The American Lawyer released its annual Global 100 report, a ranking of the world’s 100 largest law firms by gross revenue, profits per partner, and total attorney headcount. Overall, gross revenue grew by 4.7 percent to $119.6 billion, and profits per equity partner increased, on average, by 0.4 percent. Attorney headcount also saw an increase this year, with an annual growth of 8.0 percent. Additionally, that same assessment can be applied to the Global Second Hundred, which grew at a 3.6% clip, resulting in total revenue of $33.1 billion, bringing the aggregate figure for the full Global 200 to $152.7 billion. According to the report, much of this growth can be attributed to head count increases, particularly in the Second Hundred, where firms increased their complement of lawyers by 10.2%.
The report revealed that a total of 50 firms cracked the $1 billion mark, up from 46 firms last year. Of the Global 200 firms on the list, United States accounted for 139 of the world’s top-grossing firms, followed by 25 from the United Kingdom, 10 firms from China, and 7 firms from Canada. Seventy-five firms equaled or topped $1 million in PEP, compared with 73 firms last year, the report notes. Additionally, this is the fifth time in the history of Am Law’s global ranking that U.S.-based firms occupied the top four spots. The top five firms in their respective order were Kirkland & Ellis, Latham & Watkins, DLA Piper, Baker & McKenzie and Dentons.
A wider look at the Global 100, ranked by revenue, offers a picture of stability, the report adds. Eight of the firms in 2019’s top 10 remained there this year, as Allen & Overy and Linklaters both slipped slightly. And only one firm, recent trans-Atlantic merger product Womble Bond Dickinson, exited the top 100, replaced by labor and employment specialists Jackson Lewis. The Global Second Hundred does have a handful of newcomers. The highest among them is Spain’s Uría Menéndez, at 167. The other fresh faces are Australia’s Corrs Chambers Westgarth, China’s Jingsh Law Firm and U.S. firms Foley Hoag and Fisher Phillips, (as quoted in The American Lawyer).
See the full rankings and highlights from The Global 100 on The American Lawyer.
Contact Bill Sugarman for more information.
The American Lawyer released its annual Global 100 report, a ranking of the world’s 100 largest law firms by gross revenue, profits per partner, and total attorney headcount. Overall, gross revenue grew by 8.1 percent to $114.2 billion, and profits per equity partner increased, on average, by 4.6 percent. Attorney headcount also saw an increase this year, with an annual growth of 5.7 percent. According to the report, law firm mergers, rapid growth among Chinese law firms, and a healthy American market coalesced to turn 2018 into a spectacular year.
The report revealed that a total of 46 firms cracked the $1 billion mark, up from 34 firms two years ago. Of those 46 billion-dollar firms, United States accounted for 77 of the world’s top-grossing firms, followed by 12 from the United Kingdom, and five from China. Additionally, this is the fourth time in the history of Am Law’s global ranking that U.S.-based firms occupied the top five spots. The top five firms in their respective order were Kirkland & Ellis, Latham & Watkins, Baker & McKenzie, DLA Piper and Skadden Arps.
“Globally, most key practice areas were subject to brisk demand. The merger and acquisitions environment was active, albeit stronger in some markets than others. Disputes work, particularly international litigation and arbitration, kept practitioners busy. And an anticipated dip in investigations did not materialize, with sanctions, the Foreign Corrupt Practices Act and money laundering matters dotting the headlines. Other factors, beyond growing demand, also helped boost the numbers including two significant mergers between U.S.-based firms and two significant trans-Atlantic mergers: Nelson Mullins combination with Broad and Cassel and Hunton & Williams merger with Andrews Kurth Kenyon on the domestic side, and the creation of Womble Bond Dickinson and Bryan Cave internationally,” (as quoted in The American Lawyer).
See the full rankings and highlights from The Global 100 on The American Lawyer.
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The American Lawyer reports that as 2018 came to a close, it was on pace to become the busiest year ever for law firm mergers, surpassing a record set in 2017. According to a recent report by legal consultancy firm Fairfax Associates, last year’s tally of 72 completed mergers was the highest since 2001. The report revealed that the 72 mergers completed in the past year was up from 65 in 2017 and easily outpaced the historical average of 52 mergers per year from 2008 to 2017.
Within the U.S., New York, Florida, Pennsylvania, Texas, Missouri and California proved to be the most desirable locations for firms looking to grow through mergers. Nine New York firms were absorbed into larger firms, according to Fairfax, while there were six mergers involving smaller firms in Florida, five mergers apiece in Pennsylvania, Texas and Missouri, and four mergers in California, (as quoted in The American Lawyer).
Fairfax principal Lisa Smith notes that there continues to be a lot of interest in combinations that transcend national boundaries. According to Smith, the past year was also a busy one for international mergers, thanks in good measure to Dentons’ continuing eagerness to add on new units. The firm’s eight cross-border mergers completed in 2018 accounted for more than half of the 15 counted by Fairfax, (as quoted in The American Lawyer).
Other major completed cross-border combinations included Bryan Cave with Berwin Leighton Paisner in London, DLA Piper with Delacour in Denmark and with Noguera Larrain & Dulanto in Chile, Eversheds Sutherland with Dvorak Hager & Partners in Prague, and Littler Mendelson with Reliance in Belgium and with CLINT in the Netherlands, (as quoted in The American Lawyer).
See highlights from the full article on The American Lawyer.
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The American Lawyer reports that after years of globalization, some firms are pulling back to focus on building a stronger platform in the world’s most lucrative legal market. According to the article, the United States remains the world’s largest, strongest and most lucrative legal market. A recent study by U.K.-based market research company Acritas found that U.S. companies spend 166 percent more on legal services per dollar of revenue than companies around the globe.
The United States’ strength in the global legal market has also drawn attention from across the pond, particularly from London’s top firms. According to the article, Allen & Overy is reportedly in merger talks with O’Melveny & Myers, a potential move that has sent ripples throughout London and signals an increased desire and interest to finally break through in the U.S. legal market. “The U.S. is the largest and most lucrative legal market in the world, so it makes sense that firms with global ambitions would want to be here,” notes Dave Koschik, a member of White & Case’s executive committee and head of its U.S. growth team, (as quoted in The American Lawyer).
See highlights from the full article on The American Lawyer.
Contact Bill Sugarman for more information.
The American Lawyer released their annual Global 100 report, a ranking of the world’s 100 largest law firms by gross revenue, profits per partner, and total attorney headcount. Overall, gross revenue for the Global 100 grew by 6.4 percent to $105.7 billion, and profits per equity partner among Global 100 firms increased, on average, by 3.4 percent. Attorney headcount also saw an increase this year, with an annual growth of 10.7 percent.
For the third time in the history of Am Law’s global ranking, U.S.-based firms occupied the top five spots. Kirkland & Ellis advanced two spots this year to claim the No. 1 spot, knocking Latham & Watkins and Baker & McKenzie down to spots 2 and 3, respectively. Kirkland and Latham both cracked $3 billion in total revenue for the first time in 2017. But while Latham posted a commendable 8 percent increase in revenue, Kirkland’s grew at a whopping 18 percent, more than any other American firm. DLA Piper and Skadden Arps remained in their respective spots from last year, coming in at number 4 and number 5.
Another takeaway for all these firms—and those on the outside looking in—is the gap between total revenue growth and PEP. Even with plenty of money coming in, costs are growing across the world. That, according to former Clifford Chance managing partner Tony Williams, is causing firms to “look much more carefully at who becomes an equity partner and who stays one.” Those elite American firms, consolidating their hold on the top of the list, are already doing this. Now it’s up to those who wish to be in their position to follow suit, (as quoted in The American Lawyer).
See highlights from the full article on The American Lawyer.
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The American Lawyer reports on a mistaken and dangerous belief pervading the current U.S. legal market: that it is consolidating as larger firms grow more quickly than the market by taking share from their smaller rivals. However, an in-depth analysis of Am Law data over the last 20 years reveals that in fact consolidation is not happening. Rather, worldwide revenue growth from larger firms expanding overseas has been mistaken for consolidation of market share.
In Am Law’s latest article, Debunking the Consolidation Myth, the authors argue that the mistaken perception of consolidation has driven firms to bulk up—by merging, acquiring and hiring laterally—to avoid being at a competitive disadvantage. Such moves are high-risk, disruptive distractions for leaders whose attention is better focused elsewhere. Despite the intense effort involved, they create no strategic advantage. Wise partner groups and firm leaders will see past the prevailing dogma and focus instead on optimizing the performance of organically growing businesses, (as quoted in The American Lawyer).
In a tightly argued analysis, the authors conclude that “Consolidation is not happening. The imperative for law firms to grow is groundless. Smaller firms that don’t expand internationally are not losing share; in fact, they’ve gained share through the Great Recession. The data could not be clearer. And yet we know that this simple truth will be ignored. Facts are an ineffective counterweight to long-held belief. It’s too bad. Running a U.S.-centered, organically growing law firm well is a strategy with enormous validity and tremendous potential for strong profit growth.”
See highlights from the full article on The American Lawyer.
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Law firm mergers remained robust during the first quarter of 2018, with a strong outlook for cross-border combinations, according to a recent report by legal consultancy firm Fairfax Associates. In the first quarter of 2018, Fairfax tracked 20 completed mergers, which counts combinations once they are completed. According to the report, this number is slightly lower than the 22 mergers completed during the same time last year, however, is still on par with historical averages.
Despite a fairly quiet cross-border merger market in the first few months of 2018, Fairfax principal Lisa Smith notes that there continues to be a lot of interest in combinations that transcend national boundaries. “We see an awful lot of interest from particularly U.K. firms continuing to look at the U.S. market, but U.S. firms also continuing to look at their international strategies,” Smith said. “I think that’s a continuing big trend,” (as quoted in The American Lawyer).
On the domestic front, many mergers completed within the first quarter were smaller or at the regional level. Nearly 75 percent of the firms involved had between five and 20 lawyers, according to Fairfax, with the largest purely domestic tie-up being between Ballard Spahr and Minneapolis-based Lindquist & Vennum, a union that became effective on Jan. 2. “We see a mix of a lot of smaller firm acquisitions, many of which are smaller mid-sized firms combining with other smaller mid-sized firms,” Smith said (as quoted in The American Lawyer).
See highlights from the full report and article on The American Lawyer.
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Frustration with high legal fees and demand for local regulatory knowledge may give small and medium-sized law firms an edge with larger clients, according to a survey reported by The American Lawyer. The survey, released by the Economist Intelligence Unit and business-to-business marketplace Globality, found that multinational companies are seeing benefits in working with small and medium-sized firms because they can offer the same quality of legal advice at more reasonable prices.
According to the report, smaller firms can be more cost-effective because they have lower overheads, allowing them to charge more moderate rates. As a result, they are able to provide the same legal expertise at a lower cost. They can also often provide regional or specialized expertise because they focus on providing services in a specialized community or area of the law. That can be appealing for multinational organizations that may have legal issues in different international jurisdictions [as quoted by Globality].
“Companies often highlight that they like the personalized experience and top-level attention from senior lawyers that smaller providers can bring to them, which is something that larger law firms need to determine how to emulate,” notes Stefan Zorn, Vice President of Customer Success at Globality.
See highlights from the full article and survey on The American Lawyer.
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In-House Counsel at large international companies experience greater satisfaction when working with small or medium sized firms, according to a new survey reported on The American Lawyer. The survey, released by The Lawyer Research Service in collaboration with Globality, found respondents at large global companies are three times more dissatisfied working with larger law firms (19%) than smaller ones (6%).
Of the 71% of respondents that outsource the majority of work to smaller firms, nearly two-thirds (63%) report smaller firms provide better client service and almost half (40%) find smaller firms to be more innovative than traditional Big Law firms. Additionally, companies are becoming increasingly turned off by large firms due to their high prices, with over half of survey respondents saying their primary frustration when working with larger law firms is cost.
“We get better client service from smaller firms. When we instruct larger firms, we are probably one of their smaller customers and just another customer in the long list they already have. If you go to a smaller firm, even with a fairly small legal spend, we can be an important customer to them,” said Ben Woolf, General Counsel EMEA at Tate & Lyle, a U.K.-based multinational agribusiness, in a press release announcing the survey results.
See highlights from the full article on The American Lawyer.
Contact Bill Sugarman for more information.