As Squire Sanders continues its tie-up talks with another member of The Am Law 100, The American Lawyer’s reporting shows that it posted a largely flat set of financial results for 2013.
The firm’s gross revenue inched up just 0.1 percent during the last fiscal year, to a new high of $775.5 million. With revenue flat, a 2.4 percent reduction in Squire Sanders’ total attorney head count, to 1,227 lawyers, led to its revenue per lawyer rising 2.4 percent, to a three-year high of $630,000. Following a 20 percent crash in 2012, net income rebounded slightly last year, rising 0.9 percent, to $106.5 million. As a result, average profits per equity partner increased 1.3 percent, to a six-year high of $810,000. And after falling 4 percentage points in 2012, Squire Sanders’ profit margin remained at just 14 percent—the lowest it’s been since The American Lawyer began tracking the firm’s financial performance in 1985, when the figure stood at 43 percent.
Echoing the refrain offered by many of his Am Law 100 counterparts, Squire Sanders chair Jim Maiwurm said in a statement that he was pleased with the firm’s performance in the face of challenging market conditions.
“On a whole we feel positively about our performance in 2013—a year when the legal industry faced some headwinds,” Maiwurn said. “The slowly recovering global economic climate and constantly evolving legal industry have caused the legal market to contract in size and in absolute net revenue. Despite these challenges, [our] revenue grew slightly … [and] the firm was able to improve its revenue per lawyer.”
After combining with U.K. firm Hammonds via a Swiss verein in 2010, Squire Sanders is now negotiating another potential deal, this one with struggling Washington, D.C.–based heavyweight Patton Boggs.
The firms released a joint statement in February confirming that they were in the “very early stages” of discussions over a potential combination, which, if approved, would create a 1,700-lawyer giant that would be among the 10 largest U.S.–based firms by head count, according to the most recent NLJ 350 data. “Patton Boggs brings a powerful Washington presence and strong positions in Dallas, Denver and Anchorage, as well as a network of offices in the Middle East, to the strong global platform of Squire Sanders,” the statement added.
(Patton Boggs, which closed its Newark office in February and has shed about 20 percent of its lawyers since 2012, had previously held merger talks with Locke Lord. Those talks broke down in December partly due to potential liabilities Patton Boggs faces as a result of its role in a long-running litigation battle between a group of Ecuadoreans and Chevron Corp. over the company’s alleged contamination of the South American nation’s rainforest, according to The American Lawyer.)
For Squire Sanders, the Patton Boggs negotiations come on the heels of a year that saw the firm expand its global footprint by establishing a pair of international alliances.
In October the firm formed an association with 32-lawyer Salkom LLC in Ukraine, a country in which Squire Sanders has long maintained a presence. The new venture, called Squire Sanders–Salkom International Association, went live on Oct. 1, when Squire Sanders’ four local lawyers—led by managing partner Peter Teluk—began working out of Salkom’s sole office in Kiev. The Am Law 100 firm with roots in Cleveland first opened a Kiev outpost in 1995, but spun off that office in 2003 before eventually returning in 2008. (Teluk told The Am Law Daily last month that he feared the firm would have to close its Kiev office due to the unrest between Russia and Ukraine over the Crimea. Other international law firms are following the situation closely, with tensions between Russia and the West escalating following the announcement last week that the Obama administration and the European Union would be imposing fresh sanctions against individuals with ties to the Kremlin.)
In November, the firm finalized a similar arrangement with Indonesian firm Melli Darsa & Co. The tie-up with 33-lawyer Melli Darsa, which specializes in corporate finance, securities and M&A, follows Squire Sanders’ opening of an office in neighboring Singapore. In a statement released at the time, the firm said clients, particularly in the energy, natural resources and infrastructure spaces, are increasingly seeking advice on local law issues in Indonesia.
The firm’s other notable developments in 2013 included the bolstering in January of its Washington, D.C., antitrust practice with the addition of a three-partner team from Akin Gump Strauss Hauer & Feld led by that firm’s former antitrust and unfair competition head, Mark Botti.
Squire Sanders also continued to expand its fledgling Sydney office— which launched in 2012 with the arrival of Campbell Davidson, who previously headed the Shanghai corporate practice of leading Australian firm (and now Linklaters ally) Allens—with the addition of three lateral partners specializing in corporate, litigation and financial services matters.
In the United Kingdom, Squire Sanders boosted its transactional capabilities with the addition of Wragge & Co financial services partners Paula Laird and Mark Thomas from Addleshaw Goddard; and corporate partners Matthew Doughty and Hannah Kendrick, who joined the firm from Dorsey & Whitney and Eversheds, respectively.
Squire Sanders also won a place on the two inaugural legal panels of China’s Ministry of Commerce—for international investment, and for world trade organization and regional trade agreement disputes.
This report is part of The Am Law Daily’s early coverage of 2013 financial results of The Am Law 100/200. Final rankings and full results for The Am Law 100 will be published in The American Lawyer’s May 2014 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.