Bakers breaks records for revenue and headcount with $2.5bn 2013/14 results

Baker & McKenzie has posted its highest-ever revenue, recording a total turnover of $2.54bn (£1.51bn) for the 2013/14 financial year to 30 June.

The record results, which represent an increase of 5 per cent on the previous year’s $2.42bn (28 August 2013), confirm Bakers as currently the world’s largest firm by revenue.

Bakers is currently also the world’s largest firm by headcount, having grown total lawyer numbers from 4,087 to 4,245. Revenue per lawyer last year grew from $592,000 to $598,000 while Bakers’ profit margin remained static at 36 per cent.

Total partners at Bakers is now 1,430, up from 1,403 last year while total equity partners is 705, down from 719 in 2012/13.

Average profit per equity partner (PEP) reached $1.29m, an increase of 7 per cent on the previous year, although this figure was boosted by the total number of equity partners shrinking.

Bakers chairman Eduardo Leite said the PEP growth would have been around 5.5 per cent if equity partner numbers had remained the same.

Several of Bakers’ core practice groups saw double digit growth last year including banking and finance, dispute resolution and tax, which all grew by around 10 per cent.

Leite said the performance of Bakers’ transactional groups such as M&A, private equity and project finance into which the firm had continued investing had been a highlight. These areas, which generated more than $1bn last year, have a multiplying factor for other practices, Leite added.

“These strong financial results are partly due to the long-term investment we’ve made in our practices and international platform,” said Leite. “We’ve now reached a momentum where our footprint helps to grow the success and stability and synergies of new jurisdictions. We don’t need to subsidise our overseas offices, which I know is not always the case with some other firms.”

Key matters for Bakers last year included advising Dai-Ichi Life Insurance on its $5.7bn acquisition of New York Stock Exchange-listed Protective Life Corporation; the $1.1bn receivership of the Gherkin; the $638m acquisition of the largest retail pharmacy chains in Mexico and Chile by Alliance Boots; and the $5.85bn Las Bambas Copper Project in Peru acquisition by CITIC Metal as part of the Chinese consortium from Glencore Xstrata.

Geographically Bakers saw 38 per cent of its revenue last year generated by Europe, the Middle East and Africa, 36 per cent from the Americas and 26 per cent from the Asia Pacific region.

The latter is 2 percentage points down on the previous year, which Leite largely attributed to currency fluctuations.

“We report in US dollars as our functional currency,” added Leite. “If it was currency-neutral Asia Pacific would show a very modest uptick.”

The most growth geographically came from Latin America, said Leite, which contributed just less than a third of the Americas’ total. Other regions Leite said performed well last year included Continental Europe, notably Germany, while London (Bakers’ largest office) saw “moderate” growth.

“London can make a big difference for rest of firm because it creates work for the rest of the firm at large,” added Leite.

Leite pointed to the fact that around 10 of the 35 global panels to which Bakers was appointed last year had a significant London component. Indeed, being successful at panel bids had been an area of focus for Bakers over the past 12 months.

“It’s an area where we’ve put a lot of attention recently, focusing particularly on the quality of our pitching and offering to the client.” added Leite.

He also added that despite several firms including Chadbourne & Parke (6 August 2014), Sidley Austin (9 June 2014) and Freshfields Bruckhaus Deringer (7 August 2014) having recently closed offices in Continental Europe, Bakers was not looking to follow suit.

“We don’t have any plans to downsize but are constantly looking at being more efficient,” said Leite.