Top lawyer hits out at ‘Tesco law’ reforms

The Legal Services Act introduces alternative business structures into a fragmented legal sector.

‘Tesco Law’ is expected to lead to a wave of consolidation as external equity leads to buyouts at smaller firms and new economies of scale.

But James Maiwurm, global chief executive of Squire Sanders, which has an office in Leeds, said: “Outside investors would be nuts.”

He told the Yorkshire Post: “It’s a good investment for a partner.

“I believe in general in professional services organisations you want to have people in the business who are owners, who act like owners, think like owners because it’s better for clients and it’s better for the law firm.

“You don’t want an employee mentality; you want an owner mentality, in the sense that you are worried about the health of the business not only today and tomorrow but five years down the road.

“You want everyone being really careful and responsive to clients.

“The ownership of the organisation is best maintained by people who are in the business day to day.”

The Co-operative Group has announced plans to launch legal services and hire up to 3,000 lawyers.

Irwin Mitchell, Yorkshire’s largest law firm, is looking at fund-raising options after regulators gave it the go-ahead to set up an alternative business structure.

CEO John Pickering said the new structure “gives the business the flexibility to become significantly larger and expand through a number of routes, including, for example, share-based transactions”.

Squire Sanders, which has revenues of $750m and 38 offices across the world, merged with historic Yorkshire law firm Hammonds nearly two years ago.

Since the deal completed, Squire Sanders has opened offices in Perth, Sydney, Singapore and Seoul.

Its largest office is in London; its third largest is in Leeds, which employs 270 people, including 35 partners.

Mr Maiwurm, who is based in Washington DC, said: “We don’t have an HQ. We don’t think of ourselves as a US firm or a UK firm. We have more lawyers outside the US than in the US.”

He added: “We are doing pretty well in Asia. Some of our locations are new so it’s early days.

“We have doubled the size of our position in Asia in the number of lawyers in the last 15 months.

“Obviously it’s a part of the world we like. We have clients who are grateful we are there.”

Clients include BP, Tesco, Lloyds Banking Group, Eaton Corporation, the global power management giant, and Itochu, the Japanese general trading company.

Mr Maiwurm said Squire Sanders is “pleased and proud” with its presence in Leeds.

“It is a good office that we look to preserve and grow. We are not here temporarily.

“We have a nice position and we look forward to strengthening it,” he said, during a visit to West Yorkshire last Wednesday.

Jonathan Jones, head of the Leeds office, said the local operation increased revenue by nine per cent last year, which he attributed to the increased global reach.

Global stock markets have been buoyed by hopes that the US economy is in recovery mode.

Asked how he felt the world’s largest economy was faring, Mr Maiwurm replied, “...it’s still half time to be honest”, in a reference to Chrysler’s Superbowl advert earlier this year featuring Clint Eastwood, which appealed to job creation and the American spirit.

Mr Maiwurm added: “The US is still figuring out how to deal with the so-called fiscal cliff; that combined with nervousness about the eurozone. Looking forward, looking at relatively modest growth levels in Europe and the US in the latest predictions. There is just a lot of uncertainty.”

US tax cuts expire at the end of this month as major new spending cuts are introduced.