Australian linkup propels Norton Rose up UK table; magic circle revenue static

Norton Rose is the standout performer among the UK’s top 20 largest firms by revenue for the 2010-11 financial year.

Simon Davies
Simon Davies

Powered by its 1 January 2010 merger with ­Australian firm Deacons, Norton Rose has risen by three places in the table, from 10th to seventh place, with a total turnover of £484m.

After several years of ­virtually stagnant positioning among the UK’s largest firms, recent consolidation in the market has resulted in a seismic shake-up.

That trend is likely to ­continue next year, with at least two major insurance sector mergers potentially in the pipeline – Barlow Lyde & Gilbert with Clyde & Co and Davies Arnold ­Cooper with Beachcroft.

The full implementation of the Legal Services Act in October is also expected to act as a catalyst for increased merger activity.

For this year, though, it is Norton Rose’s performance that catches the eye. As The Lawyer reported last month in the Transatlantic Elite, the firm’s global revenue was enough to secure it a place among the world’s 50 largest law firms.

The firm’s international Swiss Verein structure and lack of profit sharing, however, raises questions as to whether its total revenue is being compared to its peers’ on a similar basis. A similar point can be made about firms sitting above Norton Rose in the UK top 20 table, the big two transatlantic heavyweights Hogan Lovells and DLA Piper. In both cases The Lawyer has reported only the revenue associated with the legacy UK end of the business.

Last year Hogan Lovells’ merged global revenue was £1.08bn, 54 per cent of which came from outside North America. On that basis the legacy Lovells non-US business (including ­legacy Hogan & Hartson non-US revenue) stood at £582m for the 2010-11 financial year.

DLA Piper’s global ­revenue rose in dollar terms from $1.95bn (£1.22bn) to $1.96bn on a global basis and from $933m to $935m in its non-US operations. However, when the results are converted to sterling, the firm shows a slight revenue drop of £1m in its international operations, sufficient to allow the non-US portion of Hogan Lovells to pip it in the table by £2m.

Later this year The Lawyer UK 200 Annual Report will publish a separate table highlighting ­global revenue. On that basis DLA Piper would lead the ranking, while Hogan Lovells would drop to sixth place.

For now the positioning at the top end of the UK table is static, but the gap between the big four is ­closing.

As reported on Friday (8 July), income at Linklaters rose by 1 per cent last year, from £1.18bn to £1.2bn, placing it around £190m short of ­Clifford Chance.

As Linklaters managing partner Simon Davies told The Lawyer: “It’s clear we remain in a challenging environment. However, encouragingly, we enjoyed a stronger second half of the year. We also saw healthy growth across emerging markets around the world.”

Freshfields Bruckhaus Deringer remained virtually static with a total revenue of £1.14bn, marginally ahead of Allen & Overy’s £1.12bn.

At the other end of the table, the legacy Denton Wilde Sapte drops out of the top 20 despite securing a transatlantic merger with Sonnenschein Nath & Rosenthal last year.

Although the firm’s figure of £154.4m does not include its US revenue, the 8 per cent drop in UK-based income is evidence that the tie-up has so far failed to provide a ­sufficient bump to elevate it up the domestic ranks.