Baker & McKenzie has overtaken DLA Piper as the world’s largest law firm, with revenues for the year ending 30 June 2014 climbing by 5% to $2.54 billion after a transactions bonanza.
The firm, which last year opened offices in Myanmar and Dubai, is the first law firm to break the $2.5 billion revenue barrier since the global financial crisis, with the firm’s transactions practices accounting for $1bn of that figure.
Profits at the 4,254-lawyer firm rose from $865m to $910m, producing an improved profit per partner of $1.29m, an increase of 7% on 2013.
Baker & McKenzie reported a sharp rise in revenue from the Americas, and while North America still provides a greater revenue share than its southerly neighbour, Latin America now has a higher headcount courtesy of the firm’s Peruvian expansion. Revenue in the Americas increased from $871m to $914m as that expansion paid dividends when the firm was called upon to advise on Chinese miner CITIC Metal on its $5.85 billion acquisition of Las Bambas Copper Project in Peru from Glencore Xstrata. Europe’s economic recovery, guarded closely by toughed up regulation, produced a stellar year in EMEA with revenue up from $895m to $965m, boosted by mandates that included the $1.1 billion receivership of London’s iconic Gherkin building, one of the largest commercial property restructurings in the market.
Baker & McKenzie chairman, Eduardo Leite, said: ‘We’ve witnessed an improvement on the complexity and challenging quality of the work in the transactional areas, we’ve seen an uptick in M&A and clients are more confident about the market. It’s not come back to 2007 but work now has added complexity coming from stricter due diligence on mergers and acquisitions and investments.’
‘Clients are getting more and more global, they need and they must move into the growth markets, and the more they move into emerging markets the rule of law is not as stable and they face greater risk. The regulators in the emerging markets are getting as sophisticated as in Europe and the US and that means greater risks of dealing with local issues so for us, being so widely spread across the globe, is a competitive advantage.’
‘We are concerned about the instability in some places. We have our people in jurisdictions that go through crisis and the situation in Ukraine and Russia we hope will deescalate and will not go completely out of control. We’ve had challenging times in our Cairo office, where we’ve been since 1995, which is now stabalising again. We have our own security systems but it’s a risk of doing business globally that our clients face and we should not be shy or afraid but careful of going into new jurisdictions or investing for the long-term.’
Growth was flat in Asia Pacific, where the likes of Allen & Overy, Norton Rose Fulbright and Eversheds have all pulled back on investment this past year, with revenue rising from $653m to $660m.
Baker & McKenzie was appointed to 35 legal panels over the past 12 months, including BP, Shell and Barclays. The firm is also the largest in terms of headcount, with 10,896 fee earners and an expanded partnership after making 56 laterals and promoting 65 associates to partner.
Tom.moore@legalease.co.uk