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Vereins Did Not Perform Up to Par in 2013 View Count: 62
In a report from American Lawyer on April 28, the magazine noted the disappointing performance of a group of law firms in the United States that they have named “the six giant alternatives.”
According to The Economist, the report says that the firms under-performed in 2013. All of the six firms created ‘vereins,’ which are Swiss partnerships that allows them to keep separate national or regional profit pools under a single brand. All of the firms except for one are in the top 15 in the United States according to revenue and were formed using mergers in the past 10 years.
The vereins are protesting that the numbers are not correct. They claim that four of the six firms were able to increase their profits-per-partner in 2013. The remaining two firms, Norton Rose Fulbright and Dentons, were created just last year from mergers.
A possible explanation for the disappointing performance of the vereins is that the firms that joined the alliances were not leaders in their markets in the U.S. or in their specialist areas.
An executive from DLA Piper, Jay Rains, says that the firm’s new scale has helped it bring in clients from many nations and lawyers “who would not have been interested in the predecessor firms…we’re now acknowledged to be a challenger brand to the pre-eminent firms.”
Steve Immelt is the incoming boss for Hogan Lovells. Immelt said, “Some [vereins] were not as profitable to begin with, and it should not be a surprise that when you put them together, you don’t have alchemy happen. It’s not the structure. It’s where you are in the market and what clients are prepared to pay you.”
Tony Williams is from Jomati Consultants. Williams said, “The more alignment of remuneration you’ve got, the greater the chances of providing the service the client wants.”
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