Magic Circle of UK law firms

[Giovanni]

ABSTRACT
This paper examines how and why a professional elite – the so-called “Magic Circle”
of UK law firms – has become a taken-for-granted, legitimate, and extremely durable
categorization of the most highly-reputed firms in the UK legal profession. Using
both interview and documentary data, this study examines the process of
institutionalization and belief formation in the context of two previously
unresearched, and unconnected, models - the discursive model of institutionalization
proposed by Phillips, Lawrence & Hardy (2004), and the model of industry belief
systems described by Porac, Ventresca, & Mishina (2002). The study traces the
historical evolution of this elite group, finding evidence to confirm the status of the
Magic Circle categorization as both an institution, and as part of a cognitive belief
system about the structure of the UK legal market. In particular, the study presents
evidence to suggest that the business and professional media are important
institutional actors in the field, with a significant ability to create, propagate, and
shape the necessary industry discourse required for the institutionalization of a
category or idea, and the establishment of shared industry beliefs about firms,
competitors, products, cultures, legitimate organizational behaviours, and reputations.
The paper goes on to suggest an amalgamation of the two models, proposing that
discourse, and its interactions with cognitive processes, should be given more
attention in theories of institutionalization.


Institutionalization and interorganizational cognition: two perspectives on the
development and persistence of the ‘Magic Circle’ of United Kingdom law firms.
“Magicians’ societies unite their members in honest deception: a very decent ambition to
share. We members of The Magic Circle don’t take blood oaths or have the motto tattooed on
our chests as an initiation rite. But we work hard in sticking together in maintaining the
standard of our deception and smoothing the rough edges off each others’ lives”.
Wade, J. (1974) The Trade of the Tricks: The Story of Magic, Magicians and the
Magic Circle. (p.114)
INTRODUCTION
The contemporary trend in institutional research has been to examine and explain how
organizational change occurs in the context of pressures for comparable institutions to
develop towards similarity (e.g. DiMaggio & Powell, 1983). Isomorphic forces –
coercive, mimetic, and normative – have been the traditional explanation as to why
organizational characteristics remain stable and similar over time, acting as a pressure
upon organizations to conform to accepted norms and values in order to achieve
legitimacy. Another contemporary explanation for change focuses on the
‘transplantation’ of institutional logics from one institutional field to another, or from
society more broadly (Friedland & Alford, 1991). However, this paper looks at
institutional durability – why some institutions stay the same – where the traditional
institutional explanations do not fit.

In this study I use an approach grounded in studies of institutions, and in the area of
cognition and mental modelling, to examine the creation and stability of a reputational
label attaching to an elite segment of the UK legal profession. The so-called “Magic
Circle” of UK solicitors’ firms is a long standing and widely held categorization of
five large, profitable, mainly international, legal practices, which are almost
universally regarded as the most prestigious firms in the UK legal profession. The
universal understanding of the term “Magic Circle” amongst lawyers, clients and
other industry insiders suggests that the label has become an institution in the field, as
well as an idea which forms part of a collective cognitive model of the UK legal
profession. The Magic Circle is a description of an organizational and market reality,
an institutionalized label, and the embodiment of a certain set of shared beliefs about
the structure of the legal profession and the relevance of competitors (Porac &
Thomas, 1995). It is also the apex of a status hierarchy which has remained stable for
many years. It appears almost immune to the forces which normally adjust and allow
movement in status ranks: although industry ratings based on various criteria appear
from year to year, this select group remain as enduring members of a perceived elite.

[ovchinnikov]

peki

[SoulCube]

”.