US leaders grind out growth in 2013 despite ‘anaemic economy’
Despite having to contend with what Latham & Watkins’ outgoing global chairman Bob Dell described to Legal Business as a still ‘anaemic economy’ last year, early results among the US law firms to disclose their 2013 financials are solid, with many forecasting a return to substantive growth this year.
Dechert was among the first to reveal its financials for 2013, with revenue up by 6.6% to $777.2m from $729m.
Profit per equity partner (PEP) grew by 2.4% to $2.15m, among an equity partnership that grew by almost 8% from 151 to 163 in the 2013 financial year. However, revenue per lawyer (RPL) grew at a more modest pace of 1.1%, up to $920,000 from $910,000.
Chief executive Daniel O’Donnell said: ‘We go through growth and digest modes and 2013 was a little bit more digest. I anticipate growth in 2014.’
At Latham growth was modest, with revenues up by 2.7% to $2.29bn from $2.23bn in 2012. The retirement of Dell has been a cause for reflection on the transformation of the now top five Global 100 firm since he took over in management 20 years ago, when revenue was $262m.
PEP at the 2,033-lawyer firm was up by almost 2% to $2.49m in 2013, as RPL increased by a more modest 1.4% to $1.1m.
‘We go through growth and digest modes and 2013 was a little bit more digest. I anticipate growth in 2014.’
Daniel O’Donnell, Dechert
Dell commented: ‘We’ve been dealing with an anaemic economy around the globe for six years now. We keep waiting for the recovery to kick in fully. For a very large firm with offices around the world, the global economy makes a difference.’
Elsewhere, top 15 Global 100 firm Sidley Austin posted solid growth results, with revenue up to $1.6bn from $1.49bn and net profits up to $547m from $510.5m.
Highlights include the April hire of an 11-partner securities regulation group from Bingham McCutchen in New York and an eight-partner team from Weil, Gotshal & Manges in Dallas in September.
Shearman & Sterling, meanwhile, posted strong financial results after a long period of losing ground to its Wall Street peers (see comment, page 12). In the first full year under the leadership of senior partner Creighton Condon, the top 50 global law firm posted a 9.1% rise in revenue to $820.5m, from $752m the previous year. PEP jumped 18.4% to $1.8m from just over $1.5m in 2012, while UK revenues were up from $112.6m to $134.8m.
One Shearman partner commented: ‘Management has been a key catalyst to galvanising a more cohesive approach to client development.’
Other 2013 US firm results
Mayer Brown posted a 5.5% growth in revenue to $1.15bn up from $1.09bn in 2012. PEP increased 11.6% to $1.285m. Revenue per lawyer (RPL) was also up by 9.7% from $711,000 to $780,000. Mayer Brown UK senior partner Sean Connolly said: ‘We are very pleased with our results. As the market continues to shrink, we gain more market share.’
K&L Gates unveiled a 9.3% hike in revenues to hit $1.16bn. However, RPL was down by 4.8% to $586,797 from $616,486. The firm attributed 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. London revenues rose to £40.5m.
Goodwin Procter had a record year in 2013. Revenue was up 5% to $752.5m, RPL rose by 6.5% to $980,000 and its PEP figure grew 7% to $1.63m. Representative deals include advising real estate investment trust (REIT) CreXus Investment Corporation in its $872m buyout by Annaly Capital Management.
Bingham McCutchen emerged as the obvious casualty of the early results, confirming a sharp fall in revenue. The top 40 Global 100 firm blamed a decrease in debt restructuring work for a revenue drop of 12.6% to $762m from $871.8m in 2012.
The firm’s New York and Washington DC practices took a hit last year when Sidley Austin hired an 11-partner team from its US securities enforcement and regulatory practice in April.