Global 200 Real Estate: Mayer Brown snubs nearshoring with lower cost City-based team

Mayer Brown has bucked the trend for nearshoring in the regions, forming a lower cost property management team based in its London office to deal with all aspects of real estate-related management work.

The US firm says this is a direct response to client demand for it to handle all aspects of real estate under the Mayer Brown banner.

Over the past few years a growing number of international firms have established lower cost centres in UK regions or overseas: Freshfields Bruckhaus Deringer opened a lower-cost centre in Manchester; Baker & McKenzie opened in Belfast adding to its existing support centre in Manila; Allen & Overy and Herbert Smith Freehills launched offices in the Northern Irish capital; Berwin Leighton Paisner launched a Manchester hub; and Ashurst plumped for Glasgow in 2013.

Other recent examples include DLA Piper, which opened a back office centre in Poland, Pinsent Masons, which was one of the first organisations to use Capita’s outsourced legal services in Poland in 2013; and Linklaters, which launched its business service centre in 2014 and has since relocated a number of support positions from its London and Colchester teams.

In contrast Mayer Brown London partner Jeremy Clay told The Lawyer that while the firm’s City real estate practice was primarily focused on high-end, high-margin matters, certain clients still demanded a holistic service from their primary legal services provider.

“In the old days our London office handled a higher proportion of asset management work and straightforward real estate conveyancing for UK institutions,” said Clay. “Like it or not – and some don’t like the fact – we just don’t get that work as much these days, we can’t price to do it. So clients who need that work are likely to go elsewhere.”

Clay claimed that this had created a challenge in that for Mayer Brown to act for some of the UK’s leading property companies it also had to find a way to do what he called “the real, real estate work”.

“You have to be able to service it and maybe do it for some clients,” added Clay. “We do some partnering with other firms who handle the lower margin work but some clients want us to be able to service this work under a Mayer Brown banner. These clients want us to be a bigger part of their business and not just be a dilettante. They don’t like this “we only get out of bed for £10,000’ approach’.”

To meet this client demand, Mayer Brown has established a lower cost property management team in London to deal with all aspects of management work staffed with a mix of junior lawyers, trainees and paralegals.

Clay said Mayer Brown had considered setting up a near-shoring operation in UK but concluded it didn’t currently have the scale of work to justify this.

“We’ve looked at it pretty closely,” added Clay. “This is what you have to do in the real estate market if you accept that some of your clients want the service to come from their main adviser.”

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