Why big law will keep getting bigger in the 2020s

AMESSY WORLD is great news for those whose business it is to sort through a mess. One group in particular has had a fabulous time of late. “Business demand across every market has been strong,” beams Elliott Portnoy, chief executive of Dentons, the world’s fourth-biggest law firm by revenues. In 2021 Dentons, a product of a series of combinations, including one six years ago with Dacheng, a large Chinese practice, may bring in over $3bn in gross billings. In the past 12 months it has added 1,000 or so lawyers to its head count, which now numbers over 12,000, and opened offices around the world. It has to turn away business for lack of capacity.Dentons is not an isolated exhibit. Big law is on a tear. The 100 biggest global firms look on track handily to surpass their combined revenues of $128bn in 2020 (see chart). Kirkland & Ellis, an American giant which has topped the rankings in recent years, is expected to rake in annual billings of more than $5bn, more than twice as much as in 2015. Profits for each equity partner, an industry benchmark, have risen by more than 6% at over half of the 300 biggest global firms, estimates Peter Zeughauser, a consultant who advises many of them. At the fastest-growing 75 they have shot up by double digits. Equity partners at America’s top 100 firms could take home as much as $2.5m each on average. “Every law firm I know, every one, has had a record profit,” marvels David Wilkins of Harvard Law School, whose seminar on the legal business is popular with big-law chiefs. And this breakneck growth is coinciding with significant changes in the profession’s time-honoured ways.