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Leaders in Legal Business
Chapter 5 – MPs and COOs – 100 Largest Law Firms Tony Williams1
Jomati
Principal
The development of the world’s 100 largest law firms has been quite amazing over the last 10 years and
looks to be even more substantial over the next decade.
According to The American Lawyer figures, we now have 30 law firms with annual revenues of more
than $1 billion USD; six of those firms have annual revenues of more than $2 billion. In 2008 there were only 18
law firms that passed the $1 billion mark, one of which was Dewey & LeBoeuf, which subsequently crashed and
burned. However, in 2008 there were seven firms with revenues of more than $2 billion, primarily as a result of
an exchange rate of U.S. $2 : £1, which propelled the four U.K. Magic Circle firms into that top echelon, whereas
now with U.S. $1.50 : £1, only Clifford Chance makes that particular cut.
The total revenue generated by the 100 largest firms was $78.63 billion in 2008 and reached $84.90 billion
by the end of 2013. Although much of this revenue growth was the result of merger activity, it does show that
most of this group has navigated the global financial crisis well and have in many cases improved their market
position, market share, and equity partner profitability.
It is, however, necessary to look at the drivers for this
growth in law firms (especially during a time of recession
and subdued recovery for most Western economies) and to
consider how the market will develop further over the next
10 years.
Traditionally, it has been thought that there were
relatively few economies of scale in a legal business. Size
brought more significant conflict issues and consumed large
amounts of partner time on “management” issues — so why
the urge to become bigger?
In the last 10 years, the key drivers appear to have been:
1) Globalization;
2) The need to demonstrate U.K. and U.S. law capability;
3) The wish to build a U.S. practice; and
4) Branding and recognition.
Globalization
One of the encouraging outcomes of the financial crisis is that no country reverted to significant amounts
of protectionism and that regional and bilateral trade deals continue to be made. The world is now far more
interconnected than ever before. Trade, investment and know-how move relatively easily across borders. Although
New York and London remain the world’s primary financial centers, others such as Singapore, Shanghai and Sao
1 Tony Williams is a principal at Jomati Consultants LLP, a U.K.-based international management consulting firm for law firms, lawyers and in-house
counsel that specializes in strategic expansions, reorganizations, and client strategies. Before founding Jomati Consultants, Tony was worldwide managing
partner of Andersen Legal and head of its U.K. practice, where he developed the firm’s international strategy. Prior to joining Andersen Legal, Tony was
managing partner of the world’s largest law firm, Clifford Chance. He was with Clifford Chance for almost 20 years and prior to his managing partner role
he was a corporate partner in London, Hong Kong and the managing partner of the firm’s Moscow office. For his role in the orderly and controlled dissolution
of Garretts following the Enron crisis, he was named “Partner of the Year” by The Lawyer Magazine in 2002. Tony is also a founding member of Halsbury’s
Law Exchange, an independent and politically neutral legal think tank that contributes to the development of law and the legal sector.
93
Chapter 5 – MPs and COOs – 100 Largest Law Firms Tony Williams1
Jomati
Principal
The development of the world’s 100 largest law firms has been quite amazing over the last 10 years and
looks to be even more substantial over the next decade.
According to The American Lawyer figures, we now have 30 law firms with annual revenues of more
than $1 billion USD; six of those firms have annual revenues of more than $2 billion. In 2008 there were only 18
law firms that passed the $1 billion mark, one of which was Dewey & LeBoeuf, which subsequently crashed and
burned. However, in 2008 there were seven firms with revenues of more than $2 billion, primarily as a result of
an exchange rate of U.S. $2 : £1, which propelled the four U.K. Magic Circle firms into that top echelon, whereas
now with U.S. $1.50 : £1, only Clifford Chance makes that particular cut.
The total revenue generated by the 100 largest firms was $78.63 billion in 2008 and reached $84.90 billion
by the end of 2013. Although much of this revenue growth was the result of merger activity, it does show that
most of this group has navigated the global financial crisis well and have in many cases improved their market
position, market share, and equity partner profitability.
It is, however, necessary to look at the drivers for this
growth in law firms (especially during a time of recession
and subdued recovery for most Western economies) and to
consider how the market will develop further over the next
10 years.
Traditionally, it has been thought that there were
relatively few economies of scale in a legal business. Size
brought more significant conflict issues and consumed large
amounts of partner time on “management” issues — so why
the urge to become bigger?
In the last 10 years, the key drivers appear to have been:
1) Globalization;
2) The need to demonstrate U.K. and U.S. law capability;
3) The wish to build a U.S. practice; and
4) Branding and recognition.
Globalization
One of the encouraging outcomes of the financial crisis is that no country reverted to significant amounts
of protectionism and that regional and bilateral trade deals continue to be made. The world is now far more
interconnected than ever before. Trade, investment and know-how move relatively easily across borders. Although
New York and London remain the world’s primary financial centers, others such as Singapore, Shanghai and Sao
1 Tony Williams is a principal at Jomati Consultants LLP, a U.K.-based international management consulting firm for law firms, lawyers and in-house
counsel that specializes in strategic expansions, reorganizations, and client strategies. Before founding Jomati Consultants, Tony was worldwide managing
partner of Andersen Legal and head of its U.K. practice, where he developed the firm’s international strategy. Prior to joining Andersen Legal, Tony was
managing partner of the world’s largest law firm, Clifford Chance. He was with Clifford Chance for almost 20 years and prior to his managing partner role
he was a corporate partner in London, Hong Kong and the managing partner of the firm’s Moscow office. For his role in the orderly and controlled dissolution
of Garretts following the Enron crisis, he was named “Partner of the Year” by The Lawyer Magazine in 2002. Tony is also a founding member of Halsbury’s
Law Exchange, an independent and politically neutral legal think tank that contributes to the development of law and the legal sector.
93
