In 2016, The Lawyer European 100 report shows the total turnover for the Continent’s top 100 firms broke through €9bn (£7bn) for the first time.

The 2018 top 100 European law firms ranking and their revenues

As a combined group, the top 100 saw turnover increase by 4.6 per cent between 2014 and 2015, a rise of just over €1bn in five years. Yet, in that time, the total number of lawyers has risen less than 1 per cent – from 22,659 in 2011 to 22,814 in 2015.

Screen Shot 2016-05-20 at 15.01.10So Europe’s lawyers are working harder than ever and are making the most of what seemed to be – in 2015 at least – an improved economic environment. A continued flow of regulatory and investigations work kept litigators busy, while plenty of cross-border deals meant transactional lawyers were also happy.

But the picture is still mixed. Although most Irish firms remain cagey about their financial figures, they all expanded their headcount and, anecdotally, double-digit growth was the theme. Spanish firms also had their best year since the financial crisis, with all of Spain’s big four experiencing growth last year. Switzerland was another country where growth was the norm.

Most German firms also reported comfortable growth, but not all. In France, mid-sized firms fared better than the country’s two giants, Fidal and Gide Loyrette Nouel (see page 34). Benelux and Nordic figures were mixed, both across the regions and within individual jurisdictions.

The average European 100 firm turned over €90.2m last year with an average headcount of 425. Average revenue per lawyer rose 1.5 per cent to €395,000 last year, with average revenue per partner hitting €1.28m, up 1.6 per cent on 2014.

Turnover

Last year’s turnover figures for the European 100 ranged from €346.1m for France’s Fidal, which retained top spot, to €29.2m for fellow French firm Lefèvre Pelletier & Associés – a difference of €316.9m.

The difference in turnover between the largest and smallest firms in the rankings has narrowed from €329.1m in 2011, which demonstrates how the European market has consolidated rather than expanded.

Lefèvre Pelletier was the smallest of five new entries in this year’s European 100. The others – Italian firm Pirola Pennuto Zei and Dutch firms AKD and Van Doorne – came in as a result of providing figures for the first time. Meanwhile, German firm Heussen is back on the list after a few years’ absence following a revised turnover estimate.

As a result, five firms have exited the rankings, either through declining revenues or because their revenue growth was small enough to see them overtaken by others. These are Germany’s Buse Heberer Fromm, Dutch firm Boekel de Nerée, Denmark’s Bruun & Hjejle, Spanish firm Roca Junyent and Belgium’s Eubelius.

“The difference in turnover between the largest and smallest firms has narrowed, showing how the market has consolidated”

A number of firms still refuse to provide turnover figures, but this proportion continues to drop slightly year-on-year. Ireland remains the most opaque market, with only one out of seven of its European 100 constituents providing turnover, while Norway, Spain and Sweden are the most transparent. The vast majority of firms in France, Germany and the Benelux countries provide turnover figures.

A total of 27 firms reported, or were estimated to have had, a decline in turnover last year. A number of these were Norwegian, affected by a combination of flat or slightly lower turnover in krone terms exacerbated by a weaker exchange rate. Three firms experienced a fall in turnover of less than 1 per cent.

Six firms reported a flat turnover and four saw a rise of less than 1 per cent.

A total of 16 firms reported, or were estimated to have had, a double-digit rise in revenue last year. These included a 20 per cent increase for Ireland’s Mason Hayes & Curran, an estimated 22.9 per cent rise for Swiss firm Homburger, and a 23.8 per cent increase for rival Bär & Karrer.

Revenue per lawyer in 2015 ranged from €197,000 for Portugal’s PLMJ to an estimated €955,000 at German firm Hengeler Mueller. This band has narrowed from 2014, when it ranged from €189,000 at PLMJ to €1m at French firm Darrois Villey Maillot Brochier.

Meanwhile, average revenue per partner last year ranged from €520,000 for Graf von Westphalen in Germany to €3.39m at Egorov Puginsky Afanasiev & Partners. That compares to the previous year’s range of €490,000 for SKW Schwarz to €3.96m at Egorov Puginsky,underlining the narrowing gap between the largest and smallest firms in the rankings.

Screen Shot 2016-05-20 at 15.02.07
Click to enlarge

Profit

Profit figures remain much harder to come by than turnover figures, although again most of the Norwegian firms and several other Nordic players are comfortable revealing their net profitability.

In fact, the number of firms that gave profit figures dropped from 18 to 14 last year, and only 10 firms have provided profit figures two years running.

Half of the firms that disclosed their net profit had a margin of 50 per cent or more in 2015, up from only six in 2014.

Spanish firm Cremades & Calvo-Sotelo, which provided data for the first time this year, said it had achieved net profit of €31.6m on revenue of €43.6m, equivalent to a margin of 72.5 per cent.

Norway’s Schjødt, always a profitable firm, saw its margin rise by 3.9 percentage points to 68 per cent, with revenue of €81.6m and net profit of €56.2m – or NOK729m and NOK502m.

Fellow Norwegian firms Wiersholm, Thommessen, Arntzen de Besche, Wikborg Rein and Selmer also reported margins of 50 per cent or more last year. Thommessen had not previously provided profit figures, while the rest all saw their margins slip slightly between 2014 and 2015.

Meanwhile, profitability was up at Haavind, Krogerus, Borenius and Setterwalls.

Fidal’s margin remains the lowest in the European 100 at 1.6 per cent, up from 1.35 per cent in 2014.

Headcount

As well as being Europe’s biggest firm by revenue, Fidal is also the largest in terms of workforce. In 2015, the firm had a total full-time equivalent (FTE) headcount of 2,225 staff, up from 2,213 the previous year.

Screen Shot 2016-05-20 at 15.04.01However, Garrigues remains larger in terms of fee-earner and lawyer headcount, with 1,410 fee-earners and 1,263 lawyers compared with Fidal’s 1,368 and 1,205.

These two remain the only independent European firms to employ more than 1,000 lawyers – in contrast to staffing levels at the largest international firms, several of which now have more than 1,000 lawyers in Europe (see international section, page 26).

A total of 10 independent firms still employ fewer than 100 lawyers.

A significant minority – 40 firms – saw their lawyer numbers drop or remain stable last year. Most of those that added lawyers added only a relatively small number in percentage terms, although this was enough to result in a global increase.

Spanish firm Cremades & Calvo-Sotelo had the smallest partnership of just 20 and Fidal the largest, with 608 partners – more than twice as many as Garrigues. Only 13 firms in the European 100 have 100 or more partners and 45 have fewer than 50.

Property costs

For the first time we asked firms to provide data on their property costs and how much space they managed. Very few responded to this question, which has been a standard in The Lawyer UK 200 for several years.

The highest cost reported by any of the firms that did respond was at De Pardieu Brocas Maffei. The firm says its 4,500 square metre offices on the Avenue d’Iéna, close to the Arc de Triomphe in Paris, cost it a total of €2.98m a year – or a whopping €662.82 per sq m. That is about €200 per sq m more than the next most-expensive premises, occupied by Dutch firm Loyens & Loeff and Norway’s Selmer. Loyens and Selmer both pay around €470 per sq m for their space.

Rent is also high for Italian firm Legance, which pays €412 per sq m for almost 10,000 sq m of space in Italy and London.

Switzerland’s Walder Wyss has six offices across the country and its rent averages CHF400 per sq m, or €374. The firm’s rent varies from €590 per sq m in Geneva to €239 per sq m in Lausanne.

Norway’s Wiersholm says it is paying €361 per sq m, and in Germany, Graf von Westphalen reports paying €349.06 for each sq m of its 9,050 sq m offices.

The cheapest property reported is occupied by Belgian firm Liedekerke Wolters Waelbroeck Kirkpatrick, whose 9,316 sq m of space cost it just €1.57m last year, or €168.12 per sq m.

Property costs also appear to be low in Iberia, with Cuatrecasas Gonçalves Pereira and Portuguese firm Morais Leitão Galvão Teles Soares da Silva both paying about €200 per sq m in 2015.

A number of firms provided information on the amount of space occupied, but did not give details of costs.

Borrowings

For the first time, we also asked European firms to give details of their bank borrowings. This prompted even fewer responses than the property costs question, but firms were more willing to expand on it during phone interviews with managing partners.

Unlike the UK market, where most firms have some level of bank borrowing even if it is netted out by cash to leave a positive cash balance at the year-end, most European firms that responded to the question said they avoided the banks entirely.

Liedekerke is the only firm to say it had net debt at the end of 2015.

Other firms that said they had some sort of bank facility included Germany’s Flick Gocke Schaumburg (FGS) and GSK Stockmann & Kollegen. FGS is preparing to move into new headquarters in Bonn, for which it has the freehold. The property is funded partially through partner capital and partly through a bank loan. GSK says it had an unused bank facility in 2015.

“Unlike the UK market, most European firms said they avoided bank borrowing entirely”

Switzerland’s Homburger and Froriep have both taken out loans to fund property refurbishment. Homburger borrowed CHF9m over a 10-year period when it moved into new offices some years ago, and Froriep took out a loan facility to fund current refurbishments at its Zurich offices.

In France, two firms say they had some limited borrowings last year. Employment boutique Fromont-Briens says it took out a small loan to fund property improvements, and Jeantet Associés went to the banks to fund its international expansion and also had a short-term loan facility. August & Debouzy says it has an overdraft facility that was unused last year.

However, most European firms appear to be staunchly against external borrowing, preferring to fund expansion or investment entirely through partner capital.

Strategy

Last year there was very little evolution in the strategy of independent European law firms. The key word is still “independent” – the European 100 are confident that there is a future in remaining tied to their home jurisdiction and working with a varied network of like-minded partners in other countries.

Nobody is actively seeking a merger with an international firm, and indeed most of the international firms profiled in the international section of this report are comfortable with their existing European presence anyway. Dentons is the one exception, having announced a Luxembourg merger, Hungarian expansion and an Italian launch in 2015.

Nevertheless, internationalisation remains the other watchword and firms are all looking for the best way to work on cross-border transactions. Strategies vary here. Some firms, notably the group of Slaughter and May’s ‘best friends’; the non-exclusive alliance of Chiomenti, Cuatrecasas, Gide and Gleiss Lutz; and the Nabarro-led ‘Broadlaw’ alliance are forging their own small networks.

Others think that being part of a global membership association is the best way ahead and the European 100 includes many such network members.

The Iberian firms have, arguably, been the most active in looking overseas for expansion opportunities. Garrigues is building its own network of Latin American offices and Uría Menéndez took a stake in a Latin American merger in 2014, which has since expanded. Also, Cuatrecasas launched in Mexico recently.

Meanwhile, Portuguese firms have well-established networks of offices in Portuguese-speaking Africa.

Screen Shot 2016-05-20 at 15.05.10The most popular location for international expansion last year was New York, where two small Italian firms, Portolano Cavallo and Carnelutti, and Spanish firm Perez-Llorca all set up representative offices.

The year also saw changes in two French firms’ international strategies. Gide carried out a review of its international presence and continues to slim down outside France. That prompted smaller French firm Jeantet to take advantage, snaring Gide’s Budapest and Kiev offices to launch in Hungary and Ukraine, and in May 2016 picking up a Gide team to open in Moscow.

The major strategic trend in 2015 was for firms to seek to improve cross-selling between offices, where relevant, and between practice areas or sector groups. In fact, many are moving away from a practice area focus towards a sector focus in a bid to capture a wider range of work from key clients.

This trend is likely to continue in the future as the independent market looks to safeguard its way of working and win pitches against its larger, more integrated international rivals.

Read on for analyses of the top international firms in Europe and a five-year evaluation of the market.


International Top 50 in Europe

This year for the first time, the European 100 research covers the top 50 international firms, and growth is the running theme among them

This is the third year we have gathered headcount data for international firms in Continental Europe. The analysis covers all of Western Europe, Central and Eastern Europe (CEE), the Baltics, Russia, the CIS and Turkey, but excludes the UK.

For the 2016 report, we have expanded the analysis to the top 50 international firms operating on the Continent, up from 30 in the previous two years. The vast majority of firms provided at least total numbers of European lawyers and partners, and most also gave staff and fee-earner numbers for Europe as a whole and for each jurisdiction.

This year’s analysis also expands the jurisdictions examined, to include Luxembourg and Poland as well as major markets such as France and Germany. An increasing number of firms are launching in Luxembourg, and Poland remains a key hub for many firms’ CEE operations.

The data covers all firms headquartered outside Continental Europe. For the purpose of the analysis, ‘network’ firms such as CMS and Eversheds, and Swiss vereins such as Baker & McKenzie and Norton Rose Fulbright are treated as a single entity. We consider that the benefits
these firms gain from operating under a single umbrella brand mean they should be looked at as one firm, despite not being financially integrated across the regions of the world.

“This year’s analysis extends to Luxembourg, where an increasing number of firms are launching, and Poland, which remains a key hub for many firms’ CEE operations”

In total, the top 50 international firms employ about 17,850 lawyers across the Continent, including almost 5,100 partners. That compares with the European 100’s lawyer headcount of 22,814 and partner count of 7,047.

But the numbers are skewed by CMS, which has provided headcount data for the first time. This reveals that the firm employs more than 3,000 lawyers in Europe, more than double the number employed by the largest independent firm by headcount, Garrigues.

Baker & McKenzie, with 1,345 lawyers in 2015, is also bigger than Garrigues and next-largest independent player Fidal.

The average size of the international 50 in Europe is 357 lawyers including about 100 partners, which means CMS is 10 times bigger in Europe than the average international firm.

Financial data

This year, a total of 11 firms have provided a figure for their Continental European revenues. That is up from eight firms out of the top 30 that did so the previous year.

Through interviews with management at the top 10 firms, we also have a little more information on some firms that have not provided numbers but did give an indication of how much Europe contributes to their revenue (see CMS profile, page 36 (the complete range of profiles are included in the market report)).

Among the 11 firms that gave figures, Bakers is the largest, with European revenue of €535.6m. That is €200m more than Fidal at top spot in the independent firms’ list, with only about 100 more qualified lawyers bringing in the money.

Bakers says its European turnover has risen by 5 per cent year-on-year, from €512m in 2014.

Hogan Lovells is the next-largest firm to provide figures. Its European revenue hit €359.8m last year, up 13 per cent from €319.6m in 2014.

In fact, growth was the theme across the firms that provided figures. Revenue growth ranged from a modest 1 per cent at Bird & Bird to 32 per cent at Clyde & Co, although Clydes is the smallest international firm to give revenue of just €12.4m last year. Neither Clydes nor Fieldfisher – with turnover of €28.6m – would have made it into the independent firms’ rankings.

Average revenue per lawyer (RPL) for the 11 firms that provided European turnover last year was €369,000, somewhat lower than the average RPL of €395,000 for independent firms. RPL ranged from €232,000 at Eversheds to €481,000 at Hogan Lovells.

Of the firms providing revenue figures, five also gave net profit figures. Profit margins for four of these five – Berwin Leighton Paisner (BLP), Bird & Bird, Eversheds and Taylor Wessing – were good, ranging from 27 per cent at BLP to 32.9 per cent at Eversheds. Fieldfisher’s European profit margin was much lower at 12.2 per cent.

Firms were also asked how much Europe contributed to their global income. The highest proportion was at Taylor Wessing, where Europe represents 45.6 per cent of total turnover. The lowest contribution from Europe was at Clyde & Co, with just 2.5 per cent of revenue generated on the Continent.

Some other firms did not give figures but did give an indication of turnover in interviews, and CMS was the largest of these. Executive chairman Cornelius Brandi says Europe represents around 70 per cent of CMS’s global turnover of €965m, putting it ahead of Bakers, whose European revenue is about €676m.

Clifford Chance’s LLP accounts show that in 2014/15, Continental Europe produced £469m, or 34.7 per cent, of its global turnover – about €604m. Allen & Overy (A&O) global managing partner Wim Dejonghe says Europe contributed a similar proportion of his firm’s turnover – around £417m (€537m) out of global revenue of £1.26bn in 2014/15.

Europe also accounts for about a third of White & Case’s global revenue, roughly €443m.

Meanwhile, Dentons’ European operations are clustered in its Europe LLP, for which 2015 accounts are not yet available. In 2014, the firm made €214.8m in Europe, but this is likely to have grown on the back of headcount expansion.

Screen Shot 2016-05-20 at 15.25.41

Headcount

Data provided by firms on their European headcount remains of variable quality. Where firms decline to provide a breakdown of staff and lawyer numbers by office, we have made estimates based on publicly available information from firms’ websites. Some firms provide Europe-wide figures, but do not give a jurisdiction-by-jurisdiction breakdown.

As previously mentioned, CMS has provided figures for the first time in the three-year history of this research. Although these are actual headcount rather than full-time equivalent numbers, the figures show that the largest firm in Europe is even bigger than previously estimated.

Bakers keeps its place as the second-largest firm in Europe with 1,345 lawyers, followed by the four UK-headquartered magic circle firms.

A&O, Clifford Chance, Freshfields Bruckhaus Deringer and Linklaters employ similar numbers of lawyers across the Continent, ranging from 845 at A&O to an estimated 1,039 at Linklaters. Our estimate of Linklaters’ figures sees the firm growing between 2014 and 2015 to overtake Clifford Chance, which had 1,010 lawyers last year.

However, Clifford Chance appears to have a larger European partnership – 216 partners, compared to an estimated 197 at Freshfields, 196 at Linklaters and an actual figure of 192 for A&O.

“CMS provided figures for the first time and its figures show it is even bigger than previously estimated”

DLA Piper slipped down the rankings this year after providing us with figures; in 2014, its headcount was estimated. The firm had 730 European lawyers last year, including 270 partners.

Few firms saw significant growth in terms of lawyer numbers in 2015. The most sizeable growth was at Eversheds and Dentons, with both firms rising up the rankings as a result of recruitment.

Eversheds’ lawyer headcount rose by 18 per cent from 638 to 753, and overall staff numbers were up 13.7 per cent to 1,144 from 1,006. Dentons, whose international expansion last year included a launch in Italy and the hire of White & Case’s Budapest office, saw its lawyer headcount increase by 7.8 per cent from 689 to 743 and total staff numbers rise 13.6 per cent to 1,549.

Greenberg Traurig and McDermott Will & Emery, who were both just outside last year’s top 30, rise into that bracket this year thanks to increases in their lawyer numbers.

Firms that saw a drop in their European headcount last year include Bird & Bird, whose lawyer numbers dropped from 680 in 2014 to 626 last year, although partner numbers were flat at 164.

Meanwhile, Squire Patton Boggs’ European lawyer headcount dipped from 194 to 170, a fall of 12.4 per cent.

Screen Shot 2016-05-20 at 15.27.03

Structure

International firms are operating in Europe with a mix of structures, and the partner-to-associate ratios of the top 50 range from less than 1:1 at a couple of smaller players to 1:4.8 at Cleary Gottlieb Steen & Hamilton.

Although Cleary’s partner-to-associate ratio rose between 2014 and 2015, the general trend was in the other direction. Only Freshfields, with an estimated ratio of 1:4, and Shearman & Sterling, with a ratio of 1:4.5, employed more than four associates to every partner last year.

White & Case’s partner-to-associate ratio fell from 1:4.1 in 2014 to 1:3.9 last year.

A total of 20 firms had a ratio between 1:1 and 1:1.9 in 2015 and 14 others employed between two and three associates for every European partner.

Diversity

A handful of firms did not provide female partner numbers for Europe, but the vast majority did. As the number of firms covered by this analysis has expanded from 30 to 50 this year and so encompasses a bigger universe, unlike last year, some firms did report a female partner proportion of more than 25 per cent.

Estimated figures for Olswang and DAC Beachcroft give these two firms female partner proportions of 47.3 per cent and 33.3 per cent, respectively, in Europe. Fieldfisher reports that 28.6 per cent of its European partners are women.

Meanwhile, 11 firms – up from just five of the top 30 last year – have a female partnership proportion of between 20 and 25 per cent.

Estimated or actual figures for Dechert, Freshfields, Kirkland & Ellis and Greenberg Traurig give these four firms a female partnership proportion in Europe of between 6 and 9.5 per cent.

Three firms – Gibson Dunn, Stephenson Harwood and Sullivan & Cromwell – have no female partners in Europe.

Ins and outs

There was significantly more investment by international firms in new European offices in 2015 than there was in 2014. In 2014, seven international firms launched seven offices across the Continent, and five closed offices.

Last year, 12 firms launched or announced the launch of a total of 15 offices across the Continent. Dentons launched in Milan and announced a merger in Luxembourg, while DWF opened in Brussels, Cologne and Munich.

Meanwhile, seven firms announced the closure of a total of nine offices last year. Germany saw the most exits as Orrick Herrington & Sutcliffe pulled out of Berlin and Frankfurt, Olswang closed in Berlin, White & Case shut in Munich and Freshfields announced that it was merging its Cologne office with Düsseldorf.

Several of the closures were tied in with other firms taking on rivals’ teams. White & Case’s Budapest office moved to Dentons, and Olswang’s Berlin office joined Greenberg Traurig.

Last year several firms launched in new jurisdictions, including DWF’s first foray into mainland Continental Europe with offices in Brussels and Germany (although the firm already had a base in Ireland).

Expansion into Europe has continued into 2016, with firms such as Goodwin Procter making their first moves into the Continent through launches in Frankfurt last November and Paris in April this year.


Five years of the Euro 100

The past five years have seen a revival of fortune for most of the European 100, although growth has remained modest across that period for many. Here we look back at previous findings.

2011

The ongoing economic crisis in 2011 had a major impact on the independent legal market and there was a pronounced north-south divide in financial health.

Firms in Scandinavia and Germany largely enjoyed a very solid year with turnover up as much as 11 per cent in some cases, but those in jurisdictions such Italy and Spain found the going tough.

As a group Scandinavian firms had some of the biggest increases in turnover in the top 100, although much of this was down to the weakness of the euro against the Danish, Norwegian and Scandinavian kroner. The relative strength of those three currencies has led to turnover increases of as much as 20 per cent in euro terms for some firms with real revenue growth of around 6 per cent.

Hardly any firms saw much change in headcount, save for those few that undertook mergers during the course of 2011. One of the biggest risers as a result was the sole Russian entrant in the European 100, Egorov Puginsky Afanasiev & Partners, whose tie-ups with Magisters and Principium drove it up the rankings to 18th place.

More firms willingly provided information on their financials and equity breakdown and the median leverage was around 1:3.

Garrigues, before its move to an all-equity partnership, operated a 1:16.8 leverage in 2011.

Over a third of the top 100 firms had an all-equity partnership, and this number is set to increase as firms like Bonelli Erede Pappalardo and Cuatrecasas Gonçalves Pereira move towards all-equity partnerships.

2012

After cautious optimism at the beginning of 2012, hopes for better times proved unfounded and the year turned out to be just as turbulent as the previous three or four.

The economic and political picture across Europe remained uncertain, manifesting itself in investor uncertainty, unpopular legislative decisions and a resulting decrease in transactional work.

As a result, the picture of financial performance by Europe’s law firms for 2012 was even more mixed than the previous year.

“After cautious optimism at the beginning of 2012, hopes for a better year proved unfounded”

Most German firms in the top 100 had an excellent year. Of the bigger firms, Noerr’s turnover rose by nearly 7 per cent, Heuking Kühn Lüer Wotjek’s almost 4 per cent, and Luther celebrated a revenue rise of 9 per cent.

Norway was also a very good performer, hosting the biggest riser in percentage terms. Schjødt’s turnover went up by 14 per cent.

But Germany and Norway were the standout jurisdictions in seeing the vast majority of their European 100 firms recording a turnover rise. Among the top 10, three firms reported decreasing turnover and Gide Loyrette Nouel expected revenue to be stable.

Turnover was broadly stable or down for most firms in southern Europe, including Italy, Spain and Portugal. French firms had a very mixed year, but the overall picture was one of little change, or a decrease in revenue.

The financial picture for many of the European 100 was mirrored by the shape and size of firms. Few firms did any significant hiring during the year – again, Germany was the exception, with headcount growth almost across the board. Much of the drop in headcount was not due to redundancies, in contrast to the UK. Instead, firms made strategic decisions not to replace departures, or partners and associates left either for international rivals or for boutiques.

The changing headcount across Europe led to a change in the partner-to-associate ratio picture. Whereas in 2011 16 firms employed at least four associates for every partner, in 2012 only 12 did. The number of firms employing between two and three associates for every partner rose.

Meanwhile 82 firms provided their equity partnership figures for 2012. A growing number are bringing all their partners into the equity, and the overall trend is for lower leverage.

Another headcount metric that saw change was the proportion of female partners. Across the European 100 the average proportion of women in a firm’s partnership was 16.3 per cent, up just under one percentage point from 2011.

2013

The 100 constituent members of the European 100 2014 together brought in around €8.2bn in 2013. The total figure was a rise of just under €200m from 2012 as once again the continent’s legal market was marked by wide variances in performance. Turnover changes ranged from a massive +57 per cent at Belgian firm Liedekerke Wolters Waelbroeck Kirkpatrick to -11 per cent for Norway’s Selmer.

Liedekerke’s results, which included strong organic growth, were skewed by the successful completion of several large matters last year. The next largest increases came from Italy’s Bonelli Erede Pappalardo, which said its revenue had risen by 17.6 per cent – although it does not provide figures – and French firm Jeantet Associés, with a rise of 17.5 per cent.

Single-digit growth was the most common result. Around 30 firms had reported or estimated turnover rises of less than 5 per cent, and a further 16 turnover decreases of less than -0.5 per cent.

“In terms of headcount, 2013 was not a year in which European firms did much hiring”

Finland, France and Germany were the jurisdictions that performed best in 2013, while the rankings and results for the Norwegian and Swedish firms were adversely affected by much weaker exchange rates between the kroner and the euro in 2013. Accordingly the rankings and figures in euros showed larger negative changes than had actually been the case.

In terms of headcount, 2013 was not a year in which European firms did much hiring. The total headcount of the European 100 remained broadly steady at just under 22,000 lawyers. However there was a net gain in partners of 180, from 6,422 partners across the 100 firms to just over 6,600 last year.

A number of firms reduced their staff headcount too, perhaps in a recognition that clients are still on the hunt for value. Several chose to increase their fee-earner numbers to address the issue of cost, while at the same time adding to the partnership to meet demands for advice provided by senior, experienced lawyers.

2014

Combined revenue for the European 100 rose 5 per cent to €8.6bn in 2014.

For the first time in five years there was a change in the rankings of the top four firms this year as Fidal overtook Garrigues to claim top spot. That does not mean Garrigues had a poor year. Indeed, Iberia’s largest firm saw a revenue rise and, with several major strategic shifts, is on course for further growth.

Germany’s Noerr continues to climb the rankings, this year overtaking Gide Loyrette Nouel to take sixth place. Again this was primarily due to a stronger rise in revenue at Noerr than at the French firm; Gide had a better year in 2014 than it had done for several years.

Indications that Bonelli Erede Pappalardo had a record year propelled the Italian firm into the top 10 alongside its best friends Hengeler Mueller and Uría Menéndez, pushing multidisciplinary firm Rödl & Partner into eleventh.

The top 10 firms brought in total revenue of €2.38bn in 2014, up from €2.3bn from the same firms in 2013. However, headcount among the top 10 fell at all levels, albeit only marginally for partner numbers.

A total of 18 firms within the top 100 provided profit figures for 2014, up from 15 in 2013 and 12 in 2012.

Norway’s Schjødt remains the most profitable firm in the European 100 with an eye-watering margin of 65 per cent, down 0.8 percentage points from 2013. Its average profit per equity partner (PEP) in 2014 was NOK10m (€1.19m), which if converted into sterling would put it high up the UK 200 PEP table. Schjødt’s margin is better than any of the UK 200 firms.

Fellow Norwegian firm Wiersholm saw the greatest increase in profit last year. It reported net profit of NOK406m (€48.6m) on a revenue of NOK640m (€76.6m), equating to a margin of 63.5 per cent. That was up from 41.3 per cent in 2013.

“Norway’s Schjødt remains the most profitable firm in the European 100 with an eye-watering margin of 65 per cent”

The greatest fall in profit was at Belgian firm Liedekerke Wolters Waelbroeck Kirkpatrick. Net profit fell from €31m in 2013, a margin of 58.9 per cent, to €12.5m last year, giving a still-healthy margin of 39.8 per cent. However, 2013 was an exceptional year for the firm with a number of success fees giving rise to an extraordinary boost to both top and bottom line, and 2014 was a return to a more normal situation.

The highest PEP figure was produced by Darrois Villey Maillot Brochier. With a net profit of €31m and 18 equity partners, PEP stood at €1.72m last year. This converts to around £1.4m, a figure surpassed by only Slaughter and May and Freshfields Bruckhaus Deringer in the UK.

Overall headcount grew and the European 100 employed a total of just under 41,000 people in 2014. Of those, 26,132 were fee-earners and 22,169 qualified lawyers. Total staff and fee-earner numbers rose compared with 2013, when total headcount stood at 40,587 and fee-earner numbers at 25,807, but lawyer numbers dipped incrementally from 22,194 – a decrease of just over 0.1 per cent.

Partner numbers continued to grow. In 2013 the 100 firms collectively had 6,679 partners; last year they had a total partnership headcount of 6,828, a 2.2 per cent rise.

The average lawyer to staff headcount last year was 1:0.85, up from 2013 when the ratio was 1:0.83. Meanwhile the average partner to associate ratio in 2014 was 1:2.25, slightly down from 1:2.3 the previous year.

The European 100 2018 is available for purchase. It includes 165 pages of exclusive data and analysis on Europe’s 100 largest independent firms, plus the top 50 international firms ranked by partner numbers. To purchase a full copy please contact Ben Oakshott on +44 20 7970 4275 or email market.reports@thelawyer.com