Share of US firms' revenues confirms City's pre-eminence as a financial hub
7 April 2008
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London's position as one of the world's leading financial centres is underlined today by the 2007 revenues of the top 30 US firms in the capital.
The majority of firms' results are broadly in line with the global increases reported by The Lawyer last month (24 March). But for a handful of firms, the revenue contributed by London significantly outpaced the firmwide average.
The average contribution to global revenue among the top 30 US firms in London was 9.9 per cent. Overall, the results reflect the level of investment (and return) now being made by the leading US firms in the City.
One of the most striking performances is that of White & Case. Despite the widely reported internal turmoil that led to the departure of finance partners Maurice Allen and Mike Goetz to Freshfields Bruckhaus Deringer last month, the success of the US firm's London office is clear from the outstanding contribution it made to overall revenue.
Unlike Mayer Brown, which is third on the list in terms of London contribution, thanks largely to its merger with Rowe & Maw, White & Case's City growth has primarily been driven internally. Much of the credit lies with Allen and Goetz and the close relationship the pair successfully built with Deutsche Bank.
As The Lawyer reported last month (17 March), in 2003 White & Case billed Deutsche $20m (£12.2m) worldwide. In 2007 the London office billed Deutsche that amount alone - more than the bank was billed by White & Case's New York office. Partly thanks to that success, White & Case's London office revenue rose by a staggering 37 per cent last year to $235.7m (£117.8m).
Although Mayer Brown's global revenue growth rate slowed last year (up 9 per cent to $1.18bn (£590m)), the contribution made by the firm's London office placed it among the leaders in the table.
The firm's global vice-chairman Paul Maher told The Lawyer earlier this year that, on a global scale, Mayer Brown's litigation, finance and corporate practices had been the biggest beneficiaries of the growth. In the UK, however, litigation revenue remained static, while finance, corporate, real estate and pensions were the biggest contributors to revenue growth.
Shearman & Sterling was one of the US firms where the London performance outpaced the global revenue increase. Earlier this year Shearman posted encouraging year-end global results, with turnover up 9.4 per cent, from $842m (£457.6m) in 2006 up to $921m (£460.5m) at the end of the past financial year.
But London easily outperformed that, posting a 15 per cent increase in City revenue, from $115m (£62.5m) to $132.6m (£66.3m). The improved performance of Shearman's London office is a handy legacy for incoming City managing partner Anthony Ward, who takes over?from?Kenneth MacRitchie on 1 May.
Heading the list of London contribution is DLA Piper, a function primarily of The Lawyer's recognition of the firm as a merged entity. While acknowledging that there is still work to be done in terms of the complete financial integration of the US and Europe, the Middle East and Africa parts of the practice, DLA Piper is effectively a merged firm, so the recalibration of its finances explains its dramatic rise to prominence in the US top 30 list.
DLA Piper's London office chipped in $624.2m (£312m), a rise in line with the firm's global revenue increase. As a percentage of global revenue, DLA Piper's UK offices contributed a massive 29.7 per cent - more than any other US firm.
Dramatic growth was also on show over at Reed Smith, another firm to benefit from recent merger activity. Its 2007 tie-up with Richards Butler rocketed it up the table from 24th place last year to second. The $185m (£92.5m) contributed by the London office last year was 20.8 per cent of Reed Smith's $890m (£445m) total.
There?was?some consolidation among the top 30 last year following the merger of Dewey Ballantine and LeBoeuf Lamb Greene & MacRae. The 6 per cent increase in revenue, to $114m (£57m), is based on the two firms' combined revenue last year of $107.2m (£58.3m).
Several firms stated that precise revenue figures for individual offices were not available. As a result, a number of the revenue figures in the table are estimates.