Law Firm Responses to the Big Four

Volume 7 • Issue 3 • March/April 2021
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The Global 100

What the ranking shows—and what is left off

Across different professional service markets, the largest and most profitable firms often develop a reputation as a singularly elite unit. In accounting, there is the Big Four: Deloitte, EY, KPMG, and PwC. In management consulting, there is the Big Three: Bain & Company, Boston Consulting Group, and McKinsey & Company. In the legal profession, there are comparable groups at more local and regional levels. The United Kingdom has its Magic Circle firms just as India has its own Big Six and China the Red Circle. (For more on how Indian firms in this group are thinking about the Big Four, see “Emerging Responses to the Big Four.”) However, globally, there is no elite group so fixed and exclusive—or small. Thus, for his research on how the most elite law firms around the world are thinking about and responding to the Big Four’s expansion into legal services (see “The Global 100 Responds to the Big Four”), Robert Couture turned to a much larger group: ALM’s Global 100.

The average gross revenue was nearly $2 billion and the total gross revenue of the 2020 Global 100 was nearly $120 billion. For context, per the World Bank, that is roughly the size of Morocco’s GDP.

Each year, ALM gathers data from law firms around the world and compiles a ranked list of the top 200 law firms by gross revenue—the Global 200, with the top 100 of those firms by revenue forming the Global 100. (Readers might also be familiar with ALM’s U.S.-specific counterpart, the Am Law 200 and Am Law 100, respectively.) The Global 100 includes data on revenue, lawyer head count, revenue per equity partner, the country in which firms are headquartered, the number of countries in which a firm has an office, and the country in which the firm has the most lawyers, among other facts and figures. (For the full ranking and survey, see ALM’s Legal Compass.)

Like many others, Couture uses the Global 100 as a unit of analysis in his research. To that end, it may help readers to get a better sense of what this group looks like. The top law firm in the 2020 Global 100, Kirkland & Ellis, surpassed $4 billion in gross revenue with the final firm on the list, Bird & Bird, landing at just shy of half a billion dollars. The average gross revenue was nearly $2 billion and the total gross revenue of the 2020 Global 100 was nearly $120 billion. For context, per the World Bank, that is roughly the size of Morocco’s GDP. The average number of lawyers at a Global 100 firm is just below 1,500, with the smallest firm by lawyer head count having 265 (Wachtell, Lipton, Rosen & Katz) and the largest having 10,977 (Dentons). The average number of equity partners sits at 272 and the average number of countries where the firm has an office is just above 10. (For more on Couture’s analysis using the Global 100 firms’ revenue per lawyer and number of countries where the firm has an office, see see “The Global 100 Responds to the Big Four.”)

As we note in “Emerging Responses to the Big Four,” the Global 100 does not contain a particularly large number of countries where firms are headquartered. Indeed, just six location countries are listed throughout the Global 100: the United States (77), the United Kingdom (12), China (5), Canada (4), Australia (1), and Korea (1). Suffice it to say that the Global 100 does not always capture elite regional and domestic firms (for more, see “Emerging Responses to the Big Four”). While the Global 200 includes a smattering of firms headquartered in other countries like Brazil and Germany, it is worth appreciating that more than a quarter of the Global 100 (26) have offices in three countries or fewer. Likewise, other parts of the market for legal services do not show up in the Global 100—such as many elite regional and boutique firms as well as other players like the Big Four and the whole range of alternative legal service providers (ALSPs).

Like many others, Couture uses the Global 100 as a unit of analysis in his research.

All this is to say that while the Global 100 represents the 100 most profitable law firms of the given year and offers a useful unit of analysis,  it alone does not capture the true scope of complexity of the global legal services market, whether with respect to law firms themselves or the wider ecosystem of alternative service providers.

Law Firm Responses to the Big Four Volume 7 • Issue 3 • March/April 2021

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