Henry Walker
Henry Walker (John Disney/Staff)

Revenue and profit at Kilpatrick Townsend & Stockton were lower in 2013 because the firm collected an enormous contingency fee of about $38 million in a historic class action, Cobell v. Salazar, in 2012.

In the Cobell class action, which was litigated for 15 years, Kilpatrick and Washington banking lawyer Dennis Gingold represented a class of more than 500,000 American Indians who sued the U.S. Department of Interior for decades of mismanaging their royalty payments from oil, gas and mineral leases on tribal land.

Kilpatrick reported $388.5 million in revenue, $18 million lower than the previous year and a 4.4 percent decrease. That pushed down revenue per lawyer by 5.4 percent, to $695,000.

Net income declined more significantly—by $28 million (20.4 percent) to $109.5 million, which reduced profit per equity partner by $160,000, to $700,000. PPEP spiked $230,000 (36.5 percent) in 2012 with the Cobell fee.

The firm’s chairman, J. Henry Walker IV, said he was pleased with the year. “It was a strong year in a tough market.”

Walker said if the Cobell fee were removed, 2013 revenue would have risen $20 million from 2012. Fee revenue increased by $500,000 or more for 44 clients, he added.

The firm declined to divulge its contingency fee for the $3.4 billion settlement, but it was about $38 million, based on the differences in RPL and PPEP without the Cobell fee, which the firm did supply.

If the 2013 figures were compared with 2012 figures without the Cobell fee, PPEP would have increased $55,000 (7.9 percent) and RPL would have increased $26,500 (3.7 percent), Walker said.

Nine of the firm’s practice teams registered double-digit growth in RPL, he said, including patent litigation, technology litigation, health and life sciences, global sourcing and technology and capital markets.

Walker said Kilpatrick continued to handle patent and technology matters for tech companies including Google—and now its subsidiary, Motorola—and Oracle, Apple and AT&T. He said it expanded its work for Intercontinental Hotel Group, which is mostly in trademark law, and Wells Fargo.

One major deal last year was advising Atlanta tech company AirWatch in its $1.5 billion sale to VMWare, a Palo Alto maker of cloud-based software. AirWatch manufactures mobile device management and security software for businesses whose employees use mobile phones on the job. The deal closed on Jan. 22.

Walker said Kilpatrick has represented AirWatch since it launched in 2003.

The firm advised another longtime client, Equifax, in its $1 billion purchase of Computer Sciences Corp.’s credit services business.

It represented Flowers Foods, based in Thomasville, in its $355 million purchase of several food brands, including Wonder Bread, plus 20 bakeries and 36 depots from the bankrupt Hostess Brands. The deal was final in July.

Fending off infringements on client Zynga’s “With Friends” brand kept Los Angeles partner Dennis Wilson busy. Zynga makes the online game app Words With Friends and spin-off “With Friends” apps including Chess With Friends and Hanging With Friends.

Wilson represented Zynga in a trademark infringement suit against a casual sex app called Bang With Friends. Zynga also sued dating website Cupid With Friends last year over its name.

Head count increased by a net of nine lawyers last year, to 561. Kilpatrick shed a net of four equity partners, for 156, and one nonequity partner, for a total of 256.

Kilpatrick’s previous chairman, Paul Aguggia, has become a client after departing at the end of the year to become the head of a privately held New Jersey bank, Clifton Savings Bancorp., which was his client.

Walker, who had been managing partner, was chosen as the new chairman in September. Susan Spaeth, who is in Kilpatrick’s Silicon Valley office, succeeded him as managing partner. The two litigators continue to practice law, which is the custom at Kilpatrick.

Kilpatrick added a Los Angeles office in February 2013 by acquiring a seven-lawyer boutique, Keats McFarland & Wilson, which handles intellectual property and business litigation for clients including movie studios, actors, musicians and luxury brands. Larry McFarland, Dennis Wilson and David Caplan joined as partners. “That is a market we’ve really wanted to be in, particularly the copyright and trademark work we do for a number of entertainment companies,” Walker said.

Kilpatrick made several notable lateral hires in Atlanta, including six lawyers from the now-defunct Dow Lohnes. Russell Jones joined as a partner in August, bringing three associates. Media lawyer Tom Clyde followed in January as a partner, with Lesli Gaither as counsel, bringing their client Cox Enterprises.

Two health care partners, Sidney Welch and Lynn Scott, joined from Arnall Golden Gregory. Two partners handling privacy and big data law, Jon Neiditz and Amanda Witt, moved from Nelson Mullins Riley & Scarborough.

IP partner Wendy Choi left for Ballard Spahr and another IP partner, Geoffrey Gaven, went to Jones Day. Community bank partner James Stevens and senior counsel Richard Cheatham decamped for Troutman Sanders.

Walker said Kilpatrick lawyers clocked 20 percent more pro bono hours last year than in 2012.

Kilpatrick is one of several large firms, including another Atlanta-based firm, Sutherland Asbill & Brennan, representing pro bono Indian guest workers in human trafficking suits against Gulf Coast shipbuilder Signal International, its recruiters and labor brokers.

The suits claim that Signal and its agents—a recruiter in India and a recruiter, labor brokers and an immigration lawyer on the Gulf Coast—charged the men exorbitant fees for the jobs, as much as $11,000 to $25,000 per worker, under false promises that they could obtain green cards by working for Signal, which then held them as virtual prisoners in squalid “man camps.”

Kilpatrick is representing 17 workers. The private firms are working with the Southern Poverty Law Center, which filed a class action, David v. Signal International, on behalf of 590 workers in 2008, in U.S. District Court for the Eastern District of Texas. After the class action was denied certification in 2013, SPLC recruited the firms to represent the workers individually. So far, 143 workers have filed suit.

Richard Dietz, a partner in Winston-Salem, argued another pro bono case, Abramski v. United States, before the U.S. Supreme Court in January. The case raises the question of whether a lawful gun owner may buy a gun under his own name on behalf of another lawful gun owner.

Last fall Kilpatrick recruited Tamara Caldas, the deputy director of the Atlanta Volunteer Lawyers Foundation, to become its pro bono partner after Debbie Segal decided to retire from the role. Segal remains with Kilpatrick as of counsel. Kilpatrick recruited Segal from AVLF in 2001 to become the firm’s first dedicated pro bono partner.

Keith Harper, Kilpatrick’s lead lawyer on the Cobell case, has been nominated by the Obama administration to serve as the ambassador to the United Nations Human Rights Council, but the nomination is stalled in the Senate.