Troutman Sanders offices in Washington, D.C. (Photo: Diego M. Radzinschi/ALM)

Troutman Sanders' managing partner Stephen Lewis called 2018 “another great year” for the firm. “We are on a good roll,” he said.

Revenue growth slowed a bit, but net income growth increased. Troutman posted a 2.5 percent increase in revenue to $521.5 million, lower than its 3.8 percent increase in 2017 and a 3.3 percent jump in net income to $195.5 million, up from its 0.5 percent increase in 2017.

With the 3.3 increase in net income, profit per equity partner increased by $16,000, or 1.5 percent, to $1.074 million.

The firm's lawyer head count dipped, in part because it closed its three Asia offices in Hong Kong, Beijing and Shanghai, effective May 31 last year, ending its 21-year-old Asia operations. Troutman had 43 lawyers there and about 90 employees total, including staff.

In all, Troutman's lawyer head count shrank by a net of 27 lawyers, or 4 percent, to 645, while revenue per lawyer increased 6.7 percent, or $51,000, to $809,000. Troutman's overall partner head count dipped by a net of 11 partners to 284, but the firm increased its equity partner head count by a net of three to 182.

The firm pulled out of Asia because a strategic review concluded there was “not sufficient overlap” between its China practice and its top performance areas, Lewis told the Daily Report in January 2018. The practice was focused on Hong Kong securities and M&A work, Lewis explained, while the firm's areas of strength and focus are middle-market clients, particularly in energy, banking and finance, life sciences and insurance. “Ultimately you have to focus on your strengths,” he said at the time.

Stephen E. Lewis, Troutman Sanders, Atlanta. (Photo: John Disney/ ALM)

Lewis also attributed the drop in head count to continued partner retirements, noting that 13 partners retired at the end of 2017. When taking those factors into consideration, he added, the head count dip is “not a material difference.”

The firm continues to grow, Lewis said. It recruited 16 lateral partners last year and has already added five lateral partners in 2019, including two intellectual property litigators in New York, Joe Diamante and Chuck Cantine, from King & Spalding.

Lewis declined to say if Troutman increased rates, but he acknowledged that expenses continued to rise, both for lawyer salaries and space.

Long-term View

Demand was up last year, Lewis said, adding that it “was a continuation of five years of steady growth.”

Over the five years from 2013 to 2018, Troutman's revenue increased 32.4 percent while net income increased 38.2 percent. That produced a 41.1 percent increase in profit per equity partner over the period, from $750,000 to $1.074 million.

“From a Troutman Sanders perspective, we feel good about where we are and where we are heading,” Lewis said. “We're growing, adding talented laterals and doing clients' most important work. Those are the things you like to see.”

That said, he acknowledged, the “wild card” is “what happens to the economy and what impact it will have on the business world and our clients?”

“We try and stay nimble and flexible enough,” he said, to adjust to any shifts in economic conditions.

The Talent

Lewis said that the West Coast and New York continue to be areas of focus for lateral recruitment, adding that “it's no secret that we would like to be in Texas.”

Troutman and Dallas-based Winstead started merger talks last year but ended them in July. Lewis and Winstead chairman David Dawson declined to comment on the status of talks at the time.

“We are patient,” Lewis said.

Last year's 16 lateral partner hires included a five-partner group of insurance litigators from Crowell & Moring. That group included William O'Neill and Leslie Davis, who co-chaired Crowell's insurance/reinsurance group, and Michael Carolan, who all joined in Washington, D.C.; New York-based Jack Thomas, who formerly headed Crowell's London office; and California-based Steven Allison, who headed Crowell's Orange County office.

In Atlanta, Troutman recruited two business litigation partners, David Meadows from King & Spalding and Jim Manley from Dentons. Other lateral partner hires were focused in Washington, New York and California—including Dentons partners Avi Schick, a business litigator, in New York and Randal Lejuwaan, a real estate partner, in San Diego.

In Atlanta, five partners retired. Meanwhile, Jeffrey Cavender became a federal bankruptcy judge, while litigator Scott Farrow decamped for plaintiffs firm Conley Griggs Partin. Jack Jirak became an associate general counsel for client Duke Energy and litigator Kevin Meeks left to start Meeks Law Firm.

The Work

In M&A last year, Troutman, with Herbert Smith Freehills and Hogan Lovells, advised ARRIS International, which supplies video and broadband infrastructure, on its $7.4 billion sale to CommScope. The firm also advised Brink's Co. on its acquisition of rival Dunbar Armored for $520 million in cash.

Troutman advised Atlanta-based fintech company Green Sky, which facilitates online loans for home improvements or elective surgery, on its IPO that raised $874 million.

Troutman's multifamily housing finance practice stayed active, servicing more than $52 billion in transactions for lenders—up from $50 billion in 2017. That included serving as lender's counsel for several large financing transactions, such as mortgage banker Holliday Fenoglio Fowler's $800.45 million refinancing of a 23-property portfolio through Freddie Mac.

The firm continued to represent longtime client Georgia Power Co. in ongoing regulatory issues and litigation over nuclear Plant Vogtle's cost overruns on Units 3 and 4.