Baker McKenzie will bring its London office and seven others offices across Europe, the Middle East and Africa (EMEA) into a single profit pool, taking the firm a step closer to full financial integration in the region.
The newly integrated business will be led by Baker McKenzie’s Brussels-based global antitrust head Fiona Carlin, who will assume the role on July 1 when the integration takes effect. She was elected to the post earlier this month.
The new structure will have about 1,000 lawyers and include 250 partners, with London, Brussels, Amsterdam, Stockholm, Madrid, Johannesburg, Bahrain and Qatar all sharing profits. Locations that make up key parts of Baker McKenzie’s European business—such as Paris and Germany—will not be included.
The move toward greater financial integration, which is part of the firm’s 2020 strategy, marks a significant departure for Baker McKenzie, which has faced criticism in the past for its loosely integrated “franchise” model.
“Integration is happening in the firm at all levels to align ourselves around our global brand. Regional integration is one aspect of that and it is a policy which seeks to make it easier for our offices in the regions to work across borders,” said Baker McKenzie global chair Paul Rawlinson. “We see this as a continuing implementation of our entire global strategy through to 2020.”
One London partner who did not want to be identified said the firm has been criticized for not being financially integrated. People say Baker McKenzie is just a franchise with a few offices thrown together, he said.
“Anything that is done to address that has to be a good thing,” he said. “The disappointing thing is we haven’t got more offices in there. If it was a true success we would have everyone in a single profit center. I suppose let’s see how it works with this first wave of offices.”
Further offices are expected to join the pool over time, with Carlin’s role expected to include moving the EMEA region closer to full financial integration.
The change means Baker McKenzie will have four separate profit pools in Europe. Roughly 130 lawyers in Russia are part of an integrated pool with Ukraine, Kazakhstan and Azerbaijan. Similarly, the firm’s Frankfurt, Munich, Berlin, Duesseldorf and Austria offices also share profits. The Paris arm is currently integrated with Luxembourg.
One German partner said that the firm’s intention was always to move to a more financially integrated system, with former chair Christine Lagarde initially raising the subject during her tenure. Lagarde, who later held various ministerial positions in the French government and is now managing director of the International Monetary Fund, was Baker McKenzie chair between 1999 and 2005.
“Lagarde realized that this needed to happen at some point—the intention has always been there,” the German partner said. “We will do it and get to it but only when we can. There are a lot of compliance issues and you cannot play around with compliance.”
The firm brought its North American outposts into a single profit pool in 2013 but needed to broker special arrangements for the Dallas and Washington, D.C., offices before they agreed to join.
Bakers McKenzie’s 17 offices across the Asia Pacific region are split across five different profit pools.