21 April 2005
The map of Europe has been redrawn, at least in terms of law firm revenues. For the first time ever, The Lawyer has pinpointed what is being billed and where, country by country, across the Continent. And for some jurisdictions, it is not a pretty sight.
The dominance of the US and UK firms was to be expected. Out of total revenues of 10.66bn (15.12bn) in 2003, firms from the US and UK accountedfor8.43bn (11.96bn). The magic circle (Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer and Linklaters) contributed 2.62bn (3.72). That is 25 per cent of the total and 37 per cent of total UK revenues. US firms chipped in 1.38bn (1.96bn), which means 13 per cent of total Euro-pean revenues were billed by US firms.
On the Continent, it is the relatively poor showing by Frances leading independent firms that is astonishing. In total, 31 out of the top 100 firms are Continental-headquarteredoutfits from seven countries. Of those, only five are French. And of those, only Gide Loyrette Nouel and CMS Bureau Francis Lefebvre are independent. The remain-der are accountancy-associated.
There is no Jeantet & Associ豬 no Bredin Prat. Both firms fall outside the top 100, with revenues last year of 28.9m (20.5m) and 39m (27.5m) respectively.
KPMG Fidal is the only French firm to make it into the top 20 largest European firms, with its turnover of 169.2m (240m), placing it at number 13. But that bulk has to be set against the firms rock-bottom revenue per lawyer (RPL) figure of 141,000 (200,000). Deloitte & Touches French legal arm, which scraped into the top 100 with a turnover of 42.3m (60m), has an even poorer RPL figure of 121,000 (171,700).
That is by no means the only shock revealed by the first ever chart of Europes largest firms. There is no German firm anywhere in the top 20, accountancy-tied or otherwise. Blue-chip Hengeler Mueller is Germanys highest-placed firm with a turnover of 107.1m (151m), closely followed by Haarmann Hemmelrath with 96.6m (137m). Hengelers RPL and revenue per partner (RPP) figures, at 520,000 (738,000) and 1.47m (2.1m), outstripped all its German competitors that made the top 100, in some cases by some distance. It was left to the accountants to bring up the rear. The partners at EY Law (Germany) could not even break the 500,000 (709,400) barrier, with each one on average bringing in 420,000 (595,900) to the firms 40.3m (57.18m) turnover.
Perhaps the biggest surprise of all is that the Netherlands is revealed as the Continents largest revenue generator, contributing 568.3m (806.3m) to the total. That compares with the 544.9m (773.1m) generated by the eight German firms (the same number of firms in the top 100 as those from the Netherlands). The Dutch figure includesthe127m(180.2m) supplied by Loyens & Loeff, the Dutch firm that is still better known for its tax advisers (which comprises the majority of its practice) than its attorneys.
The accountants feature less prominently in the Dutch total. Multidisciplinary partnerships (MDPs) are banned in the country, and there areonlytwofirmswithany relationship to an accountant left in the Netherlands (AKD Prinsen Van Wijmen and Holland van Gijzen). Only the former, now the Netherlands fourth-largest firm by fee-earners, was weighty enough to make it into the top 100. However, AKDs RPL and RPP figures of 158,000 (224,200) and 716,000 (1m) tell a familiar story. Compared with the figures borne out of the blue-chip client base of De Brauw Blackstone Westbroek (237,000 (337,900) and 1.08m (e1.5m)) for example, they are paltry.
Spain, the provider of just three of Europes 100 largest firms, also provided the outfit with the Continents lowest RPL figure Garrigues. Although its turnover of 121.2m (172m) slots it in at 21st, the return on its lawyers is only 97,000 (137,600). That is almost six times less than Skadden Arps Slate Meagher & Flom, where lawyers bring in an average of 562,000 (797,400) each. Garrigues top 100 Spanish competitors, Cuatrecasas and Ur쟠& M诩ndez, boast more impressive RPL figures of 138,000 (196,000) and 227,000 (322,000) respectively. The still independent Ur쟠not only trounces Garrigues in RPL, it is also the only Spanish firm with profits per equity partner (PEP) to rival many of the top 50 UK firms. In contrast, Garrigues PEP is just 162,000(230,000),while Cuatrecasass is slightly better at 211,000 (299,400).
When it comes to profits, however, it is to Italy one should turn. The country matched Spain with three firms in the top 100, but in Gianni Origoni Grippo & Partners it can claim Europes most profitable firm, with an average PEP of 1.4m (2m). Its revenues of 59.9m (85m) were relatively small fry compared with the top firms, while a glance at the number of partners at the two firms that sandwich it in the tables, Bird & Bird and Richards Butler, emphasises just how tightly the equity is held. Gianni Origoni has 47 partners compared with 103 at Bird & Bird and 84 at Richards Butler. Gianni Origonis two Italian rivals that also made the top 100, Studio Legale Chiomenti and Bonelli Erede Pappalardo, were no slouches when it came to profits either. The two firms both posted PEPs of 1.05m (1.5m).
Finally,theNordicregion contributed 211.8m (300.5m) from four firms, two from Sweden and two from Denmark. The Danish firms, Bech-Bruun Dragsted and Kromann Reumert, both dominate their market to such an extent that it is no real surprise that both make it into the top 100, with turnovers of 45m (63.9m) and 42.6m (60.4m) respectively. Swedish firms generally tend to be larger than Danish, but Mannheimer Swartling, with a 65m (92.2m) turnover, and Vinge, with a turnover of 59.2m (84m), are the two dominant players.
1 January 2004 exchange rate used for all currency conversions
European revenues2003: country breakdown
Country Total (m)
Sub total 2,237.6
Sub total 8,428.3
Grand total 10,665.9