$2 Billion Barristers' Club: Two New Members?

DLA Piper today announced global revenues of $2.14 billion for 2007, and we thought: Wow, another inductee to the $2 billion club!

Just days earlier, Latham & Watkins said it had cracked the $2 billion barrier, becoming the first U.S. firm to do so.

Now DLA Piper had followed suit. Or so it seemed.

Turns out, it's a bit complicated: DLA Piper is the product of a 2005 transatlantic merger between a San Diego and London firm. That puts it into a special category, at least in the eyes of The American Lawyer magazine.

That matters because American Lawyer produces the authoritative list of top-earning law firms each year. And it has deigned DLA Piper to be a "set of alliances" rather than a whole firm. As such, American Lawyer includes only the firm's U.S. revenues for its AmLaw 100 rankings.

Alas, DLA Piper — very much in the news of late for the steroids report authored by former U.S. senator George J. Mitchell, who is DLA's chairman — posted U.S. revenues of just $1.13 billion in 2007.

A firm spokesman calls the AmLaw methodology "pretty silly," and says the firm may challenge it heading toward the AmLaw 100 list, scheduled for publication in the magazine's May issue.

The magazine also publishes a Global 100 list in October. Last year, two London firms, Clifford Chance and Linklaters, had gross revenue of more than $2 billion. Given exchange rates, they will likely do the same this year when they release their 2007 results.

DLA Piper, with 1,500 lawyers in the U.S. and 2,100 overseas (including 400 in its London office), has "no headquarters," according to its spokesman. It has 64 offices in 25 countries. It shows up twice on the AmLaw Global 100.

But aren't we just quibbling here? After all, $2 billion is $2 billion. At any rate, DLA Piper could be a poster child for the pressure that the "billion-dollar club" phenomenon is placing on law firms to consolidate and expand globally. As a few mega-firms acquire the breadth and scale that corporate clients crave, they gobble up a bigger percentage of the legal market.

Skadden, Arps, Slate, Meagher & Flom does not release official numbers on its revenues or profits, but for many years has topped the AmLaw 100 list on gross revenues, based on estimates by the magazine that have never been challenged by Skadden.

The Skadden brass remain mum, but earlier this week, an anonymous partner told a New York reporter for The Lawyer, a London legal trade paper, that revenues were showing a 9 percent increase for 2007, to $2.02 billion.

So that's at least two. Let's see if DLA Piper dukes it out with the editors of The American Lawyer to round the U.S. group to three.

by Karen Donovan