‘A platform that will thrive’: Latham bullish as blistering growth sees revenue hit $4.3bn alongside 20% PEP surge
Latham & Watkins has brushed aside pandemic-linked uncertainty to report a 15% revenue hike to $4.33bn, while profit per equity partner has hit $4.52m.
The pace-setting results announced today (16 March) mean the Los Angeles-bred giant has bolstered its financials for a fifth year running, with a 20% surge in PEP more than doubling the 10% increase to $3.78m over 2019 .
Latham added $566m to its top line in 2020, an increase of 15% on the $3.768bn of 2019 and revenue per lawyer rose 10% to $1.52m from $1.39m the previous year, even as lawyer headcount increased 5%.
Chair Richard Trobman (pictured) was upbeat as his predictions last year of continued double-digit growth came to pass, while noting that cost-savings were not a material aspect of the financials. ‘We are focusing on client demand. There was a significant uptick in the number of hours billed to clients and clients have recognised the value of our platform and the quality of the service we can deliver,’ he told Legal Business.
Trobman emphasised that the growth was not down to a particular outperforming practice area but to increased demand across transactions and disputes, especially in areas that are currently driving the global economy, such as tech, life sciences and financial services. ‘In capital markets, M&A and banking we are global market leaders and these increases have still outpaced the rest of the market,’ he added.
The message is borne out by the firm’s top 25 clients engaging Latham lawyers across an average of 26 offices around the world in 2020, while the top 50 clients enlisted its lawyers from an average 23 offices globally.
The firm does not officially disclose revenue for its London arm but Trobman said it performed ‘a little better than the firm at large’. By that reckoning, a 20% uptick in London turnover would mean that the City office now generates in the region of $540m, further enhancing its reputation as one of the most potent foreign practices in the high-end UK legal market.
Key mandates for the year have included advising NVIDIA in its $40bn acquisition of Arm from SoftBank, retailer New Look on its restructuring and insolvency-related litigation coming out of the pandemic, as well as acting for the banks on a €1.8bn credit line for TUI Group.
The firm also made some significant lateral hires in the City, not least at the start of 2020 as Latham renewed its push into London’s public M&A space with the hire of Freshfields Bruckhaus Deringer’s rising star Sam Newhouse and expanded its City emerging company capabilities through Taylor Wessing’s Mike Turner and Bird & Bird’s Shing Lo. Other notable additions in 2020 were structured finance partner Stephen Curtis from Clifford Chance, Mayer Brown restructuring partner Jessica Walker, M&A partner John Guccione from OMERS Infrastructure and capital markets partner Manoj Tulsiani from Linklaters.
The results also follow the announcement last Friday (12 March) that Latham has elected a successor to vice chair Ora Fisher in the form of New York tax partner and member of the executive committee, Lisa Watts. Watts joins Chicago partner and fellow vice chair Brad Kotler as she succeeds Bay Area partner Fisher, who held the position since October 2011 and will retire later this year.
Trobman insists it’s not all about the financials. ‘We’ve had an equally strong year, in extraordinary circumstances, on the things that make Latham a special firm – supporting our clients, one another and the community. There has been consistent high quality and each Latham lawyer has worked to achieve the best result for clients with a total lack of self-interest. Our focus on teamwork is never more evident than in the feedback we get from clients.’
He concluded on an optimistic note: ‘2021 will be another strong year. We will continue to invest and continue to control our destiny. I really believe that the best is yet to come. We have built a platform that will thrive irrespective of macro events and are well-positioned whatever may come.’
Of course, it has now become the annual ritual for Latham to become the top grossing law firm in the world, only to be usurped a few weeks later by Kirkland & Ellis. Since the Chicago-bred juggernaut won the competition in 2019 with $4.15bn turnover, the usual trouncing seems once again inevitable in 2020. The only question will be – by what distance will Kirkland overtake?