News

Emerging markets prove fertile ground as UK firms reap benefits of international strategies

Author: Sofia Lind

Published: 17/07/2008 05:51

Email article | Comment on this article | Sign up to News Alerts

International offices have played a significant role in boosting revenues over the last year, cushioning firms as economic conditions in the UK have deteriorated.

With most of the UK’s biggest players investing heavily in overseas offices in recent years, most have been able to benefit not just from the stronger markets in regions such as the Middle East and Asia but also from the strength of the euro against sterling.

Firms including Allen & Overy (A&O), Clyde & Co, Simmons & Simmons and Norton Rose all reported that at least 50% of their revenues came from overseas offices during the last financial year, with many firms picking the emerging markets as star performers.

Simmons senior partner David Dickinson said: “[Our international network] is a very important part of our business. Generally, the European network continues to grow. Due to the exchange rate, euro income is an advantage and it is a deliberate policy to be stronger and to expand in Europe.”

Freshfields London head Tim Jones said: “The downturn affects some geographical areas. At the moment, there is a pressure on fees and deals take longer to happen, especially in London. It could turn into a difficult year, but geographical diversity will help protect us.”

With the force of the downturn likely to impact more heavily on next year’s results, firms across the top 50 are expecting to be even more reliant on their international network, with many relocating existing partners and hiring locally in preparation.

Jones said: “We would like to grow in China, Moscow and the Middle East. I assume these markets will have greater impact on future profits.”

Linklaters managing partner Simon Davies said the firm’s international network, which was streamlined earlier this year when the magic circle firm made the decision to split from four of its six offices in Central and Eastern Europe, serves as a “natural hedge”.

He said: “The increase in business in our international practices combined with the flight to quality will service the firm well over the coming year.”

Will the top 50 stand up as the slowdown takes hold? Click here to have your say.

Click on the link below for the full table of results.

UK Top 50 2007-08