US restructuring and energy leader Akin Gump Strauss Hauer & Feld piled $50m on to its top line in 2016 to take revenues to just under $1bn, despite a slide in City income.
While revenue for the 2016 year hit $980m, up 5.3% on its 2015 tally of $930m, the law firm’s City arm saw its local income fall from $91.4m to $87.9m. The Texas-bred practice dramatically upgraded its City practice in late 2014 when it absorbed the bulk of Bingham McCutchen’s City arm, shipping in a 22-partner team to double the size of its London practice.
The firm-wide increase in revenue has been accompanied by a rise in profit per equity partner (PEP), up from $1.9m in 2015 to $2.1m this year, with revenue per lawyer remaining broadly static.
Akin Gump’s London co-head, Sebastian Rice, told Legal Business that a run of marquee restructuring jobs through 2015 accounted for the comparative 2016 dip in City income. At the end of 2015, Akin Gump’s restructuring team headed by James Roome (pictured), concluded a major case involving three former Icelandic banks: Kaupthing, Landsbanki and Glitnir. The team represented holders of $33bn in bonds following the collapse of the banks.
Rice described the restructuring work as ‘keeping about 20 lawyers extremely busy’, adding: ‘At the end of 2015 it really hit its peak. Things took a few months to ramp up. By summer 2016 things were back in full swing.’
Roome commented on the slow start to 2016, saying: ‘All the junior people were hugely relieved to get a break!’ Rice and Roome both attributed the firm-wide revenue growth to Akin Gump’s focus on core product lines like financial restructuring, international trade and tax. Noted Rice: ‘We don’t pretend to be all things to all people around the world, we just focus on the things we are highly regarded for.’
In terms of key City appointments in the past year, Akin Gump hired arbitration partner Hamish Lal from Jones Day, corporate partner Igor Krivoshekov from Dentons and trade partner Jasper Helder from Baker McKenzie. Addleshaw Goddard litigator Kambiz Larizadeh is set to arrive next month, becoming the firm’s 37th partner in London.
The results come as US law firms begin releasing annual financial results, indicating how the world’s largest legal market fared in the 2016 year. While Weil Gotshal & Manges has just confirmed a robust performance in 2016, its New York peer Cadwalader, Wickersham & Taft this week said that turnover dropped 2.5% to $452m in 2016, against $463.5m the previous year. PEP increased 2.7% to $2.1m, while overall headcount fell 2.2% to 438.
The shrinking revenue coincides with the closure by Cadwalader of its offices in Beijing and Hong Kong, which was announced in the autumn, with the firm also set to shut its Houston arm as it refocus its efforts on its core Wall Street financial client base.
For an extended look at Akin Gump’s City ambitions see ‘The third wave’ (£)