Latham & Watkins news, updates and analysis | Page 1 of 16

Latham & Watkins has brushed aside pandemic-linked uncertainty to report a 15% revenue hike to $4.33bn, while profit per equity partner has hit $4.52m.

The pace-setting results announced today (16 March) mean the Los Angeles-bred giant has bolstered its financials for a fifth year running, with a 20% surge in PEP more than doubling the 10% increase to $3.78m over 2019 .

Latham added $566m to its top line in 2020, an increase of 15% on the $3.768bn of 2019 and revenue per lawyer rose 10% to $1.52m from $1.39m the previous year, even as lawyer headcount increased 5%.

Chair Richard Trobman (pictured) was upbeat as his predictions last year of continued double-digit growth came to pass, while noting that cost-savings were not a material aspect of the financials. ‘We are focusing on client demand. There was a significant uptick in the number of hours billed to clients and clients have recognised the value of our platform and the quality of the service we can deliver,’ he told Legal Business.

Trobman emphasised that the growth was not down to a particular outperforming practice area but to increased demand across transactions and disputes, especially in areas that are currently driving the global economy, such as tech, life sciences and financial services. ‘In capital markets, M&A and banking we are global market leaders and these increases have still outpaced the rest of the market,’ he added.

The message is borne out by the firm’s top 25 clients engaging Latham lawyers across an average of 26 offices around the world in 2020, while the top 50 clients enlisted its lawyers from an average 23 offices globally.

The firm does not officially disclose revenue for its London arm but Trobman said it performed ‘a little better than the firm at large’. By that reckoning, a 20% uptick in London turnover would mean that the City office now generates in the region of $540m, further enhancing its reputation as one of the most potent foreign practices in the high-end UK legal market.

Key mandates for the year have included advising NVIDIA in its $40bn acquisition of Arm from SoftBank, retailer New Look on its restructuring and insolvency-related litigation coming out of the pandemic, as well as acting for the banks on a €1.8bn credit line for TUI Group.

The firm also made some significant lateral hires in the City, not least at the start of 2020 as Latham renewed its push into London’s public M&A space with the hire of Freshfields Bruckhaus Deringer’s rising star Sam Newhouse and expanded its City emerging company capabilities through Taylor Wessing’s Mike Turner and Bird & Bird’s Shing Lo. Other notable additions in 2020 were structured finance partner Stephen Curtis from Clifford Chance, Mayer Brown restructuring partner Jessica Walker, M&A partner John Guccione from OMERS Infrastructure and capital markets partner Manoj Tulsiani from Linklaters.

The results also follow the announcement last Friday (12 March) that Latham has elected a successor to vice chair Ora Fisher in the form of New York tax partner and member of the executive committee, Lisa Watts. Watts joins Chicago partner and fellow vice chair Brad Kotler as she succeeds Bay Area partner Fisher, who held the position since October 2011 and will retire later this year.

Trobman insists it’s not all about the financials. ‘We’ve had an equally strong year, in extraordinary circumstances, on the things that make Latham a special firm – supporting our clients, one another and the community. There has been consistent high quality and each Latham lawyer has worked to achieve the best result for clients with a total lack of self-interest. Our focus on teamwork is never more evident than in the feedback we get from clients.’

He concluded on an optimistic note: ‘2021 will be another strong year. We will continue to invest and continue to control our destiny. I really believe that the best is yet to come. We have built a platform that will thrive irrespective of macro events and are well-positioned whatever may come.’

Of course, it has now become the annual ritual for Latham to become the top grossing law firm in the world, only to be usurped a few weeks later by Kirkland & Ellis. Since the Chicago-bred juggernaut won the competition in 2019 with $4.15bn turnover, the usual trouncing seems once again inevitable in 2020. The only question will be – by what distance will Kirkland overtake?

nathalie.tidman@legalease.co.uk

Latham & Watkins has reported its second consecutive year of double-digit growth as its revenue surged to $3.768bn in 2019 while profits per equity partner (PEP) hit $3.78m.

The results announced today (26 February) mean the Los Angeles-bred giant has improved its performance for the fourth year in a row, with the 9.5% surge in PEP outpacing the 6% increase achieved in 2018.

An unsurprisingly bullish chair Richard Trobman (pictured) predicted that such growth will become the new normal at Latham: ‘We expect to see growth rates in line with what we have seen in the last couple of years,’ he told Legal Business. ‘Our business model is strong, we have a clear strategy and a great culture.’

Latham added $381m to its top line in 2019, an increase of 11% on 2018, while net income rose 16%. Revenue per lawyer was up by a very credible 4% to $1.385m as Latham grew its legal staff 7% to 2,720 and partner headcount 8% to 790.

The firm does not officially disclose revenue for its London arm but Trobman said it grew at a much faster pace than the firm globally, hiking revenue ‘well in excess of 15%’. The firm’s 98-partner City office is now believed to generate in the region of $450m, bolstering its reputation as one of the most potent foreign practices in the high-end UK legal market.

Trobman said that Latham’s Asia Pacific business grew at its fastest rate ever and the US was ‘incredibly strong’. ‘Not only are we seeing significant growth, but profitable growth. What we are proud of is that what’s driving that growth is our ability to continue to utilise our global platform, work together as a team, collaborate and support one another.’

He pointed to the fact that the firm’s top 50 clients engaged Latham’s lawyers from on average 23 offices around the world, up from 19 offices in 2018.

The firm’s list of European deals in 2019 included work on the liquidation of travel group Thomas Cook, advising EQT on the financing for the acquisition Nestlé’s $10bn skincare business, and Interswitch on its partnership with Visa. Global deals included advice to Mellanox Technologies in its $6.9bn sale to NVIDIA Corporation.

The firm also made some significant laterals in the City in Linklaters’ insurance partner Victoria Sander and Clifford Chance’s infrastructure and real estate veteran Stephen Curtis in 2019. Even more significant were the moves at the start of 2020 as Latham renewed its push into London’s public M&A space with the hire of Freshfields Bruckhaus Deringer’s rising star Sam Newhouse and expanded its City emerging company capabilities through Taylor Wessing’s Mike Turner and Bird & Bird’s Shing Lo.

The 2019 results mean Latham has added $1.16bn to its top line in five years, growing revenue 44% and PEP 30% on $2.61bn and $2.9m in 2014, when it became the highest-grossing law firm in the world and the first to ever pass the $2.5bn revenue mark. The firm has doubled both revenue and PEP between 2009 and 2019.

‘We are in this for the long haul,’ concluded Trobman. ‘We are going to continue to invest in the same way that the partners who came before us did.’

The results temporarily make Latham the highest-grossing law firm in the world. Yet US rival Kirkland & Ellis, which is expected to announce its own 2019 financials shortly, only needs to marginally improve its 2018 figures to remain ahead; the Chicago giant last year reported turnover of $3.76bn. Unsurprisingly, indications from Kirkland are that the outfit will this year become the first law firm in the world to break the $4bn barrier.

marco.cillario@legalease.co.uk