JULY 2019

NORTON ROSE FULBRIGHT 2018 ANNUAL REVIEW ALM LEGAL INTELLIGENCE ANNUAL REPORT Executive Summary • Norton Rose Fulbright (NRF) continues to implement its 2020 business transformation strategy, putting in place new systems and processes while expanding its global presence and practice area offering — Ranked 11th in the Am Law 100 with $1.9b in revenue and more than 3,000 attorneys globally

— The firm’s change and innovation program – NRF Transform – provides clients with enhanced service, end-to-end delivery and maximum value through efficient performance, optimal resourcing and a long-term investment strategy for emerging technologies

— The firm’s strategy offers “globally integrated and efficient service” through new technology and service centers 1 — Opened legal process hub in Newcastle (UK) (2017) 3 and services center in the Philippines (2016) 4 to drive legal process efficiencies

— The firm expanded in the US, Mexico, Brazil, Canada and Australia through combinations in 2017 with Chadbourne & Parke, Bull Housser and Henry Davis York — Despite having the highest partner departures of its peer group, NRF grew headcount within its Corporate and Banking practices across the US, Europe and Asia Pacific, and within its Real

Estate and Energy practices in Europe and Asia • NRF had 1% revenue growth and 1% profit growth in 2018, underperforming its ALM Selected Peer Group* — Revenue Per Lawyer (RPL) declined by 1% while Profits per Equity Partner (PEP) increased by 5%

— The firm increased its leverage ratio by 8% to maintain its overall PEP — Total lawyer headcount remained largely static, but the firm increased PEP through a 5% reduction in equity partners (3% decline in non-equity partners)

— NRF’s efficiency strategy is producing results as the firm is now outperforming its peer group in cost per lawyer control • NRF has a higher percentage of female partners than its ALM Selected Peers, including their Global Executive Committee (37% female) and Global Supervisory Board (35% female)

• Going forward, Norton Rose Fulbright will continue to focus on revenue growth improvement, while seeking to differentiate itself through its industry sector focus, continued innovation and an integrated and efficient global operation

ALM Selected Peers = DLA Piper, , Baker McKenzie, and See methodology section for peer group criteria. See bibliography for links to underlying sources

2 Firm Report NORTON ROSE FULBRIGHT ANNUAL REPORT Key Statistics: Norton Rose Fulbright

Norton Rose Fulbright has struggled to achieve strong financial performance with revenue and profit largely stagnating despite aggressive expansion activity. For FY 2018, the firm failed to outperform its five-year average across any key metric

Year-on-Year Average Annual Growth 2018 Growth 2014 -2018 2017 - 2018

Revenue ($M) $1,969 1% 2%

Profit ($M) $618 1% 1%

Profit Per Equity Partner ($K) $907 5% 10%

Revenue Per Lawyer ($K) $583 -1% 3%

Total Lawyers 3,376 1% -1%

Equity Partners 681 -5% -8%

Non-Equity Partners 485 -3% 19%

Leverage 4.0 8% 10%

3 Firm Report NORTON ROSE FULBRIGHT ANNUAL REPORT Norton Rose Fulbright Global Footprint

Norton Rose Fulbright grew its headcount in the Asia Pacific region by 20% in 2018 with growth derived from acquisitions in Australia. Conversely, the firm saw headcount decline in the US and London and remain static in mainland Europe

Lawyers By Location Lawyers by Global Region Year over Year 5 Year Average Norton Rose Fulbright, 2018 2017 – 2018 2014 – 2018 For Norton Rose Fulbright, 2019

USA 789 -8% 4%

Asia Pacific 735 20% -2%

Canada 698 4% 2%

London 533 -7% -1%

Europe 353 0% 0%

Africa 166 2% -14% Latin and South 58 America -4% 0%

Middle East 46 26% 3%

4 Firm Report NORTON ROSE FULBRIGHT ANNUAL REPORT Acquisitions and Office Openings and Closures

Norton Rose Fulbright has expanded its global service-offering through acquisitions in Australia and the US while consolidating its presence in Latin America and the Middle East through office closures

Acquisitions and Office Openings and Europe Closures (2017-2019) • Opened Luxembourg office in 2017 6

US Asia • Merged with Chadbourne & Parke 2017 (also expanded presence in Mexico City, • 7 5 Closed Kazakhstan office in 2018 São Paulo and Istanbul) • Expanded in Singapore through an alliance with Ascendant Legal 8

Latin America

• Closed Colombian11 and 12 Venezuelan offices in 2019 Middle East Oceania and Australasia • Focusing growth on the • Merged with Henry Davis York (2017) 9 firm’s offices in Brazil and • Closed Abu Dhabi office 2018 as part of 11 7 • Joint venture agreement with Melbourne-based Mexico consolidation in Dubai corporate boutique Mailman Law (2018) 10

5 Firm Report NORTON ROSE FULBRIGHT ANNUAL REPORT Norton Rose Fulbright Lateral Hiring

Norton Rose Fulbright has seen the highest partner departures out of its peer group, with 152 leaving the firm, while adding only 43 partners during the same period

Lateral Partner Hires and Departures For Norton Rose Fulbright Annual Report and ALM Selected Peers, 2017 - 2019

Departures Hires

129 43 57 61

-61 -88 -113 -152

Norton Rose Fulbright Baker McKenzie DLA Piper Hogan Lovells

Note: Lateral hiring data is from the period January 2017 through February 2019

6 Firm Report NORTON ROSE FULBRIGHT ANNUAL REPORT Norton Rose Fulbright Lateral Departures

Norton Rose Fulbright has experienced significant declines in some of its largest offices with departures impacting its corporate, litigation and banking practices

Most Active Offices for Partner Departures Top Practice Areas for Partner Departures For Norton Rose Fulbright, 2017 - 2019 For Norton Rose Fulbright, 2017 - 2019

26 Corporate and Securities 42

19 Litigation 30 15 12 11 Banking and Financial Institutions 16 9

Taxation 8 2 2 3 3

New York Houston Sydney Washington DC London Energy and Natural Resources 8 Departures Hires

7 Firm Report NORTON ROSE FULBRIGHT ANNUAL REPORT 2018 Practice Area Growth

Despite partner losses, NRF grew total attorney headcount within its Corporate and Banking practices across the US, Europe and Asia Pacific, and within its Real Estate and Energy practices in Europe and Asia

Practice Area Attorney Growth By Region NRF’s Fastest Growing Practice Areas, 2018 • In the U.S, corporate was among the firm’s fastest growing 10%+ YoY Growth 5-10% YoY Growth practices, predominantly in New York and California through • Corporate and Business • Taxation and Accounting targeted lateral hiring 13 USA • Arbitration and Dispute Resolution • Antitrust and Trade Regulation • Banking and Finance • In Europe, NRF has been growing its Corporate, Banking, and Real Estate practices • Banking and Finance • Arbitration and Dispute Resolution Europe • Corporate and Business • Bankruptcy and Reorganization • Real Estate and Construction • In Asia Pacific, growth has focused on Energy and Natural Resources. In Australia, the firm has been strengthening its energy capability amid growth in the Australian renewables • Energy and Natural Resources • Admiralty and Aviation Asia 14 sector Pacific • Corporate and Business • Banking and Finance

8 Firm Report NORTON ROSE FULBRIGHT Performance in Key Financial Metrics ANNUAL REPORT

Norton Rose Fulbright had a mixed year financially in 2018, with revenue and profit growing just 1%. PEP increased 5% in 2018, continuing a strong 5-year growth trend

Likely Drivers of PEP Growth NRF NRF • Increase in both non-equity and associate leverage ALM Selected Peers Growth in Financial Key Metrics • Low Cost Per Lawyer (CPL) driven by investments in technology and Year over Year Average Annual Average Annual For Norton Rose Fulbright low-cost service centers Growth Growth Growth • Office closures and consolidation in less profitable locations 2017 – 2018 2014 – 2018 2014 – 2018 $4,500 $907 $1,000 $4,000 Profit Per Equity Partner ($k) $900 5% 10% 4% $3,500 $800 $700 $3,000 $624 $600 $2,500 Revenue ($B) Profit ($M) $1,958 $1,969 $500 1% 2% 4% $2,000 $1,814 $1,737 $1,686 31% $400 $1,500 32% Margin Margin$300 $1,000 $589 $545 $529 $614 $618 $200 $500 $100 1% 1% 3% $0 $0 2014 2015 2016 2017 2018

9 Firm Report NORTON ROSE FULBRIGHT ANNUAL REPORT Norton Rose Fulbright Partnership Changes

In order to boost PEP, Norton Rose Fulbright reduced equity partners. The firm’s US partnership has seen notable decline, while its European partnership has grown

Equity and Non-Equity Partners as % of total partnership Change in number of Equity partners by region For Norton Rose Fulbright, 2014 - 2018 For Norton Rose Fulbright, 2014 - 2018

Latin and South Europe America Asia Pacific Canada United States

59% 58% +2 69% 80% 78% -9 -17 -21

41% 42% 31% 20% 22%

2014 2015 2016 2017 2018 -93 Non-Equity Partners Equity Partners

10 Firm Report NORTON ROSE FULBRIGHT ANNUAL REPORT 2018 Revenue and PPL Growth

Norton Rose Fulbright was outperformed by the entirety of its peer group in profitability and revenue growth in 2018. The firm’s revenue grew 1%, while PPL growth remained static

Growth in Revenue and Profit Per Lawyer For Norton Rose Fulbright and ALM Selected Peers Key Grew Profitability / Grew Revenue 20% DLA Piper $1 Billion in Squire Patton Boggs 15% Baker McKenzie Annual Revenue Hogan Lovells 10% Norton Rose Fulbright

5% 2018)

– 0%

-5% (2017 (2017 YoY PPL Growth PPL Growth YoY -10% -15% -20% -20% -15% -10% -5% 0% 5% 10% 15% 20%

YoY Revenue Growth (2017 – 2018)

11 Firm Report NORTON ROSE FULBRIGHT ANNUAL REPORT 2017-2018 Performance Versus Peers

Norton Rose Fulbright generates the lowest Cost Per Lawyer (CPL) of its peer group but is outperformed across the remaining key financial and headcount metrics

Norton Rose Squire Patton Baker McKenzie DLA Piper Hogan Lovells Fulbright Boggs

2018 Financials •Revenue ($M) 1,969 2,900 2,836 2,119 1,035 •Operating Profit ($M) 618 981 751 722 173

Best performance in this metric among peer group 2018 Operating Metrics •Revenue Per Lawyer ($K) 583 614 766 804 691 •Cost Per Lawyer ($K) 400 407 563 530 575 •Profit Per Lawyer ($K) 183 208 203 274 116 •Profit Per Partner ($K) 907 1,443 1,874 1,381 1,027 •Total Lawyers 3,376 4,720 3,702 2,636 1,497

12 Firm Report NORTON ROSE FULBRIGHT ANNUAL REPORT Cost Per Lawyer Growth

Norton Rose Fulbright outperforms its peer group in cost per lawyer management, in part through service centers and technology investments focused on increasing workflow efficiencies

Cost Per Lawyer Cost Control Strategy For Norton Rose Fulbright and ALM Selected Peers For Norton Rose Fulbright

$600 • In 2017, the firm opened a legal process hub in Newcastle, England Squire as part of its 2020 transformation strategy to improve efficiency and DLA Piper integrate the firm’s global network $500 Hogan Lovells • The hub serves as an innovation for both technology and processes 4

$400 Baker McKenzie • In 2016, the firm opened a business services center in the Philippines to handle back office support functions such as marketing, HR, and Norton Rose Fulbright document management, and service the firm’s global offices across $300 Australia, EMEA, Canada and the US 4 2014 2015 2016 2017 2018

13 Firm Report NORTON ROSE FULBRIGHT ANNUAL REPORT Financial Analysis: One Year Profit Tree

Norton Rose Fulbright’s 2018 PEP grew at a slower rate in comparison to its peer group average, despite increased leverage ratios. The firm’s PPL remained static due in part to a decline in RPL that offset gains in CPL

Profit Tree Analysis: Growth Over One Year Year-on-year change in key metrics for Norton Rose Fulbright and ALM Selected Peers Average, 2017 - 2018

Key

Norton Rose Fulbright -1% Y-o-Y Growth ’17 – ‘18 Revenue Per Lawyer 0% 6% ALM Selected Peers Growth rate over PPL Y-o-Y Growth ’17 – ‘18 period 5% -1% Cost Per Lawyer 7% Profit Per Equity 5% Partner 8% 9% Associate to 8% 4% Equity Partner Ratio Leverage 4% 2% Non-Equity to 5% Equity Partner Ratio

14 Firm Report NORTON ROSE FULBRIGHT ANNUAL REPORT Gender & Minority Diversity

Norton Rose Fulbright has a female partnership of 26%, outperforming its peer group. The percentage of minority lawyers at the firm stands at 18%

Percentage of Female and Minority Lawyers For Norton Rose Fulbright and Selected Peers

Norton Rose Fulbright Baker McKenzie DLA Piper Hogan Lovells Squire Patton Boggs 44% 40% 41% 38% 38%

26% 24% 23% 21% 19% 19% 20% 18% 17% 17%

% Female Attorneys % Female Partners % Minority Attorneys

15 Firm Report NORTON ROSE FULBRIGHT ANNUAL REPORT Definitions

Definitions and Methodology

• Gross Revenue is fees for legal services. It does not include disbursements or income from non-legal ancillary businesses. In all cases, the revenue and profit figures listed are for the firm's most recently completed fiscal year. Most Am Law firms are on a calendar fiscal year. • Net income is compensation paid to equity partners. • Equity Partners are those who file a Schedule K-1 tax form and receive no more than half their compensation on a fixed-income basis. • Non-equity Partners are those who receive more than half their compensation on a fixed basis. • Revenue per lawyer (RPL) is calculated by dividing the gross revenue by the number of lawyers and rounded to the nearest $1,000. • Cost per lawyer (RPL) is calculated by dividing the total costs by the number of lawyers and rounded to the nearest $1,000. • Profit per lawyer (PPL) is calculated by dividing the total net income by the number of lawyers and rounded to the nearest $1,000. • Profits per equity partner (PPP) is calculated by dividing net operating income by number of equity partners and rounded to the nearest $1,000. • Leverage is the ratio of all lawyers (minus equity partners) to equity partners • Associate leverage is the ratio of all associates to equity partners • Non-equity leverage is the ratio of all non-equity partners to equity partners • ALM Selected Peers: Most law firms have a wide range of competitors which compete with the firm in specific geographies and/or practice areas. ALM’s Selected Peer Group is designed to identify the firm-wide peers. ALM selects peers by weighing various factors including the firm’s size, organizational structure, geographic footprint, and practice area specialty. Firms can utilize the data provided in ALM Intelligence’s Legal Compass to benchmark themselves against specific firms or peer groups.

16 Firm Report NORTON ROSE FULBRIGHT ANNUAL REPORT Bibliography 1 Norton Rose Fulbright to Shift 170 Support Jobs to SE Asia (16 May 2016) https://www.law.com/americanlawyer/almID/1202758058311/?mcode=1202615731542&curindex=6/

2 Norton Rose Fulbright Chief Targets Strategy Shift (20 October 2016) https://www.law.com/americanlawyer/almID/1202770406132/Norton-Rose-Fulbright-Chief-Targets-Strategy-Shift-/

3 Norton Rose Fulbright to expand Newcastle legal process hub with creation of 100 new jobs (07 September 2017) https://www.law.com/legal-week/2017/09/07/norton-rose-fulbright-to-expand-newcastle-legal-process-hub-with-creation-of-100-new-jobs/

4 Norton Rose Fulbright to move 170 jobs to the Philippines including nearly 60 in London (19 May 2016) https://www.law.com/legal-week/sites/jamesbooth/2016/05/19/norton-rose-fulbright-to-move-170-jobs-to-the-philippines-including-nearly-60-in-london/

5 Chadbourne Is No More as Deal With Norton Rose Fulbright Goes Live (30 June 2017) https://www.law.com/americanlawyer/sites/americanlawyer/2017/06/30/chadbourne-is-no-more-as-deal-with-norton-rose-fulbright-goes-live/

6 Norton Rose Fulbright to launch in Luxembourg (02 May 2017) https://www.law.com/legal-week/sites/legalweek/2017/05/02/norton-rose-fulbright-to-launch-in-luxembourg/

7 Norton Rose Fulbright closes Abu Dhabi and Kazakhstan offices (09 January 2018) https://www.law.com/legal-week/2018/01/09/norton-rose-fulbright-closes-abu-dhabi-office-378-74025/

8 Norton Rose Fulbright Enters Formal Law Alliance in Singapore (10 January 2019) https://www.law.com/international/2019/01/10/norton-rose-fulbright-enters-formal-law-alliance-in-singapore/

9 Norton Rose Fulbright Inks Another Deal Down Under (13 January 2017) https://www.law.com/international/sites/international/2017/06/13/norton-rose-fulbright-inks-another-deal-down-under/

10 Norton Rose Fulbright Forms Joint Venture With Indigenous Australian Firm (25 October 2018) https://www.law.com/international/2018/10/25/norton-rose-fulbright-forms-joint-venture-with-indigenous-australian-firm/

11 Norton Rose Fulbright Closes Office in Colombia (02 April 2019) https://www.law.com/2019/04/02/norton-rose-fulbright-closes-its-office-in-colombia-292-43112/

12 Adds Office in Venezuela as Norton Rose Leaves (21 January2019) https://www.law.com/international/2019/01/21/dentons-adds-another-latin-america-office-as-norton-rose-exits-venezuela-396-11492/

13 Norton Rose Fulbright Nabs Katten Muchin's M&A Co-Head (13 June 2018) https://www.law.com/therecorder/2018/06/13/norton-rose-fulbright-nabs-katten-muchins-ma-co-head/

14 Norton Rose Fulbright hires three senior lawyers amid surge in regional energy projects (30 October 2017) https://www.nortonrosefulbright.com/en/news/614c2cb1/norton-rose-fulbright-hires-three-senior-lawyers-amid-surge-in-regional-energy-projects

17 Firm Report Size of Bubbles Colors NORTON ROSE FULBRIGHT $3 Billion in Highly Profitable Global Firms Annual Revenue ANNUAL REPORT NRF’s Potential Peers Verein Firms Asian Firms European Firms Key Financial and Headcount Metrics Transatlantic Firms For Norton Rose Fulbright and the Firm’s Peer Group, 2018 A group of highly profitable firms UK Firms which are less global than NRF $3,500 Latham & Watkins A group of Verein firms that are similar in profitability, $3,000 White & Case Cleary Allen & Overy although ranging in global coverage $2,500 Freshfields

$2,000 Baker McKenzie Mayer Brown DLA Piper $1,500 Reed Smith Jones Day KWM Squire Hogan Lovells

Profit Per Equity Partner ($k) Partner Equity Per Profit $1,000 K&L Gates Norton Rose Fulbright Dentons Eversheds CMS $500 Ashurst Gowling Bird & Bird Yingke $0 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Lawyers Outside of Home Country

18 Firm Report NORTON ROSE FULBRIGHT ANNUAL REPORT Norton Rose Fulbright Peer Group

Am Law Verein firms were selected as a peer group for comparison due to their common structure, geographic coverage, and similar financials

Key Financial and Headcount Metrics For Norton Rose Fulbright and the Firm’s Peer Group, 2018

Percentage Revenue RPL CPL PPL PPP Total Total Leverage of Lawyers $M ($k) ($k) ($k) ($k) Lawyers Offices In USA

Norton Rose Fulbright 1,969 583 400 183 907 3,376 4.0 58 23%

Baker McKenzie 2,900 614 407 208 1,443 4,720 5.9 78 16%

DLA Piper 2,836 766 563 203 1,874 3,702 8.2 71 35%

Hogan Lovells 2,119 804 530 274 1,381 2,636 4.0 44 36%

Squire Patton Boggs 1,035 691 575 116 1,027 1,497 7.9 44 43%

19 Firm Report