CMS

CMS is a large, global firm which combines impressive mid-market breadth with pointed specialisms in terms of practice areas (in real estate), structure (with a unique verein-like set-up), and expansion strategy (through a focus on niche European markets). To begin by expanding on the firm’s practice area specialisms, CMS has to be understood in terms of its very large scale and scope. The firm is composed of a global network of more than 75 offices containing over 5,000 lawyers. The size of the firm allows for comprehensive coverage across the entire suite of practice areas, as well as in terms of the different jurisdictions in which a client might operate. This is certainly evident in terms of the firm’s London office, which has more than 30 Legal 500 ranked practice groups. This practice area and jurisdictional depth is key to offering the firm’s multinational clients the ‘full-service’ approach the firm is known for. That said, particularly in the UK market, the CMS is not simply a jack of all trades. Rather, it combines this aforementioned breadth with a stand-out real estate practice which often serves as a ‘hook’ for acquiring new clients. This real estate focus runs deep within the firm. Two of CMS’s legacy firms (McKenna & Co and Nabarro) were both known for their property-related expertise. The result today is a firm littered with Legal 500 Band 1 rankings across real estate-related specialisms. Particular strengths include the firm’s contentious construction team, headed by Adrian Bell and Steven Williams. Recent highlights of their practice include work advising contractors in a $1 billion power plant project in Saudi Arabia, as well as representing a Spanish energy company before ICC arbitral proceedings. CMS also stands out for a unique organisational structure. Quite a few larger, international law firms operate a Swiss verein model. In essence, this involves each jurisdiction having its own financial and regulatory independence. In theory, this is a compromise. It allows for faster and easier international expansion, though may lead to less optimal management and inter-office referral practices which decrease average global profitability. CMS does not operate such a model, but rather a sort of abridged version. Specifically, it is a European Economic Interest Grouping (EEIG). This involves, like a verein, each jurisdiction accounting for its own profits. However, global liabilities are shared. This means that if investment is made in one office through taking on debt, everyone in the firm globally could be on the hook if they are unable to pay back their creditor. Whilst this increases risk, it does come with two benefits. First, as the EEIG is a creation of EU law, it is automatically and easily recognised in all EU markets. Second, the liability risk entailed by the structure arguably results in increased centralised management control. As it is in the financial interest of all offices to reduce overall financial downside, they may be more willing to make sacrifices for the sake of general firm performance. This seems to be true in practice, as CMS has consistently shown itself willing to make difficult financial decisions, particularly regarding lay-offs. This structure also feeds into CMS’s firm-specific approach to international expansion. Despite having a real global presence, in recent years significant investment has tended to take place in more ‘marginal’ European markets. For instance, it has made a push to become the largest international firm in Poland by headcount, as well as taking active strides into Scandinavia. By focusing on markets which combine suitedness with its EU-legal structure and less competition from other international firms, it may have found a profitable pathway forward.