The rise of the top 30 international ± effectively US ± firms continued during 2004, depriving their UK rivals of total revenues of more than £1bn for the first time. The firms, all of which are headquartered in the US, increased their overall combined turnover by 11 per cent to report a total revenue figure of £1bn, up from just under £900m during 2003-04.

While this still fell far short of the total revenue generated by the UK top 30 of £7.3bn, the international firms have still managed exponential growth in the last three years, with the top 20 firms increasing their total revenues by almost 60 per cent since 2002.

Seventy of the AmLaw 100 now have some kind of presence in London and the UK market is squaring up for a further wave of US firms entering the already flooded local market.

Mid-sized US firms Cooley Godward, Goodwin Procter, Heller Ehrman White & Mcauliffe, Nixon Peabody, Proskauer Rose And Ropes & Gray have all sent management teams to London to discuss mergers with a dwindling number of available mid-size City firms. Existing US-UK tie-ups have enjoyed mixed fortunes. The merger between Kirkpatrick & Lockhart and London's Nicholson Graham & Jones, which came into effect as Kirkpatrick & Lockhart Nicholson Graham on 1 January 2005, has resulted in the firm entering the top 30 for the first time, with combined revenues of £27.1m in London. February 2002's merger to create Mayer Brown Rowe & Maw has been the biggest success story, instantly creating the second-ranked international firm by turnover in London. During 2004, the firm's key litigation practice accounted for a third of its total £79m revenue, while corporate and finance were also strong, with headline transactions including advising Danske Bank on its £967m acquisition of Northern Bank and National Irish Bank. Jones Day's merger with Gouldens in 2003 has not been quite so successful, with the London office incurring a spate of partner losses last year, although the firm still managed to report a 4 per cent increase in revenue to £52m.

The profitability of US firms still outstrips their UK rivals'. The top 30 international firms offered an average profit per equity partner (PEP) of £789,900 last financial year, compared with just £493,000 within the UK top 30. This was partly spurred by White & Case's London office posting an astonishing 73.9 per cent PEP increase. PEP jumped from £305,200 in 2003 to £546,000 in 2004, partially because of a comprehensive overhaul of its remuneration structure designed to inject a stronger merit element into partner pay.

The profitability gap has enabled several US firms to make some notable partner laterals.

Ashurst bore the brunt of several raids in 2004, including the loss of finance partner Jeremy Hill and his team to Debevoise & Plimpton and property star Ian Nisse to Shearman & Sterling after he was reportedly offered more than £1m a year to assist the firm's push to become a full-service outfit. Linklaters lost securitisation star Richard Hughes to Sidley Austin Brown & Wood, and Norton Rose's troubles were made worse by Baker & McKenzie's (B&M) hire of a four-partner securitisation team from the firm. This was B&M's first mass lateral hire and is expected to bolt on revenues of around £5m during 2005. Overall, B&M continued to lead the international pack, holding its spot at the helm for the fourth consecutive year after London reported a 9.5 per cent increase in turnover to £92m for 2004-05. The growth means B&M now generates enough revenue to compete with the top 30 UK firms on their own turf.

Latham & Watkins was the biggest mover following a 40 per cent hike in London revenue to £70m after an excellent year in capital markets. Highlights included advising Deutsche Bank, one of the largest distressed debt creditors of British Energy, on the legal aspects of its distressed debt acquisition strategy, which was the largest restructuring in the UK in 2004. Its policy of letting clients choose their billing currency assisted to increase the percentage completed in sterling, with the effect of hedging the firm against the poor performance of the dollar.

Weil Gotshal & Manges' London office also posted its best year ever, with turnover rising 4 per cent to £52m last year. This compares well against other top 10 internationals Dechert and Skadden Arps Slate Meagher & Flom, which both reported a surprisingly static performance despite headline-grabbing instructions.

Unsurprisingly, the beleaguered Coudert Brothers was the biggest loser of the year, dropping out of the top 30 rankings altogether after reporting a £1m drop in turnover to £7.6m even before talks of a dissolution began.

It was replaced by Hogan & Hartson, which leapt into the table at 25th spot for the first time this year after its revenue more than doubled to £16m in the UK. This came on the back of such significant instructions as running Goldfields' defence against Harmony.