It’s no secret that Slaughter and May is an anomaly. In the early 2000s, when the rest of the magic circle were busy opening offices and merging with foreign firms, Slaughter and May was pulling out of New York, Singapore and Paris. Over the years, many spectators have criticised the firm’s lack of international expansion and warned that Slaughter and May will fall behind the pack because of its limited overseas presence. If the critics were right, by now we’d expect to see signs that Slaughter and May has fallen from its throne. But we haven’t. In fact, it remains the most profitable firm in the City.
You might be wondering how Slaughter and May wins many of the biggest international mandates when it lacks a substantial international presence. That comes down to Slaughter and May’s best friend network. It goes beyond your standard set of law firm alliances as the firm has cultivated some of the best foreign relationships around the world. For decades, these firms have referred work, shared knowledge and secondments, and operated joint events for lawyers and clients. By partnering with the best firms in each jurisdiction, Slaughter and May doesn’t have to spend millions to win market share from local firms nor worry about the quality of its service after a series of mergers. When there’s a billion-dollar-acquisition, clients just care the best expertise in the market and that’s what you’re getting with Slaughter and May.
Across the Atlantic, Slaughter and May has developed many enviable relationships with elite New York firms including Cravath Swaine & Moore, Paul Weiss and Wachtell, Lipton, Rosen & Katz. In 2016, the firm was shortlisted for the title of Transatlantic Law Firm of the Year by Legal Week – not bad for a firm without its own US presence. In Europe, Slaughter and May works closely with best friend, Hengeller Mueller. The two firms advised Deutsche Bank after its $2.5bn fine from US and UK regulators for manipulating interest rates.
But some of the criticism laid against Slaughter and May is fair. The firm’s international capability depends on the strength of its best friend relationships. Take Davis Polk for example. Data from The Lawyer and Thomson Reuters show that Slaughter and May and Davis Polk were co-counsel on 19 M&A deals between 2008 and 2013. But in 2012, Davis Polk began to develop its own English law capability in London with the hire of a Freshfields capital markets lawyer. Now Davis Polk can do some of its finance work from this side of the pond. And that’s the risk. If the other firms decide to develop their English law capability, Slaughter and May may need to find new friends.