City law firms: what are the different types?

Dear Oracle

I want to join a City firm, but the various categories have confused me. What are the different types of City firm?

The Oracle replies

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Most City firms have strong corporate and financial practices, and the work they do tends to be international in nature, but there are still plenty of differences that set them apart.

In terms of similarities, City firms serve large clients (eg, major banks) with operations all over the world and handle transactions that take place across multiple legal jurisdictions. Other practice groups such as employment, intellectual property and tax are likely to perform supporting roles for the firm’s finance and corporate work. City firms also share a culture where long, unpredictable hours are expected in return for a healthy salary. That said, many have also introduced diversity and inclusion initiatives, environmental, social and governance policies, and continue to review their wellbeing support models.

The various descriptors that firms like to use about themselves highlight the differences or key characteristics that those firms see as a crucial part of their individual identities. Any applicant would do well to pay close attention to the stories that firms promote about themselves.

Interested in the work these firms do? The solicitors’ Practice Area Profiles offer insight into the career path, work and skills you might need to succeed in your chosen area.

International and global

Pretty much all City firms handle cross-border work for international clients. However, firms that continually emphasise their ‘international’ or even ‘global’ status in the ‘about us’ sections of their websites and recruitment material are usually drawing particular attention to their global network of offices. They want to emphasise that they have a diversity of expertise that’s particularly well suited to working on complex, multijurisdictional transactions, and that the firm’s identity isn’t centred on or limited to a geographical area.

Magic circle

The term ‘magic circle’ centres on prestige. The five magic circle firms – Allen & Overy LLP, Clifford Chance, Freshfields Bruckhaus Deringer LLP, Linklaters LLP and Slaughter and May – are generally considered to be the most prestigious law firms with the highest revenues that are headquartered in the UK. The term these days has more historical resonance than contemporary significance – there are quite a few other comparably prestigious law firms operating in the City, although many of these will be headquartered outside UK. Nonetheless, you can be sure that the magic circle firms are proud of their UK history and their long-established positions at the pinnacle of the UK solicitors’ profession, so take this into account during your research.

Silver circle

‘Silver circle’ firms are also UK-based and post revenues that are competitive with those firms that make up the magic circle. They also have significantly higher revenues than other UK commercial firms. Five firms are generally considered to make up the silver circle: Ashurst LLP, Bryan Cave Leighton Paisner, Herbert Smith Freehills LLP, Macfarlanes LLP and Travers Smith LLP. The term itself, like the magic circle, doesn’t have great practical significance in the contemporary legal market – all the silver circle firms are highly successful, prestigious outfits. However, other City firms that aren’t considered to be in the magic or silver circles compare very favourably when it comes to practical measurements, such as revenue and profits per equity partner.

US firms in the UK

Obviously, US firms in the City are those that are headquartered in the US and have offices in London. Such firms are likely to have transplanted US corporate culture to their UK offices – this could mean long hours and large salaries to match US markets. In London, US firms often have smaller offices and trainee intakes than their peers, which partly reflects their more recent establishment in London. Note that some firms that are headquartered in the US play down their US identity abroad in favour of marketing themselves as multinational and global firms, as described above. An example of this is US-headquartered international firm White & Case LLP. Other US-headquartered firms in London include Vinson & Elkins RLLP and Baker McKenzie.

For insights into the clients and commercial practices of City firms, read weekly analysis produced by their lawyers in LCN’s Commercial Question section.