“A Platform That Will Thrive”: Latham is optimistic as revenue growth is $ 4.3 billion on a 20% PEP increase
Latham & Watkins pushed aside pandemic uncertainty to report a 15% increase in revenue to $ 4.33 billion, while earnings per equity partner reached $ 4.52 million.
Tempo results announced today (March 16) mean the Los Angeles-bred giant has strengthened its finances for the fifth consecutive year. The 20% increase in PEP more than doubled the 10% increase to $ 3.78 million from 2019.
Latham increased its return on sales by $ 566 million in 2020, an increase of 15% from $ 3.768 billion in 2019, and revenue per lawyer increased 10% from $ 1.39 million in the previous year to 1, $ 52 million, despite the number of attorneys increasing 5%.
Chairman Richard Trobman (pictured) was optimistic as his predictions for continued double-digit growth last year came true, while realizing that cost savings were not a key aspect of financial metrics. ‘We focus on customer demand. The number of hours customers have been billed has increased significantly and customers have recognized the value of our platform and the quality of service we can deliver, ”he told Legal Business.
Trobman stressed that the growth was not due to any particular above-average area of activity, but rather to increased demand in transactions and disputes, especially in areas that are currently driving the global economy such as technology, life sciences and financial services. “We are global leaders in capital markets, mergers and acquisitions, and banking, and those gains have still outpaced the rest of the market,” he added.
The message is borne out by the firm’s top 25 clients who hired Latham attorneys in an average of 26 offices around the world in 2020, while the top 50 clients hired their lawyers from an average of 23 offices worldwide.
The company does not officially disclose earnings for its London branch, but Trobman said it “fared a little better than the company as a whole”. By that estimate, a 20% increase in London sales would mean the city office is now grossing around $ 540 million, further bolstering its reputation as one of the strongest overseas practices in the UK high-end legal market.
Key mandates for the year included advising NVIDIA on its $ 40 billion acquisition of Arm from SoftBank, retailer New Look, on restructuring and bankruptcy disputes related to the pandemic, as well as providing a line of credit of EUR 1.8 billion for the banks for the TUI Group.
The company has also made some significant side hires around the city, not least in early 2020 when Latham renewed its foray into London’s public M&A space with the hiring of Sam Newhouse, the rising star of Freshfields Bruckhaus Deringer and Taylor Wessing added to the capabilities of his emerging business in the city, Mike Turner and Bird & Bird’s Shing Lo. Other notable additions in 2020 included structured finance partner Stephen Curtis from Clifford Chance, restructuring partner from Mayer Brown, Jessica Walker, M&A partner John Guccione from OMERS Infrastructure and capital markets partner Manoj Tulsiani from Linklaters.
The results also follow the announcement made last Friday (March 12) that Latham has elected a successor to Vice Chairman Ora Fisher in the form of New York Tax Partner and Executive Committee member Lisa Watts. Watts joins Chicago partner and vice chairman Brad Kotler, replacing Bay Area partner Fisher, who has held the position since October 2011 and will retire later this year.
Trobman insists that it’s not just about finances. “We have had an equally strong year in exceptional circumstances doing what makes Latham special – supporting our customers, each other and the community. The quality has been consistently high and every lawyer in Latham has worked to get the best result for clients with a total lack of self-interest. Our focus on teamwork is never more evident than the feedback we receive from customers. ‘
He concluded with optimism: “2021 will be another strong year. We will keep investing and keep controlling our destiny. I really believe the best is yet to come. We have built a platform that thrives regardless of macro events and is well positioned whatever may come. ‘
Of course, it’s now the annual ritual for Latham to become the best law firm in the world, only to be usurped by Kirkland & Ellis a few weeks later. Since the Chicago-bred juggernaut won the competition in 2019 for $ 4.15 billion in sales, the usual trimming seems inevitable again in 2020. The only question will be, how far will Kirkland overtake?