Legal Business

US financials round up: White & Case revenues increase, K&L figures are flat, while Cadwalader partner profits drop

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US firms Cadwalader, Wickersham & TaftK&L GatesWhite & Case
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US financial results for 2014 continue to stream in with White & Case becoming the latest firm to reveal an increase in revenue while both K&L Gates and Cadwalader, Wickersham & Taft bucked the positive trend having turned in lacklustre performances.

White & Case’s revenues increase was not as dramatic as some results this season but the firm recorded a 4% bump to $1.5bn in 2014 from $1.4bn in 2013. Revenue per lawyer at the firm also grew 5% from $760,000 to $800,000 while average profits per equity partner rose more confidently at 7% to $2m from $1.9m in 2013, giving a 36% increase over three years.

London executive partner Oliver Brettle said the firm is proud of its performance, especially over the last three years. ‘While we do not publically announce individual office or regional results, I will say that the London office once again made an important contribution, which had a very positive impact on the overall results,’ Brettle said.

K&L Gates‘ figures show that performance was generally flat for 2014 with revenues declining modestly by 1.2%, and revenues per lawyer and net income per partner also being essentially flat year over year. Turnover fell from $1,158.9m in 2013 to $1,145.4m in 2014 while revenue per lawyer remained at $587,000. The firm attributed the flat figures to currency fluctuations with the US dollar strengthening in the second half of 2014.

The firm’s net income available for all equity partners as a percentage of revenues decreased from 27.6% in 2013 to 25.6% in 2014. The firm said this was due to the slight decline in revenues in 2014 combined with higher expenses for the year.

However, figures for its London office were more positive, with revenues growing 11% to £44.96m in 2014 from £40.5m in 2013 – an increase of some 60% since 2009. Tony Griffiths, administrative partner at K&L Gates’ London office said: ‘Against the backdrop of a challenging geopolitical environment, it is hugely encouraging to report a fifth consecutive year of revenue growth for the London office. Integral to our strategy has been to provide multi-disciplinary advice and solutions for our clients, avoiding rigid departmental structures.’

Griffiths added: ‘Our focus through the previous five years and going forward has been on boardroom risk solutions, advice to alternative capital providers, and international energy, infrastructure and resources. Each of these areas involves all of our London lawyers, and has been particularly important in driving the growth in our revenues.’

Meanwhile, Cadwalader figures took a more severe hit with partner profits dropping 15.3% to $2.21m from $2.61m in 2013 as gross revenue marginally fell to $481.5m compared to 2013’s level of $481.7m. On the other hand, revenue per lawyer decreased by 3.2% to $1.07m from $1.1m.

The fall in Cadwalder’s numbers follows the appointment of managing partner Patrick Quinn at the end of January after head Jim Woolery – who was poised to become chair of the firm that same month after nearly two years as chairman – announced he is leaving the firm to help start a new investment venture.

Akin Gump Strauss Hauer & Feld, on the other hand, saw positive growth with net income climbing 12.8% to $356m from $315.5m in 2013, and gross revenues increase 4.8% to $868m from $828.5m. Revenues per lawyer increased more moderately by 2.9% to $1.055m from $1.025m, as did the firm’s partner profits, which rose 2.7% to $1.885m from $1.835m. These results come after the firm pulled off one of the largest ever London acquisitions after taking nearly 30 partners from the now defunct Bingham McCutchen.

For more analysis of the surging US market see: The blessed – unheralded, Wall Street’s elite comes roaring back

jaishree.kalia@legalease.co.uk

Legal Business

Global growth for K&L Gates but profits edge down in 2013

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Financial results 2013 K&L Gates
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Even for rapidly globalising law firms, the market remains challenging, it seems. Financial results for K&L Gates show the US law firm continuing to expand its global footprint in 2013, unveiling a 9.3% hike in revenues to hit $1.16bn, but also struggling to improve profitability for the second year in a row.

The growth is largely due to the Pittsburgh-bred firm’s takeover at the beginning of 2013 of Australian mid-tier Middletons and the launch of offices in Houston, Seoul and Wilmington.

The 1,700-lawyer firm’s revenue per lawyer was down by 4.8% to $586,797 from $616,486. The firm attributes this to the dilutive impact on the additional headcount from its merger with the 300-lawyer Middletons combined with reduced revenue in Asia. Profit per full equity partner was also down by 7.5% to $832,376 from $899,960. Unaudited figures show the firm also generated just over £40m in its 60-partner London arm during the year.

Unusually for the US market, K&L Gates issues a considerable amount of financial data. The firm carries no bank debt and also discloses its cash and cash equivalents, investment in leases, information technology spending and partner capital requirements.

A statement issued by the firm said that its flat underlying performance was in part due to the relative strength of the US dollar, which appreciated over the year by 6.8% relative to the Australian dollar, and also gained strength against major Asian currencies.

The figures come amid a mixed set of 2013 results from major US firms, with Shearman & Sterling this week unveiling a sharp rebound in growth, while Bingham McCutchen saw revenues fall by more than 10%, citing a soft restructuring market.

david.stevenson@legalease.co.uk

Click here for an interview with K&L Gates leader Peter Kalis

Legal Business

More lateral hires as Katten Muchin and K&L Gates boost international corporate practices

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Strategic recruitment K&L GatesKatten Muchin Rosenman
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US firms Katten Muchin Rosenman and K&L Gates have strengthened their international corporate practices this month through lateral hires from rival Global 100 firms.

Hogan Lovells’ private equity partner Philip Watkins has quit the firm to join US firm’s Katten Muchin’s London office.

He joined Katten Muchin Rosenman at the beginning of the year, along with two associates who will join the Chicago-headquartered firm’s London base next month. Watkins joined legacy firm Hogan & Hartson’s City corporate practice in November 2008.

Watkins practises corporate and commercial law, with a focus on mergers and acquisitions, takeover offers, strategic investments, joint ventures, and public and private securities offerings, and has experience of advising corporations and private equity investors both in the UK and internationally.

His exit follows Hogan Lovells’ push to expand its City corporate team after it hired King Wood & Mallesons SJ Berwin corporate heavyweight Ed Harris in October last year.

Katten maintained a relatively low key presence in the City between 2005 and 2011, before embarking on a lateral hiring spree that saw the firm take on five new partners in six months during 2012. It has continued to focus on building up its three core groups in London – real estate, financial services and private equity and Watkins’ arrival follows that of Sidley Austin financial services partner Barry Breen at the end of last year.

Elsewhere within corporate, K&L Gates has hired O’Melveny & Myers’ partner Siew Kam Boon to work out of its Singapore and Shanghai offices. She will focus on cross-border M&A and private equity transactions across Asia and has experience of representing private equity and venture capital funds, special situations groups, sovereign wealth funds, and corporate clients.

K&L Gates’ Asia managing partner David Tang said: ‘She brings deep knowledge of the markets and business networks in South East Asia and China, wide experience in leading and executing deals in the region, and great energy and enthusiasm, all of which complements and enhances our regional practice.’

K&L Gates combined with Australian national firm Middletons and added its Seoul office in early 2013.

Jaishree.kalia@legalease.co.uk

Legal Business

Asia-Pacific: Clifford Chance unveils new Indonesia association as K&L Gates goes big in Japan

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With only Asia showing any real growth in M&A work for law firms during 2013, it is unsurprising that major international players are focusing their expansion plans in the region. Clifford Chance today (10 January) announced a formal association with Indonesian firm Linda Widyati & Partners (LWP), while K&L Gates has bulked up its Tokyo office with the addition of real estate and disputes partners. Earlier in the week, Duane Morris announced a new office in Shanghai.

LWP is a boutique firm, established by Linda Widyati and Dezi Kirana who have over 20 years’ experience in the core areas of focus for Clifford Chance: corporate/M&A, banking and finance and capital markets.

Clifford Chance has advised clients on Indonesian matters for more than 30 years and this alliance with LWP is not the firm’s first foray into the Indonesian market. It formed a non-exclusive agreement Indonesian firm, Mochtar Karuwin Komar at the turn of the millennium, a deal that is still in place, although a spokesperson for the firm said the new association with LWP would now take precedence.

‘The establishment of this association signals our commitment to provide our clients with world-class legal advice to meet their evolving needs in this dynamic market. LWP share our values and our commitment to the highest standards of legal advice and client service,’ said Peter Charlton, Clifford Chance’s managing partner for Asia Pacific.

The firm also relocated the head of M&A in Amsterdam, Jeroen Koster to the Asia Pacific region where he will lead the association for Clifford Chance. ‘Clifford Chance is strongly committed to Indonesia. The association with LWP will provide significant benefits to our clients,’ he said.

Clifford Chance’s latest move further enhances the firm’s capabilities in the region. In 2012, the firm launched into formal alliance with Singapore litigation boutique Cavanagh Law, giving the firm much-sought-after access to Singapore’s domestic litigation market. The firm also opened in Sydney and Perth in 2011, giving it further access to the lucrative Asia Pacific market.

Indonesia has been a destination of choice in Asia in recent, with Taylor Wessing entering into an alliance with Hanafiah Ponggawa & Partners in 2013; and White & Case partnering up with Indonesian firm MD & Partners in January last year, six years after ending its alliance with local firm Ali Budiardjo Nugroho Reksodiputro. Clyde & Co also joined up with Lubis Ganie Surowidjojo in September 2013, while DLA Piper signed an agreement with Ivan Almaida Baely & Firmansyah in May.

Elsewhere, K&L Gates has enhanced its Tokyo offering with the addition of Takahiro Hoshino and Takahiro Tsumagari as partners in its commercial disputes and real estate investment, development, and finance practices respectively.

Hoshino comes from his own firm, Hoshino & Partners. He advises clients on a range of litigation matters including domestic and international labour law as well as a variety of corporate legal matters such as strategic restructurings, joint ventures and mergers and acquisitions. Hoshino was also a judge at the Tokyo and Utsunomiya District Courts

Tsumagari joins K&L Gates from respected local firm Atsumi & Sakai where he led the international trade and tax team. He advises and represents leading Japanese and foreign corporations on real estate and structured financings and matters.

‘This is a real boost to our team in Tokyo and the region more broadly. We are seeing increased business confidence in the Japanese economy, which will inevitability flow through to more activity for clients,’ said David Tang, managing partner for K&L Gates in Asia.

The firm bulked up substantially in Asia Pacific last year, starting with a merger with Australia’s Middleton’s in January which added around 400 lawyers to its ranks, before opening an office in Seoul later in the year. The firm now has 11 offices in Asia and Australia to serve its Asia Pacific clients.

Meanwhile, 600-lawyer Global 100 firm Duane Morris, which enjoyed a 12% rise in revenues in the last financial year, has announced that it is to open its first China office in Shanghai, through Duane Morris & Selvam, its joint law venture in Asia. The firm is currently awaiting approval from the PRC’s Ministry of Justice to open its foreign representative office.

The firm’s joint venture has given the US firm coverage of the south east Asia market with offices in Singapore, Hanoi and Ho Chi Minh City in Vietnam. Leon Yee, managing director of Duane Morris & Selvam, will serve as chief representative of the Shanghai office which will be staffed by five lawyers in total.

‘Our launch in China builds upon the firm’s substantial growth and successes in Asia during the past several years, as well as our extensive experience handling China-focused matters for numerous multinational companies,’ said Duane Morris chairman and chief executive officer John Soroko.

David.stevenson@legalease.co.uk

Legal Business

Revolving Doors: DAC Beachcroft, RPC, K&L Gates and Reed Smith boost London offering with lateral hires

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Strategic recruitment DAC BeachcroftDechertK&L GatesReed SmithRPC
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London has been the focus of a series of hires for top national, City and US firms including DAC Beachcroft, RPC, K&L Gates and Reed Smith, as Dechert has also boosted its Moscow offering with a hire of a partner from Hogan Lovells.

Adrian Williams joins DAC Beachcroft’s corporate insurance team from reinsurance giant Swiss Re, where he was general counsel for Europe, Middle East and Africa, and was based in Zurich. The firm has also bolstered its real estate team in London with the hire of Nathan East from Hempsons. East specialises in advising medical professionals, care providers and the NHS.

‘We are delighted to welcome Nathan to the firm. His appointment adds an important extra dimension to our existing health practice with his considerable experience of advising GPs,’ said Eve Gregory, head of the firm’s health real estate team.

Elsewhere, 1,548-lawyer firm Reed Smith continues to grow its London office with the appointment of Eoin O’Shea as a partner in the firm’s global regulatory disputes practice based in London. Joining from Lawrence Graham (LG), O’Shea is known for his disputes work which includes economic crime, corporate crime, fraud and corruption disputes and investigations. He spent six years at the commercial bar and another six years with Simmons & Simmons before joining LG. O’Shea has led on litigation for major pharmaceutical companies relating to blackmail and other crimes.

‘Eoin’s reputation and his broad experience, across our key industry sectors and geographies, will ensure that Reed Smith is even better placed to assist clients facing the rapidly evolving regulatory landscape,’ said Richard Spafford (pictured), head of Reed Smith’s commercial disputes group for Europe and the Middle East.

‘O’Shea told Legal Business: ‘The reason I joined Reed Smith is because they are very strong in litigation worldwide. For my specialism in bribery and corruption it helps to have a strong group in the US.’

Reed Smith hired banking and finance partner Claude Brown from Clifford Chance in April this year.

Meanwhile, K&L Gates, which dropped three places in this year’s Global 100 to 25 with a turnover of $1,06bn, has added Anthony Fine as a partner in its energy, infrastructure and resources (EIR) practice in London. Fine joins from White & Case where he was head of the PPP/PFI practice in the firm’s energy, infrastructure, project and asset finance group.

‘With his track record in projects and infrastructure and his significant market connections, I am delighted that Anthony has joined our growing practice,’ said Tony Griffiths, London managing partner of K&L Gates.

Also growing in London with a number of recent heavyweight hires is RPC, which has brought in partner Sukh Ahark from Davenport Lyons, where he was head of banking and finance.

Ahark spent eight years at legacy Herbert Smith and has also worked for Pinsent Masons and Hammonds. Recent mandates he has advised on include luxury building company Harrison Varma Limited on the financing of a development of 20 new residential apartments, where the financing was provided by Barclays and Coutts.

‘We’re very pleased to have Sukh on board. His practice neatly complements our existing broad-based corporate offering, and his outgoing, unfussy and approachable style of doing business fits very well with how we operate at RPC,’ said Jonathan Watmough, managing partner of RPC.

Sukh’s appointment follows RPC’s hire of a three partner corporate team from Wragge & Co at the start of the year, consisting of former managing partner Richard Haywood, the head of corporate Maurice Dwyer, and David Marshall, a private equity specialist.

In Russia meanwhile, global top 50 US firm Dechert has recruited Taras Oksyuk from Hogan Lovells where he was head of real estate to lead the firm’s real estate and construction practice in Moscow. Deals that Oksyuk has advised on include leading Russian property fund, O1 Properties, on its $500m sale of a business centre in Moscow to Kaspersky lab.

Laura Brank, Moscow managing partner and head of Dechert’s Russia & CIS practice said: ‘We are very pleased that Taras is joining us. He is a highly regarded Russian real estate and construction expert who will bring a wealth of experience to our corporate and real estate practices in Moscow.’

david.stevenson@legalease.co.uk

 

To be included in future Revolving Doors round-ups please send your announcements to caroline.hill@legalease.co.uk

Legal Business

Ready for his close up

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Leadership K&L Gates
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Outspoken, opinionated and often right, K&L Gates head Peter Kalis has made financial transparency his latest mission. Legal Business talks to the Rhodes Scholar who runs a $1bn firm yet still can’t fit into the US legal establishment

‘I was embarrassed to be in the same profession as Dewey & LeBoeuf,’ states Peter Kalis, not without a sense of the dramatic. The chairman and global managing partner of K&L Gates is referring to the circumstances in which the aforementioned Wall Street giant last year became the largest-ever legal collapse amid acrimony and controversies over financial reporting.

Legal Business

24% of large UK firms earn more than half of revenues overseas

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Financial results BarclaysK&L Gates
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Nearly a quarter of UK law firms with revenues over £50m derive more than half of their turnover from overseas, according to a recent survey by Barclays.

Three quarters of firms surveyed by the bank, of which 73% have a presence in more than five countries, pull in more than 10% of their revenues from outside the UK.