Annual Review 2020
Leading global law firm, Baker McKenzie, shares its Annual Review for FY20, highlighting stories from the Firm's clients and people.
Milton Cheng reviews the successes of the past year
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.
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.
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.
A brief summary
Our 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 the Firm's growth with revenues and profitability up in all four of our regions.
We saw revenue growth in FY20 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, South Korea, Kazakhstan and Morocco.
Advising on some of the world’s most important deals
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.
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 (equivalent) 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.
Our values and our culture of friendship have helped us to unite and grow stronger when tested this year. We have worked collaboratively and creatively in new ways, and have stood together to promote anti-racism, inclusion, and wellbeing throughout our organization.
We promoted 84 colleagues to partner across the Firm this year, 41% of whom are women. They joined 68 lateral partner hires across the globe, demonstrating our continued commitment to investing in top talent, both home-grown and lateral. Our investment in 152 new partners over the last 12 months signifies the importance we place in the long-term growth strategy of the Firm.
Our commitment to developing and supporting our own people and attracting the very best lateral talent has never been more important to our Firm. This July 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.
We are also planning major talent initiatives to further promote wellbeing and social mobility across the Firm, and will launch our "People Deal," focused on what it means to be a Baker McKenzie professional in 2020 and beyond.
Baker McKenzie is a special Firm to be a part of. Truly global in our outlook, we nurture a genuinely multicultural environment where every person counts and every voice is heard. We bring a high-performance mindset to the most challenging work, and we are proud to make a positive and enduring sustaining difference for our clients, our people and the world. That is the essence of our "People Deal."
As a Firm we’re committed to inclusion, diversity, sustainability and community engagement — our goal is to be leaders, not followers. We demonstrate this in many ways, including the recent appointment of our first Chief Sustainability Officer Alyssa Auberger, our new Practice and Industry Group chairs, new Executive Committee member and the new Chairs of our Asia Pacific, EMEA and North America regions.
When we adopted our 40:40:20 gender global aspirational targets last year, we committed to making systemic changes to drive gender equality in our Firm. A dedicated global team have been focused on operationalizing the gender GATs through the following areas:
- Firm-wide Engagement: engaging entire partnership and collaborating across functions
- Education & Communications: educating on both the why and how of the policy
- Reporting, Metrics & Measurement: reporting to measure and monitor progress and proactively address challenges
- Sponsorship & Pipeline Development: identifying our female leadership pipeline and engaging champions to support/develop
- Systemic Changes: evaluating and improving systems and processes, e.g. partner promotions, lateral recruitment, succession planning, client leadership opportunities
Alongside local, regional and global programming, initiatives, education and communications, foundational efforts in FY20 have made a marked contribution. We will continue this critical work toward achieving the targets, recognizing that gender equity serves to benefit all of our people and will be crucial to the ongoing sustainability and success of our business.
Global Social Mobility Program
Social mobility is a complex area, with various meanings and challenges in different parts of the world. At Baker McKenzie, what stays the same is this: We believe that everyone should be able to reach their full potential irrespective of their social background. Our Top 5 ranking in the Social Mobility Employer Index in the UK is one of the ways we demonstrate our commitment to providing opportunities to young people from lower socio-economic backgrounds.
Elements of the global program include:
Driving best practices across our internal recruitment (including graduate), to ensure we eliminate bias in our global processes and increase the diversity of our candidates and hires
Creating affinity groups across the Firm to enable us to further develop our culture of inclusion from a socio- economic perspective
Launching an annual Baker McKenzie award focused on championing social mobility activities and driving a culture of inclusion within our Firm
Working with partner organizations that share our goals of providing opportunities to young people, as well as building a more diverse and inclusive legal profession
The global social mobility program intersects closely with the Firm’s broader social justice and community engagement efforts.
Racial & Ethnic Diversity
The Global D&I Committee has for several years been focused on initiatives to improve the recruitment, retention, and advancement of underrepresented racial and ethnic minority groups throughout the Firm. Following recent events, and in recognition of the many social inequities faced by members of the Black community and other underrepresented racial and ethnic groups around the world, we formed a Global Task Force on Race & Ethnicity to develop strategic initiatives to:
Provide fair and equal opportunity and remove systemic barriers for underrepresented racial and ethnic minority groups to succeed;
Increase racial and ethnic representation among our partner, senior professional and leadership ranks;
"As a Firm, we are not neutral. Our values of dignity, caring and respect are unyielding, and we must hold ourselves and each other accountable for living up to these values. That means we are not, and cannot be, silent when we see injustice. We commit ourselves to calling out racism and working to end it. We will confront racial discrimination, injustice and stereotyping anywhere it exists around the world."
The legal industry is at a critical juncture regarding the wellbeing of its people and the sustainability of its demands on them. Amplified by COVID-19, there is increasing pressure on the Firm to acknowledge the impact of these demands and to find ways to continue to operate a high-performance environment, but in a way that is sustainable for our business and our people. To address this we have designed an integrated and holistic approach to wellbeing and overall sustainable high performance -- aligned with the Firm's wider strategy, we will be focused on three key initiatives over the next
- Introduce a set of new BakerWellbeing Principles that will define and drive best practice actions
- Launch Firm-wide campaign on world mental health day, featuring personal stories from colleagues across all offices
- Roll out targeted Learning and Development Programs to help educate and train our people in a range of different areas
Global Leadership & Learning
Over the last 12 months we have seen over 40,000 learning hours of training delivered, all tracked by our new global Learning Management System. We have moved quickly to full virtual delivery and also seen a dramatic increase in the use of e-learning platforms (2817 learning hours) in our three on-line resources:
- Culturewizard: where content is focused on global teaming and collaboration including bias and
- Harvard Spark: offering premium leadership and management content
- LinkedIn Learning: which provides extensive business, people and technology skills training catalogue to cover any gaps in internal provision
Client Training: For the last four years the EMEA soft skills program has been open to clients. In June 2020 we opened up all these courses globally and have already had 887 clients register from training in the first three months. With many clients reporting cutbacks to their internal training, our soft skills program provides Partners with a great way of reconnecting with clients and offering a service that no other Law Firms provide.
Our Carbon Emissions Reduction Targets
Our plan to significantly reduce our global carbon emissions by 2030
This year, our Firm publicly announced a plan to significantly reduce our global carbon emissions over the next decade. The reductions are part of the Firm’s wider sustainability strategy and support of the UN Sustainable Development Goals.
Climate change is one of the most pressing issues facing humanity. Limiting warming requires everyone – including Baker McKenzie — to take action to reduce greenhouse gas emissions, without delay. We are setting targets to improve environmental performance across our global operations, and to clearly demonstrate our commitment. These targets are part of our Firm’s continuing effort to integrate sustainability meaningfully into our strategy and operations.
Climate change is a priority and a concern for many people at our Firm, as well as for our clients and the communities where we do business. Our various stakeholders want to know that we are part of the solution.
We plan to lower our energy consumption through improvements in the energy efficiency of our offices (including a shift to green buildings over time), as well as via procurement of renewable energy credits. With respect to business air travel, which is the Firm’s biggest emissions source, in addition to lessening non-essential travel, we will assess investments in enhanced video conferencing technology and redesign key meetings and events to make virtual attendance viable. The Firm currently offsets all business air travel associated with our annual and regional partners meetings, using offsets that provide social benefits in addition to carbon abatement, such as reducing poverty, improving health, empowering women, job creation, or other benefits to local communities.
Launch of Reinvent
Our diverse innovation initiatives worldwide under a single arm
The Firm has 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.
The people of Baker McKenzie have been better connected through the pandemic, meeting and supporting each other in ways never before.
Whether it's virtual town halls for entire regions or teams of thousands of people, our Global Board meeting or the many internal team social pages, we are more connected than ever before. We know each other better, building even stronger trust, collaboration and understanding.
As just one powerful example, two team members in Belfast are helping colleagues learn sign language. Holly Lane and certified sign-language instructor Beth Adams conducted an eight-week course and were overwhelmed by the broad interest to learn the new skill. Holly was delighted when a colleague recently started using basic sign-language over Skype to communicate with her.
"Everything that we do can have many outcomes," Holly said. "This group has had the opportunity to got to learn to communicate with me a bit better and in doing so, I’m sure they've learned a lot about deaf people, too, along the way." She is already looking forward to working with her next round of colleague students.
Nowhere has our Firm's unity and culture of friendship been more apparent than in the examples of how we have helped our communities during the pandemic. In addition to personal stories of sewing masks or giving donations, many of our people have been supporting our front-line and essential services workers and our neighbors. While there are numerous stories, below are some examples of how we are helping others.
- Our China offices raised and donated money to support families in Hubei province that were particularly hit hard early by the coronavirus.
- Colleagues in Madrid raised funds so that a local restaurant chain could provide free coffee, drinks, and snacks to healthcare workers, as well as the security teams and emergency units at the biggest field hospital in Spain.
- In Miami, volunteers helped with an emergency hearing for a child seeking a Special Immigrant Juvenile Visa, so the courts can make sure that unaccompanied immigrant children have a caretaker to get them medical assistance should it become necessary.
- In London, a group of trainees loaded cars with donations from many people across the Firm, and ferried to Calais in France, for a three-day trip providing refugee aid to a local charity. They volunteered helping prepare meals, chopping wood, and sorting donations in their warehouse.
- Our Pro Bono team is working on a global project with the Legal Atlas for Street Children, with over 50 volunteers from Accenture. The group also launched the www.justicewithchildren.org website giving COVID-19 resources to legal professionals, law enforcement and social workers addressing children in detention during this pandemic.
Baker McKenzie has the highest media profile of any law firm. Our lawyers appear on the world's leading broadcast outlets and in major international and national digital and print media. They comment on a range of issues from international trade to the latest restructuring trends, the outlook for M&A and what will happen to capital markets.
Our deals and matters are featured consistently in the legal and business press in the 50+ markets within which we operate, and the news about our Firm and our leaders regularly hit the headlines.