Big Questions, bigger issues

“I’m a sucker for the magic circle brand.”

That admission - made privately this week by a senior businessman - will ring true across the City of London. It helps explain why business lawyers in firms that aren’t in the magic circle get so worked up about the widespread use of the phrase. Indeed, the term magic circle has even received an academic stamp of approval following the publication of research into the provenance and durability of the the term.

The paper, written by Samantha Fairclough, of the Oxford Said Business School, is impressively replete with complex diagrams and long words. But its assertion that the “the magic circle is a convenient summary label for firms which can just about do it all, and do it all very well” is easy enough to understand.

The extended online version of this week’s Big Question on branding provides an interesting snapshot of current partner thinking on this issue. Most telling, in my view, is the observation of a partner with a national law firm that in order to reassure his clients they are in safe hands he must first provide the names of the large international firms he used to work for. This to appear in deals opposite junior lawyers with very little experience under their belts.

The next Big Question survey will address an equally contentious matter – that of bank-on-bank litigation. The issue is a topical one, not least because the lead story in this week’s issue of Legal Week provides evidence that law firms are softening their policies of automatically turning down the opportunity to sue banks.

As one Bingham McCutchen partner observes in the article: “The whole culture of lending has changed so there are different types of institutional lenders. I do not think you will be able to have a financial institution litigation practice if you are unwilling to sue financial institutions.”

The argument seems a compelling one. However, by no means everybody agrees. The latest Big Question survey is currently still ‘open’, but an early respondent has poured cold water on the notion that banks are squaring up to each other.

“The issue is mainly about fluctuating general market values, not documentation or specific issues, and my experience is that banks accept market risk,” he observes. “I think those firms gearing up for potential litigation will be disappointed...”

john.malpas@legalweek.com