latham watkins becomes second law firm to surpass $7 billion revenue mark

Latham & Watkins has achieved a significant milestone by becoming the second law firm in history to surpass the $7 billion revenue threshold. The Los Angeles-founded firm reported a 23 per cent increase in revenue during the last quarter, solidifying its position as one of the most successful legal practices on the global stage.

The firm follows in the footsteps of its key competitor, Kirkland & Ellis, which broke through the same revenue marker two years ago. Both firms are increasingly challenging the dominance of London’s “magic circle” firms in the legal sector. Latham’s latest earnings report also revealed a near 30 per cent rise in profit per equity partner, elevating the average pay for senior partners to over $7 million annually.

Richard Trobman, chairman of Latham & Watkins, highlighted the importance of the firm’s London presence as a key driver of its exceptional growth. He stated that the City of London remains integral to the firm’s operations, particularly in strategically critical areas such as private equity, public company mergers and acquisitions, private capital, finance, capital markets, restructuring, and high-stakes litigation.

The London office employs approximately 1,000 people, including over 550 fee earners and 140 partners. Recent high-profile cases include its advisory role in CVC’s £5.4 billion offer for Hargreaves Lansdown, currently the UK’s largest retail investment platform. Additional work includes representing Anglo American in the $3.7 billion sale of its steelmaking coal business and advising Apollo Global Management on the financing for its acquisition of Evri, the parcel delivery company.

These developments highlight the widening gap between leading US law firms like Latham & Watkins and Kirkland & Ellis, and the UK’s magic circle firms. Last year, Clifford Chance reported £2.3 billion in revenue, which slightly edged out Allen & Overy’s £2.2 billion. However, these figures lag considerably behind their US counterparts, underscoring the rising competition on both domestic and international fronts.

The continued growth of US firms in London represents a clear shift in the balance of power within the legal industry. With increased profits, high-profile cases, and attractive remuneration packages, firms like Latham & Watkins are reshaping the competitive landscape for top legal talent whilst redefining the limits of financial success.