The third issue of The Lawyer Global 100 , published in association with The American Lawyer , has broken new ground. For the first time this publication, which focuses primarily on the world’s top 20 firms, has been launched simultaneously with an online version that will include all 100 individual write-ups. The integration of print and digital media has given The Lawyer editorial team unprecedented scope to dig under the skins of the world’s leading law firms. And it was a barnstorming year to make the change. This year’s Global 100 proves that the reach of the UK’s leading law firms is getting ever more extensive.

A record number of UK firms made it into the table. And as the chart on page 7 illustrates, the average revenue of these firms is a significant 21 per cent higher than their US counterparts’ (although the average margin is 5 per cent lower).

A total of 17 UK-headquartered firms make the list, one more than last year. The new addition is SJ Berwin , which enters the revenue chart at number 95. The firm’s arrival among the global elite has been achieved not through merger but through organic growth, which makes its performance even more impressive. It posted a revenue increase of 27 per cent in 2005-06, one of the highest in the table.

The total of 17 UK firms does not include the handful of transatlantic practices such as Dechert , Jones Day , Kirkpatrick & Lockhart Nicholson Graham and Mayer Brown Rowe & Maw . But each of those firms has significant UK practices with UK lawyers working on UK deals.

The same can also be said, increasingly, of the growing number of US firms with operations in London and, in a few cases such as WilmerHale (which has an office in Oxford) and Reed Smith (with its outpost in Solihull), beyond.

According to figures in The Lawyer UK 100 Annual Report , published in September this year, the top 30 US practices in London generated a record £1.1bn in fees between them, a 10 per cent increase on 2004. Several of the largest US firms that have not grown in London via merger, such as Baker & McKenzie (with a UK revenue of £100.4m), Latham & Watkins (£81.1m) and White & Case (£71.3m), would easily slot into The Lawyer ’s UK top 100 on revenues. The figures confirm the ever-growing maturity and competitiveness of the leading US firms’ operations in the UK.

A RECORD YEAR

On the global stage, the 17 UKheadquartered firms that make the table represent total fees worth £7.025bn, up by a staggering 18.5 per cent on last year’s £5.924bn. The total is 20.5 per cent of the top 100’s total revenue of £34.172bn. It is, quite simply, a phenomenal performance.

The revenue table reveals the effects of continued consolidation among the world’s top firms and confirms that, in terms of global representation, it is UKheadquartered outfits that are increasing their market share. That is particularly apparent in the case of the US-based operations of DLA Piper , which was one of the biggest risers in the revenue table. It shot up 17 places in the rankings thanks to the merger between Chicago's Piper Rudnick with San Francisco’s Gray Cary Ware & Friedenrich .

Clifford Chance retains its position as the world’s largest law firm, although the revenue gap between it and its closest rival Linklaters shrank over the past year.

In 2004-05 Linklaters lagged £109m behind Clifford Chance. It has now closed that revenue gap to £95m. In terms of average profit per equity partner (PEP), however, Linklaters’ $1.93m (£1.06m) is 12 places in the profit table ahead of Clifford Chance’s £810,000. A strategic review has just been initiated at Linklaters: the firm may be big, but it is still hungry.

The UK’s magic circle (Clifford Chance, Linklaters, Freshfields Bruckhaus Deringer and Allen & Overy (A&O)) again confirmed its key role as the leading exporter of legal talent in the UK, contributing £3.73bn, or 53 per cent, of the UK total.

Denton Wilde Sapte (DWS), which fell 10 places, just makes the table in 100th place. It has had a tough couple of years and will have to work hard to maintain its position in the global list.

Other UK fallers include Norton Rose , which also fell 10 places, and Ashurst and Herbert Smith , which both fell three. DWS, however, was the only UK firm to post a reduction in revenue, with turnover falling by 5 per cent, from $282.5m (£154m) to $268.5m (£147.5m). And no UK firm fell out of the table altogether, although clearly in DWS’s case it was a close-run thing.

Several of the biggest risers in revenue terms are headquartered in the UK, including Linklaters, Addleshaw Goddard , and Simmons & Simmons . But the most impressive revenue increases (and therefore gains in terms of shares of the global pot) all come from US firms and were mostly the result of mergers.

DLA Piper heads the list with a 53 per cent revenue increase thanks to its merger. Ropes & Gray is second with a 38 per cent increase thanks to its merger with IP boutique Fish & Neave , while Boston’s Goodwin Procter was the year’s biggest mover, up 21 places with its 37 per cent revenue increase after its merger with Washington DC’s Shea & Gardner .

Other major mergers during the year included Pillsbury Winthrop ’s with DC’s Shaw Pittman . The deal saw the combined revenue increase by 33 per cent, despite a significant amount of collateral damage at Shaw Pittman, which saw a number of conflicting groups leaving to join other firms.

Kirkpatrick & Lockhart ’s 26 per cent rise in revenue can be attributed partially to its 1 January 2005 merger with London’s Nicholson Graham & Jones . The firm is currently looking to repeat the trick with Preston Gates & Ellis , although it failed to secure a deal with Salans ( The Lawyer , 11 September 2006).

CLOSING THE GAP ON THE US

UK firms feature less prominently on the profit table, as would be expected, although the combination of a standout year and a strong pound saw several firms close the gap on the established Wall Street players.

There was no movement at number one, with New York’s Wachtell Lipton Rosen & Katz posting a PEP of $3.79m (£2.08m). Wachtell was the only firm to make it past the $3m (£1.71m) mark in 2005, although all of the top 10 posted PEPs of $2m (£1.14m) or more for the first time.

Slaughter and May was the sole UK representative in the top 10 with a PEP last year of $2.04m (£1.12m). However, its strong year saw Slaughters rise one place up the table from the previous year, becoming the eighth most profitable firm in The Global 100 .

Cravath Swaine & Moore ’s stellar 2005 is reflected in its improvement to second spot in the PEP table with $2.6m (£1.43m), displacing Sullivan & Cromwell , which drops to fifth.

Cadwalader Wickersham & Taft also confirmed that it had a strong year financially by securing third spot with a PEP of $2.54m (£1.4m).

But several UK firms did put in strong performances in terms of profit. Linklaters had a stunning year, breaking through the £1m PEP barrier to reach £1.06m. The firm put on the biggest spurt in global terms, with a 26 per cent hike in profitability last year that propelled it to twelfth place, overtaking both Skadden Arps Slate Meagher & Flom and Weil Gotshal & Manges . Linklaters’ bottom line was powered not only by its stellar European M&A practice, but by its resurgent Asia practice.

But a number of UK firms held their own in terms of profit and are now bunched just outside the top 20 on PEP. Herbert Smith dropped out of the global top 20 to 22nd; Freshfields dropped from 22nd to 23rd; A&O climbed one place to 25th, but was overtaken by Clifford Chance, which rose three places to become the 24th most profitable firm in the world.

Perhaps the most surprising appearance was SJ Berwin, which made its first-ever showing in The Lawyer Global 100 , going straight in as the 29th most profitable firm in the world.

The UK firms are all in the $1.5m (£857,000) range, which would equate to a respectable showing on Wall Street. Their PEP figures put them in the same ballpark as Latham & Watkins and Shearman & Sterling.

REVENUE PER LAWYER

For most managing partners the game is not only about top or bottom line growth. A more reliable indicator of any firm’s economic health and true ranking in the global pecking order is its revenue per lawyer (RPL) figure.

Here the US firms pull ahead of all the UK firms, except for Slaughters. The blue-blood City firm posted an RPL of £558,000 last year, which compares favourably to Cadwalader Wickersham & Taft’s £516,000, Skadden’s £547,000 and Cleary Gottlieb Steen & Hamilton ’s £500,000.

Slaughters’ closest UK rival on this key indicator is Linklaters, which failed to break the £500,000 mark, posting a figure of £451,000. Further down the scale both the US and European and Asian parts of DLA Piper showed remarkable consistency (if not outstanding performance), with RPLs of £376,000 and £234,000 respectively. The figures illustrate the gulf in terms of levels of premium-rate work handled by DLA Piper and Linklaters.

Away from the US and UK firms, Australia maintained its share of the global pot in 2005 in terms of representative firms, but confirmed that it is benefiting from the growth of the China market by growing significantly its share of the total revenue. As with last year, Australia has five firms in the top 100. Together this group accounts for a revenue of £910.86m, a 14.5 per cent increase on last year.