What are the different types of City firm?
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I want to pursue a career at a large City firm, but the various terms that such firms use to describe themselves – ‘international’, ‘global’, ‘magic circle’ and others – have got me confused. Do these various terms essentially mean the same thing?
The Oracle replies
You are broadly right in the sense that the term ‘City firm’ can be applied to all the subsets of firms you mention that have offices in London, but the other terms that you have come across do have a purpose in indicating a few key differences between firms.
Most City firms have strong corporate and financial practices, and the work they do tends to be international in nature. City firms serve large clients (such as major banks) with operations all over the world and handle transactions which 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 very healthy salary.
The various descriptors that firms like to use about themselves highlight differences or key characteristics which those firms see as a key part of their individual identities. Any applicant would do well to pay close attention to the stories that firms tell about themselves.
International and global
As we know, pretty much all City firms handle cross-border work for international clients. However, firms which 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 network of offices all over the world. They want to put across that they have a diversity of expertise that is particularly well suited to working on complex, multijurisdictional transactions, and that the firm’s identity is not centred on or limited to a geographical area.
The term ‘magic circle’ centres on prestige. The five magic circle firms – Allen & Overy, Clifford Chance, Freshfields Bruckaus Deringer, Linklaters and Slaughter and May – are generally considered to be the most prestigious law firms with the highest revenues that are headquartered in the United Kingdom. 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 the United Kingdom. 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’ firms are also UK-based and post slightly lower revenues than those in the magic circle, but still have significantly higher revenues than other UK commercial firms. Five firms are generally considered to make up the silver circle: Ashurst, Bryan Cave Leighton Paisner, Herbert Smith Freehills, Macfarlanes and Travers Smith. The term itself, like the magic circle, does not have great practical significance in the contemporary legal market – all the silver circle firms are highly successful, prestigious outfits, but other City firms which are not 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 United Kingdom
Obviously, US firms in the City are those which are headquartered in the United States. Such firms are likely to have transplanted US corporate culture to their UK offices – that means eye wateringly long hours and massive salaries. In London, US firms usually have smaller offices and trainee intakes than their peers, which partly reflects their more recent establishment in London. Note that some firms which are headquartered in the United States 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.
For insights into the clients and commercial practices of City firms, read weekly analysis produced by their lawyers in LCN’s Commercial Question section.