For this year's UK top 50, Legal Week has spoken to law firm leaders across the market for their take on the key trends from 2016-17, as well as their plans for the year ahead. In this Q&A, Allen & Overy (A&O) managing partner Andrew Ballheimer discusses the factors behind the firm's record year, the Brexit 'phoney war' and the prospects for UK-US mergers
What contributed to A&O's strong results in 2016-17?
If you look at our network and offering, it is broader in terms of the number of offices than our peer group. We have 44 offices across the world, so the extent of our network in terms of geographic coverage has helped us.
Each of our core practices capital markets, litigation, banking and corporate - are at the top of their markets, so it is a well-hedged business in terms of geography and products. Most of our peers major on one or two of those areas, but not all four, so the result for us is a broadly built international platform with mature, top-tier offerings in each of the core areas.
We have made a series of long-term investments in our offering, our network and our product mix, where perhaps others have not invested to the same extent.
Our business also has a natural hedge because our income base is a mix of sterling, dollars and euros, so if you aggregate all three, that is 95% of our income. There is no single currency that predominates, so our business has this natural hedge.
Why have we seen such divergent results across the market this year?
If there is a concentration of your business in a jurisdiction, then that is a factor. If you are only in the UK, there hasn't been a lot of growth; while in the US it has been a little bit better - 4%-5% if you have done really well.
Growth is in the cross-border and international space, so firms that have done the best are those that have built out compelling offerings around the world in a broad range of product areas. If you look at those US firms which operate almost exclusively in the US, it's flat growth on the whole. Latham & Watkins has done 5% or so, and a lot of that growth is outside the US, but most of the rest are flat or 1%-2%. If you look at the magic circle firms, those firms that are more international seem to have performed better.
How do you see the prospects for the year ahead?
There is uncertainty, the pipeline is relatively good at the moment, but in the longer term it is harder to predict. If you look at the global market there is a concentration of a few firms that are moving away - A&O, a couple of others from the UK and a couple of the US firms.