Freshfields routs CC in recession era financials

UK firm stands alone with double-digit increases in revenue and PEP

David Childs
David Childs

Freshfields Bruckhaus Deringer can claim to be the most successful international law firm of the recession based on figures produced for The Lawyer Transatlantic Elite 2010.

The annual magazine, published today (17 May), has analysed the fortunes of the world’s leading law firms over the past three years.

Freshfields was the only firm of The Lawyer’s Sweet Sixteen, which includes five UK and 11 US firms, to post double-digit increases in both revenue and profit on a compound basis.

The UK firm posted a turnover growth rate of 14.2 per cent and an average profit per equity partner (PEP) growth rate of 18.1 per cent on the most recently available figures (2008-09 financial year). Slaughter and May was next best with a 17.9 per cent growth rate for PEP and 9.9 per cent for revenue.

In contrast, Linklaters posted single-digit rises for both metrics, while Clifford Chance registered a 2.8 per cent rise in revenue and a 15 per cent drop in PEP.
Clifford Chance global managing partner David Childs agreed that the 2008-09 financial year had been “a particularly challenging period”, although it had followed one of “very positive growth” for the firm.

“I certainly don’t see that single set of results as a true reflection of the strength of the firm,” added Childs. “We’ve taken action to ensure the firm’s in the right shape to meet the current demands of the market, and so, while we’re certainly not back to boom times, I’m confident we’ll see robust growth in our firm over the next few years.”

Cravath Swaine & Moore and Debevoise & Plimpton were the two US firms that performed worst during the downturn in terms of PEP, posting drops of 9.5 and 9.6 per cent respectively.

Although Cravath’s finances bounced back in 2009 with single-digit rises, its precipitous fall in 2008, when PEP dropped by 24 per cent and revenue by 13 per cent, dampened its ­overall performance since 2007.

At Debevoise the ending of the mammoth Siemens investigation, coupled with the dearth of private equity deals, were contributing ­factors to its 16 per cent drop in PEP last year and its 12 per cent revenue dip.

This year’s Transatlantic Elite also focuses on investments the top 16 have made during the downturn to grow core practice areas and expand global reach.

For more on the UK magic circle and for the full Transatlantic Elite click here.