It’s a Good Time to be an Equity Partner
$147 billion is a big old number. It’s the combined income of the world’s biggest 100 law firms, the Global 100, whose aggregate revenue grew nearly 15.3% in 2021. In short, the world’s biggest 100 have never been bigger.
Topping out the rankings by revenue, Kirkland & Ellis remains the only $6 billion law firm in the world, leading Latham & Watkins which drew nearly $5.5 billion in 2021.
The 2022 Global 200 Ranked by Revenue
But bigger is not always better. Perhaps a more significant number in the minds of senior lawyers is $2.2 million. That’s the average profit per equity partner across the top 100—and it swelled 17% in the last financial year. As our intelligence man James Willer put it modestly in our new Global 200 webinar last week, it’s been “another very good year to be an equity partner at the world’s largest law firms”.
The Global 200 as a whole performed extraordinarily well. But aggregate sums often belie the huge disparities within. For instance, the Global 100 accounts for nearly 80% of the Global 200′s overall revenue, which stands at $185.6 billion. This owes largely to the fact that the Global 100 continues to outperform the second hundred, which itself grew by a respectable 12.6%.
Nowhere is this disparity more apparent than when comparing PEP.
The 2022 Global 100 Ranked by Profits Per Equity Partner
If you’re a Wachtell Lipton Rosen & Katz equity partner, you’re taking home around $8.5 million. The highest PEP of any law firm. It’s the pinnacle of a growth trend that saw PEP at the 100 largest firms increase 16.8% in the last fiscal year.
Kirkland & Ellis and Davis Polk & Wardwell partners follow in second and third, with equity partners at both firms pocketing more than $7 million.
Yet those figures are in some cases more than 20 times as high as the Global 100 firms with the lowest PEP, many of which are based in Asia.
The Asia 50 Keep Getting Bigger
That said, in 2022, the headcount growth of Asia’s largest firms give us perhaps the best indication we’ve seen yet of the changing shape of the global legal industry.
As Jessica Seah reported, the number of lawyers working at the 50 largest firms in the region totaled 90,808—up 9% from the 83,347 lawyers employed in the region the previous year.
For perhaps the best example of how aggressively law firms in China in particular have been expanding, you need look no further than Yinkge, which reported 25% growth of more than 2,600 lawyers for a total of 13,299 in 2021, overtaking Dentons as the largest firm by headcount in the world. With a cheaper workforce, an abundance of major infrastructural and tech work on the horizon, as well as hard limitations on Big Law, Asia’s Top 50 is having a moment. Expect to see more Asian-grown law firms creeping up the Global 200.
For more coverage on the Global 200, check out our suite of essential reports here. And for a rundown of how firms have fared in specific locales, take a look at our region-by-region analysis here.
How Ukraine’s Law Firms Have Survived 6 Months of War
As part of our Global 200 coverage, I had the opportunity to speak with a number of senior partners at Ukraine’s biggest firms to get a sense for how they’ve held up amid the strafe. But it’s come at a significant cost. Lawyers are being deployed to other firms and/or regions, or staff have been cut to keep costs low, and litigation and transactional work had slowed to a near standstill. But the good news is, with the help of Big Law allies, firms are surviving. Take a look at my piece for a deeper dive into Ukraine, 6 months on since Russia’s invasion.
All Good News?
The Ukraine war has had much to do with how economies are performing now, with energy prices surging post-pandemic. And with inflation hitting, a global recession looming, and, consequently, demand likely to drop and purses tighten, as our executive editor Lisa Shuchman writes, the “stunning numbers” we’ve seen in this year’s Global 200 are “unlikely to be repeated”.
For more analysis on where we expect the market to head in the coming months, I recommend you read Andrew Maloney’s piece. Last year “feels like a distant memory at this point,” Julie Jones, chair of Ropes & Gray, told Andrew, noting the volume of deals that have stalled since June 1—“a higher rate of abandonment than I’ve seen in 10 or 12 years”.
A good time to be an equity partner? For sure. But it seems that, in the space of just a couple of years, firm leaders are again having to don their wartime hats as we head once more into a period of deep uncertainty.