Vinson & Elkins offices in Washington, D.C.

Revenue was up 6.1% at Vinson & Elkins in 2019 as the Am Law 100 firm posted its fourth consecutive year of revenue growth, while profits per equity partner improved by 11.2%, as the firm looked to take on more sophisticated matters and shifted certain practices toward growth sectors.

Revenue for the Houston-founded firm came in at $792.6 million, compared with $747.2 million in 2018. Revenue per lawyer was nearly flat for the year at $1.21 million, compared with $1.20 million the year before, a metric affected by 5.5% growth in the firm's total head count.

Profitability was strong in 2019, with PEP hitting $2.80 million, compared with $2.52 million in 2018. Net income was $349.5 million, up 10.9% from $315.2 million in 2018.

Chair Mark Kelly said the partners are "very pleased" with the financials, particularly because revenue continues to improve. Also, PEP is on a "good trajectory," because it is up 107% over the last 10 years.

"What was really good for us was strong levels of business activity across a wide range of practice areas. It wasn't hot in one area, and down in others," Kelly said.

Like other large Texas firms, Vinson & Elkins is buffeted by out-of-state firms launching Texas offices and trying to grab market share—and its lawyers. But in evaluating the firm's improved financials, Kelly said Vinson & Elkins went after high-end work, looked for openings in the market in areas such as REITs and renewable energy, and made investments in offices outside of the Lone Star State. Expanding on his definition of high-end work, he mentioned bet-the-company litigation, high-risk transactions and large complex transactions that require a team of lawyers.

"You've got to get out there. You can't just expect the phone to ring," he said.

Kelly said the firm did institute some "single-digit" rate increases in 2019, but also managed expenses, he said.

"We have really focused on making sure we are prudent on how we spend our money," he said.

Total head count at the Houston-founded firm grew to 656 lawyers in 2019, up from 622 the year before, but the number of equity partners, 125, did not change, and the firm is down only one nonequity partner at 72.

New York was a focus of the firm's growth in 2019, Kelly said, noting that it moved this month into new space in the Grace Building.

Perhaps most significantly, the firm picked up a 15-lawyer group of real estate lawyers from Kasowitz Benson Torres, in New York. Other hires include international arbitration partner Camilo Cardozo; white-collar defense litigator Palmina Fava; and project finance partner Eamon Nolan.

Washington, D.C., was another key location for growth, with the firm adding lawyers including CFIUS partner Damara Chambers, environmental partner Patrick Traylor and government investigations and white-collar defense lawyer Ephraim "Fry" Wernick.

The growth through lateral hiring is part of a push to expand several practices including private equity, infrastructure, real estate, restructuring and shareholder activism, Kelly said.

Across the ocean, he said, the London office "did well" in 2019, building on a significant amount of hiring in 2018.

The firm's Texas offices are in Houston, Dallas and Austin, but other U.S. locations are New York, Washington, D.C., San Francisco and Richmond, Virginia. Overseas, it has offices in Beijing, Dubai, Hong Kong, London, Riyadh, Saudia Arabia, and Tokyo. The firm closed its Moscow office in 2019.

Kelly attributed the firm's revenue growth to a number of practices, including technology, particularly in Austin; real estate and REITs; restructuring; private equity; and renewable energy. The environmental, social and governance task force also saw more activity in 2019, he said, with lawyers advising clients on issues such as climate change, cybersecurity and human rights.

Kelly said the firm worked on 28 transactions in 2019 for large investors in the renewable energy space. Lawyers also handled infrastructure matters and projects for companies including Gulf Coast Ammonia, CPChem and New Fortress Energy. Tech company work included M&A for clients such as MoneyGram and ForeFlight.

In part because of lateral hiring, growth in the real estate and REIT practices was significant, Kelly said, noting that REIT offerings comprised nearly 40% of all securities offerings completed by the firm. Additionally, he said, the restructuring practice had one of its best years ever, representing clients including franchiser Taco Bueno in its pre-petition debt sale and prepackaged Chapter 11.

Among significant litigation wins, the firm secured a $100 million jury verdict in Colorado for client Antero Resources Corp., and a favorable Texas Supreme Court ruling for client Anadarko Petroleum in an insurance dispute related to the Deepwater Horizon oil spill.

Some practices were slower than usual in 2019, Kelly said, including traditional oil and gas and energy IPOs.

"Traditional energy is challenging now. You look at oil prices. With the renewable side of the house, are were able to gain market share," he said.

As for 2020, Kelly said he is hopeful because the firm is in a good position after four years of record revenue, and should reap the benefits of lateral hiring. But, he added, in an election year and with the long-term effects of the coronavirus remaining unknown, the industry is plagued by some uncertainty.

The firm will focus on hiring again in 2020, Kelly said. Vinson & Elkins is eyeing litigators and funds lawyers in New York, technology lawyers in Austin, and tax lawyers in London.

Despite the competition, Kelly said, "A good strategy for us is to really try to go for people at the top, people who fit culturally."

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