A minority of international firms saw UK revenue fall as global platforms kicked in. The majority of this year’s top 30 international firms in the UK table saw a return on the investments they made in the past three to five years. Only seven firms on the list saw their UK revenue drop last year, a long way from the figures published by The Lawyer in 2009, when 21 firms reported year-on-year falls in UK fee income.
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That year, just one firm in the top five – Latham & Watkins – increased London revenue, compared with all of the top five firms in 2012. This reflects the changed fortunes of many of the firms that populate this year’s table, with the US’s most successful revenue generators in the UK – Baker & McKenzie ($210m), White & Case ($199m) and Latham ($197.5m) – seeing their year-on-year revenue grow by 5 per cent, 4 per cent and 3 per cent respectively. Turning over $210m at its June year-end, Bakers remains at the top of the table for the fifth year running.
An increasing number of firms now have sufficient geographical coverage to compete with Baker & McKenzie. Indeed, global juggernaut DLA Piper – which, along with Hogan Lovells, appears in the main UK 200 list by dint of its dual US/UK management structure – has stolen Bakers’ crown as the world’s largest law firm by revenue. However, Bakers continues to lead the way when it comes to global expansion. Some rival lawyers still like to joke that, like McDonald’s, Bakers has a franchise in every country.
This may be true but being a McFirm has paid off, with Bakers reporting a record global revenue of $2.419bn for the year ending 30 June 2013. Chairman Eduardo Leite attributed the record result to investments made in 2011/12 and new offices in Casablanca, Lima and Seoul. Over the past year, the firm has added 60 lateral partners in key practice areas and jurisdictions, bringing the total number of lawyers to more than 4,100 in 74 offices in 46 countries.
“The benefits of these investments are starting to show,” Leite said earlier this year, unsurprised by his firm’s solid results. “This growth was projected, expected and hoped for.”
One factor that has helped US firms in London is the City’s importance to emerging markets.
Many of this year’s Top 30 international firms in London are doing what they can to better their proposition in this respect. Dechert’s London office last year created a London emerging markets unit in its corporate practice under Camille Abousleiman, one of several hires Dechert made from the now defunct Dewey & LeBoeuf.
While the firm did not provide a precise UK revenue figure, it did confirm that last year its London office saw a whopping 44 per cent increase in turnover. By The Lawyer’s calculations that would take total revenue from $81.6m to $118m.
Home and away
While UK revenue shows only a snapshot of a firm’s year, the top 30 table continues to reflect those firms that have invested heavily in building international platforms, whether those platforms have been built over decades as with Bakers, or more recently, as with new entrant Slater & Gordon – the first non-US firm to
appear in the table.
The Australian-listed personal injury (PI) specialist features for the first time as an international firm in The Lawyer’s UK 200 list after it acquired PI powerhouse Russell Jones & Walker in January 2012. It becomes one of three new entrants to this year’s top 30 table, alongside US firms Quinn Emanuel Urquhart & Sullivan ($45.3m) and Arnold & Porter ($42.7m), after posting UK turnover of A$70.5m ($72.8m) at the end of the 2012/13 financial year, just beating its target of A$70m set in last year’s report.
Looking at the UK offices of other international firms, it is not difficult to see why some have done well on the total revenue metric. For many, it is largely because of their investment in local talent and English law.
Weil Gotshal & Manges posted a 21.6 per cent rise in London revenue to $110m for the 2012 financial year, with total lawyer headcount also growing significantly from 89 to 99. New partner hires in 2012 included Freshfields high-yield head Gil Strauss and Hogan Lovells restructuring partner Alex Wood, who joined last summer. Former Jones Day partner Adam Plainer, who joined the firm in 2011, also provided Weil with one of the plum jobs of recent years, picking up instructions on the UK end of the MF Global bankruptcy.
It is also worth drawing attention to one of this year’s new entrants, US litigation powerhouse Quinn Emanuel.
While still relatively small in the City, the firm’s raid on Herbert Smith Freehills earlier this year secured it the services of senior litigation partner Ted Greeno and underlined its ambition. Months earlier, the firm had made waves when it hired Stephen Jagusch and Anthony Sinclair from Allen & Overy (A&O) as partners in its London office. Jagusch, who joined in January, is reprising his A&O role as global chair of Quinn Emanuel’s international arbitration practice.
The firm posted UK revenue of $45.3m last year, with an estimated profit of $31m – impressive, considering it only opened the doors of its London office in April 2008.
But 2012 did not bring good news for everyone: Mayer Brown’s UK revenue fell. While the firm would not divulge a London revenue figure, The Lawyer estimates turnover to have dropped by 8 per cent, from $156.8m to $145m, based on a slow first half for the transactional team and firmwide turnover sliding to a six-year low from $1.13bn to $1.09bn. There was also an unusual number of partner exits – in London these included reinsurance litigator Ian McKenna, who joined burgeoning US rival Locke Lord; structured finance partner Stephen Day, who left for Cadwalader Wickersham & Taft; corporate partner William Charnley, who quit for King & Spalding; leveraged finance partner Neil Caddy, who joined Milbank; and finance partner Nicola Marley, who left for Minter Ellison.
Another US firm that saw UK revenue fall was Gibson Dunn & Crutcher. It posted an 11 per cent decrease, to $61.3m, despite boasting a double-digit rise in turnover globally.
As The Lawyer reported earlier this year, the co-partner in charge of the London office, Tom Budd, said this could be explained by the conclusion of a number of major litigation matters, such as advising UBS on the Libor investigation with a team that featured heavy use of contract lawyers and paralegals, led by City disputes head Philip Rocher.
Of course, bulking on a bit of extra revenue is not everything. Several firms in this year’s table had standout years, even if the needle on the total revenue counter did not shift that spectacularly.
Debevoise & Plimpton’s revenue in its London office remained flat at $81.3m. Despite this it snared roles on a number of standout matters, including representing Suzuki as the claimant in consolidated ICC London arbitration proceedings against Volkswagen. London partner Sophie Lamb led a team that included partners Lord Goldsmith QC, Karolos Seeger and John Missing, along with more than 20 associates and counsel in London, Hong Kong and New York.
Overall, as the US economy picks up, international firms on this side of the pond are clearly benefiting from local hires as partners and clients look for firms with a global reach. It looks like now is the time for a Chicken McLaw.
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