021, which has been having a positive impact. When we set out our strategy, we set out our choices on the areas we were going to focus on winning market share and grow: private capital, energy transition and ESG. We are seeing significant growth in these areas, and we will see sustainable growth for the next few years.’

Asked which were the firm’s best-performing  jurisdictions, D’Agostino responded: ‘London had an outstanding year, as well as strong, double-digit growth coming from New York. EMEA saw good growth too, with double digits from Milan, Dubai, Germany and Johannesburg.’

He added: ‘The market was tougher than previous years in Asia and Australia. Despite this we still saw double digit growth in Japan and South-East Asia too.

‘On the practice side, our contentious practice did particularly well. We saw increased client demand in class actions, competition and disputes deals. The largest class actions we are seeing are with our biggest clients, such as Google and Meta.’

Probed further on the firm’s US strategy, D’Agostino commented: ‘We have been growing our New York office and we will continue to grow organically there. We are very focused on the US market and real attention will be placed on it by us over the next period.’

HSF’s chief financial officer, Steve Bowers, contextualised the discrepancy between the acceleration in the rate of revenue increase and the reduction of the rate of PEP and profit growth since this time last year: ‘Compensation costs are high because of the intense demand for talent, which remains an issue. We continue to invest and ensure that our employees are rewarded and that we have the right standing in the market for talent compensation.

‘Macro factors such as high interest rates, as well as our investment into digital technology, our core systems, and further investment in our people is the right thing to do with long-term benefits. That means that sometimes there will be a disconnect between profit and revenue growth. You won’t see many firms of our size and scale this year having their best-ever results on those three key metrics.’

He added: ‘The context is important here. If we look at the performance for FY23, you do see client demand soften in a few places, but we are still doing really well. Improving growth has not been an easy task.’

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A&O managing partner Price departs pre-merger as revenue passes £2bn

Allen & Overy has announced the shock resignation of managing partner Gareth Price amid a set of financial results that saw the Magic Circle firm break £2bn in revenue for the first time.

The firm said Price’s resignation was due to ‘personal reasons’ and came as revenue jumped nearly 8% from £1.94bn last year to £2.1bn in 2022/23. While eye-catching, the level of turnover growth fell slightly short of the 10% uptick achieved last year, of which more than half was attributed to A&O’s US business.

Profit per equity partner (PEP) dropped 6.6% from £1.95m to £1.82m, while profit before tax dipped slightly to £892m after a 9% hike to £900m last year.

Price was elected A&O’s managing partner in February 2020. News of his departure has been met by surprise, not least because he had been hotly tipped internally to stand again for managing partner in the firm’s 2024 leadership elections, a move that could be seen as a vote for continuity as A&O faces inevitable challenges posed by its proposed merger with Shearman & Sterling.

‘The board has asked me to step in to cover the [managing partner] role’, senior partner Wim Dejonghe told Legal Business. ‘They will make a decision on a more permanent solution in the autumn. Leadership elections were scheduled for early next year, after the merger vote. The board also has to decide whether they stick to that schedule or not.’

On the financials, A&O reported strong growth in private capital revenue of more than 60% for the last two years. In the US, ‘growth and expansion has remained a high priority’ – unsurprising given the firm’s pursuit of the Shearman merger. A&O pointed to the region as one of its strong performers, alongside Africa, Europe, and the Middle East, which saw its ‘strongest financial performance ever’, driven by what it describes as ‘a hot IPO market’, as well as by opportunities in Saudi Arabia.

A&O’s Advanced Delivery & Solutions (AD&S) business also grew by 13%.

While the US accounted for over 50% of the firm’s revenue growth last year, this year Dejonghe said it accounted for less than half. ‘It’s up in absolute figures, but it’s not 50% of the growth,’ he said.

A&O also reported strong performance in energy transition, technology, and private capital: ‘With the energy transition, there’s a lot of financing needed in the energy and infrastructure space. That’s definitely a strong growth point for us. Technology, both on the litigation and the transactional side, has also seen massive growth, as has private capital on the debt side,’ Dejonghe added.

Dejonghe explained the drop in PEP with reference to macroeconomic conditions and a competitive legal market. ‘We’re in an inflationary environment. Costs generally have gone up. And of course there’s been a salary war in the industry around the world. We’ve defended our position, and we’ve had to spend quite a bit more on salaries to keep and recruit the best talent.’

A&O has no plans to slow its investment. ‘In terms of sectors, we’re focusing on technology, energy transition, and private money. We’re investing quite heavily in those practices around the world.’

But, unsurprisingly, the lion’s share of attention will go to the proposed combination with Shearman. ‘Obviously, the merger will be a priority going forward’, said Dejonghe. ‘There’s no doubt about that.’

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The Law Surrounding Domestic Abuse in England and Wales

Elizabeth Barlow, student at The University of Winchester, analyses the changes brought about by the Domestic Abuse Act 2021.

Until recently the term ‘domestic violence’ has been used to describe abuse in the family home. However, the very word ‘violence’ indicates a physical assault and therefore disregards the many other forms of abuse that both men, women and children can experience.

The move to the term ‘domestic abuse’ has been enshrined in statute with the new Domestic Abuse Act 2021. Section 1(3) of the act establishes the different forms of abuse, including but not limited to violent or threatening behaviour, economic abuse and coercive and controlling behaviour.

Unfortunately coronavirus and the cost-of-living crisis have added pressure to many households, which in turn has seen a large increase in domestic abuse cases.

The need for reform came from the substantial lack of guidance and assistance for victims. The lack of duty on local and national authorities to offer help and support, and the outdated outlook on what domestic abuse consisted of.

Following 2021, authorities now have a duty to provide appropriate and safe accommodation for a person or family fleeing abuse. It also ensures that fleeing abuse does not result in the loss of right to lifetime or assured tenancies when these were in place.

For the first time local authorities will be held accountable following the creation of the Domestic Abuse Commissioner. They will also report back annual statistics to consider best how to tackle the problem as well as establishing a chain of command and processes to improving the support services

One significant change sees the recognition of children in the abuse cycle. Prior to 2021 children could witness horrors within the family home and were simply considered witnesses. Now, however, a child who witnesses abuse will be treated as a victim in their own right.

With emotional abuse being recognised within statute it would be contradictory to leave children as witnesses when the sheer emotional effects of witnessing abuse are, in fact, a form of abuse all of its own. This welcome change affords them further protection and support.

As well as children, both men and women suffer domestic abuse. However, it is significantly disproportionate and is still very much a gendered offence. A lot of abuse comes following what is known as a ‘trigger point’.

The most common trigger points are pregnancy, post-separation, drug and alcohol use and chronic illness. This can be when most abuse starts or gets worse during a relationship.

Practice Direction 12J guides the judiciary in child arrangements proceedings where there is alleged domestic abuse, and it clarifies that domestic abuse can be a single incident or a series of incidences.

It also goes into more detail on ‘Coercive and Controlling’ behaviour, a form of abuse that is by no means new, but newly recognised in law.

It includes acts of assault, intimidation, and humiliation, where the perpetrator desires to make the victim feel subordinate or dependant by isolating them. If you are a victim or know of a victim of domestic abuse you can make an application to obtain disclosure from the alleged perpetrator.

The introduction of the Domestic Violence Disclosure Scheme (DVDS), first implemented in 2014 and known more widely as Clare’s Law, allows the police to disclose any relevant information regarding a partner or ex-partner.

This is managed in two ways, by establishing a ‘right to ask’ and a ‘right to know’. This enables the victim to make informed choices on whether they should leave a relationship for their own protection or refrain from going back.

Sadly, on average, a victim of domestic abuse returns to the abuser seven times before they leave for good. Either the victim or a family member can make an application for disclosure.

Anyone suffering abuse can reach out to a number of organisations for initial help, including a solicitor for legal advice. Whilst some people will be eligible for legal aid, the service is stretched far beyond its means and many people cannot access it.

With that in mind, domestic abuse is not discriminatory, and anyone can be a victim regardless of wealth. With increasing use of social media, victims are open to newer forms of abuse such as ‘revenge porn’.

Revenge porn is the disclosure of any sexual photographs or videos with intent to cause distress. The most recent case involved celebrity Stephen Bear, who was sentenced to 21 months’ imprisonment for voyeurism and two counts of “revenge porn”.

This case highlighted that even those in the public eye still have a right to privacy and that the law would not enable perpetrators to abuse this right. However, whilst the Act supports some groups of people, it’s support tis lacking for others.

The new Domestic Abuse Act is far from perfect, there have been criticisms over its lack of protection for migrant women and for not making judicial training mandatory in order to ensure judges have a deeper understanding of domestic abuse and its many forms.

Yet it has been praised for its forward thinking with regards to the inclusion of a new offence, Non-Fatal Strangulation (NFS). NFS has been a tool in which perpetrators hold over their victims, the act itself is a way of them showing the victim they quite literally hold their life in their hands.

Considering the long-term medical effects of partial asphyxiation, making NFS a criminal offence of its own is a welcome change.

Another positive addition relates to the court process, a process that can be incredibly intimidating to a survivor of domestic abuse. Being in the same room as the abuser is sometimes terrifying, and up until 2021 if the abuser was a litigant in person, they were entitled to cross-examine the victim themselves.

This was clearly not effective in ensuring a witness gave their best evidence.

Now, if an abuser is a litigant in person, they will ensure a separate third party is available to cross-examine where appropriate. The introduction of special measures has also made the court process a little easier for survivors, and are suitable in criminal, civil and family court.

A survivor can be kept separate from their abuser at all times, this may mean using a separate entrance at the courthouse, having a curtain drawn whilst in the witness box, giving evidence via video link or ensuring they have a special room to wait in whilst court is adjourned.

Ultimately, there are safeguarding measures in place to protect survivors of abuse all whilst allowing them to have their say. It is important to recognise the difficulties victims face and that the justice system provides an environment that allows them to speak up, whilst feeling safe and secure.

The law is by no means perfect but is certainly a step in the right direction to ensuring victims are supported.

The difficulty remains where the Act predominantly supports those pursuing criminal charges, which leaves a large gap for those pursing civil remedies following domestic abuse.

Where so many cases will fall short of the CPS threshold, there should be the ability and support for those who fall through the gap to utilise civil law whether it is to provide an injunction, by way of a non-molestation order, or to assist in a fact-finding hearing during children proceedings.

Either way, more must be done to offer protection, especially to those most vulnerable.

 

Helpful Contacts

National Assistance

 

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Financials 2022/23: Taylor Wessing sustains global growth for fifth year in a row

With the financial reporting season in full swing, Taylor Wessing has unveiled its latest results, becoming a €500m firm for the first time.

The firm experienced slower growth compared to the previous season, as it did not achieve double-digit growth as it did in 2021/2022. The firm saw a 4% increase in global revenue to £439m in this year’s financial results, up from £420.6m last year, which its highest recorded international revenue to date.

It witnessed a similar increase in UK revenue, which went up 4% to reach £227.1m, surpassing the figure of £219.3m reported for the 2021/2022 period.

UK profit, however, dropped by 12% from £93m to £87.1m, but it is still the second highest on record for the firm. The firm did not disclose some figures, but PEP is estimated to be £809,000 and RPL in excess of £500,000.

UK managing partner Shane Gleghorn (pictured) told Legal Business: ‘We’re delighted to see growth in both the UK business and international business. We’re very pleased we managed to maintain growth in those circumstances where the markets, certainly in the UK, were more muted in relation to fundraising and corporate work.’

Talking about the latest developments, he continued: ‘We’ve got big investment in our new premises in London, and we’ve moved into new premises in Cambridge and Dublin. There’s been quite a lot of lateral hiring and promotions taking place, particularly across London, Dubai and Dublin. We’ve been growing out our IP offering and broadly speaking, the plan is to create a holistic IP offering across Europe. We’ve started to implement that, and it has been a very significant point of investment for us.’

This year marked the launch of Taylor Wessing’s latest three-year strategy, following the introduction of its previous strategy in 2020, which Gleghorn said resulted in significant revenue growth in the UK, increasing from approximately £157m to over £227m, a growth rate of 44%. Additionally, global revenue also increased from around £365m to approximately £438m, a growth rate of over 20%.

Commenting on the fall in UK profit this year, Gleghorn said: ‘We do anticipate that the profit will improve next year, but it wasn’t an unexpected turn of events for the profit to be flat at this year. We anticipated that the market would be slower in some of our core areas. We are very confident about our profit position because, when you view it in the context of the preceding two years of growth, it is still the second-highest profit that we have ever earned.’

Discussing which practice areas had made the greater contribution, he continued: ‘It’s fair to say it was across the board contributions. In London, patents, private equity, private client, disputes work, and employment have all had strong years. Tech and life sciences have also had a strong year, but there’s no doubt that the second half of the financial year was more challenging for most firms who focus on that area.’

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Financials 2022/23: HFW posts best-ever results

HFW has posted its best-ever financial results for the financial year 2022/23. After a slight dip of 1% to £198.7m in 2022, revenue climbed by more than 13% to £225.3m. Profit per equity partner and revenue per lawyer were up too: PEP rose by more than 17% to £786,000, while RPL hit £455,000.

In London revenue increased by 16%, accounting for about 40% of the firm’s total revenue. The most impressive increases around the world, meanwhile, were in the Middle East (32%) and Australia (24%).

Last year aside, these figures continue a strong upward trajectory for HFW, which has seen the firm grow its RPL almost 25% in four years, and its revenue more than 60% since 2015.

In conversation with Legal Business, the firm explained its success as the result of a strategy focused on broadening its international coverage and extending its offering in its core sectors of aerospace, commodities, construction, energy, insurance, and shipping.

‘We’ve built up a good network’, said managing partner Jeremy Shebson (pictured). ‘We were building foundations, and now we’re looking to build on top of them.’

Senior partner Giles Kavanagh concurred. ‘We have a network of 20 offices around the world. The focus now is to build on the network, not to extend it further.’

That said, Kavanagh noted that the firm was not opposed to expanding into new areas ‘where there are good opportunities’. On this front, HFW recently received permission from China’s ministry of justice to open a representative office in Shenzhen. ‘It’s a very big commercial area’, explained Shebson. ‘The numbers are eye-watering, and the opportunities are considerable.’

In addition to the firm’s sector-focused international strategy, Shebson noted the importance of HFW’s strength in contentious work as a factor behind its continued growth in what he called a ‘difficult economic environment’. Results for 2023 showed the proportion of revenue generated by contentious matters held steady at around 70%.

Moving forwards, HFW intends to double down on its existing strengths. In Kavanagh’s words: ‘We are looking to attract laterals, teams, smaller law firms, and even something more ambitious than that.’

This approach has paid dividends over the last year: the firm reports ten lateral partner hires in 2022, and a further six in the first two months of this year.

As for that something more ambitious, Kavanagh was candid. ‘We’re open to discussions, not just with bolt-ons, but with larger-scale firms.’

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‘A powerful position’: Youle succeeds Trivedi as Skadden London head

Rich Youle, Skadden’s much-admired co-head of private equity, has taken over from Pranav Trivedi as the head of Skadden’s London office.

Youle (pictured) took the helm on 1 July and will continue as global co-head of the firm’s private equity group alongside Ken Wolff in New York.

Widely regarded as one of the most influential dealmakers in the Square Mile, Youle joined Skadden from White & Case in 2017 amid much fanfare.

For his part, Trivedi has been at Skadden for 30 years and is widely held to have been a strategic and effective London leader throughout his ten years in the role.

Commenting on his appointment, Youle said: ‘I’m honoured to take over from Pranav, who has served the office so brilliantly during his tenure. As Skadden celebrates its 75th year anniversary and 35 years in London, with a new home in the City, it is an exciting time to reflect upon our growth. I’m looking forward to working with our talented team to build on that success.’

Trivedi added: ‘It has been such a pleasure to lead the London office for ten years. I’m proud to say that the office has grown exponentially, becoming one of the cornerstones of the firm’s global network. Rich’s impressive leadership capabilities, business acumen and deep understanding of the market, will undoubtedly continue to drive forward our success.’

Executive partner Eric Friedman concluded: ‘Pranav has served the London office with unwavering dedication and leaves it in a powerful position. Rich embodies our core values and has a proven track record of delivering outstanding results for clients and for his exemplary leadership skills. I know we are in good hands as he leads the London office into its next chapter.’

For more on Youle, read Legal Business’ 2018 Life during Law interview. 

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Ince unable to pay creditors in full as administration draws to a close

Following their appointment as joint administrators for Ince on 28 April 2023, Andrew Hosking and Sean Bucknall of Quantuma Advisory have filed a statement of administrator’s proposal (the Quantuma proposal) at Companies House.

A pre-pack sale of Ince’s business and assets to Axiom Ince has now been completed. The Quantuma proposal states: ‘Of the total sale consideration of £2,200,000, £1,000,000 has been received to date and the remaining £1,200,000 will be collected as and when it falls due for payment.’

Ince owes secured creditors a total of £16,854,792 in banking debt at the date of the appointment of the joint administrators. This includes an estimated £15,000,000 debt owed to Investec Bank.

The firm does not have any preferential creditors. All its employers were TUPE transferred to Axiom Ince and there are therefore no preferential claims.

However, HMRC is a secondary preferential creditor and is expected to make a claim of around £15m. This includes liabilities for VAT, PAYE income tax, employees’ NIC, CIS deductions and student loan deductions. A Compass Evaluator report filed with the Quantuma proposal and commissioned by Tony Mead, a director at Axiom Ince, detailed the challenges faced by the beleaguered firm. It notes that while Ince had been hoping to find a solvent trade on solution, its considerable arrears with HMRC have proved challenging.

The directors of Ince had sought a time to pay agreement for the arrears to avoid administration but this was rejected by HRMC. ‘Enforcement action is imminent,’ according to the report. Additionally, the report highlights that the audited accounts for the year ended 31 March 2022 are outstanding and ‘the shares have been suspended since 3 January 2023.’.

The total owed to creditors amounts to £41,188,082.40. The firm has accumulated a wide range of creditors during its troubles, including individuals, universities, law firms, and The Law Society.

The Quantuma proposal states ‘it is anticipated that there will be insufficient funds to pay a distribution to secondary preferential creditors in full or the unsecured creditors.’

To conclude the administration the remaining deferred consideration from the purchaser, amounting to £1,200,000, needs to be collected. The joint administrators will also need to discharge their statutory duty to investigate the affairs of Ince. The Quantuma Proposal states: ‘the administration is expected to conclude in c.30 months by exiting to dissolution.’

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The Implications of Artificial Intelligence in the Legal Profession (Winner of the Legal Article Writing Competition)

The article below was written by Julita Gajewska, winner of the Legal Article Writing Competition, run in conjunction with The University of Westminster Corporate Law Society.

Artificial intelligence (AI) has emerged as a catalyst for transformative change across industries, with the legal sector undergoing its own revolutionary transformation. The integration of AI into legal practices is reshaping the legal landscape, introducing  a myriad of opportunities, challenges, and potential benefits in the sector. In this article, the narrative focuses on the implications of AI in the legal system, unravelling the current state of AI implementation and uncovering its potential for transformation.

The term ‘AI’ was coined by John McCarthy, although there is no universally accepted definition, as highlighted by the Carnegie Endowment for International Peace. The report ‘a pro-innovation approach to AI regulation’ has divided the term into two key characteristics: adaptivity and autonomy.

The integration of AI in the legal system provides numerous advantages that enhance efficiency, access to justice, and the general practice of law. By leveraging AI-powered tools, time-consuming processes can be streamlined, allowing legal professionals to work more efficiently and focus on more complex strategic matters. The positive impact of these technological developments is highlighted in ‘AI-assisted lawtech: its impact on law firms’, which showcases a model that promotes workplace efficiency and collaboration. Eurojust and eu-Lisa also reported similar benefits of AI, emphasising its ability to improve effectiveness and reduce costs, ultimately leading to increased access to justice. Particularly, administrative tasks, such as document review or due diligence, which currently consume a significant amount of energy for legal professionals, can be greatly aided by AI. Lawtech estimates that this boost in productivity could be worth up to $2.1 billion.

Conversely, there are potential challenges that occur with this technological transformation. In particular, there is a limited understanding of current AI methods, particularly in the legal sector. A recent case involving Steven Schwartz highlights the current lack of accuracy, as citing non-existent cases in court demonstrates the potential defects of AI. Nonetheless, PwC suggests that AI has the potential to improve accuracy by up to 80% in the near future.

The integration of AI in the legal system is poised to revolutionise the future of legal practice and redefine the delivery of legal services. While it is acknowledged in ‘AI-assisted lawtech: its impact on law firms’ that the traditional model may not change immediately, it is notable that an increasing number of companies are launching products to assist the legal profession and driving remarkable technological developments in the field. The investment in Lawtech is projected to reach $2.7 billion by 2026, highlighting the growing momentum and enthusiasm surrounding the integration of AI in the legal sector.

The integration of AI into the legal system represents a transformative shift in the practice of law. As AI technologies continue to advance, they offer numerous opportunities to enhance efficiency and improve access to justice. By acknowledging and addressing its potential challenges, the integration of AI in the legal system can be guided by a responsible and balanced approach.

Julita Gajewska

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‘An excellent foundation from which to build’: Clifford Chance appoints new office managing partner in New York

Less than two weeks after Clifford Chance revealed the opening of a new office in Houston, the firm has announced the appointment of long-time CC real estate lawyer Ness Cohen as managing partner for its New York office, while also continuing to serve as real estate practice leader of the Americas.

Speaking to Legal Business, Cohen said: ‘The firm decided that it would make sense to have a New York office manager generally, especially with New York being one of our largest offices and also with our growth ambitions in the US.’

Cohen said that regional managing partner for the Americas, Sharis Pozen, approached him and said many of his fellow partners put his name forward for the new role. Pozen is based in CC’s Washington office, although she will be in New York for one week a month.

‘We just had an offsite meeting in Philadelphia for the US partners, as well as our colleagues in São Paulo, mainly to talk about our overarching global strategy. The alignment between the two is very clear. The global strategy identifies, among other things, that the US is a focus area,’ Cohen explained.

Cohen started at New-York based Roger & Wells back in 1998. The following year, the firm merged with Clifford Chance and Pünder Volhard Weber & Axster in Germany in a three-way merger. ‘[It] was really ambitious. To do one merger is feat, imagine pulling off a three-way merger that brought together three best-in-class firms,’ he added.

He was promoted to CC partner in 2007 and his practice focuses on real estate private equity, joint ventures, acquisitions, dispositions and financings involving real estate.

Earlier this month, the firm announced the opening of a new office in Houston, bolstering its global energy and infrastructure practice in the US.

‘Our entry into the Houston market is underway by an extremely appealing range of lateral candidates, which exemplifies the essence of our US strategy. The New York strategy is very similar, and we’ve brought in a fair number of laterals recently, integrating them into our office and the region,’ Cohen said.

‘There are some other ambitions that are underway with respect to potentially other locations. It’s safe to say that the firm as a whole sees the US as a region it can really achieve outsize growth.’

Cohen explained that the firm’s key focus areas are energy and infrastructure, technology, life sciences and healthcare, while it also seeks to build on other sectors.

‘We see our existing team as an excellent foundation from which to build further and grow out further. In other areas where the firm outside the US is extremely strong, we can use that and leverage it to build further. Houston is a good example of that.’

Cohen has also headed up the firm’s Personal Committee since 2011. He said ‘I really enjoy that role. It deals with everything, including our lawyers’ work-life balance. But that’s something that probably we’ll be looking to transition, since it wouldn’t make sense for me to keep that role with this.’

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This article first appeared on our sister publication Legal Business