UK firms lead way as China becomes new battleground
2 October 2006
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17 December 2012
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16 September 2013
A record number of UK firms have made it into The Lawyer Global 100 2006, the definitive list of the world's top firms based on revenue.
Linklaters closed the revenue gap between itself and Clifford Chance to $175m (£100m), down $25m (£14.29m) on the previous year. In terms of average profit per equity partner (PEP), however, Linklaters' $1.93m (£1.1m) is 12 places ahead of Clifford Chance's $1.47m (£840,000).
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 UK-headquartered outfits that are increasing their market share.
A total of 17 UK firms make the list of the largest firms ranked by revenue this year, one more than last year. The new addition is SJ Berwin, which enters the revenue chart at number 95.
Denton Wilde Sapte (DWS), which fell 10 places, just makes the table in 100th place. 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).
UK firms feature less prominently on the profit table, as would be expected. There is no movement from the number one slot, with New York's Wachtell Lipton Rosen & Katz posting a PEP of $3.79m (£2.17m).
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 (£1.17m).
Cravath Swaine & Moore's stellar 2005 is reflected in its promotion to second spot in the PEP table with $2.6m (£1.49m), 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 figure of $2.54m (£1.45m).
Arguably the table ranking firms by revenue is less important than that which ranks them by profitability or revenue per lawyer (RPL), both of which are seen as more reliable indicators of a firm's economic health.
But as Anthony Fiducia, London managing partner of merger-hunting Bryan Cave, put it: "We've realised that size does matter. An increasing number of general counsel are saying that they'd prefer to instruct one firm across several jurisdictions. That means any firm with a greater reach is likely to be more attractive to clients that those without."
Nowhere is that battle for expanded coverage currently being fought harder than in China. Over the past year a succession of UK firms, including Clyde & Co, DLA Piper, Norton Rose and Pinsent Masons, have opened, or announced their intentions to open, offices in mainland China.
US firms such as Cleary Gottlieb Steen & Hamilton, Kirkland & Ellis, Orrick Herrington & Sutcliffe and Simpson Thacher & Bartlett have also opened offices or ramped up their presences in a jurisdiction that is seen as having more growth potential than any in the world.
The push for growth has continued throughout the current financial year, with a merger between Kirkpatrick & Lockhart Nicholson Graham and Preston Gates & Ellis, and with Orrick and Dewey Ballantine both likely to enhance significantly the merged firm's profile in China.
As one China-based Orrick partner put it: "Indirectly, for Orrick locally the Dewey deal would be terrific. It would give us the benefit of great weight in the world's two key financial centres, London and New
Exclusive research by The Lawyer, however, confirms that it is UK firms that are so far being most successful in terms of increasing their representation in China. Although the largest foreign firm in China remains Baker & McKenzie with 211 lawyers, eight out of the top 10 largest foreign firms in China are headquartered in the UK.
Additional reporting by Vanessa Arora