Bigger & Better: A look at the exclusive world of first rate law firmslaw firms

For many new wigs and ambitious young legal professionals, the attraction of working in the world’s best and largest law firms can never be down played.

The reasons are not far-fetched as these top-tier firms, inclined towards business, corporate commercial and transactional law, are known to have the greatest turnovers, pay above-market-level-salaries, have an envious list of high end clients across the world, offer the best bonuses to deserving associates.

These are firms strategically positioned to deal with the challenges of a global market. Thus, with a cutting- edge approach to business law and a stream of high-end transactions; AKA the ‘juicier’ side of the law (as many would like to believe), they stay on top of the market as game changers. 

Multinational corporations/companies (particularly Fortune 500 companies) rely on these firms for consistent legal advice, with the focus being their defined structures, global best practices and the world class culture within these law firms.

Globally, these top-tier law firms are described by a number of quirky nomenclatures. For instance, the five leading commercial law firms in the United Kingdom (UK) are called the ‘Magic Circle’ firms. While their practices are spread all over the world in various jurisdictions, they are headquartered in the UK and are generally regarded as the most prestigious.

They have the highest earnings per-partner and earnings per-lawyer among other law firms headquartered in the UK. However there’s yet another cadre of prestigious and elite English law firms outside the Magic Circle known as the Silver Circle. This includes firms like Herbert Smith Freehills, with a turnover of £465.1m, Ashurst (now merged with Blake Dawson) at £303m, Berwin Leighton Paisner at £229m, SJ Berwin (now King&Wood Mallesons SJ Berwin) at  £179m, Macfarlanes at £94. 7m and Travers Smith at £72m.

Other such nomenclatures include; the BIGLAW, which refers to the Large law firms in the United States, the ‘White shoe firms or Charmed Circle’: leading lawyers in New York City, ‘The Big Five’: South Africa’s largest law firms, The ‘Big Six’; Australia’s six top tier law firms and the ‘Seven Sisters’, are the dominating law firms in Canada. 

The ‘Seven Sisters’ have dominated the Canadian legal market for the last several decades. The term is traced back to 2001 and was coined by Sandra Rubin who described these top seven by the mergers and acquisitions deal volume at the time. The seven firms are still referred today as the ‘Seven Sisters’.

Without doubt, the legal market in jurisdictions around the world over, have law firms of this nature, dominating the market and Nigeria is not left out. 

However, a recent publication by online legal journal ATL, showcased a list described as the ‘disadvantages of working in a large law firm’. These according to the report include; long working hours ranging from 50 to 80 work weeks, very high expectations, limited partnership spots, a highly competitive environment, with a wealth of high-caliber legal talent, all competing for the best assignments, promotions, long partnership tracks, irregular working hours, mundane tasks and incessant overnight travels.

Our SUNDAYLAWYER takes an in-depth look into the world of Nigerian leading law firms to find out if life inside this ‘magical circle’ is as juicy and rosy as it portends from the outside.

We spoke to lawyers in some of these top firms to find out about life in Nigeria’s ‘Biglaw’, and whether indeed the list above are ‘disadvantages’ or a natural progression to the top at these firms.

For Ayodele Oni, an energy expert and transactional lawyer well on his way to the top, there may be no such thing as the ‘juicier’ side of the law, particularly when he has to spend nights and even long weekends at his desk in the office, away from his young family.

However he notes, “It is necessary to put in the hours, as our clients are far more diverse than those of smaller firms.” According to him, a large, diversified client base comes with great responsibilities and a lot more hard work.

Tolu Aderemi, Senior Associate at Perchstone & Graeys’ another top commercial law firm in Nigeria, agrees with this position.

“With the complex nature and level of transactions we are involved in, it is impossible to work for lesser hours especially because of the quality of work your clients are ordinarily accustomed to,” he says.

Ironically though, Ayodele tells us that the time spent trudging and slogging it out in the posh, but highly professional offices of Banwo & Ighodalo cannot be traded for anything.

“I would not give up the experience I have acquired here and I am still acquiring, to be somewhere else. I love the challenge that comes with every new task I undertake and the hands-on experience that working in a firm like B&I affords me,” he states matter-of-factly.

In reality, working weekends and late nights are not uncommon for first-rate commercial law firms, given their high-end clientele and the high-end nature of the work and transactions that they do. These range from Mergers & Acquisitions (M&A), Securities, Corporate Finance & Restructuring, Foreign Investments & Divestments, Project Financing, International Investments, Capital Markets, etc., all of which require long hours of strategic meetings, planning, and brokering complex negotiations. The motto at these firms is usually, “work until the task is done”. 

However, the idea of working on challenging but high-end sophisticated work AKA ‘juicy’ briefs and transactions; with far-reaching resources to aid your work; plush and sometimes lavish offices in choice locations; professional administrators and consultants, a line-up of expert IT personnel, highly skilled librarians, numerous file clerks, court filers and several other support staff is not so traumatic, and may even be motivation enough to keep anyone going at it. 

In Tolu’s view, “when your practice is bench-marked against international standards, then long hours, weekends, late nights or even holidays will no longer matter to you as your contemporaries (the foreign lawyers) will do even more. 

“You would not ordinarily want to conduct yourself in a professional manner less than what is globally acceptable. Of course, you must also attempt to strike a work-life-balance,” he counseled.

One of the greater benefits of working in a firm as this, is the global perspective it affords members of the firm including junior Associates, thanks to a multi-jurisdictional practice that gives members (no matter the cadre) an opportunity to travel across the globe, working and sharing knowledge with legal counterparts from other jurisdictions, whilst serving the firm’s international clients scattered around the world.

While flying round the globe and negotiating deals worth hundreds of millions of dollars may be quite appealing to some young and upcoming lawyers, for others the attraction is an ‘above-market earning,’ mouth-watering bonuses, or even the dream of making Partner at a ‘Biglaw’. But as the Senior Associate from P&G succinctly puts it, “to whom much is give, far more is expected.” 

According to him, there must be a commensurate level of knowledge and competence to sustain this ‘above-market earning.’

To sustain a top-line revenue growth, Nigeria’s legal market dominators have had to employ a number of strategies. This includes a large pool of high-quality legal talent, lateral hiring and mergers, an extensive client base, above-market salaries, interesting bonuses as reward for hard work, and most importantly, the firm owners in this category, go out of their way to finance growth – with continuous training and capacity building – locally and internationally.

Affirming this position, Tolu points out that this is owed to the fact that firms like his, recognise the need to keep and sustain their pool of high quality legal talent.

“Otherwise, competitors are ready to attract such talent with better working conditions,” he stated.

An earlier chat with Koye Edu, Managing Partner at leading law firm, Jackson Etti & Edu (JEE), revealed that competence and proficiency were key factors in the hiring and sustenance of lawyers at top-tier firms.

Koye, who is also the Chairperson of the Law Practice Management (LPM) Committee of the Section on Business Law (SBL) explained, “We cannot afford the risk that comes with incapacity. We would rather train and build capacity for our lawyers and have them leave us or abscond, than keep them untrained. Given the quality of clients and the industries we service, we have no room for such errors.”

From our discussions with younger associates who have gained entry into these prestigious firms, one major concern seems to be the issue of growth and Partnership at these firms. 

Whilst partnership trends in other jurisdictions such as the UK and the US, have evolved over time to accommodate very liberal partnership terms – including base compensation for non-equity partners with other variables like bonus element, the Nigerian scenario is still slightly rigid in this regard, as a good number of Nigerian law firms, small and large are still grappling with the critical challenge of Partnership Structures.

No doubt, a few of the top guns have restructured their partnership policies to be more liberal and open members of the firm who do well (of course within a stipulated period), there are several others whose Partnership Structures are still rigid, unwelcoming or undefined to members from within the firm.

This is why critics in the industry and legal recruitment experts, advice that it is relevant for Associates to ask and understand the Partnership Structure in a law firm before signing a contract of employment.

According them, answers and words that contain descriptions like “non-equity partners” or “two-tier partnership” are red flags that point to long and strenuous partnership tracks or limited partnership slots in a law firm, and thus applicants must either brace up for thus or not take the job at all, if they are hoping for more.

On a positive note, firms like Aluko & Oyebode, Ajumogobia & Okeke, Banwo & Ighodalo, Perchstone & Graeys, Olaniwun Ajayi LP and a few others are currently working on Partnership structures that allow partners to be grown from within. Tolu Aderemi confirms this.

“Some top commercial law firms in Nigeria have come to the realisation that structures must be built to sustain their respective institutions. So you can see that Partners are now made from within. This is an incentive to the young lawyer that he/she has a future/career in the law profession and of course the law practice he/she is attached to. Examples of such law firms are Perchstone & Graeys, where I work, Aluko & Oyebode, Olaniwun Ajayi LLP and a few others,” he said.

Two years ago, Stella Duru of Banwo & Ighodalo (B&I) rose to the ranks of Partnership and before her was Ayotunde Owoigbe, who became a Partner of the firm in 2010. Interestingly both had come into the firm as Youth Corpers in 2001.

Over this period, Stella has grown in her areas of expertise, energy and natural resources; actively participating in countless negotiations in these fields. She also served as Team Lead in various departments and groups within the firm. Today, Stella heads the firm’s Litigation, Arbitration & ADR practice, while Ayotunde is the Partner in charge of the Corporate, Securities and Finance Practice Group.

While some firms have gone the entire rope to offer equity partnerships, others chose to play it safe by growing only non-equity partners in the firm. A non-equity partner most often than not, is non-owner partner of the firm, and as such does not get full partner payments, dividends or a share of the firm’s profit. Rather he gets paid a salary like every other employee.

That trend has almost been discarded in the UK, where top commercial law firms have either drastically decreased or abolished this sort of partnership (salaried partnership) and have moved in favour of fixed-share equity partners as against non-equity partners. This has significantly reduced their employer/employee legal liabilities to salaried partners.

Following sharp decreases in non-equity partner base salary compensation at UK headquartered law firms in between financial years 2009/10 and 2010/11, the average London based non-equity partner base compensation increased at top 50 firms in 2012.

Tolu however urged new wigs and young entrants into ‘BigLaw’, that hard work may indeed bring the desired result. “Once you demonstrate exceptional character, diligence, business acumen and knowledge, the road to partnership might be shorter than one thinks,” he advised.

Partnership Structure challenge or not, the disparity between SM (Small & Medium) law firms and the large top tier ones, is still found in their revenue growth rate.

The graph below from The Wall Street Journal indicates the growth rate between small, medium and large-sized law firms.

Where firms with more than 150 attorneys were noted to have boosted their average revenue per lawyer with an 8.5% jump, the smallest firms – those with nine or fewer lawyers, saw their average per-lawyer revenue drop by 8.1%.

While this is may be a true indicator of the growth and movement in the global legal market, there are others who have argued that, it is not a true reflection of the position of most of these the law firms.

The argument posits that while revenue offers insight into market dynamics, it only paints a one-sided picture; as issues such as profits, price pressure, or how the market itself is changing may give better insight into the market. 

Another random draw back some see at the ‘BigLaw’, is the lack or little autonomy given to young and new entrants to these firms. The complaint from this cadre of Associates is one of having to share mundane tasks with the support staff. According to them this includes, site-checking, mailings, multi researches, and other ‘random’ errands from older Associates, Senior Associates and other members of the firm pass on to them.

B&I’s Ayodele Oni was however quick to differ on this. According to him, new entrants into the firm enjoy massive responsibility, which in turn increases as they become more qualified.

In his words, “I can tell you that with the volume of high quality work and transactions we do at B&I, there are no such thing as ‘mundane tasks’. Even the most junior associate who shows attitude and aptitude may be given the best quality of work to do,” he said matter-of-factly.

Our foray into life at Nigeria’s BIGLAW’ establishes one fact: with BIG, comes far greater responsibilities, greater sacrifices, greater challenges, deeper insights, greater risks, a wealth of knowledge, exceptional proficiency, higher investments and of course far greater risks.

While it seems all glamorous on the outside, it is not for the ‘Average’ and definitely not for the faint-hearted.

As the market deepens, the competition is getting stiffer and it doesn’t look like the top guns will be relinquishing their hold on the market any time soon. They are here to stay and they are doing all it takes to stay on the lead in the global legal market – Cross border partnerships/transactions, mergers, lateral hiring, cutting-edge services, innovative client-centered solutions and the entire works.

On our part, LEGALBUSINESS (on Thursday & Sunday) continues to follow the trends in the market, looking out for some exciting and ‘bullish’ tendencies that may just change the dynamics of the market.

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THEODORA KIO-LAWSON