Legal Business Blogs

Latham’s global march slowed as capital markets slump hits US elite

After setting the pace during last year’s global reporting season, raising revenue by 14% to $2.61bn to become the largest law firm in the world by turnover, growth at Latham & Watkins slowed in 2015 as the collapse in capital markets activity hits elite US firms.

Revenue grew 2% at Latham last year to $2.65bn as the firm added $38m to its top line. While the firm has extended its lead as the world’s largest law firm, with mid-tier giants DLA Piper and Baker & McKenzie yet to release their financial results, it is Latham’s slowest growth since 2009 when the financial crisis hit revenues across the legal elite.

Profit per partner at Latham was slightly up at $2.908m during Bill Voge’s (pictured) first year as global chair, having replaced longstanding leader Bob Dell at the start of 2015.

Revenue per lawyer dipped 2% to $1.22b and an extra 77 lawyers joined the firm last year after heavy investment in the firm’s international network and the launch of an entertainment, sports and media practice.

Voge said: ‘I was fearful this was going to be a dismal first year for me so the fact we had a revenue increase and stayed flat on profits made me a happy camper and they’re not going to throw me out any time soon!’

With capital markets one of the cornerstones of Latham’s business, accounting for around 15% of turnover, the firm was impacted by the slowdown in that market during the second half of 2015 following stock market turmoil in China. The firm’s renowned project finance practice, which Voge headed between 2004 and 2007, also suffered after oil companies stalled and cancelled projects following the oil price plunge last year.

Voge told Legal Business that slowdowns in these practices ‘were made up for with a strong showing in litigation, we well as in our white-collar, antitrust and IP groups which all had double-digit growth’.

He added: ‘Unlike last year, when every practice was on fire, we had a few that were down but there were a lot that were up. We’re very cautious going into 2016. The high yield market is still in hibernation and the equity markets are slow. We’re looking at Q1 and maybe Q2 of this year with caution.’

Latham has been one of the world’s fastest growing major law firms in the past five years, with revenue rising more than $400m between 2011 and 2015. It is currently the only law firm in the world with revenue of over $2.5bn. Voge added that ‘there will be further growth in New York, London and Germany’ as the firm focuses on core legal hubs, with Latham taking from star equity partners Clifford Chance and Linklaters in Frankfurt over the last 12 months.

The firm’s figures follow flat results from US elite firms Weil, Gotshal & Manges, White & Case and Davis Polk & Wardwell as the latter half of 2015 saw capital markets cool down and litigation linked to the financial crisis draw to a close.