Paul Weiss and Milbank join ranks of US law firms reporting strong results for 2016
US duo post double-digit revenue rises after busy 12 months
February 19, 2017 at 04:23 PM
5 minute read
Paul Weiss Rifkind Wharton & Garrison saw revenue rise 10.1% in 2016 to reach $1.22bn (£984m), a record year for the 959-lawyer firm.
Profits per equity partner (PEP) rose 7.1% to $4.38m (£3.53m), while revenue per lawyer rose 13.4% to $1.27m (£1.02m). The number of partners stayed flat at 139, while headcount rose to 959, a slight increase on 2015.
"All of our practice areas and offices were exceptionally busy in 2016, busier than in any previous year," said firm chair Brad Karp (pictured).
Paul Weiss made headlines when it hired Cravath Swaine & Moore M&A partner Scott Barshay, who made a big contribution in his first year. The firm also brought on commercial litigator David Bernick from Dechert and recruited a high powered antitrust team from Cadwalader Wickersham & Taft, led by partner Charles 'Rick' Rule.
Karp said each hire "fits within our existing compensation system, which is 90% lockstep".
Barshay brought Paul Weiss a new client in Qualcomm, when he advised the mobile phone chipmaker on its $47bn (£37.9bn) acquisition of NXP Semiconductors. Rule advised Cigna on its proposed combination with fellow health insurance giant Anthem, which was challenged by the US Department of Justice and then blocked by a federal judge. Rule's team also has a role providing antitrust counsel to Monsanto on the agribusiness giant's proposed $66bn (£53bn) acquisition by Bayer.
But those were not the only big matters that Paul Weiss worked on last year. The firm represented Time Warner Cable on its merger with Charter Communications, and also negotiated a deal for JPMorgan Chase when a subsidiary of the bank was accused of hiring the children of government officials in China, in order to bribe its way into investment deals. The New York-based financial services giant paid $264.4m (£213m) to settle those claims.
The firm also conducted a high profile investigation at Fox News after former anchor Gretchen Carlson accused then-CEO Roger Ailes of sexual harassment. The investigation found that two dozen women had been sexually harassed at the network, prompting Ailes' resignation. Carlson later settled for $20m (£16m).
Karp said the firm will continue to hire in its five key practice areas: litigation, white-collar crime, M&A, private equity and restructuring. So far this year, it has brought back former partner Jeh Johnson, who spent the past few years as secretary of the US Department of Homeland Security.
Elsewhere, Milbank Tweed Hadley & McCloy also posted a double-digit revenue increase for 2016, as PEP topped $3m, marking a fourth straight year of strong financial growth for the firm
The Wall Street firm saw revenue jump to $855.5m (£689m), an 11% increase on 2015′s figure of $771m (£621m). PEP grew by 12.8% to $3.12m (£2.51m), while revenue per lawyer at the 664-lawyer firm grew by 8.4% to $1.29m (£1.04m).
Reflecting on the year, Milbank chairman Scott Edelman had nothing but positive things to say about the firm's performance in 2016, and that optimism extends to the firm's outlook for 2017, he said. In addition to the increases in PEP and revenue, Edelman noted that his firm's total billed hours were up about 5%, even amid a market in which Citi Private Bank's law firm group has reported relatively flat demand for legal services.
"In a year like this," Edelman said, "it was tough to come up with many negatives."
Edelman highlighted the firm's litigation work in 2016, including the firm's successful defence of AXA Equitable Life Insurance in a case that accused the mutual fund adviser of charging excessive management and administrative fees.
On the financial restructuring front, Edelman said that despite a relatively strong economy, Milbank's restructuring lawyers "were so busy in coal, oil and gas and shipping", and the firm also played a role in the Caesars bankruptcy as one of the firms representing parent company Caesars Entertainment in the run-up to a deal with junior bondholders.
Milbank's corporate practice had its own string of notable representations in 2016, Edelman added. The firm advised long-time client Ultimate Fighting Championship on its $4bn (£3.2bn) sale to a consortium of private buyers. Milbank also advised Revlon on the company's $870m (£700m) acquisition of fellow cosmetics and fragrance company Elizabeth Arden.
The firm made a number of notable hires in 2016, including a three-lawyer real estate group from Allen & Overy in November. Overall, the total number of lawyers at the firm in 2016 increased 2.3%, rising to 664 from 649 in 2015, while the equity partnership ranks increased 2.1% rising to 149 in 2016.
Other US firms to have recently posted financial results for 2016 include King & Spalding, which saw revenue increase 3.8% to $1.06bn (£854m), while PEP dipped 1.8% to $2.47m (£2m); and Locke Lord, where revenue dropped by 6.4% to $559m (£450m), while PEP hit $950,000 (£765,000) – up 6.7% on 2015.
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