Cadwalader, Wickersham & Taft news, updates and analysis | Page 1 of 2

Cadwalader, Wickersham & Taft has seen its London revenue drop for the second year in a row, falling 4% to $41.3 in 2019.

Following a 13% fall to $43.1m in 2018, the figure is a far cry from the $50m it recorded in 2017 and comes despite the firm posting a solid 9% global revenue growth to $459m.

The firm’s financials announced today (12 February) also show global profits per equity partner at the New York-bred firm rose 11% to hit $3m and revenue per lawyer 7% to $1.2m. The results come as the firm added three to its equity partner ranks to 46 and its lawyer headcount rose 2% to 382.

A second year of global turnover growth following the 3% rise in 2018 will be welcomed as good news for a firm that saw its revenue fall for three consecutive years between 2015 and 2017.

As part of its refocused strategy targeting its core client base of financial institutions, large corporates and funds, the firm cut 15% of its legal workforce in 2017 and has closed a number of its offices over the last few years. In 2018 it shut its Brussels outpost, following the withdrawal from Hong Kong and Beijing in 2016 and leaving London as the firm’s only office outside the US.

But its City outpost, which had outperformed the firm’s global business in previous years by growing its revenue fivefold in the five years to 2017, has recently been hit by a number of departures in its restructuring practice. They included well-regarded Yushan Ng, who at the beginning of 2018 quit for Milbank, Tweed, Hadley & McCloy.

Speaking to Legal Business last year, London head Greg Petrick said the firm had ‘the right strategy’ and was ‘in an aggressive growth mode’, adding that the London office was ‘right at the centre’ of that strategy.

The City base will in the next few months move to new premises at 100 Bishopsgate, with space for up to 150 lawyers: almost double its headcount, which at the beginning of last year stood at 60.

Cadwalader’s financials come after US disputes heavyweight Quinn Emanuel Urquhart & Sullivan yesterday posted an impressive 20% growth in its City turnover, breaking the £100m barrier.

Cadwalader has also had to deal with a claim for indirect sex discrimination brought by a female associate in its London office.

Ana Maria Knott brought a claim in the UK employment tribunal concerning the firm’s policy of not reducing its billable hours target for bonuses to reflect time spent on holiday.

The tribunal agreed that Cadwalader’s policy put women at a disadvantage but Judge Isaacson dismissed the case, saying that the claimant had a choice between ‘taking very generous holiday leave or working more to improve her chance of obtaining the bonus’.

Knot returned from maternity leave in 2018 and was entitled to seven days of statutory minimum leave during the remaining 16 weeks of the year, but the firm did not reduce the bonus target of 8.6 billable hours per day to reflect time spent on holiday.

marco.cillario@legalease.co.uk

Bucking a trend which has seen a number of City outposts of US firms grow apace last year, turnover at Cadwalader Wickersham & Taft’s London office dropped 13% to $43.1m in 2018.

While London suffered the impact of a five-partner team departure at the beginning of last year, global figures painted a rosier picture as firm-wide turnover grew 3% to $420.7m after three consecutive years of decline.

Global profit per equity partner (PEP) rose 8% to $2.7m from $2.51m even as its partner ranks grew by 3 to 43. In 2017 PEP rose at a pacier 19%, but revenues dropped by a striking 10% to $408.1m after years of retrenchment in a bid to concentrate efforts on a more focused client roster. After cutting 15% of its legal workforce in 2017, last year the firm kept its lawyer headcount flat at 373, with revenue per lawyer growing 3% to $1.13m.

Conversely, the drop in London revenue comes after years of solid growth for the firm’s 60-strong City arm, which in the five years to 2017 grew almost fivefold from $10.8m to $50m.

The beginning of 2018 saw the firm hit by the departure of a dozen of its restructuring lawyers, including well-regarded Yushan Ng, who quit for Milbank, Tweed, Hadley & McCloy, and head of loan portfolios, debt and claims trading Louisa Watt, who moved to Brown Rudnick.

London managing partner Gregory Petrick told Legal Business that the revenue generated by the team which stayed at the firm was up 13%, while also pointing to the fact that the office had rebuilt its ranks over the year, finishing 2018 with the same headcount as it started.

London hires in 2018 included fund finance partner Samantha Hutchinson from Dentons, while real estate finance partner Duncan Hubbard joined from Norton Rose Fulbright in January this year.

Next year the firm will move to new London premises at 100 Bishops Gate, with space for up to 150 lawyers. ‘We feel we have the right strategy and we are in an aggressive growth mode,’ said Petrick. ‘The London office is right at the centre of that growth strategy.’

The firm’s global financial results mark the end of a five-year review process of its business, which was badly hit by the global financial crisis and the collapse of some of its key clients such as Lehman Brothers. The firm slashed its headcount and shut its Asia offices in Hong Kong and Beijing, as it looked to focus on its core client base of financial institutions, large corporates and funds.

The firm now has three offices in the States – with around 200 lawyers in New York and bases in Washington DC and Charlotte – while in Europe it keeps a small outpost in Brussels alongside London.

‘We are a quintessential Wall Street firm, known for finance and finance-related products. We embraced and emphasised that more,’ said Petrick.

A number of other US firms have announced strong financial results for their London practices. Akin Gump Strauss Hauer & Feld recorded a 28% City revenue hike to $123.5m. White & Case’s London revenue rose 7% to $350m and Milbank Tweed Hadley & McCloy recorded a 25% increase in City turnover to $156m. Elsewhere, revenue for Goodwin Procter’s London office grew 58%, while King & Spalding was up 12% and Cooley’s 16% to $66.7m.

marco.cillario@legalease.co.uk

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.’

marco.cillario@legalbusiness.co.uk