Continental drift

The map of Europe has been redrawn – at least in terms of law firm revenues. For the first time ever, The Lawyer Euro100 has pinpointed what is being billed and where, country by country, across the Continent. For some jurisdictions, it’s not a pretty sight.
The dominance of the US and UK firms was to be expected. Out of total revenues of £10.68bn in 2003, firms from the US and UK accounted for £8.43bn.

The magic circle (Freshfields Bruckhaus Deringer, Clifford Chance, Linklaters and Allen & Overy) contributed £2.62bn. That’s 25 per cent of the total and 37 per cent of total UK revenues. US firms chipped in £1.38bn – that’s 13 per cent of total European revenues billed by US firms.

On the Continent, it is the relatively poor showing by France’s leading independent firms that is astonishing. In total, 31 out of the top 100 firms are Continental-headquartered outfits from seven countries.
Of those, only five are French. And of those, only two (Gide Loyrette Nouel and CMS Bureau Francis Lefebvre) are free from any past or present association with accountancy firms.

There is no Jeantet, no Bredin Prat. Both firms fall outside the top 100, with revenues last year of €28.9m (£20.5m) and €39m (£27.7m) respectively. Gide only managed 28th place with revenues of £93.7m.

KPMG Fidal is the only French firm to make it into the top 20 largest European firms, with its turnover of £169.2m placing it at number 13. But that bulk has to be set against the now independent firm’s rock-bottom revenue per lawyer (RPL) figure of £141,000. Deloitte & Touche’s French legal arm, which scraped into the top 100 with a turnover of £42.3m, has an even poorer RPL figure of £121,000.

That is by no means the only revelation in the chart. There is no German firm anywhere in the top 20, accountancy-tied or otherwise.
Perhaps the biggest surprise of all is that the Netherlands is revealed as the Continent’s biggest revenue generator, contributing £585.1m to the total. That includes £204m supplied by Loyens & Loeff, the Dutch firm better known for its tax advisers (the majority of its practice) than for its attorneys. As the firm has full financial integration between both sides of the practice, the two have been counted as one.

It is equally surprising that the Netherlands produced the same number of firms in the top 100 (eight), as Germany. Blue-chip Hengeler Mueller is Germany’s highest-placed firm with a turnover of £107.1m, closely followed by Haarmann Hemmelrath (£96.6m). As a whole, Germany contributed £544.9m.

Spain, provider of just three of Europe’s 100-largest firms, also provided the outfit with the lowest RPL figure on the Continent, Garrigues. Although its turnover of £121.2m slots it in at a respectable 21st place, the return on the lawyers at Garrigues is only £97,000. That is almost six times less than Skadden Arps Slate Meagher & Flom, where lawyers bring in an average of £562,000 each. Still, they probably don’t get a siesta. Garrigues’ top 100 Spanish competitors, Cuatrecasas and Uría & Menéndez, boast a slightly more impressive RPL figure of £138,000 and £227,000 respectively.

Italy matched Spain with three firms in the top 100, and in Gianni Origoni can claim Europe’s most profitable firm (average profit per equity partner is £1.4m). Its revenues of £59.9m were relatively small fry compared with the top firms, but a glance at the number of partners at the two firms that sandwich it in the table, Bird & Bird and Richards Butler, emphasises just how tightly the equity is held. Gianni Origoni has 47 partners compared with 103 at Bird & Bird and 84 at Richards Butler.

Finally the Nordic region contributed £211.8m from four firms, two from Sweden and two from Denmark. The Danish firms, Bech-Bruun Dragsted and Kromann Reumert, both dominate their home markets to such an extent that it is no real surprise that both make it into the top 100, with turnovers of £45m and £42.6m respectively.

Swedish firms generally tend to be larger than the Danish, but Mannheimer Swartling (£65m) and Vinge (£59.2m) are the two dominant players.

European revenues 2003:
country breakdown
Country Total (£)
The Netherlands 585.1m
Germany 544.9m
France 475m
Spain 272m
Italy 165.6m
Sweden 124.2m
Denmark 87.6m
Sub total 82.25bn
UK 7.04bn
US 1.38bn
Sub total 8.42bn
Grand total 10.68bn
Source: The Lawyer Euro100