US and UK law firms announce bumper financial results
Profits soar at Hogan Lovells, Dechert, White & Case and Addleshaw Goddard 📈
A quartet of US and UK headquartered law firms look to have put the economic uncertainty of the pandemic firmly behind them, with all four recording sizeable increases to profits in their latest financial results.
Hogan Lovells announced profit per equity partner (PEP) had climbed a hefty 25.9% to hit $2.49 million (£1.8 million) thanks to a 12.9% uptick in global revenues to $2.6 billion (£1.9 billion). Revenue per lawyer also jumped 16.5% to $1.03 million (£760,000) for the 2021 financial year.
The firm’s chief executive Miguel Zaldivar pointed to the global transactions practice as a “key driver” for the “strongest results in its history”.
Dechert, meanwhile, saw global revenues rise by a quarter to exceed $1.34 billion (£996 million) against a 49% jump in PEP to $4.2 million (£3.1 million). Net income rose from $435.9 million (£324 million) to $597.7 million (£444 million) — an increase of 37%.
Dechert’s CEO, Henry Nassau, commented: “2021 was one for the history books. We are incredibly proud of the firm, our partners and associates and the rest of our business community. This was an extraordinary year with extraordinary demand in the backdrop of another challenging year of Covid.”
Fellow US outfit White & Case also posted robust figures, with revenues climbing 20% to $2.87 billion (£2.1 billion) and PEP rising 17% to $3.5 million (£2.6 million) for the 2021 financial year. In London, turnover enjoyed a 12% increase to roughly $445 million (£331 million).
London office executive Dipen Sabharwal QC said:
“Our London practices were very busy supporting clients as the office again made a significant contribution — one sixth of the global total — to another year of record global financial results. Since the start of 2016, our UK revenue has increased by 53%. Our success speaks volumes for the hard work and dedication of our people in London and the office is positioned to continue its track record of success in 2022 and beyond.”
Elsewhere, UK headquartered outfit Addleshaw Goddard saw pre-tax profits climb by over a third (33%) to £135.6 million. Turnover climbed £285.3 million to £320.5 million. It’s highest paid partner received £1.61 million, a 47% jump on the previous year.
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12 Comments
Anonymous
And yet associate salaries are criticised…
SatiricalSloth
Yay the senior equity partners get more money wahooo!!!!
mc
Yet partners think associates are overpaid earning a tiny fraction of what the equity partners do
Artistotle
Be told, the profitability of a firm should have no bearing on associates’ remuneration. It’s like telling Hermes to pay each sale associate at the store £200k because the leather goods are popular amongst the upper echelons of society.
One must cease asking for more pay rise for associates. This is unhealthy and would only result in enormous expectations on associates to deliver, which may adversely affect the career path of the associates by booting them out early. Juniors should earn a modest salary and develop the requisite skills necessary to perform their responsibilities in their entirety.
Yawn
Which firm are you a partner at?
If it’s clearly profitable to pay associates well (still a fraction of the earnings of a PEP) without treating associates like complete sh*t, why not do it?
arguing on LC whilst the world is burning
You’re comparing Hermes staff to Law firm associates? Oh this site will never fail to me laugh.
Most importantly those businesses run completely different business models. Staff ARE a law firms key asset and thus remuneration is high. For a luxury fashion house their key asset is the brand and it’s products. So comparing the two like for like is just absurd.
Queen's Counsel of Hearts
My friend, I only read LC for the comments!
Hard Facts
I find it astonishing that some partners are complaining that associate salaries are going from 4% of PEP to 5% of PEP. Partners will sometime make 20 times the amount their associates, and then they complain about associates getting paid too much. It’s truly repugnant.
They also say that increases in associate salaries will have to be passed on in higher fees to clients. If I run a business and my costs go up, sometimes the client will pay more, but if I’m making a massive profit sometimes my profit will go down slightly. They will still make literally millions every year. Cry my a river.
Basil Brush
At the other end of the scale, BLM have issued a corporate tie.
Like its pay, the pattern will be small checks.
Impatient
Still waiting for a 49% increase in associate pay…
Anon
Firms like White & Case and even Hogan Lovells now leaving the magic circle behind on both PEP and revenues. MC need US mergers or risk sliding to mediocrity
well done, your open day application has been accepted
since when did revenues or PEP have anything to do with mediocrity?
MC firms are still rated extremely highly in most areas by the directories and they’re doing fine when it comes to deal count/value and market share… including in areas where they’re supposedly “losing” like big ticket M&A and funds…
Hogan Lovells is a verein – its London partners don’t enjoy the same levels of profits as those in the US offices. This differentiated compensation is true for basically all ‘true’ US firms and is why US partners often still out-earn their counterparts in London.
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