Stagnant US turnover fails to dissuade UK giant from trying to plunder American riches
While Linklaters’ global revenue fell by 8 per cent in 2009-10, its US turnover remained flat at around £70m, according to the firm’s US co-managing partner Larry Byrne. The US market has been a notoriously tough nut to crack for the magic circle and, despite stepping up their investment in the region, they still lack the market penetration achieved by their US counterparts in London.
London revenue for White & Case, for example, accounts for 15 per cent of its global turnover. Similarly, around 13 per cent of Mayer Brown’s global revenue comes from its City practice.
Linklaters’ Americas practice - based across its offices in New York and São Paulo - contributes around 6 per cent of the firm’s £1.18m turnover. In terms of both headcount and fee income, Byrne says the practice is split fairly evenly between litigation, mainstream corporate and banking and finance, with each area contributing roughly £23m. The firm has stated on numerous occasions its desire to expand in the States, and headcount figures over the past five years appear to back up these claims. Among the magic circle Linklaters has undergone the biggest expansion in terms of partner and lawyer numbers in the US. Since 2006 the number of US-based partners has risen from 19 to 33, while the total number of lawyers has mushroomed by 89 per cent to 172.
Since January 2008 the firm has made five lateral partner hires in the New York office, strengthening its corporate, antitrust, tax and financial regulation teams. Despite its obvious ambition in the region, though, some observers remain unconvinced.
One former Linklaters partner says: “They still don’t have the market share they’d like. It’s the one market where Linklaters UK has struggled to make a breakthrough and it’s going to be a big challenge for them.”
In April Americas managing partner John Tucker was replaced by John Turnbull after the former’s three-year term at the helm came to an end.
“John was heading the global finance and projects team as well as serving as managing partner for the Americas - that’s too much work for any one person,” says Byrne.
He insists that the firm’s US strategy remains unchanged since Turnbull’s arrival. But what exactly is the strategy?
“It’s quite clear,” says Byrne.
“We don’t want to be at a certain number of lawyers, rather we want to secure certain types of work - the big M&A deals, finance work with major clients and high-level litigation, particularly regulatory investigations. We’re particularly well-positioned to handle cross-border regulatory work.”
Linklaters has picked up some impressive mandates recently, particularly in litigation, where the firm has seen a proliferation of regulatory actions. Byrne himself led the team advising BAE Systems’ $400m (£264.09m) corruption settlement with the US Department of Justice and the UK Serious Fraud Office.
But the market also remains highly competitive, and last week the firm received a major blow when Freshfields Bruckhaus Deringer won the role to advise BP following the Gulf of Mexico oil spill.