Orrick Passes $1B Revenue Benchmark as Footprint Grows

The firm grew gross revenue 7.3 percent to $1.05 billion, as PEP increased by 6.8 percent to $1.99 million last year.

March 07, 2019 at 01:50 PM

6 minute read

The original version of this story was published on The Recorder

Continuing its momentum from 2017 and riding a strong year for the legal market industrywide, Orrick, Herrington & Sutcliffe joined the $1 billion revenue club in 2018, and nearly reached the $2 million mark for profits per equity partner (PEP).

The firm's gross revenue exceeded the $1 billion mark for the first time in 2018, rising by 7.3 percent to $1.05 billion. And revenue per lawyer (RPL) climbed 4.6 percent, to $1.085 million.

On that revenue growth, PEP increased by 6.8 percent, from $1.86 million in 2017 to $1.99 million last year. The firm's net income was up 6.9 percent to $234.87 million.

“Ultimately, the year was a function of just executing well across all three of our sectors, which are tech, energy and infrastructure, and finance,” Orrick global chairman and CEO Mitchell Zuklie said. He added that the Silicon Valley-based firm achieved the same growth rate in Europe as well, thanks to strong performance in those three key sectors.

Zuklie, who took the helm of the firm nearly six years ago, said Orrick experienced an uptick in venture capital, renewable energy, infrastructure finance and public finance activity last year.

Fueled by the opening of its Houston office in 2016 and the Austin office in 2017, Orrick's rapidly growing public finance group has handled a number of high-profile matters. It counseled John F. Kennedy International Airport's operator on its $13 billion redevelopment, worked with two subsidiaries of Switzerland-based Proman in the development of a $1.3 billion ammonia plant in Mexico, and helped Microsoft establish a new renewable energy contract structure that intended to reduce risk for buyers in corporate power purchase agreements, Zuklie said.

On the corporate side, the firm's lawyers represented China-based tech leaders Baidu and JD.com in several rounds of investments, including advising JD.com, China's largest retailer and e-commerce company, on a $2.55 billion financing of its subsidiary JD Logistics. Orrick's litigation attorneys defended Microsoft and Twitter in gender discrimination class actions and served as national counsel to Johnson & Johnson in asbestos-related talc litigation.

“The bottom line was it was a pretty diverse year in terms of things that drove us,” Zuklie said.

Head Count Growth, and One Office Closure

In 2018, Orrick saw a net increase of 24 lawyers in its total head count, up by 2.5 percent to 964.

With 35 new partners added to its ranks, Zuklie said the firm had an active year on the lateral hiring front. But 19 partners also left the firm in lateral moves during 2018.

Orrick's partner head count, at 342, increased by 2.4 percent from 2017. The size of its equity partnership remained steady at 118.

“We have put a lot of effort into adding great lawyers to service our clients in the tech, energy and finance space,” Zuklie said.

In its litigation group, Orrick hired Weil, Gotshal & Manges veteran Jared Bobrow to co-head its global IP practice, and added Clement Roberts, a founding partner of tech litigation boutique Durie Tangri. The firm also brought in a 15-lawyer group from litigation boutique Morvillo in New York and Will Stute, a former first-chair trial lawyer at McDermott Will & Emery and national coordinating counsel for the NCAA on concussion litigation.

On the corporate side, Orrick brought on Bill Hughes, a former Fenwick & West corporate partner, to co-lead its capital markets practice; hired tech companies partner Ellen Ehrenpreis in Silicon Valley; and expanded its finance capabilities by adding Proskauer Rose's former co-head of finance in New York, as well as a partner from Kirkland & Ellis in Germany.

Demand for transactional and litigation work grew within the Orrick Analytics group, the firm said, so it also added a total of 12 in-house lawyers and staff in its Wheeling, West Virginia, location, bringing the total number of Orrick Analytics professionals to 43.

In addition to investing in the Orrick Analytics platform, Orrick has also launched a corporate venture fund to legal tech companies the firm plans to implement.

While it grew in multiple locations, Orrick made an exit from the Russian market last year after closing its shop in Moscow. The firm also maintains a Russia-focused practice based in Washington, D.C., where private equity and M&A partner Olga Sirodoeva relocated. And corporate partner Konstantin Kroll, who joined Orrick's Moscow office in 2014 from Jones Day, has moved to London.

“We were tiny in Moscow,” Zuklie explained. “We didn't think we needed to be in Moscow to continue serving our clients, so that's why” the firm closed its office there.

He added, “I don't think that's a huge growth area for us anytime soon.”

Continued 'Investments'

Kicking off the New Year, Orrick launched a new office in Boston with several key hires from Ropes & Gray's cybersecurity and data group, including its practice co-leads Doug Meal and Heather Egan Sussman. The Boston shop later also brought on a group of five intellectual property litigation partners from Fish & Richardson to build out its technology and innovation practices.

And closer to its Silicon Valley base, Orrick this year picked up Matthew Gemello, who previously led Baker McKenzie's North America corporate and securities practice.

“We feel really good about the investments we have made so far, opening in Boston with the cyber and privacy team, and the IP team,” said Zuklie, adding that his firm will continue to add people in key areas, including tech, structured finance and renewable energy.

He said the firm will also continue to focus “on innovation,” stressing the importance of Orrick Analytics, the corporate venture fund and Orrick Lab to the firm.

“We are busy,” Zuklie said.

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