An increasingly competitive market and claims of a 'flight to quality' have reignited the ever-smouldering rivalry between New Zealand's 'Big Three' and their local competitors
The UK has its 'Magic Circle', Australia has its 'Big Six' and the conventional view is that New Zealand has its 'Big Three' - Bell Gully, Russell McVeagh and Chapman Tripp. But as far as Simpson Grierson's Rob Fisher is concerned, that 'three' should be a 'four'. "If you look at the industry awards - including ALB's own awards - and the fact that Simpson Grierson was the only New Zealand law firm to be featured on the Mergermarket legal advisory table for Australasian M&A transactions - it is clear that we are regarded by the market as top-tier," he says.
One can sense a weariness in the voice of Buddle Findlay national chairman Peter Chemis when the subject comes up. "The [Big Three concept] is the perpetuation of a myth which has been part of the landscape for years," he says. "We can accept that some firms may be pre-eminent in particular areas, but we take exception to the suggestion that [the three] are pre-eminent across the board."
Russell McVeagh CEO Gary McDiarmid says it is unfair to classify lawyers outside the 'Big Three' as somehow inferior, although he says that market opinion places the trio in a class of their own. "Across the various practice areas - the lawyers we see across the other side of the table are more often than not from two particular firms," he says diplomatically.
Client perception
In June 2008, the NZ Corporate Lawyers Association (CLANZ) released key results from a survey undertaken by professional services consultancy Team Factors and Thomson-Reuters in which nearly 1,900 lawyers participated. Team Factors estimated that approximately 30% of the NZ in-house legal profession and 21% of the overall NZ legal profession participated in the research. It involved detailed brand analysis - how the biggest firms are perceived by corporate and government clients across key brand attributes - with a high-level objective also to rank New Zealand's 14 largest commercial firms against performance and pricing criteria. Respondents singled out Russell McVeagh, Chapman Tripp and Bell Gully as the firms delivering the highest overall performance, although Chapman Tripp was perceived to be less expensive than the other two. Other firms such as Kensington Swan, Simpson Grierson and Buddle Findlay were also well regarded, but collectively ranked distinctly below the first group.
Is it possible that these results reflect the self-reinforcing nature of market perception? Chemis says that they are a function of "size and brand awareness". "It's not an observation on quality," he says. "You take the amount of shopping around that's happening on panels for example. We are increasingly picking up work at the expense of the top-tier firms because clients are realising that our quality of work is just as high."
Ronald Pol, director of Team Factors, agrees that perception matters. "If you want to get new clients, you need to know what prospective clients think about you too," he says. "What clients and prospective clients say about the firm is part of its brand. What these people think about a firm's brand will determine whether they instruct a firm, or not. Sophisticated clients will also select some firms perceived as absolute top quality for some work and will use other good firms for different work, often at a lower price."
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