The British publication The Lawyer has published the
UK equivalent of the AmLaw 100 called, inventively, the UK
100.
While many of the firms will be unfamiliar to a US audience, there
are several interesting lessons to be drawn, particularly since The
Lawyer has been doing this for five years now and they venture
some five-year "trend" comparisons:
- Overseas expansion is anything but a guarantee of increased
profitability: In fact, of the four "Magic Circle" firms
with the most aggressive overseas-growth plans, only one—Freshfields—has
managed to pull off its investment with a profit-neutral impact. (It
didn’t hurt that Freshfields’ profit margin is in Microsoft-land
at 45%.) If this is sowing the seeds of future accelerating
profitability (as the strategy’s defenders claim), we are still
awaiting proof. - At the mid-range level (meaning, in the case of UK firms,
annual revenues from, say, US$40–$140-million), specialization
can pay off. Even if that means, harrumph, litigation. - Finally, mergers seem a viable route to higher profits/partner,
although the devil is in the execution.
Here’s the full table, with one column I added converting the
revenue numbers from £(000) to US$(000).
As a completely unexpected, and delightful, bonus, The Lawyer provides
an additional article delving
into the accounting practices and even financial-collection metrics
of a sampling of firms. [To the help with the jargon, work-in-progress,
a/k/a WIP, is the value of completed but unbilled work, and "lockup"
is the median period from delivering a bill to receiving payment.]
The main article ends on a speculative note, wondering whether
US/UK mergers are slated to return. If so, you’ll hear about
it here.
