Even for rapidly globalising law firms, the market remains challenging, it seems. Financial results for K&L Gates show the US law firm continuing to expand its global footprint in 2013, unveiling a 9.3% hike in revenues to hit $1.16bn, but also struggling to improve profitability for the second year in a row.
The growth is largely due to the Pittsburgh-bred firm’s takeover at the beginning of 2013 of Australian mid-tier Middletons and the launch of offices in Houston, Seoul and Wilmington.
The 1,700-lawyer firm’s revenue per lawyer was down by 4.8% to $586,797 from $616,486. The firm attributes this to the dilutive impact on the additional headcount from its merger with the 300-lawyer Middletons combined with reduced revenue in Asia. Profit per full equity partner was also down by 7.5% to $832,376 from $899,960. Unaudited figures show the firm also generated just over £40m in its 60-partner London arm during the year.
Unusually for the US market, K&L Gates issues a considerable amount of financial data. The firm carries no bank debt and also discloses its cash and cash equivalents, investment in leases, information technology spending and partner capital requirements.
A statement issued by the firm said that its flat underlying performance was in part due to the relative strength of the US dollar, which appreciated over the year by 6.8% relative to the Australian dollar, and also gained strength against major Asian currencies.
The figures come amid a mixed set of 2013 results from major US firms, with Shearman & Sterling this week unveiling a sharp rebound in growth, while Bingham McCutchen saw revenues fall by more than 10%, citing a soft restructuring market.
Click here for an interview with K&L Gates leader Peter Kalis