Latham & Watkins has become the first law firm ever to report revenues over $3bn with the Los Angeles-bred firm adding nearly $250m to its top line.
The US giant today (22 February) confirmed financial results for the 2017 year, showing an 8.5% hike in revenues to $3.06bn, against $2.82m the previous year. Profit per equity partner (PEP) shifted up 6% to $3.24m, arguably sealing its status as the most potent global law firm, underwritten by credible transactional and disputes coverage spanning the US and Europe. Revenue per lawyer grew at a modest 1.5% pace to $1.26m while the firm increased its headcount 6.9% to 2,436 lawyers.
Richard Trobman, who is coming to his first anniversary as co-vice-chair, told Legal Business of his take on the ‘very exciting figures’, noting: ‘2017 was a fantastic year of strong and steady demand. Q4 was incredibly busy and we see that continue into 2018 across our practices, industries and markets.’
Although the firm did not disclose London revenues, Trobman said its City arm outpaced the global performance, posting a double-digit percentage income hike. ‘Along with New York, London is the central focus of our strategy and we’ll continue to focus on it.’
Trobman said many of the firm’s core practices in M&A, private equity, capital markets and banking saw 20%-plus growth, while its contentious business continued to grow. ‘In 2017 we saw the real benefit of our integrated global platform,’ added Trobman, pointing to the fact that the firm’s top 25 clients instructed its lawyers in 21 offices across the world on average.
The list of highlights and headline hires in 2017 is unsurprisingly long. Marquee deals included acting for Siemens on the €15bn merger between its railway operations with Alstom and advising Blackstone and CVC on the £3bn acquisition of Paysafe. The firm’s 34 laterals worldwide in the year included six in London.
In the City the firm returned to the Magic Circle for well-liked M&A partner Edward Barnett from Allen & Overy. It also continued its push outside its transactional heartlands in the UK. In disputes, it tapped Quinn Emanuel Urquhart & Sullivan in the first lateral out of the elite litigation firm’s City office in nine years and Olswang just before its three-way merger with CMS.
The firm also made waves in Europe, bolstering its small Spanish operation with the hire of DLA Piper senior partner and global co-chair Juan Picón last November, one of the most renowned lawyers in the country. Trobman also pointed to Germany as the area in Europe where the firm saw the biggest opportunities.
Trobman said the bullish mood was running into 2018, promising: ‘We have only just started.’
Despite the robust performance, all industry speculation now will be on if Kirkland & Ellis can de-throne Latham as the world’s highest revenue law firm after months of market chatter about another robust year for the ultra-ambitious shop.
While Kirkland last year trailed Latham’s turnover to generate $2.65bn, the question is if the frenetic activity among its core sponsor clients can have propelled it past its global rival. However it plays out, rivals in the City can’t help but reflect that it wasn’t that long ago that industry pundits believed the first $3bn law firm would have been bred in the Square Mile. Pity the poor City leaders.
For more on the competitive threat of US leaders in London, see the recent cover feature, The Departed (£)