Baker & McKenzie Breaks $2B; Firm’s Revenue Rises 20%
Posted Aug 14, 2008 10:21 AM CST
By Martha Neil
Despite the struggling U.S. economy, Baker & McKenzie has had a banner year. For the fiscal year that ended in June, it booked total global revenue of $2.19 billion, breaking the $2 billion—and the 1 billion pound—barrier for the first time.
Last year, the megafirm, which got its start in Chicago, booked revenue of $1.82 billion (918 million pounds), so the latest figures represent a 20 percent revenue rise, according to Legal Week.
The latest figures also represent a 20 percent increase in profit per partner, the British legal publication reports: Firmwide PPP was a little over $1.2 million (644,000 pounds) for the fiscal year, up from $1.063m (567,000 pounds) for the prior year. However, it says that "average profits per partner" are stagnant, at 590,000 pounds ($1,101,901) both this year and the prior year. The average figure may include non-equity as well as equity partners.
What is the secret to the law firm's success? A diversified practice that benefits from a global economy, according to John Conroy, the chairman of Baker & McKenzie's executive committee.
“We are very encouraged by the results, as they are well distributed across all four of our regions," he tells Legal Week. "Obviously certain markets have seen a slowdown; however, we are less reliant on local work because of the way our international offices are integrated.”
The 3,900-attorney firm has made a sea change in its management in recent years, integrating much more closely what was once viewed as a group of independent law offices (they now number 70, in 38 countries), reports an American Lawyer article on Baker's banner year. "Those actions include an effort, called the Global 200, to focus on expanding the firm's relationship with its 200 most important client relationships, trimming the firm's more than 30 practices to 11 core practices, and growing in key markets such as New York, where the firm’s office has doubled in the last three years."
Conroy highlighted Baker & McKenzie's offices in Brazil, the Middle East and Russia as particularly strong performers, in his interview with Legal Week. The firm now generates 42 percent of its revenue in the European and Middle Eastern market, and has only 20 percent of its lawyers in the U.S., American Lawyer says.
Three other international law firms with a significant presence in the U.S. reportedly have broken the $2 billion revenue mark within the last year. They are: DLA Piper; Latham & Watkins; and Skadden Arps Slate Meagher & Flom, as discussed in an earlier ABAJournal.com post.
Updated at 5:56 p.m. to indicate that Baker has offices in 38 countries.