In previous years this regular feature has revealed the top 50 firms by London revenues. But why be so exclusive? In a global legal market divisions between revenues originated from the City and those from the regions at UK-headquartered firms are arguably meaningless.
This year we have widened the scope to look at the top 50 firms by revenue across the UK. This has the immediate effect of including firms in the table that often compete for, or appear on, the same deals as their London rivals, but simply do not have the same weight of numbers in the City.
Increasingly a number of these firms are leveraging off a nationwide network to carry out work won in the capital at lower cost in the regions.
Take Dundas & Wilson and McGrigors. Although they remain nominally headquartered in Scotland, they are aggressively building their City offices and are often sat across the table on deals from the largest London outfits.
These two firms, which enter the table in 43nd and 44rd places respectively, will be only too glad to tell anyone who will listen that they work in a UK-wide marketplace.
A UK table also sees the entry of firms with major regional coverage, such as Eversheds, Osborne Clarke, Pinsent Masons and Wragge & Co, dislodging firms such as Ince & Co, Kennedys and Watson Farley & Williams (although the latter’s pending merger with Chadbourne & Parke should
soon see it catapulted into another league altogether). Out too goes the increasingly international Bird & Bird, where some 55 per cent of revenue is now generated overseas.
The table also includes a handful of purely domestic players such as Beachcroft, Irwin Mitchell and Shoosmiths, although these are vastly outnumbered by those firms that
compete at the highest levels for UK-wide and international deals.
At the very top of the table, however, it is a familiar story. The global elite dominate, although Slaughter and May’s strong year saw it overtake Freshfields Bruckhaus Deringer to take fourth place with a UK revenue of £394.1m. This was just £100,000 more than at Freshfields, but was generated by 37 fewer partners, giving Slaughters the leading revenue per partner (RPP) in the table at £3.26m, compared with Freshfields’ £2.49m.
Unlike the main UK 100 table, which is topped by Clifford Chance, Linklaters takes the top spot for UK-only revenue with £543m. London accounts for around 38 percent of total headcount, but generates in excess of 45 per cent of total turnover. As managing partner Tony Angel put it, for
Linklaters London represents two completely different markets.
“We have a very powerful UK practice acting for UK clients on UK deals,” said Angel, “but we also have people located in London handling derivatives, securitisations, capital markets and so on who can be located wherever the financial market is. So the London office has two conceptually separate but overlapping groups.”
The table also illustrates for the first time the increasing size and scope of the biggest US firms in the UK. Heading the list is Baker & McKenzie, which drops just six places from seventeenth place in last year’s London table to 23rd in the UK-wide representation of the market. Bakers’ £112m revenue for the year ending June 2007 places it, in turnover terms, ahead of national firms Hammonds, Beachcroft and Halliwells, not to mention less broad-based firms such as Macfarlanes, Olswangand TaylorWessing – a phenomenal achievement.
As Gary Senior, managing partner of Bakers’ City office, said: “London is the most international of all the legal marketplaces and therefore it’s not surprising that international firms feature strongly in the UK table.
“London is Bakers’ largest office in terms of headcount and turnover, and although we’re proud of our US heritage, you can see why we and our clients don’t regard the firm as US anymore. There’s a very clear division these
days between firms very much focused on domestic work and those aiming to serve major multinationals and financial
institutions operating globally; we’re in the second category.”
In total just six US firms, including US-UK merger product Mayer Brown Rowe & Maw, make the table, down from 11 last year. Which is, of course, not to say that the majority of
the top US firms have had a poor year.
Take Weil Gotshal & Manges. Its London revenue last year of £53.3m means it just misses out on a place in the table this year. Yet perhaps more than any other US firm in
the UK it has been on a hiring spree that over the past couple of years has translated into a growing number of roles on some of the biggest domestic deals in the market.
According to mergermarket, Weil featured on seven of the top 40 deals featuring legal advice from a US-headquartered firm in 2006. But it also featured on seven of the top 10 between January and July 2007. These included its historic win advising Terra Firma on the £3.2bn takeover of music publishing giant EMI.
As The Lawyer reported at the time (22 May), the EMI deal, which featured corporate partners Marco Compagnoni and Ian Hamilton, underlined the growing power of firms with developed private equity capabilities. But it also underlined the increasing maturity of US firms in the UK
market in general, and Weil in particular.
As Weil London managing partner Mike Francies put it: “Our strategy is clear: we want to compete with the biggest UK firms for the best and biggest UK and European work. The EMI deal says, ‘yes, we’re doing that’. And clearly we need to be of a certain size and shape to advise on those deals.”
The weakness of the US currency might mean that the lure of the dollar is a little less than it used to be, but the appetite among the top US firms for a slice of the UK market is as strong as ever.