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‘All cylinders running’: Latham breaks the $3m PEP mark and adds $1bn to its post-crisis top line

Latham & Watkins is the latest US firm to boost its revenue, announcing 7% growth and breaking the $3m mark for profit per equity partner (PEP) for the first time.

After seeing its slowest growth since the height of the financial crisis in 2015, when revenues grew just 2% to $2.65bn, Latham is back on a faster upward trajectory. Overall revenue last year rose to $2.8bn as the firm added $173m to its top line, while revenue per lawyer also rose by 2% from $1.21m to $1.23m as 103 lawyers joined the firm throughout 2016.

Latham made 26 lateral hires in 2016, including nine in the US, 13 in Europe (10 in London) and four in Asia.

According to Latham global chair and managing partner Bill Voge, the firm was ‘cautious’ going into 2016 given its significant exposure to capital markets.

Voge (pictured) said: ‘Though capital markets were slower in Q1 2016, we have 28 practice areas here and most of them were quite busy. Litigation and the environmental practice were both red hot throughout the year, and from Q2 in 2016 it was quite epic on transactional side,’ he said.

While in 2015 Latham’s project finance practice suffered due to falling oil prices, 2016 brought two big changes.

‘Energy development kicked up again and we started seeing new mandates, and we also saw tremendous activity in debt restructuring. Oil and gas was also up 300% in production,’ Voge added.

In his second year as global chair, PEP grew by $154,000 from 2015. But he argues he simply inherited a well-run firm.

‘Bob [Dell] invested 20 years in the firm, and my job is just cashing in dividends from his hard work. I could not have been more fortunate to step into his shoes,’ he says.

‘However profitability, whichever way you measure it, is all down to high-end complex cross-border transactions and staying with the current issues that are affecting global clients, on a mission to deliver the expertise they demand,’ he adds.

As US capital markets recover from a bruising 2016, Latham has added more than $1bn in revenue since the downturn in 2009, entering its seventh year of consecutive growth.

As chief operating officer LeeAnn Black says: ‘When you increase your revenue by $1bn, you have to have all cylinders running. We spent the last 10 years building the platform and making sure we have diverse capability to keep the engine running no matter what.’

Looking ahead, the firm continues its focus on London and continental Europe, following on from a series of high-profile hires in London in 2016, including Ashurst’s head of financial regulation Rob Moulton and restructuring partner Simon Baskerville, Slaughter and May’s former head of structured finance Sanjev Warna-kula-suriya and one of London’s most high-profile banking lawyers, Allen & Overy’s former head of finance Stephen Kensell.

The latest moves in Latham’s hiring spree were announced yesterday (22 February) as two new lateral hires joined its southern California Los Angeles and Century City offices. Former federal prosecutor and bar leader Thomas Nolan joins Latham from Skadden, Arps, Slate, Meagher & Flom, and securities litigator Joshua Hamilton joins from Paul Hastings in Los Angeles. Both will join Latham’s litigation and trial department.

Read more: ‘The firm most likely – can anything halt Latham’s global rise?’