Legal Business Blogs

Revival watch – after a lost decade Shearman delivers pace-setting 9% fee hike as PEP soars to $1.8m

It was a performance that the Wall Street thoroughbred badly needed and at last Shearman & Sterling has proved its many doubters wrong to unveil a 9.1% hike in revenues and a double-digit percentage increase in partner profits for its 2013 year.

Under the first full year of the leadership of senior partner Creighton Condon, the top 50 global law firm has posted a 9.1% rise in revenue to $820.5m, from $752m the previous year. Profit per equity partner (PEP) jumped 18.4% to $1.8m from $1,521,000 in 2012 while revenue per lawyer hit $1m, a 13.4% annual rise.

It is hard to over-state how much Shearman needed a confidence-inspiring year under its new management team after a decade that has seen its revenues plummet against its New York and global peers. In the five-year period to the end of the 2012 financial year, the firm saw its revenues fall by 18%, one of the worst performances in the Global 100.

Shearman’s headcount edged down over the year with just one addition to its equity partnership and its total headcount down by 4%, mainly due to the firm’s restructuring in Germany which saw the closure of offices in Munich and Dusseldorf.

One Shearman partner commented: ‘Management has been a key catalyst to galvanising a more cohesive approach to client development.’

The 840-lawyer firm has been an active recruiter of late, hiring 18 partners in 18 months and has moved to expand its litigation practice to balance out its traditionally corporate finance-heavy business.

Stand-out hires in London include private equity partner Mark Soundy and tax specialist Sarah Priestly from Weil, Gotshal & Manges. In New York, the firm strengthened its litigation team with a three-partner team from Orrick, Herrington & Sutcliffe. Litigation partners Joseph Frank, Matthew Craner and Agnès Dunogué joined along with three Orrick leveraged finance partners, Ronan Wicks, Patrick Flanagan and Jason White.

Among the stand-out deals for last year included representing Liberty Global in connection with its $23bn acquisition of Virgin Media, the underwriters working with Petrobras on its recording-breaking $11bn debt offering programme, and affiliates of Toyota Motor Corporation in a pair of financings collectively worth close to $25bn.

Whether one strong year will be enough to convince its critics is doubtful but Shearman at last has a performance to rally the troops.

Click here for more US financial results and see Taking Manhattan for more analysis on the New York legal market.