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Soft H2 debt restructuring market blamed for 12.6% drop in 2013 US revenue for Bingham McCutchen

When many firms were busy cutting costs and dicing teams in 2008, Bingham McCutchen weathered the economic downturn pretty well thanks to the solid inflow of work in its debt restructuring practice.

Five years later, with corporates finding cash far easier to come by, and Bingham is feeling the pinch after its H2 2013 restructuring work slowed and its revenues for the financial year dropped by 12.6% to $762m from $871.8m in 2012.

London revenue was also down 4.4%, from $54.7m in 2012 to $52.3m, after increasing 11.4% in 2011, when turnover totalled $49.1m. Revenue per lawyer in the City was down by more: 6% to $1.09m from £1.16m last year.

Firmwide revenue per lawyer fell 1.1% from $968,667 to $958,491.

The firm said the overall decline was largely because of the uptick in high yield and the greater accessibility to funding, which led to a drop in debt restructuring work.

Bingham’s London managing partner James Roome told Legal Business: ‘It’s counter-cyclical. When other firms – mainly transactional based firms – were coming down in 2008, we were doing pretty well. But in the middle of last year, we felt the impact. High yield is flying and that has killed debt restructuring as there is more cash available.’

The firm’s New York and Washington DC practices took a hit last year when Sidley Austin hired an 11-partner team from its US securities enforcement and regulatory practice in April, leaving Bingham with some 20 partners in its broker-dealer practice across the US.

However, the firm’s corporate and litigation practices in Europe were active across 2013, with projects from previous restructuring work. Highlights include representing the senior lenders of Terreal Group in France, the senior noteholders of Uralita in Spain, the noteholders of Northland Resources in Sweden and the noteholders of Invitel/Magyar Telecom in Hungary, as well as continuing work for the creditors of all three Icelandic banks.

‘London had a reasonable year in 2013, although we were slightly down on our record-breaking 2012 result. The decline was largely due to the debt restructuring market in Europe, which was softer in the second half of 2013 after a strong run,’ added Roome.

‘We are confident that 2014 will be at least as strong as 2013, as our market-leading cross-border restructuring practice continues to attract a large proportion of the restructuring transactions in Europe, Asia and the US.’