Correction, 2/27/2012 9:40 a.m., EST: The original version of this story misstated the Weil, Gotshal & Manges’s average profits per partner figure for 2012. That figure is $2.23 million. The story also incorrectly reported that a fraudulent conveyance action in which Weil represents Andarko Petroleum Corporation had settled. The first and seventh paragraphs of the story have been revised to reflect the correct information. We regret the errors. 

A year that saw Weil, Gotshal & Manges expand its partnership ranks significantly ended with the firm’s gross revenue essentially flat at $1.229 billion and its profits per partner down 8.6 percent, to $2.23 million, according to The American Lawyer‘s reporting. The firm’s net income was also down 4 percent, to $435 million.

Weil chairman Barry Wolf says he is happy with last year’s financial performance despite the fall-off in profits, in large part because demand for the firm’s services—a metric not reflected in the gross revenue tally, which represents money actually collected—increased by 3 percent between 2011 and 2012. "We are very pleased with the results," Wolf says. "Our PPP is down, but in our view, that’s all just math. We did not draw down inventory simply to make results look stronger."

The decline in profits was largely the product of the uptick in lateral growth, which, Wolf notes, cost Weil Gotshal—as it does any firm—in the form of current-year cash. Many of the 20 laterals Weil brought on in 2012 likely came at a premium. Those additions included dealmakers like Richard Climan, who moved over amid Dewey & LeBoeuf’s collapse and had a hand in both the $2.15 billion sale out of bankruptcy of Major League Baseball’s storied Los Angeles Dodgers franchise; and Roche Holding AG’s ultimately abandoned bid for Illumina Inc. (Climan represented Illumina in connection with the failed takeover offer). Among the other new arrivals: well-known trial veteran Diane Sullivan, formerly with Dechert, whom The American Lawyer named a Litigator of the Year finalist in January 2012 for her work obtaining a major defense verdict for Philip Morris International.

The profit figure was also driven down by an increase in the firm’s equity partner ranks, which grew nearly 5 percent, from 186 to 195. The number of nonequity partners, meanwhile, grew by three, to 112. (According to Wolf, the firm doesn’t consider new laterals as equity partners during their initial "stub" year. "We treat them as nonequity" during that period, he says.)

Also contributing to the erosion of profits last year. Wolf says, was the firm’s decision to take on what amounted to a double class of associates. Since the financial crisis began in 2008, Weil has delayed the entrance of first-year associates to the following January. Last year, as part of a shift back to a more traditional schedule, 2011′s first-years were invited to join the firm in January 2012 and 2012′s were invited to start last October. As a result, Weil had 31 more associates last year than it did the year before.

As for specific practice areas, Wolf says litigation—which accounts for about 37 percent of Weil’s gross revenues—outpaced corporate work last year. The firm was nonetheless busy on the corporate side—which accounts for 43 percent of revenue—advising, among others, the Lehman Brothers Holdings Inc. estate in connection the $16 billion sale of Archstone Enterprise LP, and General Motors Company on its $11 billion revolving credit facility.

Like many firms, Weil saw demand for its litigators’ services surge as subprime lending–related lawsuits and investigations mounted. But the firm’s docket also included several big-ticket cases in intellectual property and other areas. Weil helped SEACOR Holdings Inc. resolve its liability in the Deepwater Horizon oil spill; served as lead trial counsel to Anadarko Petroleum Corporation in a high-profile fraudulent conveyance action; and obtained a successful infringement verdict for client General Electric Company in what sibling publication The Am Law Litigation Daily has called an epic battle against Mitsubishi Heavy Industries Inc.

The firm’s bankruptcy practice, another key performer, also had a robust year. Among the group’s notable assignments: serving as lead debtor’s counsel in both AMR Corporation’s ongoing $11 billion Chapter 11 case and the mammoth Lehman Brothers Holdings Inc. bankruptcy, which wrapped up last year.

This report is part of The Am Law Daily’s early coverage of 2012 financial results of The Am Law 100/200. Click here to see an interactive chart comparing this firm’s 2012 finances to those of other Am Law 100 and Second Hundred firms that The Am Law Daily and its sibling publications have reported on to date. Final rankings and full results for The Am Law 100 will be published in The American Lawyer’s 2013 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.