Baker & McKenzie’s global revenues fell by 3% and profits per equity partner dropped by 17% this year, according to results announced by the firm. Profits from the firm’s Asia offices have also dipped slightly, by approximately US$20m.
Global revenues at the international firm dropped to US$2.11bn for the year ending June 2009, and PEP fell to US$992,000. Last year the firm experienced record growth, for the first time tipping the US$1m PEP marker while its revenue grew to US$2.2m. The firm’s Asia-Pacific offices this year amassed 26% of the US$2.11bn in global fees generated, a US$20m drop from last year’s count of 26% of the US$2.19bn generated.
This year’s figures were affected by currency exchange rates and a financial year with longer exposure to the economic crisis. "Our 2009 fiscal year coincided with the most severe months in the current global economic downturn - a challenging time for our clients and, therefore, for our firm," said Baker's chairman, John Conroy. The firm recently underwent major cost-cutting measures, including an 11% reduction of its fee earners in Greater China.
Poh Lee Tan, Baker & McKenzie’s Asia Pacific regional chairman said that the economic crisis affected the firm’s Asia transactional practices. “Demand for our transactional practices declined, while other practices such as climate change, disputes, restructuring and insolvency, IP, tax and employment held or grew.”
Tan added that the firm is starting to see signs of recovery. “While we are starting to see some early but encouraging signs of improvement in the macroeconomic outlook and in our own business, we are continuing to focus on supporting our clients with their shifting legal needs in a rapidly changing market. In particular, we are focused on providing services that our clients need in a more efficient manner, so that they clearly recognise the value we provide.”
Clifford Chance recently lost its title as the highest grossing law firm in the world after recording a 37% drop in PEP and 7% drop in revenue this year. Skadden remains the highest-grossing US firm, with revenues of US$2.2bn, according to The American Lawyer.
For more on law firm revenue results and the measurements used to weigh them, see the September issue of ALB.
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