Baker McKenzie

Chicago-headquartered Baker McKenzie is one of the largest law firms in the world by revenue (ranking 4th by that metric in 2023/24). It has built that impressive scale as a result of its M&A and advisory expertise as well as its flexible verein structure. However, as the firm has begun to reach ‘maximum expansion’ its strategy seems to be switching towards consolidation and efficiency. To begin, Baker McKenzie is distinguished by its practice area excellence, particularly in cross-border M&A and in specialist advisory work. To start with the former, the firm specialises in complex multi-jurisdictional work. For instance, it has been awarded Thomson Reuters No. 1 ranking for its cross-border M&A work in eight of the past ten years. Whilst traditional sub-specialisms have lied in mid-market work, the firm is increasingly picking up big-ticket technology and consumer goods mandates. For instance, it was instructed to act for Johnson & Johnson in its $40 billion demerger. To elaborate on the latter, the firm has developed an impressive offering in employment law, commercial contracts, and IPTech team (which encompasses the firm’s IP, TCC, & Media groups). In the employment context, partner Monic Kurnatowska regularly acts for some of the largest blue chip companies in the UK. Regarding commercial contracts, the firm specialises in long-term supply agreements. For instance, it recently helped support a deal between the Saudi PFF and Pirelli. In respect of IPTech, the firm is one of the premier providers of advisory services on a truly global scale. For instance, it is one of three firms ranked in Chambers’ Band 1 for multi-jurisdictional technology, media, and communications work, and has maintained that position for five years longer than the other similarly ranked firms.. But Baker McKenzie’s rise to one of the largest firms in the world did not solely arise because of practice area specialisms. Rather, growth was embraced structurally through the adoption of a Swiss verein structure. A Swiss verein is a model for international law firms wherein individual offices (or groups of offices) operate financially independently of each other. They may share centralised resources and branding, but are distinct from an accounting perspective. This allows for rapid expansion by simplifying regulatory workload as well as by quelling the fears of existing partners about diluting average profits through expansion. The strategy certainly seems to have worked for Baker McKenzie. With over 70 offices and global revenues which rose meteorically (including being the world’s largest law firm by revenue from 2009-2012), any and all growth targets were exceeded through the adoption of the verein model. However, as the firm has reached the natural limits of geographic expansion (there are simply few additional profitable jurisdictions for the firm to enter) it has begun to rethink to what extent a highly disjointed verein fits its future vision. Specifically, the firm has started to feel that now, having achieved scale, it must push towards efficiency and inter-office collaboration. A more centralised approach would facilitate this more easily, and the firm now sees financial integration as a key future objective. Its current aim is to reduce its number of global profit pools down to three, but internal chatter is indicative of a more ambitious future aim of total integration. So far the firm has managed to integrate the US, parts of the UK and Europe, and swathes of Asia. Whilst resistance remains in some quarters, the firm seems to be progressing towards its aim (if slowly). A part of this shift appears to be attracting high-end talent at the junior end. This is reflected by a NQ salary (£150k) significantly higher than many of its global/mid-market counterparts. The combination of extremely competitive pay with slightly less intensive working hours than many other firms in that pay grade have made the firm an increasingly attractive landing spot for aspiring lawyers. Baker McKenzie’s latest strategic shift seems geared to try to achieve the best of both worlds: global reach with high levels of efficiency and inter-office collaboration. It will be interesting to see to what extent they achieve their lofty aims.