Major Del. Supreme Court Win Highlights 'Gangbusters' 2018 for Paul Weiss
A precedent-setting victory on behalf of Fresenius SE & Co. was among the high points for Paul Weiss in a year that propelled the firm closer to the elusive Wachtell in the stratosphere of partner profits.
March 18, 2019 at 05:30 AM
5 minute read
The original version of this story was published on The American Lawyer
Profits per equity partner (PEP) at Paul, Weiss, Rifkind, Wharton & Garrison jumped 10 percent to more than $5.02 million in 2018, capping a decade of financial growth for the New York firm.
The 10 percent rise in equity partner profits ensures that the firm will remain among the very highest-ranking firms by PEP for 2018, based on preliminary Am Law 100 reporting. In 2017 only Wachtell, Lipton, Rosen & Katz posted PEP higher than $5 million, defining the most exclusive of clubs in the competition among top-tier firms. (There's still some catching up to do: Wachtell's 2017 figure was pegged at $5.7 million.)
Gross revenue rose double digits at Paul Weiss last year, climbing 10.6 percent to more than $1.439 billion. Revenue per lawyer rose 8.2 percent to $1.4 million. Head count at the firm was up 2.2 percent to 1,022 lawyers, while the equity partnership remained stable, growing from 144 partners to 145.
Paul Weiss chairman Brad Karp, who took over as head of the firm in 2008, credited the surge in revenue and profits last year to the strength of the firm's core practice areas—public M&A, private equity, restructuring, litigation and white-collar regulatory defense practices.
“Our five core practice areas have been going like gangbusters,” Karp said.
In 2018, the firm handled nearly $400 billion in M&A transactions globally, he noted. Among those matters were Harris Corp.'s $37 billion merger with L3 Technologies Inc. and International Business Machines Corp.'s $33.4 billion purchase of open source software company Red Hat Inc., the largest ever acquisition of a software company.
Both of those deal teams were led by Scott Barshay, who joined the firm from Cravath, Swaine & Moore in 2016 and now serves as global head of Paul Weiss' M&A practice.
Paul Weiss also worked on more than 100 significant M&A transactions for its private equity clients—a record high for the firm in that key sector—and its fund formations group raised hundreds of billions of dollars for Apollo Global Management and Blackstone Group L.P. and other private equity giants, Karp added.
Its restructuring practice was also busy, representing radio giant Cumulus Media Inc. in its Chapter 11 reorganization, as well as distressed retail giants Sears and Toys R Us in their bankruptcy proceedings.
On the litigation front, Karp is leading a team representing embattled auto industry titan and former Nissan Motor Co. chair Carlos Ghosn. Paul Weiss is also representing Tesla's board of directors in connection with a U.S. Securities and Exchange Commission inquiry, the National Football League in ongoing global concussion class action matters, as well as major financial institutions in significant litigations and regulatory matters, long a bread-and-butter practice for the firm.
A team at the firm also scored a precedent-setting victory for Fresenius SE & Co. in the Delaware Supreme Court that allowed the German global health care group to walk away from a merger based on material adverse changes, a win that earned Litigator of the Week honors for partner Lewis Clayton.
As for 2019 plans, Karp said the firm intends to keep focusing on its core practices and growing incrementally in each area.
“It's very important to me that we have, and sustain, market-leading practices in each of our five key practice areas in each jurisdiction in which we operate,” he said.
Paul Weiss has also expanded to other areas, including with the high-profile addition of U.S. Supreme Court litigator Kannon Shanmugam from Williams & Connolly in January to launch a dedicated Supreme Court and appellate practice for the firm.
“At the end of the day, it's all about talent, value, client service, results and focus. You will not see us dabbling in one-off, esoteric practice niches,” Karp said. “We have a very clear strategy, which we've been able to execute consistently over the past decade and we're very proud of the results.”
The year was not without its hiccups. Late last year Karp was obliged to publicly reaffirm Paul Weiss' commitment to diversity and vow to “do better” after it was heavily criticized for a white male-dominated slate of newly minted partners—a situation inadvertently highlighted by the firm's own announcement of the promotions.
One area where the firm has no apologies: pro bono, especially when it comes to Paul Weiss lawyers butting heads with the Trump administration over policy.
“We're enormously proud of the successes we've achieved in our battles against the administration on a host of vital social justice issues,” Karp said.
In 2018, attorneys at Paul Weiss logged 113,000 hours in pro bono work, taking on some of the country's most high-profile legal battles on pressing social issues, Karp said, noting that the firm is on pace to exceed its pro bono commitment in 2019.
The firm is working as counsel, alongside the American Civil Liberties Union, in a federal lawsuit against the Trump administration against its family separation policy. In Mississippi, the firm won a major victory for women's reproductive rights when a federal court struck the state's ban on abortion after 15 weeks on constitutional grounds.
The firm also took on voting rights matters in Georgia, gun reform legislation, and, as the firm that defended Edith Windsor to establish the constitutional right to same-sex marriage, continued its efforts to fight LGBTQ discrimination.
“Anytime the administration takes action that, in our view, violates fundamental constitutional rights, my law firm is prepared to step into the breach and fight tooth and nail to ensure that the rule of law is respected,” Karp said.
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