Gibson Dunn posts record revenues as international expansion halts PEP growth
US firm continues two-decade long streak of increases in key financial metrics
February 14, 2018 at 02:54 PM
4 minute read
The original version of this story was published on Law.com
Gibson Dunn & Crutcher posted its 22nd straight year of revenue growth, earning more than $1.64bn in 2017, while the firm's net income also passed the $1bn mark for the first time, according to preliminary ALM reporting.
Profits per equity partner, however, took a slight dip to $3.24m as the firm added a Houston office, expanded internationally and increased its headcount.
Looking back over the financial year, Gibson Dunn chairman and managing partner Kenneth Doran described the results as positive. He explained that 2017 was a year of investment for the firm: among other developments, Gibson Dunn opened and staffed up an office in Houston to help strengthen the firm's energy and oil and gas presence, and recruited some 29 lateral partners across the globe – the highest number ever, according to Doran.
Despite heavy investments, Doran noted that Gibson Dunn continued a consecutive run of financial growth that stretches back more than two decades. In 2017, the firm took in revenue of $1.643bn, up 2.3% on the previous year, and a net income of $1.013bn, 3.6% up on 2016. That marks 22 straight years of revenue growth and 21 straight years of net income growth, according to the managing partner.
"All of that is against a backdrop of significant investment for the long term," said Doran. "We will be harvesting these investments this year, and the years ahead."
Gibson Dunn's profits per equity partner dipped by 1.1%, dropping to $3.24m in 2017 compared with $3.275m in 2016. That came as the firm's number of equity partners grew 4.7% to 313. In all, Gibson Dunn had 359 partners in 2017. Revenue per lawyer at the 1,275-lawyer firm also experienced a slight drop of 0.6%, coming in at $1.288m.
Doran acknowledged the slight decline in the partner profits metric, but also said the actual take-home compensation for Gibson Dunn partners in 2017 still increased to a record high.
"From my perspective, 2017 was a very strong year," he said.
A little more than half of Gibson Dunn's revenue stemmed from litigation and investigation matters, while slightly less than half came from transactional work, according to Doran. That breakdown has remained roughly the same for several years, he added.
As Doran noted, the firm had an active year in the realm of lateral hiring, attracting top-flight lawyers such as Nicole Saharsky, who served as an assistant US solicitor general and had argued some 29 Supreme Court cases when news broke in November about her joining the firm as partner and co-chair of Gibson Dunn's appellate and constitutional law practice. The firm announced in February its plans to open in Houston, later revealing that it had recruited a group of former Baker Botts energy partners to the new Texas outpost.
Outside the US, the firm added a litigation team in Paris, bringing in a group of partners from Ashurst to launch that group. That move came 50 years into the existence of Gibson Dunn's Paris outpost, which first opened in 1967. Gibson Dunn also grew in London in 2017, adding Sacha Harber-Kelly, who joined as a partner after departing the anti-corruption and bribery division of the UK Serious Fraud Office. And the firm expanded in Hong Kong with the addition of a team led by Paul Boltz, who had previously been managing partner of Ropes & Gray's office in Hong Kong.
Those growth efforts, said Doran, were aimed at broadening the offerings in some of its international offices. In Paris, for instance, that meant adding dispute resolution expertise to existing strengths in areas such as cross-border transactions, he added.
"It gave us the ability to add depth and strength to new practice areas," Doran said. "It's [about] trying to round out the practice and remain highly relevant for our clients."
The American Lawyer magazine will release its full report on the Am Law 100 in its May issue.
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