National
US firms and the magic circle have emerged as winners in The Global 100 from The American Lawyer and Legal Week, which shows both groups making ground on
New York’s legal elite.
The Global 100 league table of the world’s largest law firms shows the group’s combined turnover up 13% in 2007, with 15 of the firms grossing more than $1bn (£490m), compared with 12 last year. The world’s top 100 law firms grossed $67.5bn (£33bn) between them in their latest financial year, with average partner profits across the group of $1.36m (£665,000).
Expansive US law firms including Latham & Watkins, Dechert and Morgan Lewis & Bockius were among the fastest growing, while London’s big four magic circle firms also made ground on their global rivals.
Clifford Chance (CC), Linklaters, Freshfields Bruckhaus Deringer and Allen & Overy (A&O) all bagged places in the top six largest firms in the world, grossing $7.76bn between them.
There are 17 UK-based firms in the league table, which has been produced by Legal Week and its US sister title The American Lawyer, with Berwin Leighton Paisner replacing the departing Denton Wilde Sapte.
Analysis of the magic circle compared with the 10 leading US-based global firms and leading New York-focused firms found the UK group had made considerable ground on profits and revenue-per-lawyer measures, even with the 2006 average exchange rate of $1.84 to the pound, which strips out the recent weakness of the dollar.
Partners on both sides of the Atlantic attribute the faster growth of the magic circle to a number of factors, including the impact on Wall Street of the Sarbanes-Oxley Act and the wariness of foreign businesses regarding America’s so-called litigation culture.
Freshfields co-senior partner Konstantin Mettenheimer commented: “There are two trends that can explain why the New York firms are not growing as fast as the European and national US firms. Firstly, they are less inclined to follow the international model and, secondly, the growth of London as a financial centre relative to New York.”
Skadden Arps Slate Meagher & Flom executive partner Robert Sheehan said that the global challenge to New York’s status was impacting on US firms’ thinking.
He told Legal Week: “London has become an increasing priority to US firms with significant capital markets practices over the past half-a-dozen years and this will continue to be the case.”
However, Linklaters capital markets head Nick Eastwell said: “For a number of reasons, I think it is unlikely that the bluechip Manhattan firms will change their New York-centric models drastically.”
Despite Skadden and Cadwalader Wickersham & Taft emerging as strong performers globally, New York firms in a number of cases have slipped down the annual rankings. Shearman & Sterling, for example, has dropped from the world’s 15th-largest firm in turnover in 2005, to 21st.
See Richard Lloyd on Editor’s Blog for more Global 100 comment. Legal Week will publish full details of The Global 100 later this month.
See The American Lawyer, a US sister title of Legal Week for more information.
