US firm revenues for 2014 have kicked off with Weil, Gotshal & Manges showing a comeback in its results after profits and turnover plummeted in 2013.
After drops of 7% and 5% in the previous years which took profits per equity partner (PEP) to $2.1m in 2013, the firm made up for lost time with a 16.5% increase to $2.4m in 2014. In addition Weil’s net profits for the year grew by $52m to $411.5m, shooting up 14.5%.
The results are a positive start for the firm after suffering greatly from the slowdown in bankruptcy work after 2012 – especially the wind down of the record-breaking insolvency of Lehman Brothers. In 2013, the firm made some tough decisions including firing 60 associates and 110 support staff, and reducing at least 10% of its partnership’s compensation.
But it seems cutting its headcount has proved beneficial with the firm’s revenues growing by $14m or 1.2% to $1.15bn from $1.13bn in 2013. This came after revenues fell 7% from $1.2bn in 2012 after flat lining from 2011’s level.
Revenue per lawyer also rose by 9% to just over $1m from $985,000 as lawyer headcount dropped 7%. The number of non-equity partners also dropped by 10%, while overall equity partner numbers decreased only slightly from 174 to 171.
Barry Wolf, the firm’s executive partner told Legal Business: ‘We have had a strong rebound at the firm and are happy with our 2014 results. We have expectations to grow further next year and while we are happy where we are today we won’t be satisfied until we grow further next year.
‘There was a strong transactional market in 2014 and we were top-five for the M&A completed deals league tables. Our litigation practice improved but our bankruptcy practice remains slow. All this together meant more production.’
Key M&A deals for the firm over the last year saw them advise Kinder Morgan in its $70bn acquisition of KMP, KMR and EPB; represent DirecTV in its $67.1bn acquisition by AT&T; and act for Facebook in its $19bn acquisition of WhatsApp.
Overall production – meaning the number of hours billed multiplied by the billing rate – also grew between 5-6%. ‘The last quarter was particularly busy. Revenue always lags and takes around four months from when you produce,’ said Wolf.
In terms of the firm’s international offices, Wolf said its European offices were very successful. ‘London and Paris were very strong, and the transactional, restructuring and finance practices were very busy,’ he said. The firm’s European offices in general contribute around 25% of the firm’s overall revenues.
Wolf added that while 2015 will not bring any changes strategy, the firm will be focused on building its revenues and profits further, and gaining more market share.