Anglo-Saxon firms dominate France's top 30
21 July 2008
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Anglo-Saxon firms have fared better in France than in other European jurisdictions, according to a table of financial results from French legal publication Juristes Associés.
Almost two-thirds of the top 30 by revenue, if the legal arms of accountancy firms Ernst ;& ;Young ;and Landwell are included, are firms that have headquarters outside France.
A little more than half (16) of the biggest firms by number of lawyers are from the UK or US.
Geography and history play a big role in these results. Paris is the UK’s closest major business centre. Many UK and US firms have been there since the 1970s and have used the time since then to hire top local lawyers and establish strong reputations.
France is similar to the UK in that its political capital is also its financial and commercial capital. Unlike in Italy, Spain and Germany, a foreign firm can get comprehensive coverage with a single office.
The magic circle now lines up among some of France’s biggest law firms. Clifford Chance and Freshfields Bruckhaus Deringer have duelled for the title of richest Paris office, with the former overtaking the latter this year.
However, Freshfields is conspicuous in the table for having shrunk revenue by 2 per cent. The firm is busy restructuring in Paris, cutting out practice areas outside the core M&A, dispute resolution and finance departments.
Allen & Overy and Linklaters have had a strong year in France, growing by 18 and 10 per cent respectively. Last year Linklaters fielded a three-partner team advising the underwriters, including BNP Paribas and Goldman Sachs, on the e1.24bn (£984.63m) IPO of Bureau Veritas – the largest IPO of 2007.
Paris can also be a spring-board into the rest of Europe. Anglo-Saxon firms have picked up a fair amount of energy and telecoms work in North Africa via Paris, as well as chunks of arbitration and litigation.
Shearman & Sterling, ranked 26th by number of lawyers in Paris, was called in by Algerian state-owned energy group Sonatrach when it sued a consortium of Spanish energy companies for delays to the e5bn (£3.97bn) Gassi Touil gas field project in Algeria. French arbitration head Emmanuel ;Gaillard led the three-partner team against Spanish firm Uría Menéndez and French firm Derains & Associés.
Paris is also unique in Europe as a place where Anglo-Saxon firms can make real money. By focusing on a few key financial institutions and buyout firms, Paris partners can widen profit margins beyond those of colleagues in London or New York.
Mayer Brown, which is 26th on the list by turnover, is a good example. Its Paris office is recognised as one of the most profitable in France. Senior partner Jean-Philippe Lambert puts this year’s average profit per equity partner (PEP) figure at e2.4m (£1.91m), which is triple the firm’s overall PEP of £630,000 and reverses the notion that foreign offices need to be carried by partners in New York and London.
Lambert ;said: ;“The French partners are very compatible together: we share everything, we’re friends, there are no politics. We work well with the London guys and have the same entrepreneurial structure.”
Active ;transactional clients, such as LBO France, Défense Conseil International and Eurazeo, also have a part to play.
Below Mayer Brown there is a list of challengers. SJ Berwin comes in at number 31 by revenue, with a Paris turnover of e27m (£21.44m). And between 33 and 37 is a block of Anglo-Saxon firms: Bird & Bird, Paul Hastings Janofsky & Walker, Simmons & Simmons, Skadden Arps ;Slate Meagher & Flom and Taylor Wessing. The fastest mover of this group is Paul Hastings, which grew by 23 per cent in Paris to hit a revenue of e25.8m (£20.49m).
Despite doing well, Anglo-Saxon firms are still a long way from challenging the top three – Fidal, Gide Loyrette Nouel and CMS Bureau Francis Lefebvre. But the big local success story of the past year is Slaughter and May’s French best friend Bredin Prat.
The firm grew by a huge 33 per cent to take tenth place with a revenue of e80m (£63.52m). Bredin Prat wrung every drop out of the corporate and private equity boom of 2007, and while activity may have dropped off, the firm is adapting into new practice areas. At the start of the month it launched an employment practice with the hire of partner Pascale Lagesse from Freshfields.
The French market will grow in importance for Anglo-Saxon firms over the next few years, as economic troubles grip the US and UK. Baker & McKenzie, Debevoise & Plimpton, Lovells and Simmons have all increased their lawyer counts by more than 20 per cent in the French capital in anticipation.
Paris looks to be fairly stable in times of uncertainty. Or as Lambert puts it: “We’ve had a terrible month of July. So many signings – we’re working day and night. It’s horrible.”