Revenues at Cadwalader Wickersham & Taft dropped by a striking 10% in 2017 as the firm persists with retrenching in a bid to concentrate its efforts on a more focused client roster.
Global revenue at the Manhattan firm fell for the third consecutive year to $408.1m against a 15% dip in the firm’s lawyer headcount to 373.
Profit per equity partner (PEP) grew 19% to $2.51m – largely down to the firm trimming five of its equity partners to 40. PEP previously increased 3% to $2.116m in 2016 as headcount fell 2% to 438.
A spokesperson for the firm said the 2017 results exceeded the firm’s internal projections by a substantial margin and pointed to the fact that revenue per lawyer grew 6% to $1.09m – while skirting over the reduction in lawyer numbers.
A reduction in headcount, expenses and revenue were all anticipated as part of the first step of the firm’s refocused strategy, adopted at the end of 2016.
Cadwalader has been shutting a number of its offices worldwide over the last couple of years as it looks to focus on its core client base of financial institutions, large corporates and funds. It closed in Hong Kong and Beijing in 2016 and in Houston last year.
The spokesperson said the firm expected to return to growth in 2018. However, the latest fall in global revenue is part of a sustained decline in turnover for a firm over the past decade or more – pre-financial crisis in 2007 the firm was in the top 50 of the Global 100 with revenues of $556m before sliding down the table as the top-line faltered – revenue has now fallen 27% since 2006, comfortably one of the slowest performances of any Global 100 firm.
Conversely, Cadwalader’s London office has been bucking the trend of late, growing revenue to $50m in 2017, a 10% increase on 2016 and almost five times the $10.8m posted five years ago.
But the new year started with some bad news for the firm’s City outpost too, as its restructuring practice was decimated by the departure of five partners.
Restructuring co-chair Yushan Ng left with a team of three other partners and 11 associates for Milbank, Tweed, Hadley & McCloy. Clients of the team include brand name sponsors Oaktree Capital, Centerbridge Capital Partners, GSO and Apollo.
Meanwhile, Brown Rudnick recruited head of loan portfolios, debt and claims trading Louisa Watt, leaving Cadwalader’s London team with only two restructuring partners, including office managing partner Gregory Petrick.
Petrick, for his part, painted a somewhat different story of the firm’s recent performance. ‘2017 was a very successful year for Cadwalader, with outstanding financial results firmwide and in London, and we are very optimistic going forward,’ Petrick told Legal Business at the time. ‘We have outstanding lawyers and market-leading practices in London and across the firm. We will continue to focus on serving our core client base of financial institutions, large corporates and funds, both in London and across the firm.’