Three of the five highest-earning legal practices for UK corporate work are American, new research suggests.
US law firms Kirkland & Ellis and Lathan & Watkins have today been named as the top earners for UK corporate instructions, beating off their English rival Linklaters.
Researchers at The Lawyer said that figures suggested further ‘evidence of the Americanisation’ of London’s legal market.
Kirkland, which was founded in Chicago, took the top spot earning more than £422million at its UK office last year.
Latham, which is originally from Los Angeles, is said to have earned £341million from its UK team, while Linklaters earned £263million from its UK operations.
The UK’s Allen & Overy law firm, which merged with Manhattan’s Shearman & Stirling earlier this year, came in fourth position earning nearly £214million. Earnings were assessed prior to the merger.
And New York’s Simpson Thatcher & Bartlett — one of the so-called white-shoe law firms — earned more than £204million in the last 12 months from its London office.
White-shoe law firms have typically been associated with the upper-class elite who graduated from Ivy League colleges such as Harvard, Princeton and Yale.
While American law firms dominated the top of the highest-earnings table, the bottom half was dominated by domestic firms.
Slaughter and May, who are arguably the richest of London’s ‘magic circle’ of firms, earned just shy of £200million — significantly less than its US counterparts.
The ‘magic circle’ are a category of law firms which are headquartered in the UK and have traditionally been seen as the top-ranked or most prestigious international law firms based in London.
The other firms in the ‘magic circle’ are A&O Shearman, Linklaters, Clifford Chance and Freshfields Bruckhaus Deringer.
They have been grouped together because of their extraordinarily high profitability.
But The Lawyer’s researchers have suggested that the value of the ‘magic circle’ term, which was coined by the media company 30 years ago, has diminished.
However, some senior City lawyers believe that the leading London law firms have a better reach internationally than their US rivals, who targeted London specifically and did not consider overseas markets.
Charles Adams, managing partner at Clifford Chance, told The Times today that US law firms ‘are a reality in London’ and that ‘all competition is good’.
He said there is ‘no doubt’ that US corporate clients pay more for legal services and put this down to American culture, adding ‘just look at how Americans pay such large tips to waiters’.