In the flurry of speculation over financials this year, the reality is that some firms’ results are simply more interesting than others’. And for the past few days, it seems everyone has been on tenterhooks for Latham & Watkins’ figures.
The official results are due out next week. Unofficially, sources within the firm are predicting a substantial dip in revenues by up to $400m. That would take the firm roughly back to where it was in 2006, before its record 2007 partly powered by the private equity and leveraged buyout boom.
But another Latham source we spoke to insists that it’s more or less business as usual, and that firm-wide revenues dropped last year by less than ten per cent. Even more interestingly, plenty of Latham partners don’t seem to know much at all. So what’s going on?
Latham may not like it, but the firm’s sky-rocket success in recent years means its financial performance is scrutinised by the market and its competitors. When the official figures come out on Monday, much of Wall Street will want to see how this most expansionist of US firms is faring.
Latham has always done it differently. As we pointed out last year in The Lawyer Transatlantic Elite, Latham stands out among most of the world’s other leading law firms for its success in delivering law locally but with New York standards.
And the firm has long had those standards. Latham, famously, is a firm that has weathered a storm before – namely, when Drexel went belly-up in the 1980s. Back when Drexel Burnham dissolved, Latham successfully continued its relationships with cast adrift Drexel investment bankers by the simple strategy of offering many of them space in its offices. The move helped solidify Latham’s position as one of the leading firms for high-yield.
However, history and the firm’s track record in New York is one thing. Since those days, Latham has built a global practice across dozens of jurisdictions. It may look like hubris in hindsight but the firm generated huge headlines last February when it simultaneously opened three offices in the Middle East.
Juggling an international network growing at that pace, and to that extent, is much trickier. Just look at the strategic overhauls currently underway at Clifford Chance and Linklaters for more evidence, if it were needed.
The fact is, the market won’t know the extent of Latham’s exposure to the world downturn until next week. But frankly, with rumours abounding, it can’t wait.