The days when London offices tended to be expensive beachheads draining profits from American parents appear to be long gone, with Weil, Gotshal & Manges and Covington & Burling joining the string of US law firms to substantially hike their revenues in the City in 2014.
Weil’s London arm saw a 10% rise in revenue to $125m in 2014 as the New York firm targeted the newer divisions of private equity clients, including credit and distressed debt desks. Last year the firm grossed $114m in the UK. The result means Weil’s 31-partner City arm was a major driver of growth as firm-wide revenue was up only 1.2% to $1.15bn.
The 300-partner firm attributed the growth to an uptick in M&A activity and the broadening of its London office beyond its buyout heartlands. ‘We’ve benefitted from having a strong range of practices, with leveraged finance and restructured finance off the charts,’ said Weil London managing partner Mike Francies.
While the firm last year lost highly regarded banking partner Stephen Lucas to Kirkland & Ellis in a much publicised transfer, Francies says the firm has focused on achieving organic growth. Having last year secured the hire of restructuring veteran Andrew Wilkinson from Goldman Sachs, the firm made London the focus of its partner promotions, with a third of the 12 made up in January being based in the City.
‘The biggest contributor to our success last year came from the broadening out of the practice. Previously it was very private equity-focused and a lot of the work, even if it wasn’t generated by the partners, was based off our private equity expertise, whereas now the work is based off funds generally,’ said Francies.
He added: ‘A lot of the big private equity funds aren’t private equity funds anyway, they have credit, real estate, infrastructure, distressed, the whole lot, and that really plays to our strengths because having a really strong finance practice, particularly in structured finance, we could attack these multi-asset managers in a number of different areas.’
Covington, meanwhile, also posted a notable rise in revenue, with its income in the City nearly 7% up to $64m. In 2013 the firm grossed $60m in the Square Mile. Covington’s 23-partner City arm accounted for 9% of its global revenue, which grew at a similar pace to hit $709m in 2014.
The results underline a three-year run in which US-bred law firms have made considerable ground in the UK. Legal Business’s 2014 Global London report, which tracks the 50 largest foreign law firms in London, found that headcount in the Square Mile in the group had risen by 6% over the previous 12 months, with the 50 largest firms employing 4,624 lawyers as a whole. Current indications are that such trends are continuing… and perhaps even accelerating.
Click here to access our 2014 Global London report