Baker McKenzie breaks through $3bn revenue benchmark
Global giant records 7.8% increase in fee income as profit per partner jumps by 41.5%
Profit per partner (PPP) at Baker McKenzie has jumped by 41.5% as a 7.8% increase in turnover propels the global giant through the $3bn revenue benchmark for the first time.
The rise in fee income to $3.1bn comes against an eye-watering 41.5% in PPP while profits climbed by 36.7% to $1.24bn having last year fallen from $1bn to $903m.
The results are in stark contrast to last year’s results, when the firm recorded flat revenue with PPP down by 12%. Compared to 2019 PPP has grown by 25.1%, the firm reported.
The firm’s unusual year-end of 30 June made it particularly exposed to the Covid-19 pandemic in 2020. This year it has yielded the full benefits of a sharp rise in deal activity in the second half of 2020 combined with lockdown-enforced cost savings.
In revenue terms, the results are broadly in line with the world’s 100 largest firms by revenue, which increased revenue by 6.7%, according to research by Law.com.
That would allow the firm to jump ahead of Dentons ($2.91bn) to number three in the ranking behind Kirkland & Ellis ($4.83bn) and Latham & Watkins ($4.33bn).
Global chair Milton Cheng said: “Against such a challenging backdrop, to achieve record revenues is a huge vote of confidence from our clients, and testament to the hard work and resilience of our people around the world.”
He added: “However, while we are proud of what we have achieved together in this last, extraordinary year, we know that we can still do more. We need to continue to build momentum – focusing on how we can achieve sustainable and inclusive growth - for the firm and for our clients.”
In line with other firms with exposure to Latin America, it was the only region where revenue fell – by 5.5% – with the firm blaming ‘steep local currency devaluations’.
The EMEA region recorded the highest revenue growth – 12.7% – reflecting the strength of its network in the region. Income was up by 5.8% and 5.5% in Asia Pacific and North America respectively.
The firm identified UK, the Middle East, Poland, Austria, Sweden, Hong Kong, Japan and the booming US West Coast as hot spots for growth. M&A revenue grew by 8%, with private equity up by more than 30%, Employment and compensation and dispute resolution both grew by 15%.
A strategic highlight for the firm has been the launch of its firm-wide innovation arm, Reinvent, last October alongside a partnership with AI specialist SparkBeyond. Earlier this week, the firm hired AI specialist and former Elevate digital strategy head Brian Kuhn to lead its new data science and machine learning team alongside innovation officer and IP specialist Danielle Benecke.