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Shearman tight-lipped on City revenue amid reduced headcount and 4% global turnover rise

After rising by less than 1% in 2017, Shearman & Sterling’s global revenue grew at a slightly faster pace last year to hit $955.5m as profit per equity partner increased 5% to $2.4m.

The New York-headquartered firm today (21 February) declined to disclose its London revenue for the second year running, although senior partner David Beveridge told Legal Business the City office grew at a comparable rate to the firm globally. The last time Shearman released London numbers they showed a 14% revenue uptick to $169.7m in 2016.

Last year’s growth in City revenue came despite it reporting a drop of around 10% in lawyer headcount to about 160 from 178 the previous year.

‘This is the normal ebb and flow of the practice,’ said Beveridge. ‘We shifted people back to New York in leveraged finance. We will see the number come back up this year.’

Meanwhile, the 4% rise in firm-wide turnover came amid 3% growth in headcount to 882 from 853, meaning revenue per lawyer rose by just over 1% to $1.08m. The firm’s global revenue was up 27% on 2013.

Beveridge said the financial performance was ‘in line with what we expected and we will see more growth this year’, adding the firm was looking to achieve ‘profitable growth’ and pointed to a 53% increase in profitability over the last five years.

He said the firm was looking to grow in leveraged finance, mid-market private equity and M&A with a focus on energy, tech and life sciences. After concentrating its investment on the States in 2018 with the launch of two Texas offices in Austin and Houston, the firm will now look to ‘grow disproportionately’ in both the US and the City.

London remained the firm’s second largest office after New York, which is home to around 350 lawyers, while the States account for 60% of the firm’s workforce.

There were notable moves on the lateral front in London last year. Its high yield team lost guru Apostolos Gkoutzinis to Milbank Tweed Hadley & McCloy in January but managed to hire back Ward McKimm from Freshfields Bruckhaus Deringer in July. The firm also added Tim Scheddick from Baker McKenzie to its corporate practice.

Key mandates for the office included advising Boston Scientific on its $4.2bn acquisition of BTG.

Beveridge anticipated ‘consistent growth’ of between 5 and 10% year-on-year over the next several years.

A number of US firms have posted strong financials for their City practice so far. Reed Smith hiked London revenue by 18% to $222m and Akin Gump Strauss Hauer & Feld by 28% to $123.5m. White & Case’s London revenue rose 7% to $350m and Milbank Tweed Hadley & McCloy recorded a 25% increase in City turnover to $156m. Elsewhere, revenue for Goodwin Procter’s London office grew 58%, while King & Spalding was up 12% and Cooley added 16% to reach $66.7m.