Our view...

Two things really irritate Herbert Smith. One is that it’s not in the Magic Circle. This irritates the firm so much a former senior partner banned the utterance of the words “Magic Circle” in his hearing. The other is that everyone bangs on about what a great litigation firm it is and forgets about the rest of its work.

Which is a little unfair, because although this is the best litigation firm in the City (if you go for that meat eating, red braces, aggression type thing), it does have serious corporate clout too. Corporate accounts for 42% of global income compared to litigation’s 32%. Clients include British American Tabacco, Transport for London and UBS. Of course, big ticket corporate work means big profits. After a surprising dip in 2007, revenue grew in by 26% in 2008 and a further 5% in 2009. And all this despite (or perhaps because of) launching new offices in Dubai Abu Dhabi and Madrid.

Before the real estate market went through the floor, from an assistant’s point of view the firm was also an increasingly good bet for property work: way back in 2000 it poached the head of real estate at what was then Berwin Leighton, and the department hasn't looked back. It will be interesting to see how it weathers the current storm.

It’s widely held to be one of the best players in development, planning and investment. Its pre-eminence in litigation makes for some interesting contentious work - Farrers must have been furious when Buckingham Palace instructed Herbert Smith in their spot of trouble with the Daily Mail. The firm’s litigators have had the joys of representing the Law Society in its interminable fight with Kamlesh Bahl and recently successfully represented Eurotunnel in arbitration proceedings against the UK and French governments regarding the Sangatte hostel.

Herbert Smith has traditionally tended to look towards “best friends” alliances in countries where the legal markets are already mature rather than getting its own people on the ground. And it certainly seems happy to continue with those relationships for the most part. Firms with dozens of letterhead offices might sneer, but this strategy has made Slaughter and May the most profitable firm in the City and it’s hard to fault Herbert Smith’s reasoning. Particularly when it’s so clearly in demand. Italian firm Gianni Origoni looked to it for a tie-up after the collapse of its relationship with Linklaters: an approach which was apparently met with a polite refusal. And it seems to be making a decent fist of it where it does open up overseas, particularly in China - in 2007 the firm advised ICBC on its US$21.9 billion IPO, the largest IPO ever.

Pay and standard of work are all at Magic Circle levels, although there are some grumbles that the firm is slow to match competitors rates. Interestingly, while the assistants’ up-to-30%-of-salary bonus is based mainly on chargeable hours, a fifth of it is awarded for business development and work in the community. Trainees are allocated a partner as mentor as soon as they start, and are appraised twice during each seat. After qualification, fee earners are appraised twice a year.

We’ve heard praise for the “diverse mix of people” – it’s the only top ten firm to monitor the progress of ethnic minority staff, and it’s introduced flexible and part-time working to help retain more female solicitors. In 2006 Carolyn Lee was appointed as full time diversity manager - the first such appointment at a City firm. There is praise also for excellent cooperation and cross-selling between departments (although divisions are extremely disparate – “Corporate is cut throat while Finance is friendly and full of teddy bears”). The senior partner is apparently “a genuinely nice guy with genuinely good intentions” and the hours, while tough, are generally thought to be slightly down on the Magic Circle. There also seems to be a good “general buzz in the office”, so perhaps Herbies’ bizarre and tortuous training contract application form works after all. And as a heavyweight litigation firm, Herbies is one of the few City outfits that might actually do pretty well out of the recession. Not that you'd know it from the firm's belated decision to make some 84 staff redundant in spring 2009. The firm called the decision, which was months behind its competitors, market related. Others might call it opportunistic...

On the negative side, the once glamorous offices in Exchange Square are looking very Eighties and a bit faded (“retro chic”, claims the firm...). The firm may have a higher than usual number of mavericks amongst its partners, but “this means that it has a higher than average number of oddballs” too. IT and round the clock secretarial support are not as good as they should be. And perversely, it may not be the best firm at which to begin a career in litigation - junior assistants may find themselves doing endless disclosure as part of a vast team on cases that may run for years. Waiting until you have a couple of years’ experience under your belt may be a better tactic if you want to head for the Courts.

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