Norton Rose Fulbright has grown its global brand and transformed its market position at an impressive speed. In 2008, Norton Rose Fulbright was a decent mid-sized firm who, in the CEO’s own words, was trying to replicate Linklaters. It was caught between the magic circle and specialist law firms, whilst similar-sized firms like Simmons & Simmons boasted a higher turnover and PEP.
But soon after the financial crash, Norton Rose Fulbright turned its focus outward, on becoming a member of the international elite. Between 2009-2013, the firm made use of Swiss vereins – loose law firm combinations – to quickly expand across the globe, entering Australia, Canada, South Africa and the US.
In those five years, Norton Rose Fulbright grew revenue from £297m to £1.1bn and its partner headcount from 246 to 1,156. All of a sudden, Norton Rose Fulbright was a different beast altogether and many UK rivals followed suit. In other words, Norton Rose Fulbright wasn’t following Linklaters anymore.
Perhaps its most impressive merger was with Fulbright in 2013. At the time, not many law firms had successfully carried out a merger with a US firm and after that, Norton Rose Fulbright became a top 10 global law firm in revenue and lawyer headcount.
After those mergers, Norton Rose Fulbright spent some time consolidating its practices and developing its presence in Asia and Africa.
But recently, it looks like the firm has been pursuing a second transformation. Since 2016, the firm has opened offices in Europe and returned to Canada, Australia and the US for more mergers.
After its last merger with US firm, Chadbourne & Parke, Norton Rose Fulbright had about 4000 lawyers, revenues of up to $2 billion and 59 offices in 33 countries. In its $1-2bn bracket, Norton Rose Fulbright has the biggest partnership and largest international footprint, according to The Lawyer.
The mergers have given Norton Rose Fulbright a global platform to serve clients. This has led to many lucrative mandates. For example, the firm won M&A Team of the Year in the 2017 Legal Week Africa Awards for its work advising Barclays. According to Legal Week, the bank said that few firms “would have the necessary resources in London and Africa to handle a transaction of this scale”. This is true; Norton Rose Fulbright is one of the most established firms operating in Africa.
Interestingly, even before its recent US and Australian mergers, The Lawyer rated Norton Rose Fulbright as the most international law firm in the world (June 2017). An astonishing 86% of the firm’s partners are based outside its home jurisdiction in the UK. The same applies to earnings, in 2016-17, 80% of its revenue came from outside the UK. That’s a long way away from 2001, when London was the 80%.
Norton Rose Fulbright has built a formidable global energy practice. Its merger with Fulbright gave the firm a presence in Houston, the energy capital of the world, and strengthened a number of client relationships in the process. Chadbourne & Parke brought its energy practice to the table and offered Norton Rose Fulbright a deeper US platform. Its merger and strategic alliances in Africa have attracted many foreign investors interested in projects in the region. In 2016, when Shell decided to reduce its legal panel from eleven law firms to six, it’s no surprise that Norton Rose Fulbright made the cut. It’s now one of the largest in the world.
Norton Rose Fulbright was already a good finance firm, but its recent merger with Chadbourne & Parke also provided something that many City firms have been trying to build for years: a deep US finance capability. Norton Rose Fulbright has been exploring a US merger since the 90s and now its New York office is among the 25 largest. The extensive presence should help Norton Rose Fulbright to cement its existing finance relationships and secure new ones from its transatlantic reach. It also follows Norton Rose Fulbright’s hire of 17 lawyers from Sidley Austin in 2016, the rival firm’s entire public finance team.
It seems that Norton Rose Fulbright’s rapid expansion has not been followed by a boost in profitability. In fact, according to The Lawyer, its PEP was higher a decade ago. To some, that’s the cost of using Swiss vereins. It’s much easier to merge when you don’t have to worry about combining profits or sharing liability, but it doesn’t necessarily mean partners will share work between jurisdictions. There are other consequences too. Norton Rose Fulbright has seen a number of exits over the years, particularly in the Middle East, where lawyers have been unwilling to join the combined firm.
Perhaps it just takes time for the firm to consolidate its new practices. And it is taking a number of steps to do so with its widely marketed 2020 business transformation programme. That includes the implementation of an expensive global management system that will handle everything from time recording to the monitoring of client relationships, and the investment in business services centres in Newcastle and the Philippines. These are expensive upfront costs but it’s a wise investment: efficiency will be essential to the law firms of the future.
Finally, this piece would be remiss if there was no discussion of the person at the helm of Norton Rose Fulbright. Peter Martyr, Norton Rose Fulbright’s global chief executive, has a lot more power than most law firm leaders, but he’s also got a lot more done. When he took the job in 2002, the firm had suffered from failed mergers, partner exits and a belated international expansion. Who knows where it would be today if it weren’t for Martyr.