Top Continental firms see financials inch up

Continental Europe’s largest 10 law firms produced a collective turnover of e2.3bn (£2bn) in 2010 after a year of steady but unremarkable growth.

Led by Spanish giant ­Garrigues, which brought in e352.8m to become the first European firm to break through the e350m barrier, the top 10 saw revenue growth of between 1 per cent and 10 per cent last year.

Figures collated for The Lawyer’s upcoming European 100 survey indicate that, while firms began to recover from the downturn of 2009, rebuilding will be a slow process.

The exception in the top 10 is Germany’s Noerr. The firm’s revenue rose by 10.2 per cent between 2009 and 2010, lifting turnover to e143.3m and pushing the firm into the top 10, ahead of Benelux firm De Brauw Blackstone Westbroek and Slaughter and May’s Italian best friend Bonelli Erede Pappalardo.

Noerr is one of the few European firms to openly declare its profitability. At e49.9m this represents a 34.8 per cent profit margin, with average profit per ­equity partner standing at e726,260.

Entering the European 100 list for the first time is pan-European firm Salans, reporting a revenue of e196.5m and a net profit of e42.1m, translating into a profit margin of 21.4 per cent.

Salans’ lack of a head office and its significant presence in London has ­previously led to the firm being listed in The Lawyer UK 200. Its last appearance in that ranking was in 2009, when it was 19th with a turnover of £183.7m.

Like many European firms Salans suffered a ­significant drop in turnover between 2008 and 2009 and was forced to make some redundancies, but 2010 was a year of rebuilding, with a number of hires, particularly in Eastern Europe.

Salans chief operating ­officer Neil Woodcock said 2009 had been “tough”.

He added: “We’ve used the downturn as an opportunity to invest. We’ve brought on board some hires where we’re very hopeful that they’ll be the engine of increased revenue for the current year.”

Woodcock said Salans was budgeting to break back through the e200m barrier in the 2011 financial year.

However, not every top 10 firm managed to increase turnover. Gide Loyrette Nouel’s estimated revenue for 2010 is flat compared with the previous year’s ­figure, meaning the French firm has been unable to make up the ground it lost in 2009.

Nauta Dutilh’s revenue was also unchanged ­compared with 2009’s, remaining flat at e150m.

Firms said corporate work continued to be slow during 2010. Garrigues managing partner Fernando Vives said there had been a “significant upturn” in M&A transactions towards the end of the year, but that litigation and advisory services had ­driven ­revenue growth for 2010 as a whole.

The outlook from Europe for 2011 is good, with many firms expressing hope that corporate work will continue to pick up.

Woodcock identified ­Central and Eastern Europe as a particular hub for growth, adding that the ­pressure on fees will ­continue.

“Nothing will be the same as it was in 2007, and I’m quite grateful because that wasn’t sustainable,” he noted.

The Lawyer European 100 will be published on 4 April