US alliance exposed BLP’s image problem

Berwin Leighton Paisner (BLP) has an image problem. Given the number of firms struggling to differentiate themselves in the the City's crowded legal market, there’s nothing unusual about that. The difference with BLP, as underlined by the announcement of the end of its alliance with Kramer Levin, is that the firm’s problem is largely about how it sees itself. Out there in the market, BLP is typically lauded as an object lesson in how to take a firm upwards, but BLP insiders are plagued with doubts over whether the firm is really good enough to be mentioned in the club of the UK’s leading 10 or 15 firms.

That painful sense of self-doubt is clear from BLP’s hyperactive Wiki entry, which is shot through with internal debate between two camps. On one side the true believers argue that the firm has already arrived, having substantially upgraded its transactional practice in recent years. On the other, a larger group (probably rightly) frets about the distance the firm still has to travel before it can be mentioned in the same breath as an Ashurst or even Travers Smith and DLA Piper.

A key plank of that frustration was the firm’s ineffective international strategy. “The international strategy doesn't work,” complains one poster. “Kramer Levin never refers anything to us and neither does Beiten [Burkhardt] in Germany.”

There had unsurprisingly been rumbles for a long time that BLP’s five-year old alliance with Kramer Levin simply was not delivering, despite initially being billed as an exclusive arrangement that would provide a platform for a Herbert Smith-style multi-firm model with a US twist.

At the time of the alliance’s 2002 launch, the practice fit had looked sensible and the venture seemed both imaginative and promising. Five years on, with BLP surging forward and Kramer Levin failing to do more than tread water in Manhattan, BLP looks at the US firm and sees a reminder of what it is trying to get away from.

In retrospect, the relaunch of BLP’s international strategy in 2005 to expand its referral links was as much about distancing itself from Kramer Levin as it was about extending the UK firm’s reach.

Ending the alliance now is entirely understandable. Indeed it’s surprising that it took so long.

Still, the question remains whether ditching its US partner will really deal with BLP’s image problem. An increasing rumble of discontent has been heard over the firm’s obsession with recruiting flashy laterals, sometimes at the expense of good internal performers. This has been aggravated by a growing consensus that the firm’s corporate and banking push is not really delivering, at least against the lofty expectations that the ambitious firms has created. If those doubts over the firm’s non-real estate progress prove to be well-founded, the slickest referral network in the world will not be able to cover the cracks.