The legal industry is fixated on numbers—law firm revenue, profits per equity partner, revenue per lawyer, associate pay, rankings, and more. But numbers by themselves have little meaning. There’s a story behind them. And it may not be what you think.
M&A league tables, for example, purport to show winners and losers in various markets around the world. Last week we saw the London Stock Exchange Group’s rankings from the first six months of 2024, showing that Skadden, Arps, Slate Meagher & Flom was the top legal adviser in M&A as measured by deal value, globally and in Europe. In Asia, Simpson Thacher & Bartlett led the rankings for deal value in the first half, while in Latin America, Big Law was shut out of the top spots by Brazilian firms, led by by Pinheiro Neto Advogados. In the U.K., meanwhile, it was Linklaters that topped the rankings.
But these tables merely demonstrate short-term success and tend to change year to year. They fail to tell the whole story.
Linklaters can be applauded for topping the U.K. league tables and getting in on big deals, and it should be proud of its financial results for the year, which showed that it surpassed £2 billion ($2.5 billion) in revenue for the first time in its history. (It also saw an increase in pre-tax profit and PEP). But that’s only one Linklaters story.
The firm also lost a string of senior partners over the past year, many to higher-paying U.S. firms such as Paul, Weiss, Rifkind, Wharton & Garrison, Skadden and Gibson, Dunn & Crutcher—firms unencumbered by a lockstep compensation system.
Allen & Overy also reported its financial results for the year prior to its merger with Shearman. Those numbers also showed a strong year, with profits increasing more than 17% to £1 billion, average profit per equity partner reaching £2.2 million, and revenue hitting £2.2 billion.
While those numbers appear strong, the firm’s financial results from the previous year—albeit a tough year for many firms in the U.K.—were not so stellar. Legacy A&O still seized upon the opportunity to push into the valuable U.S. market by merging with Shearman. The now-merged firm is expected to see revenue reach about $3.4 billion, but the story yet to be told, both through numbers and more intangible measures, is how quickly and painlessly the new firm can capitalize on the historic transatlantic merger.
More numbers-based stories abound...
