Litigation

It has been a year of solid, and in some cases exceptional, growth for the City’s litigation practices. The avalanche of high-profile regulatory investigations across the world has helped UK firms’ dispute resolution teams to post across-the-board increases in turnover. Freshfields Bruckhaus Deringer remains top of the list, with litigation revenue ­increasing 10 per cent to £276m in 2010-11. As a proportion of the firm’s total this has risen from 22 per cent to 24 per cent. Freshfields also continues to outstrip its rivals in terms of revenue per litigation partner, last year exceeding £4m for the first time.

Considering that only a few years ago Freshfields was second in the table to Clifford Chance, the firm’s continued success in this practice area is impressive and it is pulling away from its magic ­circle peers. It made up seven partners into the litigation team last year: three in London, two in Germany and one each for Paris and the US.

A strong year at Herbert Smith puts the City’s best-known litigation practice in second place for the first time. A number of partner departures announced at the end of the last financial year could dent the firm’s performance in 2011-12, but its £190m revenue for 2010-11 means Herbert Smith has leapfrogged Clifford Chance.

At Clifford Chance, litigation revenue increased just 2 per cent last year. The firm has seen a number of departures recently, particularly in the US. However, revenue per partner remains good at £2.47m and it continues to pick up roles on some of the most high-profile disputes out there, including litigation connected to the collapse of Lehman Brothers.

Litigation remains a key part of Hogan Lovells’ offering. The newly merged firm’s contentious teams produced revenue of £180m last year in Europe, a similar figure to that reported by legacy firm Lovells in 2009-10.

Rankings at the top of the table will, however, not last longer than a year. Fifth-placed Clyde & Co is set to become the UK’s second-largest litigation practice when it merges with Barlow Lyde & Gilbert (BLG) later this year. The two firms’ combined litigation revenue ­exceeded £230m in 2010-11 and management is confident that this figure should ­remain constant or rise following the merger.

BLG just missed out on the top 15 this year, with litigation revenue of £82.1m despite significant growth on the back of a good year in professional ­indemnity and also the addition of a volume business from defunct firm Halliwells.

The mixture of general litigation expertise (with the increasingly rare ability to take on disputes against major banks) and specialist insurance expertise should see the enlarged Clyde & Co become a dominant force in contentious work.

Perhaps one of the stand-out performances in ­litigation over the past year was that of Eversheds.

A number of lateral hires across the disputes group helped push turnover up by 39 per cent to £99.3m, while revenue per litigation partner rose from £1.34m in 2009-10 to £1.44m last year. Litigation head Ian Gray put the growth down to a focus on financial services and international litigation in particular.

Although Linklaters’ litigation practice continues to be smaller as a proportion of total revenue than its magic circle peers, it outstrips Clifford Chance and Allen & Overy in productivity terms. Each Linklaters litigation partner produced ­average revenue of £3.57m last year, up from £3.24m the previous year.

Litigation is also growing as a proportion of the firm’s total revenue, now contributing 12.5 per cent of all turnover compared with 11 per cent in 2009-10.

Norton Rose is the only new entrant into the litigation top 15 this year, following its merger with Australia’s Deacons. Deacons’ strength in litigation has helped drive a significant increase in revenue from the practice group, up from just £43m in 2009-10 to £104.9m last year. Average revenue per litigation partner at Norton Rose sat at £1.44m, a comparable figure to Eversheds and Simmons & Simmons.