Revenues up 1.2% for year ending 30 June with growth in all regions despite headwinds since January
Significant long-term investments in home-grown and lateral talent and technology
Tax, Projects and Antitrust practices and Healthcare and Life Science and Technology/Media/Telecommunications industries show significant growth
- Launch of global innovation arm Reinvent
Baker McKenzie has announced revenues for the fiscal year ended 30 June 2020 (FY20) of $2.9 billion. In terms of constant currency revenues were up 1.2% compared to the previous year. In US dollar terms, the Firm's reporting currency, this translates into a flat year (FY19 $2.92 billion), after the effect of adverse currency movements during the year.
All of our regions recorded growth in constant currency terms - Asia Pacific up 1%, EMEA higher by 2%, Latin America rose 2% and North America increased 1%. In US dollar terms, three out of our four regions - Asia-Pacific, EMEA and North America - each experienced slight growth. Latin America revenues, however, fell by 12% in U.S. dollar terms, highlighting the weakness of currencies in that region during FY20. The first quarter of FY21 has continued that growth with revenues and profitability up in all four of our regions.
Our PPP for FY20 is down 12% year-on-year as compared with FY19, reflecting the significant investments we made in new technology, infrastructure and laterals and other talent, as well as the negative impact of FX. Over the last decade the Firm has grown by 37% in terms of revenue and 31% in terms of PPP.
We saw revenue growth in our two largest markets - the United States and the UK. Some of our markets that saw high single-digit or double-digit growth include: Thailand, Singapore, South Korea, Netherlands, Belgium, Sweden, Luxembourg, Hungary, Egypt, Kazakhstan and Morocco.
Milton Cheng, Global Chair, Baker McKenzie says, "I am proud of how our Firm has stepped up this past year to record a reasonable set of results, given the economic and logistical headwinds we have faced since January and the softening of demand we saw in the final quarter of FY20. It is a strong demonstration of our collective resilience.
"We continue to look to the future. Despite the ongoing challenges of COVID-19 and the decline in economic activity in many parts of the world, Baker McKenzie is heading into FY21 with confidence, bolstered by our client base, resilient team, and exciting investments in the future of our industry and communities. The Firm has appointed new leaders, including our first Chief Sustainability Officer, as well as announcing our innovation arm Reinvent.
"A record number of lateral hires these past 12 months combined with our continued commitment to developing home- grown talent, as well as our significant investments in technology and our new services centers ensure that we are well prepared for a new set of challenges over the next decade.
"We have also learnt how to collaborate, work and socialise together in new and innovative ways that bring out the very best of Baker McKenzie. We transitioned smoothly to working remotely, with nearly all of the teams in our offices across the world working from home for significant periods of time over the past months."
A new approach to working with our clients
Milton continues, "We launched our Resilience, Recovery & Renewal framework in April, to focus our team on understanding and responding to the challenges our clients face, and what they need from their external legal advisor each step of the way. This has ensured we remain relevant and deliver real value through service lines that cover a wide range of interconnected issues businesses face as they journey through this pandemic and its consequences. In FY21, our top priority is continuing to enhance the value we deliver to clients to help them recover their operations and reimagine their businesses for the next normal."
Investing in our people
Our values and our culture of friendship have stood up well when tested this year, embedding Inclusion and Diversity in all its forms in our organization, and committing to stand up against racism.
We promoted 84 colleagues to partner across the Firm this year. They joined 68 lateral partner hires across the globe, demonstrating our continued commitment to investing in top talent, both home-grown and lateral. Welcoming 152 new partners over the last 12 months is a clear sign of the importance we place in the long-term growth strategy of the Firm. Over 40% of those new internal promotions are women, highlighting that we are making progress towards the ground-breaking Global Aspirational Targets we announced last summer. And in July this year we announced new task forces globally and in North America, aimed at implementing programs to advance racial and ethnic diversity and promote anti-racism in the legal industry.
Milton comments, "Our commitment to developing our own people and attracting the very best lateral talent has never been more important to our Firm. In FY21, we are planning major talent initiatives to further promote wellbeing and social mobility across the Firm, as well as the launch of our 'People Deal' - what it means to be a Baker McKenzie lawyer or business professional in 2020 and beyond."
Our practices and our sectors
Notably strong practices in FY20 included Tax, Projects, Antitrust & Competition, and Private Equity. Industry sectors that showed significant growth included Healthcare and Life Sciences, Technology, Media & Telecommunications, as well as Financial Institutions.
The Firm advised on some of the world’s most important deals and cases during the year, including:
- Advised Puig, the third generation, family owned fashion and fragrance company based in Barcelona, on its acquisition of a majority stake in Charlotte Tilbury, the iconic British luxury make up and skincare brand.
- Represented Turkish mobile gaming company Peak in its USD 1.8 billion acquisition by US-based Zynga Inc. The transaction makes Peak one of the most valuable companies in the history of Turkey.
- Advised the syndicate of 14 initial purchasers on the USD 2.1 billion dual-tranche high-yield bond offering by certain subsidiaries of Teva Pharmaceutical Industries Limited based in Israel.
- Advised AbbVie with the USD 63 billion acquisition of Botox maker, Allergan. The Firm assisted with the tax planning for the acquisition and immediate post-closing integration and we are lead counsel for the integration of Allergan into AbbVie.
- Advised consortium Grupo Vía Central S.A. on the financing for the construction of the Uruguay Central Railway project. The project, with an estimated value of USD 1.07 billion, is the largest private investment made in Uruguay and will be the country's largest infrastructure project.
- Advised China Yangtze Power Company on its USD 3.59 billion purchase of Sempra Energy's Peruvian businesses, including its 83.6% stake in Luz del Sur S.A.A.
- Successfully negotiated Empresas Públicas de Medellín’s (EPM) acquisition of Electricaribe the largest energy sector transaction of the year in Colombia.
- Assisted Afterpay in a successful AUD 1.05 billion capital raising, moving the Fintech firm into the ASX top 20.
- Advised Equinix Inc., the global interconnection and data center company, on its US 1 billion joint venture with GIC, Singapore's global wealth fund, to develop and operate xScaleTM data centres in Japan.
- Advised Copenhagen Infrastructure Partners on the USD 3 billion project financing of the 589 MW Changfang Xidao Offshore Wind Farm Project in Changhua County, Taiwan.
Launch of Reinvent
The Firm has recently launched Reinvent, uniting and aligning all its diverse innovation initiatives worldwide under a single arm. Some of these initiatives include:
- Our SparkBeyond pilot partnership, a market-first collaboration to apply SparkBeyond's technology to disrupt the legal industry and reimagine what legal services might look like for clients in the future.
- Our global service design team, with people located in the US, UK, Germany, and Singapore, and which will grow under these plans to include further project implementation resource.
- Our Transaction Innovation Group, focusing on change in our transactional practices.
- The innovation hub at Reinvent.law in Frankfurt, which involves not only Baker McKenzie, but also Daimler, Bosch, ING, Wolters Kluwer and AF along with some 30 legal tech start-ups and law schools.
- Our LegalTech Startup program, which currently includes, among others, Avoka, Litigate, Imagine Dragons, and StructureFlow.
- Our Reinvent Fellows program, with 11 Fellows currently running 7 projects across 5 practices.
Like the majority of our clients, the pandemic has also accelerated our own digital transformation, encouraging far greater use of technology that facilitates virtual communication and remote client service. We have made significant investments in technology in recent years through a series of automation and digitization projects.
Milton comments, "We are committed to investing in the long-term future of our client relationships, our people and our infrastructure, from pursuing new ways of working with clients to making further investments in shared services, technology and knowledge management."
Our brand and client recognition
Many leading organizations recognized Baker McKenzie's innovation and leadership in FY20, including:
- Refinitiv / Thomson Reuters has ranked the Firm No. 1 for cross-border deals for the last 14 years. More than 63% of our deals are cross-border.
- Over the last 16 years, Refinitiv has ranked the Firm first for deals with emerging market involvement, by both number of announced and completed deals.
- Law360 ranked the Firm as the leading global law firm in its annual survey.
- Acritas recognized the Firm as the world’s strongest legal brand for the tenth year in a row.
- Identified as one of the best law firms for women by Working Mother magazine, Law360 and Euromoney.
- The Firm was honored to be one of Stonewall's 2020 Top Employers and listed as a Highly Commended LGBT+ Network Group.
- Chambers Global recognized Baker McKenzie more than any other law firm in its 2020 global guide.
Milton concludes, "Baker McKenzie’s robust financial strength, truly global platform, practice mix, culture of friendship, performance mindset and global client roster position us well for this downturn. As well as being a responsible employer, we also have the experience of weathering many crises before, enabling us to always take a long-term and global view. We remain resilient and are confident that we can seize the opportunities and deal with challenges ahead."