The U.S. Capitol Building. Credit: Mike Scarcella/ALM

Washington Wrap is a weekly look at industry news and Big Law moves shaping the legal business in Washington, D.C. Send news tips and lateral moves to Ryan Lovelace at [email protected].

In the coming week we'll be continuing to analyze Am Law 100 and 200 financial results in the D.C. market and beyond. But it's not too early to note that while some of Washington's largest law firms posted record revenues in 2018, some of their competitors faced stiffer headwinds.

Bottom line: Not everyone is enjoying the broader industry trend of rising demand, growing revenue and increasing profits.

Among early reports, Covington & Burling and Wilmer Cutler Pickering Hale and Dorr stand out for posting record high revenues in 2018. Wilmer ticked up to $1.149 billion in gross revenue, while Covington cracked the $1 billion threshold for the first time.

Elsewhere around town and throughout the mid-Atlantic, however, the picture is somewhat less rosy.

The majority of D.C. firms analyzed by Citi Private Bank's Law Firm Group—62 percent—recorded decreasing demand in 2018, while 61 percent of the total 191 firms Citi surveyed nationwide saw demand increase. Wells Fargo's law firm and lending advisory unit reported similar results: demand dropped by 2.7 percent in the mid-Atlantic, but rose by 2.3 percent across all 150 firms it reviewed nationwide.

Such results have prompted rumblings about the strength of the D.C. market and questions about how firms would survive an economic downturn amid divided government. But others are more optimistic.

“I don't think the D.C. market is vulnerable because it's the D.C. market. I actually think D.C. firms that have our kind of brand are going to thrive in periods of congressional investigations and more regulation,” said Bob Novick, co-managing partner at Wilmer. “It's not D.C. versus New York versus Chicago, it is how much high-value work will corporate America, will the corporate clients push into the outside counsel market in a period of downturn? Because that's where we all live.”

Novick noted that the leverage between clients and law firms had shifted coming out of the financial crisis. While the financial crisis is in the past, “clients never let us recover from it” insofar as they did not start paying full rates again and covering all expenses, he said.

He said firms trimmed down during the recession, which could leave little room for cuts that may be needed to weather a new storm. The “tipping point” for a firm approaching the brink, Novick said, “is pretty quick.”

Jeffrey Lowe, Major, Lindsey & Africa's managing partner in D.C., said 2018 was a pretty strong year for firms nationwide. He said he thinks firms “are still very bullish about the market, knowing that it's full steam ahead until it crashes.”

“Since the Trump administration began, there's a continued focus on D.C. as a power center and I think that's a good thing for people in the D.C. market,” Lowe said.

D.C. firms also appear to be recognizing the strategic importance of another power center, with a clientele increasingly coming under the critical gaze of federal lawmakers and regulators: San Francisco. Wilmer is opening offices in San Francisco in 2019 and has designs on serving the tech sector's Washington-facing legal needs. Crowell & Moring, which is in the process of recalibrating after large contingency windfalls in recent years, has its “greatest aspiration for growth“ this year in San Francisco, according to firm chair Philip Inglima.

Such near-term planning for D.C. firms could shift again next year, depending on the economy and the outcome of the 2020 election.

“As a D.C. firm, you're always thinking, I could lose 20 people at the next election just because people have been waiting their turn and now they go,” Novick said. “And you're thinking, 'Who am I going to take out of an administration?' You're always sort of pipeline planning, if not by name sort of conceptually, are you well-positioned to attract 15 people as 20 people walk out the door?”

Law Firm Moves, News & Notes

Speaking of walking out the door, K&L Gates partner Dick Thornburgh formally retired from the practice of law this week. He started at K&L Gates as an associate in 1959 and rejoined the firm after more than 25 years in government, including as Pennsylvania's governor and U.S. attorney general for Presidents Ronald Reagan and George H.W. Bush.

Sheppard, Mullin, Richter & Hampton added Thomas Dillickrath as partner in its antitrust and competition practice group in Washington, D.C.

Dillickrath was most recently deputy chief trial counsel at the U.S. Federal Trade Commission.

Sidley Austin added Laurence Kirsch and Noreen Phelan as partners in Washington, D.C. Kirsch is partner in the firm's environmental practice and Phelan is partner in the energy and infrastructure practice.

Kirsch made the move from Goodwin Procter where he was partner, while Phelan joined from Orrick, Herrington & Sutcliffe where she was partner.

Venable has brought on Kevin Lipson as partner its regulatory practice in D.C. Lipson made the move after 26 years at Hogan Lovells.

Lipson represents the estate of artist Robert Indiana, who created the LOVE sculpture.

Karen C. Corallo has joined Skadden, Arps, Slate, Meagher & Flom as of counsel from Greenberg Traurig. She was of counsel at Greenberg Traurig, too.

Corallo is a former director of the U.S. Food and Drug Administration's center for drug evaluation and research. She handles litigation for pharmaceutical, medical device and food industry clients and tackles regulatory and enforcement issues for businesses, according to Skadden.

Former U.S. Sen. Joe Donnelly, D-Indiana, will start as partner at Akin Gump Strauss Hauer & Feld on April 1.

Last weekend, Akin Gump international trade practice head Tom McCarthy co-chaired the Leukemia & Lymphoma Society's annual Leukemia Ball.

Steptoe & Johnson added Teddy Baldwin as partner in Washington, D.C. Baldwin is joining from Baker McKenzie and handles international arbitration matters.

Brownstein Hyatt Farber Schreck named Ryan A. Smith chair of the firm's national resources department. Smith is a Brownstein shareholder in D.C. who joined the firm in 2011 after serving as a staffer to former U.S. Sen. Jon Kyl, R-Arizona.

Jason Gould and James Jorden joined Drinker Biddle & Reath as partners from Carlton Fields.

Gould is a class action litigator and Jorden is an insurance and financial institutions counsel. Jorden's law firm merged with Carlton Fields in 2014 to form Carlton Fields Jorden Burt. In February, Carlton Fields axed Jorden Burt from its name and Jorden left with a large group of lawyers soon thereafter.

Alston & Bird said Elinor Hiller rejoined the firm as a partner in its health care group in Washington, D.C.

She was most recently a senior adviser at the Centers for Medicare and Medicaid Services, and previously practiced at Alston & Bird for seven years.