How Are U.S. Firms Faring in London?

For anyone who has kept abreast of the breaking news in our U.K. publication Legal Week, it's clear that the London legal market is being gripped by unprecedented economic turmoil. On Monday, Lovells became the latest major firm to announce cuts to attorneys and staff, while Freshfields Bruckhaus Deringer revealed that it was freezing associate salaries at 2008 levels.

Against this backdrop, a number of U.S. firms' London offices have started to report their financials for 2008. And as the London results for Bingham McCutchen, Mayer Brown, White & Case, and Weil, Gotshal & Manges show, the picture is not as gloomy as might have been predicted.

White & Case, which has one of the largest London offices of any U.S. firm, reported Wednesday that its London revenues increased by 4 percent in 2008 to $245.9 million. Profits per equity partner (PPP) in the office hit $1.5 million, broadly in line with firmwide numbers.

Mayer Brown, another large player in the London market, saw its City revenues grow by 8 percent to $202 million. The increase roughly tracks the firm's overall performance, which saw an increase in its top line of 9 percent, up from $1.183 billion to $1.294 billion.

Weil reported London revenues were up slightly from $83.3 million in 2007 to $85.2 million, while PPP leapt 23 percent to $2.4 million. Weil has boosted its partner ranks in London to 24 with some recent prominent lateral hires, including corporate partner Peter King from Shearman & Sterling; Tony Horspool, a restructuring partner from Cadwalader Wickersham & Taft; and finance partner Stuart Hills from O'Melveny & Myers. Weil's London financial results compare with firmwide numbers of $1.23 billion in revenues (up 5 percent) and PPP of $2.3 million, an increase of 7.5 percent from 2007.

Bingham's London revenue dropped by 4.6 percent from $32.5 million to $31 million, but the firm reported an increase in PPP from $1.75 million to $1.88 million. Given that Bingham's 40-attorney London office has a heavy focus on countercyclical practices, the drop in revenues is surprising, but office head James Roome says that the restructuring assignments only began to flow toward the end of 2008. He expects 2009 to be better.

"For us 2008 was the year between cycles," Roome says. "There was just a big nasty gap." What fills that gap -- not just at Bingham but at its competitors -- will determine who manages to grow in 2009.

This article first appeared on The Am Law Daily blog on AmericanLawyer.com.

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