International expansion boosts mid-tier revenues by 48%

A decade since the global financial crisis, UK 200 has underlined the extent to which international expansion via office openings and laterals has driven the financial fortunes of a swathe of mid-tier firms.

Some of this growth has been particularly recent, with Fieldfisher for example opening five offices during a seven-month period in 2016/17, giving it new bases in the Netherlands, Italy, Birmingham, Beijing and Shanghai.

Watson Farley & Williams (WFW) had a 21.8 per cent increase in revenue last year, from £131.2m to £159.8m, with the firm’s overseas offices contributing £97.7m (61 per cent) last year, an increase of 32 per cent on 2015/16. In comparison, its UK revenue growth was slower, up 9 per cent to £62.1m in 2016/17.

Insurance and trade specialists Clyde & Co and Kennedys both continued a targeted acquisition trail in the Americas and respectively saw 12 per cent and 8 per cent growth in turnover.

Over the last four years mid-tier firms in the UK 200 have collectively boosted overseas revenue by 48 per cent, from £590m in 2014 to £872m. This means that 42 per cent of the increase in total revenue during the last four years has come from overseas work.

Collectively, mid-tier firms have opened 120 offices since 2010. In 2011, there were 24 openings, and 32 in 2012 and another 32 in 2013. Over the next years the launches kept coming; in 2014 there were 18, and 19 in 2015. It is only in the last year or two that overseas growth has slowed, with seven new openings in 2016.

The favoured jurisdictions are highly competitive. Eight firms have opened 12 offices in the US, including seven on the west coast, three in New York and two in Miami. Another eight firms have opened 10 office in Germany, including three in Munich, two in Berlin, two in Frankfurt and one in Dusseldorf and Hamburg. Mid-tier firms also opened nine offices in the UAE and Singapore, eight in China and six in Hong Kong.

Data from UK 200 shows that for the most part, overseas expansion has made financial sense. In the last five years the 32 mid-tier firms collectively grew revenue by £1bn, a rise of 26 per cent from £3.9bn in 2013 to £4.9bn in 2017. This growth outstrips that of the magic circle, whose collective revenue rose 20 per cent in the last five years.