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GAR 100 - 10th Edition

The GAR 30

17 March 2017

How does one "rank" international arbitration practices?

At first blush, it looks like something that should be easy. After all, they compete head-to-head... so there’s a winner, right? Or how about looking at who’s working on the bigger, "sexier" cases?

There are surveys that do both of those. But with all due respect, neither approach, on its own, works too well.

A law firm, for example, can often be obliged to take on a stinker of a case as a favour to a client. Or there’s the opposite scenario: one might win (or seem to win) the battle but lose the war, as one of our readers in fact experienced (he didn’t know he was losing the war because he didn’t have control of the totality of the case). In that matter, the lawyer successfully defended an US$80 million claim. Meanwhile (and out of his hands), the client was losing a parallel case about the same transaction worth US$200 million.

As for "size", that isn’t always a great indicator of importance either. A story from the back catalogue of Jan Paulsson may help to explain.

A while ago, Paulsson’s firm at the time, Coudert Brothers, received a smallish-looking case from an Asian client, about vested rights. About US$50 million seemed to be at stake. Except – and here’s the rub – when the team scratched the surface, they found the terms in this dispute with a Middle Eastern agent were repeated in lots of contracts.

Worse, most of the client’s corporate loans contained acceleration clauses. A loss of more than US$5 million and those would become eligible for early repayment.

The small case was far from minor, it turned out.

After a "pretty bloody fight" (that included the discovery of forgery), the client lost – but only US$2 million. It was overjoyed.

"A silly summary of the case," says Jan Paulsson, "would have been that we lost a little case."

In reality, the client exhaled with huge relief. It treated Paulsson and the rest of the team – plus spouses – to an all-expenses paid trip to the Seoul Olympics.

It’s more normal for things to be the other way around. The so-called "bet the company" case turns out to be worth tens of millions when all is said and done. Indeed, for a period it was noticeable how few of the billion-dollar cases that began at ICSID have produced anything like that amount. This phase may have ended recently (see recent awards such as Yukos v Russia and Occidental v Ecuador), but before that a number of cases produced far less than the amounts claimed. So the point remains. It’s unwise to draw too many conclusions about the "size" of a case until the result is in.

So how can one take the pulse of a practice?

A few years ago, GAR journalists and the magazine’s editorial board pondered that question, leading to the thought: what about a survey built chiefly on the number of hearings conducted by the firm in a two-year period?

For those reading about international arbitration for the first time, the hearing (particularly the merits hearing) is the closest thing that arbitration has to a day in court. It’s the moment the two sides convene in a hotel room, law firm office or arbitration hearing centre for however many days of oral arguments have been agreed.

For the senior counsel (the advocates), it portends a period of isolation beforehand prepping – and perhaps the odd cold towel pressed to the head. (For the younger lawyers, it means sorting out all of the logistics of the presentation, and possibly dealing with a more-jittery-than-usual boss.)

If it’s a very important case, the team may have done some dress rehearsals in front of arbitrators hired specially for the purpose.

So why is the incidence of hearings a good indicator of the health of a practice?

As a metric, the hearing has a number of strengths. First, it’s innate. Just as fissile material emits radiation, so the busy arbitration practice cannot help but produce hearings.

Second, it’s the same for everyone. Although some firms have complained that their cases tend to settle before a hearing, there is no evidence to suggest anyone has a different settlement rate.

Third, it’s checkable. International arbitration is often confidential, but firms can reveal descriptive, generic information about each hearing (such as language, dates, claim size, opposing counsel, chairman of the tribunal, and so on) without breaching that, and so allow its existence to be verified.

Fourth, real experience is gained in merits hearings. Any advocate will tell you there’s no better gymnasium for the legal mind than going into a hearing, big or small.

Of course, there are exceptions that test the rule.

Practices that focus on very low-value commodities cases pose a problem for this method – as there’s a risk they can swamp the chart. We’ve met that by ignoring matters below a certain figure (despite what we said earlier about size not counting) as well as cases at certain industry-specific arbitral institutions.

Practices that have large but slow-moving cases are also difficult: for many DC-based firms, for example, the majority of their work is large, labour-intensive yet slow-moving investment disputes. Again, we’ve met that by asking them to send in their billable hours – as well as their hearings information – to see if we can give them extra credit.

As you can see, we’ve attempted to adapt the approach so it is fair to all. But the core of the survey remains the number of hearings.

Having collected the data, how do we turn it into the "ranking"?

One can compare the GAR 30 to a class of students. The students get different grades per test throughout their year. (Note the grade is always relative to the other students. An "A" doesn’t mean "80% or above" – it means it is in the top 10% of performances (or something close). The more high grades, the better the student’s overall placing.

So it is with our firms (except the tests are columns in an Excel spreadsheet): lots of A grades (or A+ or A-) mean a high final position in the GAR 30; Bs and Cs mean a mid-table score; and so on.

That raises the next question: what do the firms get tested on?

The survey now looks at:

  • merits hearings and jurisdictional hearings in a two-year period and the amount of money at stake;
  • the number of hours billed to arbitration in the past two years;
  • the number of lawyers at the firm who were peer-selected for inclusion in our sister publication Who’s Who Legal: Arbitration; and
  • the number of pending cases in which a firm’s members have been appointed as arbitrators.

Further, we split "hearings" into four categories according to their value: bet-the-company cases (US$1 billion and upwards); large cases (US$250 million to US$999 million); medium-sized cases (US$10 million to US$249 million); and small cases (these are all but ignored, except as a tie-breaker).

"Winning" doesn’t come into it. If it did, Shearman & Sterling would have been the runaway number one a couple of years ago, having won the US$50 billion Yukos awards – and the likes of Debevoise & Plimpton, Arnold & Porter Kaye Scholer and Squire Patton Boggs would all have done better in previous editions.

The problem with comparing arbitration practices is that often it’s apples and oranges. In the past, this survey tended to over-reward high-volume practices. In recent years, we’ve tried to construct it so that everyone has a good chance to shine – from firms who focus 100% on super-complex work to those that are more like arbitration supermarkets.

What’s the secret to succeeding in the GAR 30?

There are two ways to do well.

One – the easier – is to perform better than average across the board. This is the "well-roundedness" route to success. If one looks at the top of the table, this is how Freshfields, White & Case, King & Spalding and others do well year in, year out, and why some other firms are also regularly in the GAR 30, without particularly standing out in any single column.

The second way is to do exceptionally well in one or two particular columns and averagely elsewhere. This is the "big-game hunting" route to success.

Something to be aware of in the GAR 30 is that it can be a bit changeable – particularly in the middle order. There are various reasons for this.

First, it’s the nature of the endeavour. There is often very little difference, in grade terms, between a firm that finishes, say, 16th or 17th and one that’s in 23rd position. But by referring to them as being in 16th and 23rd place, the difference is made to look starker than it perhaps is. It also means that for firms in zones of the table where everyone’s grades are tightly bunched, moving up or down is fairly easy, and the jumps that are made also seem magnified.

This highlights another caveat about the table: it’s relative. The fact that a firm has moved its ranking compared with a year ago in fact establishes nothing about whether the firm’s own practice has changed (improved/not improved). All it shows is that its performance relative to other firms has changed. In an extreme example of this, a firm may have exactly the same figures this year as a year ago and yet move several places, up or down. It itself hasn’t changed. But others have posted better (or worse) figures.

With that background established, you are ready to find out about this year’s ranking.

(Click for larger image)

This is the tenth edition of the GAR 30. The range of characteristics we looked at per practice remains as it was last year.

We publish all the data relevant to the ranking apart from billable hours (which must remain secret). We include two columns that don’t count towards the overall position ("Value of current portfolio as counsel" and "Number of cases settled in two years") because they are illuminating nevertheless. There were submissions from around 220 firms this year.

In this year’s GAR 30, ten firms go up, 13 firms go down, while four firms haven’t moved. Three firms have reappeared in the ranking after a time away; and another three that appeared last year have dropped out.

Most notably, White & Case has emerged in first place, with Freshfields Bruckhaus Deringer coming second. (The two firms were tied for the number one spot last year.)

The highest riser in the table this year is Three Crowns (which has gone up eight places), followed by Allen & Overy, Linklaters and Latham & Watkins (each up seven places), and Dechert (up six). Clyde & Co, Hughes Hubbard & Reed, Baker McKenzie, Quinn Emanuel Urquhart & Sullivan and Curtis Mallet-Prevost Colt & Mosle have also made modest gains since last year.

The firms that have come down the most in the table are Debevoise & Plimpton (six places); King & Spalding (five places); and DLA Piper and Orrick Herrington & Sutcliffe (four places each). Lalive, Dentons, Foley Hoag and Sidley Austin also fell by three places each.

Besides White & Case, the firms that haven’t moved this year are Herbert Smith Freehills, Wilmer Cutler Pickering Hale and Dorr, and Hogan Lovells.

Cleary Gottlieb Steen & Hamilton and Derains & Gharavi reappear in the table, having last featured in the 2015 edition. Schellenberg Wittmer also appears for the first time since 2013.

Three firms have dropped out of the table entirely: Homburger and King & Wood Mallesons (who feature in our list of runners-up, the GAR 31-40); and Skadden Arps Slate Meagher & Flom (which chose not to participate in the survey).

Another impressive firm, Squire Patton Boggs, narrowly missed out on inclusion in the ranking but topped the list of runners-up.

GAR 31-40

Rank

Firm

Value of pending counsel work

31

Squire Patton Boggs

US$15.4 billion

32

King & Wood Mallesons

US$9.4 billion

33

Chaffetz Lindsey

US$3.4 billion+

34

Baker Botts

US$20 billion

35

CMS

US$6 billion+

36

Homburger

US$6.2 billion

37

Cuatrecasas Gonçalves Pereira

US$3.6 billion

38

Vinson & Elkins

US$14.5 billion

39

K&L Gates

US$20.5 billion+

40

Uría Menéndez

US$5.1 billion

So that’s what’s different this year. But what to make of it?

One question the GAR team has been asking is whether the firms are taking on more work? For a while, there’s been some talk in London that some of the larger international arbitration shops are moving in the direction of ever greater volume and leverage.

Do the figures in this year’s table bear that supposition out? Certainly the total value of the firms’ pending counsel work has continued to rise (it now stands at over US$1.9 trillion) and there’s been a further rise in the number of billable hours reported. On the other hand, the number of hearings we counted in the research window fell slightly (869 this year compared with 953 reported by the same firms last year) and so did the total number of pending cases as counsel (3,102 compared with 3,471 a year ago).

And for all the talk of a mushrooming of investment treaty work, the number of such cases hasn’t risen noticeably since last year. (As a side note, we also asked the firms what proportion of their cases as counsel were being third-party funded. The answer on average was about 1.4%.)  

As we noted last year, some of the highest-value cases seem to be spawning marathon hearings (by international arbitration standards) of two to three weeks’ duration – and more bifurcated hearings on merits and quantum issues. That’s particularly true for firms at the top of the table. For instance, a €6 billion ICC dispute over a nuclear power plant in Finland (in which four firms in the GAR 30 are acting) has spawned 48 days of merits hearings over the past two years. An arbitration over a Central American power plant required four merits hearings, culminating in a 12-day hearing in Dublin in 2015 with testimony from 30 witnesses.

The news may not delight those who care about arbitration’s average time and cost. It also poses difficulties for GAR, as we apply a rule of counting only one "merits hearing" per case for the purposes of the ranking. While we continue to believe that’s generally the right approach, we’ve made the occasional exception this year for hearings of unusual duration.

Turning to the ranking, White & Case’s position in the top spot – above Freshfields – needs some backstory. Freshfields dominated the number one position in seven consecutive editions of the GAR 30 before it was supplanted for the first time by White & Case in 2015. The timing was unfortunate, coming soon after a couple of leading names had left the Freshfields practice to set up a rival shop, Three Crowns.

Then last year White & Case and Freshfields were tied in first place (the first time this had ever happened in the GAR 30’s history). Our researchers simply found the two firms too evenly matched to pick a clear winner.

This time around, White & Case has edged slightly in front, though it was still a close call. It’s true that Freshfields notched up a larger number of merits hearings overall during the research period (60 compared with White & Case’s 46). It’s also true that Freshfields had a slightly higher number of hearings in cases worth more than US$1 billion.

Then again, White & Case had a higher number of "large" hearings and the value of some of those was not far off the billion-dollar mark. It also has a slightly larger number of practice members who are recognised in Who’s Who Legal and reported a significantly higher number of hours billed to arbitration (in fact, the highest of any firm in the table).

Though it didn’t factor into the ranking, it’s worth observing that White & Case’s portfolio of counsel work is now valued at US$124 billion (a 44% increase on the figure of US$86 billion it reported last year.) Freshfields’ pending cases are meanwhile valued at US$75 billion, down from last year’s figure of US$80 billion.

Both firms have been busy – though, unlike last year, White & Case’s biggest hearings during the research window have been commercial rather than ICSID matters. It’s one of the firms involved in the Finnish nuclear power plant dispute already mentioned, and it appeared for Bulgaria in another nuclear power dispute. It also acted for a Middle Eastern state in a large construction matter and for the consortium behind the expansion of the Panama Canal. A couple of high-stakes hearings for German and French energy clients have also carried the firm aloft.

In contrast, Freshfields’ investment treaty practice generated some of its biggest hearings this time around. At ICSID, there were hearings in Crystallex and Rusuro (resulting in billion-dollar awards against Venezuela); as well as Burlington Resources (which saw the firm fight off a massive environmental counterclaim by Ecuador). A multibillion-dollar dispute over the cut-off of Egyptian gas supplies to Israel after the Arab Spring has also continued to provide a lot of work, as has a case for a UAE gas consortium against the Kurdistan regional government of Iraq.

It’s been a year of consolidation for Herbert Smith Freehills, which hasn’t moved from the third place that it attained in the last edition. As we noted then, the firm saw a sharp rise in its caseload between 2015 and 2016, much of it relating to energy and natural resources. It’s true that HSF’s portfolio of counsel work has fallen in value by more than half over the past year (US$52 billion compared with US$121 billion in 2016). But the firm says this is primarily thanks to its efforts in a pending arbitration originally worth US$80 billion, where it has reduced the amount in dispute to US$18 billion. The firm has 14 cases on its books worth more than US$1 billion each.

Significant HSF hearings during the research window included one for Spain in a closely watched treaty claim brought by investors in the solar photovoltaic industry, an ICSID case in which it defended Tunisia and a case for a French-owned utility against a Middle Eastern state authority (represented by Freshfields). There was also a substantial ICC matter on behalf of an Asian energy company relating to gas fields in the Pacific Ocean.

HSF’s practice also features 15 people who are recognised by their peers in Who’s Who Legal – more than any other firm in the table except for White & Case and King & Spalding, which field the same number.

Allen & Overy is one of the highest risers this year, jumping from 11th to fourth place (the highest it’s ever been). That’s because the firm has continued to improve by almost every metric we use. It had twice as many hearings in the "bet the company" and "large" categories compared to last year, along with more arbitral appointments and a notable rise in billable hours. Ten members of the practice appear in Who’s Who Legal (compared with six in 2015): they include LCIA president Judith Gill QC and the recently anointed head of the HKIAC, Matthew Gearing QC.

The value of A&O’s counsel work has also risen by more than US$6 billion in the past year. Hearings that occupied the firm included two cases by renewable energy investors against Spain; a US$600 millon LNG-related claim in which its client Pakistan prevailed; and a US$5 billion oil and gas dispute with the Indian government.

A&O’s ascendance means that Shearman & Sterling has slipped to fifth place. One shouldn’t read too much into that. While the US$50 billion Yukos case has now moved to the enforcement stage, the firm continues to be visible on some of the world’s highest-value arbitrations. In the past two years, Shearman has had hearings against the likes of White & Case and Freshfields in various disputes already referred to above, as well as big-ticket work for Sonatrach and a dispute between two high-net-worth individuals from the Middle East. But a couple of big cases (for Lithuania against Gazprom and for Brazilian clients against Telecom Italia) didn’t come off, so those hearings haven’t given the firm the boost that they otherwise would have in the ranking. Shearman also continues to be hampered by a relatively low number of people listed in Who’s Who Legal – even though one of the two names listed is Emmanuel Gaillard, a celebrity in the international arbitration world. The firm’s members also take a smaller number of arbitral appointments than most of their competitors.

Meanwhile WilmerHale – home to arbitration star Gary Born – hasn’t moved from sixth place. The firm continues to benefit from some substantial matters in the financial services and pharmaceuticals sectors, as well as its representation of Kurdistan in the gas dispute already mentioned. Meanwhile the value of its portfolio of counsel work has risen to US$170.5 billion (a 59% increase on last year’s figure).

When Three Crowns first appeared in the table last year (in 15th place), we observed that this was an auspicious debut for a firm that had only been up and running for a relatively short time. We predicted then that the firm would likely climb higher – so it’s gratifying to see it jump to seventh place this year.

Established in 2014 by Jan Paulsson and other prominent names from Freshfields, Shearman and Covington & Burling, Three Crowns styles itself as "a radical departure from Big Law". From what we’ve seen, the firm appears to be living true to its mission statement of focusing on a smaller number of important cases. While we only counted 11 merits hearings during the research window, more than half of these were matters above the billion-dollar mark – including the latest phase of the Chevron v Ecuador saga. Its pending counsel work is worth US$111 billion, which is on a par with some leading full-service firms in the table. 

Hogan Lovells hasn’t budged from eighth position. There was a dip in "bet the company" hearings but the number of large hearings surged. These included oil and gas, energy, construction and IT disputes (some emanating from Nigeria and Mexico) as well as an ICSID matter for Venezuela. There was also a rise in hours billed to arbitration. In ninth place, Clifford Chance benefited from hearings in some large energy and financial services matters – though we downgraded a couple of billion-dollar ICSID cases (against Indonesia and Papua New Guinea) after the claims were thrown out. The firm retains a strong showing of eight names in Who’s Who Legal and boasts the second-highest number of arbitrator appointments in the table.  

King & Spalding chalked up a lower-than-usual number of "bet the company" hearings this year, despite appearing in some major treaty-based matters for Chevron, Oleg Deripaska, ConocoPhillips and the Turkish government. Nevertheless, it narrowly beat Quinn Emanuel Urquhart & Sullivan to 11th place on the back of its strong presence in Who’s Who Legal (15 names) and impressive number of arbitrator appointments.

Last year, we reported anecdotal evidence suggested Quinn Emanuel (along with a few other firms in the 30) were offering some very generous fee deals when pitching for new work. If that’s true, it certainly seems to be working: the firm’s caseload as counsel is now worth over US$110 billion (more than five times the figure reported last year) – and that includes 11 more investment treaty disputes. Major matters that went to a hearing in the past two years include a US$2 billion claim on behalf of a UAE fund against Citigroup; a treaty-based ICC claim against Cyprus; and a price review claim on behalf of Italy’s Edison against Eni relating to gas supplies from Libya (which resulted in a €1 billion win for the client).

Climbing to 12th place, Curtis Mallet-Prevost Colt & Mosle reported broadly similar figures to last year, apart from an uptick in billable hours. It had a busy two years defending India, Kazakhstan, Turkmenistan and Venezuela in some high-stakes treaty matters. And while it’s best known for its work in the investor-state arena, the firm had hearings in some big commercial matters too.

In 13th position, Lalive continues to be the only firm from a civil-law jurisdiction to have featured in every single edition of the GAR 30 – and is one of only two Swiss firms to appear in the table this year. The practice fields 10 names in Who’s Who Legal and its members take on a high number of arbitrator appointments. Its portfolio of counsel work has risen to more than US$40 billion compared to US$26 billion a year ago. Lalive’s hearings in the research window included a US$3.5 billion matter in which it defended a Southern European state, and a private wealth dispute coming out of the Middle East.

Baker McKenzie continues to hover around the middle of the table, coming in at 14th place this year. It conducted 76 merits hearings – more than any other GAR 30 firm. The majority of these were worth less than US$250 million, though there were a couple of billion-dollar matters (including an ICSID case against Pakistan on which it’s co-counselling with Arnold & Porter). The firm’s caseload is now worth over US$76 billion (having increased by more than half in the space of a year) and it has an impressive 12 names in Who’s Who Legal across its many offices.

Debevoise & Plimpton’s appearance in 15th place is perhaps surprising given how strong a reputation it enjoys within the international arbitration community. Though the practice is smaller than some of its competitors, it has seven names in Who’s Who Legal, including practice co-heads David W Rivkin (immediate past president of the International Bar Association) and Donald Donovan (president of the International Council for Commercial Arbitration).

For whatever reason, though, Debevoise had a relatively low number of hearings during the research window; we counted 11, including a hearing on quantum in Perenco v Ecuador and a jurisdictional hearing in one of the "second wave" Yukos cases against Russia. This picture is likely to change, however, as some of the firm’s newer cases pick up steam. The recent hire of Wendy Miles QC, formerly a long-time partner at WilmerHale, should also bring in more work.

It’s been a good year for Dechert, which has risen from 22nd to 16th place thanks to a cluster of major investor-state matters. The firm appeared for Ecuador in the Perenco, Burlington and Chevron cases, and helped Hungary’s MOL prevail against Croatia. There was also a 70% increase in hours billed to arbitration.

Dentons comes in at 17th place a year after completing its tie-up with Rodyk & Davidson, a well-regarded Singaporean firm that also features in the GAR 100. But it’s the European arm of the practice that continues to draw in the most work, including weighty cases for Gazprom, Sudan’s national oil company and a gas field operator in Bangladesh.

Meanwhile Linklaters has climbed to 18th place. It’s worth remembering that the Magic Circle firm only appeared in the GAR 100 (and 30) for the first time in 2015, having been slower than most of its peers in setting up a dedicated international arbitration group. Since then, it’s made a number of shrewd hires, including the highly respected Matthew Weiniger QC from Herbert Smith Freehills. His investor-state practice has given the firm a further boost in the table. Linklaters also had hearings in a monumental US$22 billion matter for a Total subsidiary defending a claim by two Russian regional governments; and for the German government in a US$8 billion dispute over a truck toll system.

Latham & Watkins has made impressive headway, climbing to 19th place – the highest position its achieved in the table since 2011. It too is involved in that German truck toll dispute just mentioned, and a US$7 billion matter relating to a nuclear power plant in California has given it a leg-up. Meanwhile its caseload value has gone up by US$20 billion since last year. Partner Sophie Lamb recently joined the firm from Debevoise to head the London practice so it’s likely that Latham will climb even higher in the next few years (we haven’t counted any hearings Lamb was involved in at her former firm).

In 20th position, Jones Day hasn’t moved much from where it’s been in the table for the past four years. It’s had some significant jurisdictional hearings recently in a pair of treaty claims against Central Asian states.

Climbing to 21st place, Hughes Hubbard & Reed remains something of an outlier. It has a smaller practice than most of its rivals – around 15 pending cases worth a combined US$7 billion. But they include some high-profile and politically sensitive work for Ukrainian investors in Crimea pursuing claims against Russia (a jurisdictional win in two of these cases was announced as this book went to press).

The hire of Alex Yanos from Freshfields has given the firm a further boost (he co-counselled with his former firm on the Crystallex case that ended in a billion-dollar win against Venezuela). On the commercial side, it has been involved in a big dispute coming out of the Philippines.

Norton Rose Fulbright has fallen in the table this year. After some departures, it now has seven names in Who’s Who Legal compared with nine a year ago. Its caseload also stands at around US$11 billion (compared with US$35 billion in 2016). It’s one of the few firms that refuse to tell us about their billable hours (Hughes Hubbard is another) – a decision that can count against a firm in the event of a tie-breaker. 

DLA Piper’s and Orrick’s drops in the table are mainly because neither firm reported a "bet the company" hearing during the research window. On the other hand, both firms have improved their showing in Who’s Who Legal since last year.

DLA Piper’s portfolio of counsel work is now worth US$153 billion, more than any other firm in the GAR 30 (and an 85% increase on last year). That includes a US$50 billion matter for Gazprom against Ukraine’s Naftogaz that went to hearing in late 2016 – unfortunately, too late to be counted in this edition, but it will factor in next year’s ranking.

As for Orrick, it’s been busy with hearings in some large post-M&A, private equity, gas pricing and electronics disputes. The firm recently announced the hire of a new practice head, Charles Adams – formerly of Akin Gump Strauss Hauer & Feld – which should bring in even more work.

Clyde & Co currently has more than 400 active arbitrations on its books, more than any other firm in the GAR 100. While shipping and commodities disputes make up a significant part of this, the firm says there’s been a considerable shift in recent years towards higher-value and more complex international arbitrations. The evidence we’ve seen appears to back this up. There’s been a marked increase in hearings above the US$1 billion mark. There’ve been some large oil and gas, construction and insurance matters that have gone to a hearing, and the firm is now handling ICSID work for its long-term client Yemen. But for ranking purposes, it remains disadvantaged by a shortage of names recognised in Who’s Who Legal and a relatively small number of arbitrator appointments.

Those disadvantages are also true for the two firms immediately below it – Foley Hoag and Cleary Gottlieb Steen & Hamilton. Both could be forgiven for feeling some frustration at their positions in the table, considering their recent track record. Foley Hoag has had a triumphant year – it helped Uruguay see off Philip Morris’s controversial claim over tobacco measures and led the Philippines to victory in one of the most closely watched inter-state arbitrations in history (over Chinese claims to the South China Sea). Cleary has meanwhile successfully defended Greece in an ICSID case that could have had seismic implications for the Eurozone, and it also defeated a US$15 billion ICC claim.

But for better or worse, the GAR 30 methodology tends to favour firms with a higher volume of cases more evenly balanced between investor-state and commercial work – as well as those that have a higher number of arbitration stars listed in Who’s Who Legal.

Derains & Gharavi makes a return to the table in 28th place (it last appeared in 2015, though it featured in the list of runners-up last year). The boutique, which has offices in Paris, DC and Beirut, has an impressive showing of four Who’s Who Legal names. It had major hearings in an ICSID case against Kazakhstan and a road construction dispute in the Middle East.  

Sidley Austin (which made an overdue debut in the GAR 30 last year) comes in at 29th place, buoyed by hearings in a US$4.5 billion ICSID case against South Korea and a politically sensitive dispute over a power plant in Bulgaria. The firm ascribes a value of US$124 billion to its pending counsel work (which puts it on a par with Freshfields).

Finally, Schellenberg Wittmer makes a welcome return to the table after last appearing in 2013. That’s largely thanks to a strong showing of six names in Who’s Who Legal and a remarkable 105 arbitrator appointments – the highest score in this category in the table. It played a successful role in the recent Croatia v MOL dispute and has had hearings in large to medium-sized cases in the pharmaceuticals, commodities and healthcare sectors.

Turning to the runners-up, Squire Patton Boggs’ position doesn’t do justice to its recent results. It successfully settled three energy disputes, each worth several billion dollars, and ten other cases worth a combined US$10 billion before they reached a hearing – unfortunately these can’t be counted towards the ranking.

King & Wood Mallesons’ presence may raise a few eyebrows given the headlines about the insolvency of the firm’s European arm. But the arbitration team from those offices has been salvaged, and the firm’s Asia-Pacific arm continues to bring in high-value energy and natural resources work.

New York disputes boutique Chaffetz Lindsey is also finally getting recognition after some impressive work on a Guatemalan power plant dispute. It also has a growing investment treaty practice thanks to the recent hire of Aníbal Sabater from Norton Rose Fulbright.

It’s no surprise to see the likes of CMS, Vinson & Elkins and K&L Gates feature, but it’s also good to see the presence of another Swiss firm – Homburger – and two Iberian firms, Cuatrecasas Gonçalves Pereira and Uría Menéndez.

Methodology

The GAR 30 ranks firms according to a "score" built by adding up several T-scores. What’s a T-score? In brief, it’s a way of converting performance in a particular test so it can be more easily compared with performance in a different test. Thus, law firms, or students, or football teams, can be compared by aggregating a series of different performances without fear than any single test will come to dominate the final "score". The GAR 30 T-scores cover:

  • the number of merits and jurisdictional hearings during the research period (two years);
  • the number of hours billed to arbitration in two years;
  • the number of lawyers who qualified for the latest edition of Who’s Who Legal: Arbitration, our sister publication; and
  • the number of arbitral appointments members are handling.

Furthermore, we subdivided "hearings" into four categories: bet-the-company cases (more than US$1 billion dollars); large cases; medium-sized cases; and small cases (which don’t count towards ranking).

The following is a bit more about the columns in the spreadsheet that count towards the final score (and those that don’t), and the "accounting" principles our researchers use.

The GAR 30 chart

  • People in Who’s Who Legal – shows how many members of a firm won entry to the 2017 edition of Who’s Who Legal: Arbitration.*
  • Pending cases as arbitrator – shows the number of cases in which a lawyer from the firm has been asked to sit as an arbitrator (snapshot on 1 August 2016). It ignores sports and maritime cases as well as cases at certain sector-specific arbitral bodies or mainland Chinese institutions.*
  • Merits hearings completed in two years – shows how many merits hearings the firm participated in as counsel or co-counsel during the past two years.*
  • Jurisdictional hearings completed in two years – shows the same, but for jurisdictional matters. Hearings under a certain duration in commercial arbitrations are excluded.*
  • Bet-the-company hearings – shows how many hearings were in the US$1 billion-plus range.*
  • Large hearings – shows how many hearings were in the US$250 million to US$999 million range.*
  • Medium-sized hearings – shows how many hearings were in the US$10 million to US$249 million range.*
  • Cases settled – number of arbitrations that ended in a settlement in two years.
  • Value of current portfolio as counsel – the value of all the claims the firm is now handling as counsel.
  • Billable hours (unpublished) – the number of hours billed to international arbitration in a two-year period - excluding the work of paralegals, support staff and trainees.*

* Counts towards the ranking.

"Accounting" policies

When deciding whether to include a particular reported matter and what value to assign it, we use the following rules:

  • "If in doubt, leave it out" – if a matter is insufficiently described (for instance, there is information missing on the date and duration of the hearing, the name of opposing counsel, the value at stake, or the name of the presiding arbitrator), it can’t be included in the score.
  • Jurisdictional hearings in commercial cases are only counted if they exceed a certain duration.
  • "One dispute/multiple panels" (different arbitrators) – each hearing is counted.
  • "One dispute/several merits hearings" – count it once.
  • "Disagreement over the amount at stake" (usually affects higher value disputes only) – standardise the value, based on the highest total, and apply that to all firms.
  • "Large claim/small award" – if arbitrators have ruled on the value of a dispute, that award becomes the amount.

The research period was 1 August 2014 to 1 August 2016.

Q&A on methodology

How do you get this data?

Law firms provide it, subject to us agreeing to keep it confidential.

Why do you include jurisdictional hearings as well as merits hearings?

At the request of some firms that do mainly investment treaty work. We count jurisdictional hearings in commercial cases too but only if they exceed a certain duration – to prevent essentially "procedural" hearings being included.

Why do you include billable hours?

At the request of firms that felt they were disadvantaged by the exclusive focus on hearings.

Do you accept the claim sizes asserted at face value?

Yes, but where we know that an award has been handed down, the size of the award becomes the value of the case.

What do you do in the following scenarios: (i) requests for declaratory relief; (ii) emergency arbitrations, hearings on interim measures, ICSID annulment hearings or summary dismissal procedures; (iii) baskets of public international law matters before unique claims tribunals; (iv) test cases; and (v) hearings "happening soon"?

(i) The firm usually provides (on background) an estimate of the value of the relief sought, so we use that.

(ii) We don’t count these.

(iii) We tend not to aggregate these into a "bet-the-company" case.

(iv) Again, the firm usually explains the value at stake.

(v) These aren’t counted. They can go in next year’s survey.

We try to use common sense and caution.

Aren’t these figures entirely self-reported?

Yes, but we do cross-reference the cases mentioned with the other side, where possible. The exception is billable hours, but there it becomes obvious pretty quickly who the outliers are, whereupon we go back to the firm seeking further explanation.

Are there any weightings in the formula?

The scores for the different categories of hearing (particularly the bet-the-company and large range) count a little more. Appointments as arbitrator count a little less.