Baker & McKenzie has fallen behind rival firm DLA Piper in the stakes to be the biggest global law firm after its worldwide revenues dropped 4% to $2.43bn in the fiscal year ending 30 June 2015.
The firm said the results, which are down on last year’s record $2.54bn, highlighted ‘the exceptional appreciation of the US dollar against most other currencies in the period’, which resulted in a ‘modest decline’, and that, on a like-for-like exchange rate, the firm’s total global revenues would have been up 2% compared to the previous financial year.
But profit per equity partner at the firm would still have been down, though instead of dropping the steep 12% to $1.14m from $1.29m the previous year, it would have only marginally shifted to $1.25m.
‘We are not where we wanted to be,’ said Bakers’ chairman Eduardo Leite (pictured). ‘We were affected, like anyone else that has a very global footprint and deals with 35 or more currencies by the devaluation of many currencies when we convert into the dollar. We also had a one-time impact of the change to a new system for financial and management purposes – SAP system – so there is an adaptation period, and this to some extent affected our billing cycle.’
In the last 12 months the firm has continued its international investment with the launch of two new offices in Brisbane and Jeddah, a joint venture in Shanghai which allows the firm to practice both international and Chinese law, as well as a new global services centre in Belfast.
Leite particularly cited standout performance in its antitrust, competition and tax practices, which managed to grow in dollar terms. The firm’s transactional practices in banking and finance, capital markets, M&A, private equity and real estate were also active, as well as the firm’s less established areas such as compliance and cybersecurity, which also saw a rise in activity.
The firm hired 51 lateral partners in the past year, and increased its full-time equivalent fee-earner headcount by 34% to 5,685 while total staff headcount was 11,336. Total billable hours at the firm grew by 5% to 7.8 million while productivity increased 2% on average.
Some key work at firm in the last year included advising the financial advisors and lead managers on the $6bn floatation of The National Commercial Bank, Saudi Arabia’s largest lender; representing Merck on the international aspects of its $14.2bn consumer care business sale to Bayer; and acting for CSR Corporation Limited on its $26bn merger with China CNR Corporation.
The results are considerably apart from last year when the firm overtook rivals and became the world’s largest law firm with a turnover of $2.54bn. In Legal Business’ Global 100, the top spot is currently occupied by Latham & Watkins, which set a high bar for the global elite after its 2014 revenues surged 14% to $2.61bn.