US firms’ financials are continuing their positive trend, with recent releases showing revenue spikes and profit boosts including for Davis Polk & Wardwell and Paul, Weiss, Rifkind, Wharton & Garrison which both broke the billion-dollar mark in gross revenues last year.
For Davis Polk, both its revenue and partner profits were significantly higher; revenue was up 12.8% from $975m in 2013 to $1.1bn last year, while its average profits per partner crossed the three-million-dollar threshold to $3.3m, rising 12%. The positive result is a fundamental boost for the firm that was widely perceived to have drifted off course during the 2000s.
Similarly, disputes leader Paul Weiss has particularly outshone competitors enjoying its 15th record-breaking year in revenues in a row. Gross turnover surged to $1.03bn, up 11% from when the firm grossed $934.5m in 2013 and lifting average partner profits by 6% from $3.6m to $3.8m in 2014. The firm’s overall headcount rose 10% percent from 854 to 943, while partner ranks grew by just four heads to 135, a more modest 3% rise.
Since the credit crunch hit, Paul Weiss is one of the few firms that has managed to keep revenues well above water. Speaking to Legal Business earlier this year, Paul Weiss chairman Brad Karp said: ‘Breaking the billion-dollar revenue mark in 2014 was a very significant milestone for us. We are very proud of what we have accomplished – not just in 2014, but in the seven years since the financial crisis began. Over that period, our revenues have increased by 60%, our profitability has increased by 50%, and our pro bono hours have increased by more than 50%.’
Also enjoying double-digit growth so far this was energy focused Houston firm Baker Botts, which recently saw its revenue shoot up 11.4% to $653m from $586m in 2013, while net income soared 22.6% to $299.3m. But it was the firms’ profits per partner that truly shone at $1.7m – a 25.5% increase on 2013’s $1.36m – this was after the firm posted flat partner profits in 2013.
‘2014 was an exceptional year,’ said the firm’s managing partner Andrew Baker. ‘We achieved these results while making sizable new investments in our long term growth in the form of substantial new marketing, business development, practice management, pricing and information technology systems.’
jaishree.kalia@legalease.co.uk
For more analysis of the surging US market see: The blessed – unheralded, Wall Street’s elite comes roaring back