Baker & McKenzie reported record revenue on Monday of $2.54 billion for the fiscal year ending June 30, a 5 percent jump from a year earlier, positioning it to take the top spot on The American Lawyer’s Global 100 ranking this fall.
The firm claims to be the first to break the $2.5 billion barrier since the global financial crisis. Baker & McKenzie’s profits per equity partner rose to $1.29 million, a 7 percent increase over the year before, even as the firm increased its head count. Net income rose to $910 million from $862 million, an increase of 5.6 percent. Revenue per lawyer was $600,000, up from $590,000 for a 1.7 percent increase.
Baker & McKenzie’s gains allow it to bump DLA Piper from its perch on the Global 100. Last year, DLA Piper edged out Baker & McKenzie despite the latter’s record revenue. But DLA Piper’s own revenue of $2.48 billion in 2013 will not be enough to keep it in the lead.
Baker & McKenzie hired 56 lateral partners and elected 65 partners from within its ranks in its most recent fiscal year. Its partner head count grew to 1,430 from 1,400. About 29 percent of the partners were women.
Baker & McKenzie’s banking and finance and tax-and-dispute resolution practices were the firm’s standouts, and revenue from mergers and acquisitions, intellectual property and trade and commerce increased markedly, the firm said.
Revenues from the transactional practices surpassed $1 billion for the first time, thanks to rising activity by corporate clients after several years during which they mainly sat on cash. The firm said 65 percent of its deals were cross-border.
Eduardo Leite, chairman of Baker & McKenzie’s executive committee, said in an interview with The Am Law Daily on Thursday, “We reached the $1 billion mark in all the transactional practices, which is a very rewarding number and achievement because since the global financial crisis, we have been hoping that transactions that are a multiplying factor for other practices would come back.”
Leite noted several office openings this year, including in Yangon, Myanmar and Dubai in the United Arab Emirates. In July, Baker & McKenzie also opened a new office in Brisbane, Australia—a mining and energy center in the Asia-Pacific region. Baker & McKenzie also acquired a capital markets team from collapsed Canadian law firm Heenan Blaikie, establishing an office in Toronto.
Leite said the firm has added 10 offices internationally since he became chairman four years ago in such locations as Istanbul and Seoul, with further expansion anticipated. It currently has 76 offices in 47 countries. The firm received 38.5 percent in revenues last year from Europe, the Middle East and Africa, 35.5 percent from the Americas and 26 percent from the Asia-Pacific region.
Some other highlights for Baker & McKenzie included advising the Japanese life insurance company Dai-Ichi Life Insurance Co. on its acquisition of Protective Life Insurance Corporation for $5.7 billion, the largest foreign acquisition by a Japanese life insurer. It also advised on CITC Metal’s purchase for $5.85 billion of the Las Bambas Copper Project in Peru as part of the Chinese consortium from Glencore Xstrata. This was one of the largest mining-related acquisitions by a Chinese company recently.
Baker & McKenzie also acted as counsel for Deloitte and the lenders in the $1.1 billion receivership of London’s “The Gherkin,” an iconic building that was one of the largest commercial property restructurings in the market, according to the firm. Baker & McKenzie also touted its role in Yamal Development’s $2.94 billion acquisition of 60 percent of Arctic Russia from Eni in January.
Leite said the firm expects continued growth in the next year. The firm plans to focus its efforts on four areas, including energy, mining and infrastructure; information technology and communications; pharmaceuticals and health care; and financial institutions.
“We believe those four will be the fastest-growing areas in the next decade, and we want to be positioned in that area,” he said. The firm also expects growth in international arbitration, compliance and investigations and cybersecurity.
As for possible obstacles, he cited political tensions in regions such as Russia and Ukraine and the Philippines, but “we have been in the emerging world for 65 years, and we are always in it for the long run. We don’t divest quickly at the first signs of instability.
“From our side, our concerns are more the outside world and the state of business. We are prepared to hopefully have another good year,” he said.