LawFuel.com- International Law Newswire Service
NEW YORK (October 1, 2010) – U. S. law firms Baker & McKenzie and Skadden, Arps, Slate, Meagher & Flom regained the number one and two revenue spots respectively, as The American Lawyer unveiled its 2010 Global 100 rankings of the world’s largest law firms based on gross revenues, headcount and profits per partner for their most recent fiscal year. The U.K.’s Magic Circle law firms, hit by the fallout of the global recession and currency devaluation, dropped significantly on this year’s list, with last year’s leaders, Linklaters and Freshfields Bruckhaus Deringer, dropping to the fourth and sixth spots, respectively. Six of the top ten largest firms on this year’s rankings were based in the U.S. For these and other stories, as well as Global 100 charts, visit www.americanlawyer.com.
Wachtell, Lipton, Rosen & Katz again gained the top ranking in profits per equity partner and also reported the highest revenue per lawyer. Baker & McKenzie again led the headcount rankings.
“The recession was an equal-opportunity destroyer of revenue at most of the global 100 firms, but our data showed that, thanks to rigorous cost-cutting, many firms handled it well,” said Robin Sparkman, editor in chief of The American Lawyer.
With five Yankee newcomers—Jenner & Block, Littler Mendelson, Sheppard Mullin Richter & Hampton, Troutman Sanders, and Venable—the revenue list from top to bottom has a decidedly more American accent. Some 79 of The Global 100 are U.S.–headquartered.
Second-tier London firms fared especially badly. Eversheds and Ashurst tumbled nine and 12 spots on our chart in a year, respectively, and Simmons & Simmons dropped 25 spots. Third-tier British firms performed even more poorly. Five of 17 U.K. firms on The Global 100 have vanished from the list since fiscal year 2007. (Some U.K. firms, however, remain in the top 100 by head count.)
Even controlling for currency effects (by comparing pound results to pound results), on average those British firms on both this and 2008’s lists saw a 7 percent compound annual decline in profits per partner from 2007 to 2009, versus a comparable decline of 2 percent for the U.S. firms on the list.
In addition to drops in the value of the pound, at least two other factors account for the transatlantic discrepancy in performance. First, the U.K. firms have smaller litigation practices than the U.S. firms, typically 15–20 percent of firm revenues, rather than 40–60 percent. While litigation has not fully counterbalanced the transactional falloff during this recession, it has provided some measure of stability for American firms.
Secondly, law firm layoffs are about three times more expensive outside the United States because of longer notice and severance requirements. With six months’ severance and often longer required for associates and other staff, layoffs in 2008–09 will make a British firm’s numbers look uglier on 2010’s charts.
The American Lawyer’s Global 100 rankings are compiled in conjunction with London’s Legal Week. Detailed ranking charts will be available on the Web to registered subscribers at www.americanlawyer.com/global100.
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