Latham & Watkins‘ global strategy has paid off with its 2014 revenues surging by 14% to $2.61bn in 2014 and making it the largest law firm in the world, an achievement managing partner Bill Voge (pictured) puts down to the recovery of the global M&A market and to clients increasingly using multiple offices across its ‘global footprint’.
The sharp rise in turnover from the $2.29bn achieved in 2013 helped the firm to record its highest ever profit per equity partner (PEP), with the average take home package for 2014 rising by 17% to $2.9m. The level of profitability edges the firm closer to the likes of Kirkland & Ellis and Gibson, Dunn & Crutcher and makes ground on the White Shoe firms that have historically clocked the highest partner profits with Latham’s PEP having previously been $2.49m in 2013 compared to the likes of Sullivan & Cromwell which recorded $3.65m that year.
Lathams’ revenues could still be surpassed by DLA Piper, which pulled in over $2.48bn in 2013 and won’t publish its results until April, or Baker & McKenzie, which raked in $2.54bn for the year ending 30 June 2014 but it is worth noting that the US firm has been growing at a faster rate than those firms in recent years. The figures also put the firm clear of Magic Circle rivals such as Clifford Chance which in 2013/14 had revenues of around $2.1bn with Linklaters and Freshfields Bruckhaus Deringer both around the $2bn mark.
The firm’s managing partner, Bill Voge, put the achievement down to the resurrection of the global M&A market last year and huge gains achieved by the firm’s capital markets and private equity groups. ‘Next week I have to address our partnership in London at our annual partners meeting and traditionally Bob Dell [the firm’s former managing partner] highlighted 10 or so high profile deals, but I’m going to tell our partners it was too difficult to highlight deals in 2014 as we had around 50 high profile deals.’
He added that the firm’s aggressive international expansion, with 33 offices worldwide, had also played a major part with over 85 of the firm’s top 100 clients using Latham in more than one country. Voge explains: ‘The global footprint has caused us to have this increase in revenues. We have a global footprint that satisfies the needs of our clients and a lot of what kept our lawyers so busy was the clients that chose to use Latham in multiple offices and countries.’
While the number of lawyers at the firm only increased by 40 to 2,100 in 2014, largely driven by London and New York, revenue per lawyer increased from $1.11m in 2013 to $1.24 in 2014.
US firms have outperformed their UK rivals in recent years and Latham’s figures for 2014 have continued that trend and even outpaced some of its stateside rivals. Both Davis Polk & Wardwell and Paul, Weiss, Rifkind, Wharton & Garrison broke the billion-dollar mark in revenues in 2014 with strong revenue growth of 13% and 11% respectively to $1.1bn and $1.03bn.
The achievement concludes Bob Dell’s 20-year leadership of the firm after stepping down as managing partner and chair on 31 December to be replaced by London-based Bill Voge.
Voge concluded: ‘The global law firm that Bob Dell led over 20 years is starting to have dividends by clients using us more and more in different offices and different countries.’
tom.moore@legalease.co.uk
For more analysis of the rise and rise of Latham & Watkins see: The firm most likely – can anything halt Latham’s global rise?